Fortive Corp
For the period ended Mar 28, 2025. Filed May 1, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 28, 2025 · Filed May 1, 2025
FTV$65.37-0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-27; filed 2024-10-30.
0001659166-24-000162
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-28; filed 2025-05-01.
0001659166-25-000080
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe 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 217 previous paragraphs and 178 current paragraphs.
89 unchanged; 66 reworded; 20 added; 58 removed; 4 previous and 3 current paragraphs rearranged.
Tables are not compared: 11 previous and 11 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 (20)
Current report
•Our ability to attract, develop, and retain senior leaders and other key employees is critical to our success.
Current report
Update on Pending Separation of the Precision Technologies Segment
Current report
During the three-month period ended March 28, 2025 (the “quarter” or the “first quarter” and “year-to-date period,” respectively), our sales decreased by 3.3%, primarily driven by a 1.7% decrease in our core revenue and a 1.2% decrease from unfavorable foreign currency exchange rates. Core revenue growth in the first quarter included favorable pricing of 1.9%, offset by volume declines of 3.6%.
Current report
In 2025, the U.S. government began imposing tariffs on products from all countries and additional individualized reciprocal tariffs on certain countries. In response, China, in particular, and other countries have announced retaliatory tariffs against certain imports from the United States. These changes to trade policies, retaliatory measures, and prolonged uncertainty in trade relationships negatively impact operations and financial results, including potential impairment of certain intangible assets, through resulting supply chain disruptions, delayed shipments, and increased operational complexities and costs. We continue to evaluate what impact these tariffs may have on our financial results, as the application and imposition of these tariffs remains unpredictable. For additional discussion of risks related to tariffs and trade relations, please refer to the risk factor, “Trade relations between the United States and other countries, including the imposition of new or increased tariffs and related uncertainty thereof, could have a material adverse effect on our business and financial results” in Part II, Item 1A. Risk Factors of this Quarterly Report on Form 10-Q.
Current report
•The year-over-year net effect of costs related to the Separation during 2025 and acquisition and divestiture-related transaction costs incurred in 2024 — favorable 15 basis points
Current report
•The year-over-year net effect of acquired and divested businesses, including amortization, and acquisition-related fair value adjustments — favorable 55 basis points
Current report
•The year-over-year effect of costs relating to discrete restructuring plans — unfavorable 25 basis points
Current report
Our sales growth in the first quarter was driven by favorable pricing across the segment and an increase in volume in our test and measurement instrumentation and gas detection products, partially offset by a decline in certain product lines in our facilities and asset lifecycle offerings, as well as unfavorable foreign currency exchange rates.
Current report
Operating profit margin increased 120 basis points during the first quarter as compared to the comparable period of 2024. Year-over-year changes in operating profit margin were comprised of the following:
Current report
•Year-over-year increase in price, a net increase in sales volume across the segment, and efficiency gains achieved through FBS measures, partially offset by higher employee compensation and the impact of unfavorable foreign currency exchange rates — favorable 150 basis points
Current report
•The year-over-year effect of costs relating to discrete restructuring plans — unfavorable 50 basis points
Current report
The sales results for the first quarter were impacted by price increases across the segment and volume increases in utility sensing and solutions,which were more than offset by volume reductions in test and measurement, energetic materials, and industrial sensing products. Additionally, there was an unfavorable impact from foreign currency exchange rates and the Invetech Divestiture.
Current report
•Year-over-year increase in price, more than offset by net volume reductions, higher compensation costs and the impact of unfavorable foreign currency exchange rates — unfavorable 375 basis points
Current report
•The year-over-year effect of amortization from existing businesses — unfavorable 30 basis points
Current report
•The year-over-year net effect of acquisition and divestiture-related transaction costs incurred in 2024, primarily related to the EA acquisition — favorable 465 basis points
Current report
•The year-over-year net effect of acquired and divested businesses, including amortization, and acquisition-related fair value adjustments — favorable 150 basis points
Current report
•The year-over-year effect of costs relating to discrete restructuring plans — unfavorable 10 basis points
Current report
The sales results for the first quarter were driven by price increases across the segment and volume increases in dosimetry services, and software products, all partially offset by a decline in biomedical test tools and unfavorable foreign currency exchange rates.
Current report
Operating profit margin decreased 50 basis points during the first quarter, as compared to the comparable period of 2024. Year-over-year changes in operating profit margin were comprised of the following:
Current report
Cash outflows from investing activities declined $1.71 billion when compared with the prior year, which had outflows related to acquisitions, net of cash acquired, partially offset by proceeds from the sale of property.
Removed paragraphs (58)
Previous report
•If we are unable to recruit and retain key employees, our business may be harmed.
