Fortive Corp

Previous wording

Fortive Corporation (“Fortive,” the “Company,” “we,” “us,” or “our”) is a provider of essential technologies for connected workflow solutions across a range of attractive end-markets. Our strategic segments - Intelligent Operating Solutions (“IOS”), Precision Technologies (“PT”), and Advanced Healthcare Solutions (“AHS”) - include well-known brands with leading positions in their markets. Our businesses design, develop, manufacture, and service professional and engineered products, software, and services, building upon leading brand names, innovative technologies, and significant market positions. We are headquartered in Everett, Washington and have a workforce of more than 18,000 research and development, manufacturing, sales, distribution, service, and administrative professionals in more than 50 countries around the world.

Current wording

Fortive Corporation (“Fortive,” the “Company,” “we,” “us,” or “our”) innovates essential technologies to keep the world safe and productive. Our strategic segments - Intelligent Operating Solutions (“IOS”) and Advanced Healthcare Solutions (“AHS”) - include iconic inventor brands with leading positions in their markets. Our businesses design, develop, manufacture, and market products, software, and services, building upon leading brand names, innovative technologies, and strong market positions. Our research and development, manufacturing, sales, distribution, service, and administrative facilities are located in approximately 50 countries around the world.

Previous wording

On June 28, 2025 (the “Distribution Date”), the Company completed the separation (the “Separation” or the “PT Separation”) of its former Precision Technologies segment by distributing to Fortive shareholders on a pro rata basis all of the issued and outstanding common stock of Ralliant Corporation (“Ralliant”), the entity incorporated to hold the PT businesses. Beginning with the third quarter of 2025, the Company will classify Ralliant as a discontinued operation in its financial statements, as a result of the Separation. Refer to Note 2 for additional information.

Current wording

On June 28, 2025 (the “Distribution Date”), the Company completed the separation (the “Separation” or the “PT Separation”) of its former Precision Technologies segment by distributing to Fortive shareholders on a pro rata basis all of the issued and outstanding common stock of Ralliant Corporation (“Ralliant”), the entity incorporated to hold the PT businesses. The accounting requirements for reporting Ralliant as a discontinued operation were met when the Separation was completed. Accordingly, the accompanying consolidated condensed financial statements for all periods presented reflect this business as a discontinued operation. Unless otherwise indicated, all references in this report refer to continuing operations. Refer to Note 2 of the consolidated condensed financial statements for additional information.

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 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, international trade policies, customer demand, prolonged government shutdown, 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

•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.

Current wording

•We use artificial intelligence in our business and in our products, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations.

Previous 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.

Current wording

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

Previous 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.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Fortive is a multinational business with global operations with approximately 46% of our sales derived from customers outside the United States in 2024. As a company with global operations, our businesses are affected by worldwide, regional, and industry-specific economic, regulatory, and political factors. Our geographic and industry diversity, as well as the range of products, software, and services we offer, typically help limit the impact of any one industry or the economy of any single country (except for the United States) on our operating results. Given the broad range of products manufactured, software and services provided, and geographies served, we do not use any indices other than general economic trends to predict the overall outlook for the Company. Our individual businesses monitor key competitors and customers, including their sales, to the extent possible, to gauge relative performance and the outlook for the future.

Current wording

Fortive is a multinational business with global operations with approximately 44% of our sales derived from customers outside the United States in 2024. As a company with global operations, our businesses are affected by worldwide, regional, and industry-specific economic, trade policies, fiscal policies, regulatory, and political factors. Our geographic and industry diversity, as well as the range of products, software, and services we offer, typically help limit the impact of any one industry or the economy of any single country, except for the United States, on our operating results. Given the broad range of products manufactured, software and services provided, and geographies served, we do not use any indices other than general economic trends to predict the overall outlook for the Company. Our individual businesses monitor key competitors and customers, including their sales, to the extent possible, to gauge relative performance and the outlook for the future.

Previous wording

As a result of our geographic and industry diversity, we face a variety of opportunities and challenges, including technological development in most of the markets we serve, the expansion and evolution of opportunities in growing markets, trends and costs associated with a global labor force, and consolidation of our competitors. We operate in a highly competitive business environment in most markets, and our long-term growth and profitability will depend, in particular, on our ability to expand our business across geographies and market segments, identify, consummate, and integrate appropriate acquisitions, develop innovative and differentiated new products, services, and software, expand and improve the effectiveness of our sales force, continue to reduce costs and improve operating efficiency and quality, attract relevant talent and retain, grow, and empower our talented workforce, and effectively address the demands of an increasingly regulated environment. We are making significant investments, organically and through acquisitions, to address technological change in the markets we serve and to improve our manufacturing, research and development, and customer-facing resources in order to be responsive to our customers throughout the world.