Previous report
•Future pandemics and epidemics, and any corresponding constraints on supply chain, labor force, and the operations of our customers, suppliers, and vendors could have an adverse impact on our business and results of operations.
Previous report
Other Matters
Previous report
We initiated a discrete restructuring plan in the first quarter of 2023 that was completed during the fourth quarter of 2023. The nature of these activities were broadly consistent throughout our segments and consisted primarily of targeted workforce reductions in response to overall macroeconomic and other external conditions. We incurred these costs to position ourselves to provide superior products and services to customers in a cost-efficient manner, while taking into consideration the impact of broad economic uncertainties. During the three and nine-month periods ended September 29, 2023, we incurred charges of $0.9 million and $29.2 million, respectively.
Previous report
During the three and nine-month periods ended September 27, 2024 (the “quarter” or the “third quarter” and “year-to-date period,” respectively), our sales increased by 2.7% and 2.9%, respectively.
Previous report
The year-over-year increase in sales in the third quarter was primarily driven by a 1.1% increase in our core revenue and a 1.6% increase from acquisitions, net of divestitures. Core revenue growth in the third quarter included favorable pricing of 2.9%, partially offset by volume decline of 1.8%.
Previous report
Year-over-year increases in the year-to-date period were consistent with those in the third quarter, and were driven by a 1.2% increase in our core revenue and a 2.3% increase from acquisitions, net of divestitures, partially offset by a decline of 0.6% due to unfavorable currency translation. Core revenue growth during the year-to-date period included favorable pricing of 2.6%, partially offset by volume decline of 1.4%.
Previous report
Geographically, in the third quarter, year-over-year core revenue in developed markets increased slightly, driven by low single-digit growth in North America, partially offset by a low single-digit decline in Western Europe. Core revenue in high growth markets was up low single-digits year-over-year in the third quarter, driven by high-teens growth in Latin America, partially offset by a slight decline in Asia where China declined by high single-digits.
Previous report
Geographically, in the year-to-date period, year-over-year core revenue in developed markets increased slightly, driven by a low single-digit growth in North America, partially offset by a slight decline in Western Europe. Core revenue in high growth markets increased year-over-year in the year-to-date period by low single-digits, driven by high-teens growth in Latin America, partially offset by a low single-digit decline in Asia where China declined by mid-single-digits.
Previous report
We anticipate revenue growth to be approximately 3% for the fourth quarter of 2024 and the full year. We anticipate core revenue growth to be approximately 1% for the fourth quarter and the full year.
Previous report
•Year-over-year increase in price from existing businesses, volume gains in AHS, and gains from productivity measures, partially offset by a volume decline in certain businesses and end markets within our IOS and PT segments, and higher employee compensation — favorable 70 basis points
Previous report
•The year-over-year effect of amortization from existing businesses and impairment of intangible assets incurred in 2023 — favorable 25 basis points
Previous report
•The year-over-year net effect of acquired and divested businesses, including amortization, and acquisition-related fair value adjustments — unfavorable 110 basis points
Previous report
•The year-over-year effect of costs relating to the discrete restructuring plan initiated and completed in 2023 — favorable 5 basis points
Previous report
Operating profit margin was 19.5% for the year-to-date period, yielding an increase of 110 basis points as compared to 18.4% in the comparable period of 2023. Year-over-year changes in operating profit margin were comprised of the following:
Previous report
•The year-over-year effect of amortization from existing businesses, and impairment of intangible assets incurred in 2023 — favorable 25 basis points
Previous report
•The year-over-year net effect of acquisition and divestiture-related transaction costs incurred in the year-to-date period — unfavorable 70 basis points
Previous report
•The year-over-year net effect of acquired and divested businesses, including amortization and acquisition-related fair value adjustments — unfavorable 130 basis points
Previous report
•The year-over-year effect of costs relating to the discrete restructuring plan initiated and completed in 2023 — favorable 65 basis points
Previous report
The sales growth in the third quarter and year-to-date period was driven primarily by favorable pricing across the segment and increased volume in our gas detection products, as well as software and service offerings, including software as a service (“SaaS”), partially offset by volume decline in test and measurement instrumentation. The acquisitions in 2023 also contributed 0.8% and 1.1% to revenue growth during the third quarter and year-to-date period, respectively.
Previous report
Geographically, core revenue in developed markets increased in the year-to-date period by low single-digits, driven by a low single-digit growth in North America and Western Europe. Core revenue in high growth markets in the year-to-date period increased by mid-single-digits, driven by high-teens growth in Latin America and a low single-digit growth in Asia.
Previous report
Operating profit margin increased 110 basis points during the third quarter as compared to the comparable period of 2023. Year-over-year changes in operating profit margin were comprised of the following:
Previous report
•Year-over-year increase in price from existing businesses, and higher sales volume from gas detection products, as well as software and service offerings, offset by decline in sales volume from test and measurement instrumentation, and higher employee compensation — favorable 35 basis points
Previous report
•The year-over-year effect of amortization from existing businesses — favorable 30 basis points
Previous report
•The year-over-year net effect of acquisition-related transaction costs incurred in the third quarter of 2023 — favorable 25 basis points
Previous report
•The year-over-year net effect of acquired business, including amortization — relatively flat
Previous report
Operating profit margin increased 180 basis points during the year-to-date period, as compared to the comparable period of 2023. Year-over-year changes in operating profit margin comparisons were comprised of the following:
Previous report
•Year-over-year increase from favorable pricing and higher sales volume from existing businesses, partially offset by higher employee compensation and customer acquisition and marketing costs to support growth initiatives — favorable 70 basis points
Previous report
•The year-over-year effect of amortization from existing businesses, and impairment of intangible assets incurred in 2023 — favorable 45 basis points
Previous report
•The year-over-year net effect of acquisition-related transaction costs incurred in the year-to-date period — relatively flat
Previous report
•The year-over-year net effect of acquired business, including amortization, and acquisition-related fair value adjustments — unfavorable 25 basis points
Previous report
•The year-over-year effect of costs relating to the discrete restructuring plan initiated and completed in 2023 — favorable 90 basis points
Previous report
The sales results for both the third quarter and year-to-date periods were impacted by price increases across the segment and volume increases in energetic materials, offset by volume reductions in test and measurement and certain sensing technology products. The acquisition of EA, partially offset by the Invetech Divestiture, contributed 3.3% and 5.0% to revenue growth during the third quarter and year-to-date period, respectively.
Previous report
•Year-over-year increase in price from existing businesses and gains from productivity measures, offset by net volume reductions in the segment — favorable 5 basis points
Previous report
•The year-over-year effect of amortization from existing businesses — favorable 5 basis points
Previous report
•The year-over-year net effect of acquisition and divestiture-related transaction costs, which were incurred in the third quarter of 2024, primarily related to the EA acquisition — unfavorable 35 basis points
Previous report
•The year-over-year net effect of acquired and divested businesses, including amortization, and acquisition-related fair value adjustments — unfavorable 315 basis points
Previous report
Operating profit margin decreased 100 basis points during the year-to-date period as compared to the comparable period of 2023. Year-over-year changes in operating profit margins were comprised of the following:
Previous report
•Year-over-year increase in price from existing businesses and gains from productivity measures were offset by net volume reduction in the segment and unfavorable changes in foreign currency exchange rates — unfavorable 10 basis points
Previous report
•The year-over-year effect of amortization from existing businesses — relatively flat
Showing the first 40 of 58 passages. Open the source sections for the rest.
Reworded paragraphs (66)
Previous wording
Certain statements included or incorporated by reference in this quarterly report, in other documents we file with or furnish to the Securities and Exchange Commission (“SEC”), in our press releases, webcasts, conference calls, materials delivered to shareholders and other communications, are “forward-looking statements” within the meaning of the United States federal securities laws. All statements other than historical factual information are forward-looking statements, including without limitation statements regarding: projections of revenue, expenses, profit, profit margins, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, our liquidity position or other financial measures; management’s plans and strategies for future operations, including statements relating to anticipated operating performance, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions, divestitures, strategic opportunities, securities offerings, stock repurchases, dividends and executive compensation; growth, declines and other trends in markets we sell into, including the expected impact of trade and tariff policies; our plans to separate into two independent, publicly traded companies; new or modified laws, regulations and accounting pronouncements; impact of climate-related events or transition activities; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; foreign currency exchange rates and fluctuations in those rates; impact of changes to tax laws; general economic and capital markets conditions, including expected impact of inflation or interest rate changes; impact of geopolitical developments and events, including the anticipated impact of the Ukraine/Russia conflict, conflict in the Middle East, and other hostilities; the timing of any of the foregoing; assumptions underlying any of the foregoing; and any other statements that address events or developments that we intend or believe will or may occur in the future. Terminology such as “believe,” “anticipate,” “should,” “could,” “intend,” “will,” “plan,” “expect,” “estimate,” “project,” “target,” “may,” “possible,” “potential,” “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 quarterly report, in other documents we file with or furnish to the Securities and Exchange Commission (“SEC”), in our press releases, webcasts, conference calls, materials delivered to shareholders and other communications, are “forward-looking statements” within the meaning of the United States federal securities laws. All statements other than historical factual information are forward-looking statements, including without limitation statements regarding: projections of revenue, expenses, profit, profit margins, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, our liquidity position or other financial measures; management’s plans and strategies for future operations, including statements relating to anticipated operating performance, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions, divestitures, strategic opportunities, securities offerings, stock repurchases, dividends and executive compensation; growth, declines and other trends in markets we sell into, including the expected impact of trade and tariff policies; our plans to separate into two independent, publicly traded companies; new or modified laws, regulations and accounting pronouncements; impact of climate-related events or transition activities; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; foreign currency exchange rates and fluctuations in those rates; impact of changes to tax laws; general economic and capital markets conditions, including expected impact of inflation or interest rate changes; impact of geopolitical events and other hostilities; the timing of any of the foregoing; assumptions underlying any of the foregoing; and any other statements that address events or developments that we intend or believe will or may occur in the future. Terminology, such as “believe,” “anticipate,” “should,” “could,” “intend,” “will,” “plan,” “expect,” “estimate,” “project,” “target,” “may,” “possible,” “potential,” “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
•Conditions in the global economy, the markets we serve, and the financial markets and banking systems may adversely affect our business and financial statements.
Current wording
•Conditions in the global economy, the markets we serve, and the financial markets may adversely affect our business and financial results.
Previous wording
•If we cannot adjust our manufacturing capacity, supply chain management or the purchases required for our manufacturing activities to reflect changes in market conditions, customer demand and supply chain or transportation disruptions, our profitability may suffer. In addition, our reliance upon sole or limited sources of supply for certain materials, components, and services could cause production interruptions, delays and inefficiencies.
Current wording
•If we cannot adjust our manufacturing capacity, supply chain management or the purchases required for our manufacturing activities to reflect changes in market conditions, customer demand and supply chain disruptions, our profitability may suffer. In addition, our reliance upon sole or limited sources of supply for certain materials, components, and services could cause production interruptions, delays and inefficiencies.
Previous wording
•Significant disruptions in, or breaches in security of, our information technology systems have adversely affected, and in the future could adversely affect, our business.
Current wording
•Disruptions in, or breaches in security of, our information technology systems have adversely affected, and in the future could adversely affect, our business.
Previous wording
•Defects and unanticipated use or inadequate disclosure with respect to our products (including software) or services could adversely affect our business, reputation, and financial statements.
Current wording
•Defects and unanticipated use or inadequate disclosure with respect to our products (including software) or services could adversely affect our business, reputation, and financial results.
Previous wording
•Adverse changes in our relationships with, or the financial condition, performance, purchasing patterns, or inventory levels of, key distributors and other channel partners could adversely affect our financial statements.
Current wording
•Adverse changes in our relationships with, or the financial condition, performance, purchasing patterns, or inventory levels of, key distributors and other channel partners could adversely affect our financial results.
Previous wording
•Work stoppages, works council campaigns, and other labor disputes could adversely impact our productivity, economic conditions, and results of operations.
Current wording
•Work stoppages, works council campaigns, and other labor disputes could adversely impact our productivity and results of operations.
Previous wording
•We are subject to a variety of litigation and other legal and regulatory proceedings in the course of our business that could adversely affect our financial statements.
Current wording
•We are subject to a variety of litigation and other legal and regulatory proceedings in the course of our business that could adversely affect our financial results.
Previous wording
•We use artificial intelligence in our business, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations.
Current wording
•We may use artificial intelligence in our business and in our products, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations.
Previous wording
•International economic, political, legal, compliance, and business factors could negatively affect our financial statements.
Current wording
•International economic, political, legal, trade policies, compliance, and business factors could negatively affect our financial results.
Previous wording
•Trade relations between China and the United States could have a material adverse effect on our business and financial statements.
Current wording
•Trade relations between the United States and other countries, including imposition of new or increased tariffs and related uncertainty thereof, could have a material adverse effect on our business and financial results.
Previous wording
•Foreign currency exchange rates, including the volatility thereof, may adversely affect our financial statements.
Current wording
•Foreign currency exchange rates, including the volatility thereof, may adversely affect our financial results.
Previous wording
•Any inability to consummate acquisitions at our anticipated rate and at appropriate prices could negatively impact our growth rate and stock price.
Current wording
•Any inability to consummate acquisitions at our anticipated rate and at appropriate prices, and to make appropriate investments that support our long-term strategy, could negatively impact our growth rate and stock price.
Previous wording
•Our acquisition of businesses, joint ventures, and strategic relationships could negatively impact our financial statements.
Current wording
•Our acquisition of businesses, investments, joint ventures, and other strategic relationships could negatively impact our financial results.
Previous wording
•Divestitures or other dispositions could negatively impact our business, and contingent liabilities from businesses that we have sold could adversely affect our financial statements.
Current wording
•Divestitures or other dispositions could negatively impact our business, and contingent liabilities from businesses that we have sold could adversely affect our financial results.
Previous wording
•Our reputation, ability to do business, and financial statements may be impaired by improper conduct by any of our employees, agents, or business partners.
Current wording
•Our reputation, ability to do business, and financial results may be impaired by improper conduct by any of our employees, agents, or business partners.
Previous wording
•Our operations, products, and services expose us to the risk of environmental, health, and safety liabilities, costs, and violations that could adversely affect our reputation and financial statements.
Current wording
•Our operations, products, and services expose us to the risk of environmental, health, and safety liabilities, costs, and violations that could adversely affect our reputation and financial results.
Previous wording
•Our businesses are subject to extensive regulation, including healthcare regulations; existing or future failures to comply with those regulations could adversely affect our financial statements and reputation.
Current wording
•Our businesses are subject to extensive regulation, including healthcare regulations; failure to comply with those regulations could adversely affect our financial results and our business, including our reputation.
Previous wording
•Changes in our effective tax rates or exposure to additional income tax liabilities or assessments could affect our profitability. In addition, audits by tax authorities could result in additional tax payments for prior periods.
Current wording
•Changes in our effective tax rates or exposure to additional tax liabilities or assessments could affect our profitability. In addition, audits by tax authorities could result in additional tax payments for prior periods.
Previous wording
See “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for further discussion regarding reasons that actual results may differ materially from the results, developments, and business decisions contemplated by our forward-looking statements. Forward-looking statements speak only as of the date of the report, document, press release, webcast, call, materials or other communication in which they are made (or such earlier date as may be specified in such statement). We do not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise.
Current wording
See “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and in this Quarterly Report on Form 10-Q for further discussion regarding reasons that actual results may differ materially from the results, developments, and business decisions contemplated by our forward-looking statements. Forward-looking statements speak only as of the date of the report, document, press release, webcast, call, materials or other communication in which they are made (or such earlier date as may be specified in such statement). We do not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise.
Previous wording
In January 2024, we realigned Invetech from the AHS segment to the PT segment (the “Segment Realignment”) based on our strategic decision to divest the equipment design and manufacturing businesses of Invetech, while retaining the motion solution businesses (the “Motion Solution Business”) that are more closely aligned with the PT segment than the AHS segment. Prior period segment amounts below have been recast to conform to the revised segment presentation. In June 2024, we divested and transferred ownership of Invetech, excluding the Motion Solution Business, to its management team (the “Invetech Divestiture”). As a result of the divestiture, in the nine-month period ended September 27, 2024, we recorded a net realized loss of $25.6 million, which is identified as “Loss from divestiture” in the Consolidated Condensed Statements of Earnings. The divested businesses accounted for less than 1.0% of total revenue and less than 1.0% of total assets for the fiscal year ended December 31, 2023. The Invetech Divestiture did not represent a strategic shift with a major effect on the Company’s operations and financial results, and therefore the divested businesses are not reported as discontinued operations.
Current wording
In January 2024, we realigned Invetech from the AHS segment to the PT segment (the “Segment Realignment”) based on our strategic decision to divest the equipment design and manufacturing businesses of Invetech, while retaining the motion solution businesses (the “Motion Solution Business”) that are more closely aligned with the PT segment than the AHS segment. In June 2024, we divested and transferred ownership of Invetech, excluding the Motion Solution Business, to its management team (the “Invetech Divestiture”).
Previous wording
In this report, references to sales from existing businesses (“core revenue”) refer to sales from operations calculated according to generally accepted accounting principles in the United States (“GAAP”) but excluding (1) the impact from acquired and divested businesses and (2) the impact of currency translation. References to sales attributable to acquisitions or acquired businesses refer to GAAP sales from acquired businesses recorded prior to the first anniversary of the acquisition, less the amount of sales attributable to certain businesses or product lines that have been divested or, at the time of reporting, are pending divestiture but are not, and will not be, considered discontinued operations prior to the first anniversary of the divestiture. The portion of sales attributable to the impact of currency translation is calculated as the difference between (a) the period-to-period change in sales (excluding sales impact from acquired businesses) and (b) the period-to-period change in sales (excluding sales impact from acquired businesses) after applying the current period foreign exchange rates to the prior year period. Sales from existing businesses 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.
Current wording
In this report, references to sales from existing businesses (“core revenue”) refer to sales from operations calculated according to generally accepted accounting principles in the United States (“GAAP”) but excluding (1) the impact from acquired and divested businesses and (2) the impact of foreign currency translation. References to sales attributable to acquisitions or acquired businesses refer to GAAP sales from acquired businesses recorded prior to the first anniversary of the acquisition, less the amount of sales attributable to certain businesses or product lines that have been divested, or, at the time of reporting, are pending divestiture, but are not, and will not be, considered discontinued operations prior to the first anniversary of the divestiture. The portion of sales attributable to the impact of currency translation is calculated as the difference between (a) the period-to-period change in sales (excluding sales impact from acquired businesses) and (b) the period-to-period change in sales (excluding sales impact from acquired businesses) after applying the current period foreign exchange rates to the prior year period. Core revenue 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.
Previous wording
On September 4, 2024, we announced our intention to separate into two independent, publicly traded companies (the “Separation”). The Separation will create (i) a technology solutions company, retaining the Fortive name, with a portfolio of the brands currently operating under Fortive’s IOS and AHS business segments, focused on resilient, high-quality recurring growth by delivering productivity, safety, and reliability value to customers, and (ii) a global industrial company (“NewCo”) consisting of our brands currently operating under the PT segment with a focus on powerful secular growth trends by leveraging mission critical technologies in test and measurement, specialty sensors, and aerospace and defense subsystems. The Separation is expected to be structured in a tax-free manner for Fortive shareholders. The Company is targeting to complete the Separation by the fourth quarter of 2025, subject to the satisfaction of certain conditions, including, among others, final approval of Fortive’s Board of Directors, satisfactory completion of financing, receipt of a favorable opinion of legal counsel and/or a private letter ruling from the U.S. Internal Revenue Service with respect to the tax treatment of the transaction for U.S. federal income tax purposes, the effectiveness of a Form 10 registration statement filed with the SEC, and other regulatory approvals. All assets, liabilities, revenues and expenses of NewCo are included in the consolidated results of the Company in the accompanying consolidated condensed financial statements.
Current wording
On September 4, 2024, we announced our intention to separate our PT segment business into an independent publicly-traded company (the “Separation”), which has been incorporated under the name Ralliant Corporation. The Separation will create (i) a technology solutions company, retaining the Fortive name, with a portfolio of the brands currently operating under Fortive’s IOS and AHS business segments, focused on resilient, high-quality recurring growth by delivering productivity and safety to customers, and (ii) a global technology company consisting of our brands currently operating under the PT segment with a focus on precision instruments and highly engineered products essential for breakthrough innovation and aligned to powerful secular trends. The Separation is intended to qualify as a tax-free spin-off to Fortive shareholders for U.S. federal income tax purposes. The Company is currently targeting completion of the Separation by the end of the second quarter of 2025, subject to the satisfaction of certain conditions, including, among others, final approval of Fortive’s Board of Directors, or a delegated committee thereof, satisfactory completion of financing, receipt of a favorable opinion of legal counsel and/or a private letter ruling from the U.S. Internal Revenue Service with respect to the tax treatment of the transaction for U.S. federal income tax purposes, the effectiveness of a Form 10 registration statement filed with the SEC, and other regulatory approvals. All assets, liabilities, revenues and expenses of Ralliant are included in the consolidated results of the Company in the accompanying consolidated condensed financial statements. Fortive anticipates that Ralliant’s Form 10 registration statement will be filed publicly with the SEC in early May 2025.
Previous wording
On January 3, 2024, we acquired EA Elektro-Automatik Holding GmbH (“EA”), a leading supplier of high-power electronic test solutions for energy storage, mobility, hydrogen, and renewable energy applications. The acquisition of EA will bolster our innovative portfolio of products and services for engineers with complementary test and measurement solutions enabling the global energy transition. The total consideration paid was approximately $1.72 billion, net of acquired cash. We recorded approximately $1.17 billion of goodwill within the PT segment related to the EA acquisition, which is not tax deductible. We also anticipate future tax benefits as a result of the transaction.
Current wording
On January 3, 2024, we acquired EA Elektro-Automatik Holding GmbH (“EA”), a leading supplier of high-power electronic test solutions for energy storage, mobility, hydrogen, and renewable energy applications. The acquisition of EA will bolster our innovative portfolio of products and services for engineers with complementary test and measurement solutions enabling the global energy transition. The total consideration paid was approximately $1.72 billion, net of acquired cash. We recorded approximately $1.18 billion of goodwill within the PT segment related to the EA acquisition, which is not tax deductible. We also anticipate future tax benefits as a result of the transaction.
Previous wording
Geographically, core revenue in developed markets decreased by mid-single-digits in the year-to-date period, driven by a low single-digit decline in North America, a high single-digit decline in Western Europe, and a low double-digit decline in Japan. Core revenue in high growth markets decreased by low single-digits in the year-to-date period, driven by a low double-digit growth in Latin America, offset by a mid-single-digit decline in Asia, where China decreased by low double-digits.
Current wording
Geographically, in the first quarter, core revenue in developed markets decreased low single-digits, driven by low single-digit growth in North America, offset by a high-teens decline in Western Europe. Core revenue in high growth markets decreased low single-digits in the first quarter, where we had high single-digit growth in Latin America, offset by a high single-digit decline in China.
Previous wording
We expect foreign exchange rates to remain volatile throughout the year, which could continue to impact our financial results. Additionally, our financial outlook is subject to various assumptions and risks, including but not limited to, ongoing geopolitical developments and events, including the U.S. presidential and other elections, macroeconomic conditions in the United States, China and other critical regions, impact from our pending separation into two independent publicly traded companies, and the the impact of inflationary dynamics on our expenses or our ability to realize price increases in our sales, interest rates, market conditions in key product segments, and elective surgery rates. We will continue to deploy FBS to actively manage these challenges and utilize pricing and other countermeasures to offset the aforementioned dynamics. We continue to monitor these conditions which may continue to impact our business, as well as potential adverse global economic trends and sentiments, monetary and fiscal policies, international trade and relations between the U.S., China and other nations, and investment and taxation policy initiatives being considered in the United States and by the Organization for Economic Co-operation and Development (“OECD”), including the potential impact of the Pillar Two initiative. In addition, we expect to execute a discrete restructuring plan related to the Separation beginning in the fourth quarter of 2024.
Current wording
We also expect foreign exchange rates to remain volatile throughout the year, which could continue to impact our financial results. Additionally, our financial outlook is subject to various assumptions and risks, including but not limited to, ongoing geopolitical developments and events, global uncertainties related to governmental policies toward international trade, monetary and fiscal policies, including the current uncertainty about the future relationship between the United States and other regions with respect to tariffs as mentioned above, trade policies, treaties, government regulations and sanctions, increased economic nationalism, macroeconomic conditions in the United States, China, and other critical regions, impact from our pending separation into two independent publicly traded companies, and the impact of inflationary dynamics on our expenses or our ability to realize price increases and/or competitiveness in our sales, interest rates, market conditions in key product segments, and elective surgery rates.
Previous wording
The following table summarizes total aggregate year-over-year sales growth and the components thereof for the third quarter as compared to the comparable period of 2023:
Current wording
The following table summarizes total aggregate year-over-year sales growth and the components thereof for the first quarter as compared to the comparable period of 2024:
Previous wording
Operating profit margin was 19.3% for the third quarter, representing a decrease of 20 basis points as compared to 19.5% in the comparable period of 2023. Year-over-year changes in operating profit margin were comprised of the following:
Current wording
Operating profit margin was 15.8% for the first quarter, representing a decrease of 400 basis points as compared to 19.8% in the comparable period of 2024. Year-over-year changes in operating profit margin were comprised of the following:
Previous wording
•The year-over-year effect of the gain on sale of land and certain office buildings in the PT segment in the first quarter of 2024 — favorable 140 basis points
Current wording
•The year-over-year effect of the gain on sale of land and certain office buildings in the PT segment in the first quarter of 2024 — unfavorable 415 basis points
Previous wording
•Year-over-year increase in price from existing businesses, volume growth in IOS and AHS, and gains from productivity measures were partially offset by a volume decline in certain businesses and end markets within our PT segment, higher employee compensation and investment in growth initiatives. Additionally, there were unfavorable foreign exchange rates — favorable 80 basis points
Current wording
•Year-over-year increase in price, volume gains in IOS and AHS, and gains from productivity measures through our FBS initiatives, offset by volume declines in certain businesses and end markets within our PT segment, higher employee compensation and the impact from unfavorable foreign currency exchange rates — unfavorable 20 basis points
Previous wording
•The year-over-year net effect of acquisition and divestiture-related transaction costs incurred in the third quarter of 2024 — unfavorable 10 basis points
Current wording
•The year-over-year effect of amortization from existing businesses — unfavorable 10 basis points
Previous wording
Geographically, core revenue in developed markets increased in the third quarter by low single-digits, driven by a low single-digit growth in North America, partially offset by a low single-digit decline in Western Europe. Core revenue in high growth markets increased in the third quarter by low single-digits, driven by high-teens growth in Latin America, partially offset by a a mid-single-digit decline in China.
Current wording
Geographically, core revenue in developed markets increased in the first quarter by mid-single-digits, driven by high single-digit growth in North America, partially offset by a high single-digit decline in Western Europe. Core revenue in high growth markets decreased in the first quarter by low single-digits, driven primarily by a low double-digit decline in China, offset by high single-digit growth in India.
Previous wording
Year-over-year price increases in our IOS segment contributed 2.6% to sales growth during both the third quarter and year-to-date period, and is reflected as a component of the change in core revenue.
Current wording
Year-over-year price increases in our IOS segment contributed 1.7% to sales growth during the first quarter and is reflected as a component of the change in core revenue.
Previous wording
•The year-over-year effect of costs relating to the discrete restructuring plan initiated and completed in 2023 — favorable 20 basis points
Current wording
•The year-over-year effect of amortization from existing businesses — favorable 20 basis points
Previous wording
Geographically, core revenue in developed markets decreased by mid-single-digits in the third quarter, driven by a mid-single-digit decline in North America and Western Europe. Core revenue in high growth markets increased by low single-digits in the third quarter, driven by low-twenties growth in Latin America, partially offset by a low single-digit decline in Asia.
Current wording
Geographically, core revenue in developed markets decreased by low double-digits in the first quarter, driven by a mid-thirties decline in Western Europe and a mid-single-digit decline in North America. Core revenue in high growth markets decreased by low single-digits in the first quarter, driven by a high single-digit decline in China, partially offset by low thirties growth in Latin America.
Previous wording
Year-over-year price increases in our PT segment contributed 2.9% and 2.2% to sales growth for the third quarter and year-to-date period, respectively, and is reflected as a component of the change in core revenue.
Current wording
Year-over-year price increases in our PT segment contributed 1.8% to sales results for the first quarter and is reflected as a component of the change in core revenue.
Previous wording
Operating profit margin decreased 340 basis points for the third quarter as compared to the comparable period of 2023. Year-over-year changes in operating profit margin were comprised of the following:
Current wording
Operating profit margin decreased 930 basis points for the first quarter as compared to the comparable period of 2024. Year-over-year changes in operating profit margin were comprised of the following:
Previous wording
•The year-over-year effect of the gain on sale of land and certain office buildings in the first quarter of 2024 — favorable 380 basis points
Current wording
•The year-over-year effect of the gain on sale of land and certain office buildings in the PT segment in the first quarter of 2024 — unfavorable 1,130 basis points
Previous wording
Geographically, core revenue in developed markets increased by low double-digits in the third quarter, driven by a low double-digit growth in North America and a high single-digit growth in Western Europe. In high growth markets, core revenue increased by mid-single-digits in the third quarter, driven by mid-teens growth in Latin America.
Current wording
Geographically, core revenue in developed markets increased by mid-single-digits in the first quarter, driven by mid-single-digit growth in North America and a low single-digit decline in Western Europe. In high growth markets, core revenue decreased slightly in the first quarter, driven by mid-single-digit growth in Latin America, partially offset by a mid-single-digit decline in China.
Previous wording
Year-over-year price increases in our AHS segment contributed 3.6% and 3.3% to sales growth during the third quarter and year-to-date period, respectively, and is reflected as a component of the change in core revenue.
Current wording
Year-over-year price increases in our AHS segment contributed 2.3% to sales growth during the first quarter and is reflected as a component of the change in core revenue.
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Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
We continue to deploy the Fortive Business System (“FBS”), including tools and processes to leverage existing sourcing strategies and optimize production and logistics to actively manage these challenges and utilize pricing, cost and productivity actions and other countermeasures designed to offset the aforementioned dynamics. We continue to monitor these conditions and potential adverse global economic trends and sentiments, monetary and fiscal policies, international trade policies and relations between the U.S., China and other nations, and investment and taxation policy initiatives being considered in the United States and by the Organization for Economic Co-operation and Development (“OECD”), including incremental impacts of the Pillar Two initiative.
Current report — wording carried from elsewhere
•The year-over-year effect of amortization from existing businesses — favorable 20 basis points
Current report — wording carried from elsewhere
•We repaid $427 million in net commercial paper borrowings.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Pending Separation Into Two Independent, Publicly Traded Companies
Previous report — wording carried elsewhere
Comprehensive income increased by $56 million during the year-to-date period as compared to the comparable period in 2023 due primarily to favorable changes in foreign currency translation adjustments of $32 million and an increase in net income.
Previous report — wording carried elsewhere
•On August 24, 2023, we repaid $250 million in outstanding principal of the Delayed-Draw Term Loan due 2023.
Previous report — wording carried elsewhere
•We repurchased 3 million shares of our common stock for approximately $208 million under our share repurchase program.