Current wording

As a result of our geographic and industry diversity, we face a variety of opportunities and challenges, including technological development in most of the markets we serve, the expansion and evolution of opportunities in growing markets, trends and costs associated with a global labor force, trade policies, and consolidation of our competitors. We operate in a highly competitive business environment in most markets, and our long-term growth and profitability will depend, in particular, on our ability to expand our business across geographies and market segments, identify, consummate, and integrate appropriate acquisitions, develop innovative and differentiated new products, services, and software, expand and improve the effectiveness of our sales force, continue to reduce costs and improve operating efficiency and quality, attract relevant talent and retain, grow, and empower our talented workforce, and effectively address the demands of an increasingly regulated environment. We are making significant investments, organically and through acquisitions, to address technological change in the markets we serve and to improve our manufacturing, research and development, and customer-facing resources in order to be responsive to our customers throughout the world.

Previous wording

The IOS segment provides advanced instrumentation, software and services to tens of thousands of customers enabling their mission-critical workflows. The PT segment helps solve tough technical challenges to speed breakthroughs in a wide range of applications, from food and beverage production and manufacturing to next-generation electric vehicles and clean energy, as our customers seek new test solutions to enable the electrification and connectivity of everything. The AHS segment supplies critical workflow solutions enabling healthcare providers to deliver exceptional patient care more efficiently. Refer to Note 11 for further description of each segment.

Current wording

The IOS segment provides advanced instrumentation, software and services to tens of thousands of customers enabling their mission-critical workflows. The AHS segment supplies critical workflow solutions enabling healthcare providers to deliver exceptional patient care more efficiently. Refer to Note 10 of the consolidated condensed financial statements for further description of each segment.

Previous wording

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. Currently, certain of these tariffs have been temporarily paused until August of 2025. There may be additional changes to tariff levels, trade restrictions, and other aspects of global trade policy in the U.S. and other countries due to global trade negotiations and other factors. 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 the impact of tariffs 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 the Quarterly Report on Form 10-Q for the fiscal quarter ended March 28, 2025.

Current wording

The development of tariffs and trade relations remains uncertain. While most of the reciprocal tariffs have been implemented in August of 2025, certain of these tariffs have been temporarily postponed until November of 2025, with periodic escalation. For additional discussion of risks related to tariffs and trade relations, please refer to the risk factor, “Trade relations between the United States and other countries, including the imposition of new or increased tariffs and related uncertainty thereof, could have a material adverse effect on our business and financial results” in Part II, Item 1A. Risk Factors of the Quarterly Report on Form 10-Q for the fiscal quarter ended March 28, 2025.

Previous wording

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. In addition, we are continuing to assess the potential impact, including on our tax liabilities and our strategies, of the OBBBA. Refer to Income Taxes below for further detail on the OECD initiatives and the OBBBA.

Current wording

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

Previous wording

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

Current 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 2024:

Previous wording

Geographically, in the second quarter, the core revenue decline was driven primarily by market dynamics in Western Europe largely in the PT segment. North America and China also experienced softness in the quarter. Geographically, in the year-to-date period, the core revenue decline was again driven primarily by the PT segment in Western Europe. Further, declines in China were partially offset by growth in North America and Latin America. For further detail, refer to the Intelligent Operating Solutions, Precision Technologies, and Advanced Healthcare Solutions sections below.

Current wording

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

Previous wording

•The year-over-year increase in price and gains from productivity measures through our FBS initiatives were offset by overall volume declines, higher employee compensation, and unfavorable impacts from tariffs net of countermeasures — unfavorable 170 basis points

Current wording

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

Previous wording

•The year-over year effect of all other items was an unfavorable 60 basis points comprised of -85 basis points in discrete restructuring charges, +15 basis points from acquisition and divestiture-related costs, and +10 basis points from amortization of existing businesses

Current wording

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

Previous wording

The sales results in both the second quarter and year-to-date period were driven by favorable pricing of 2.3% and 2.0%, respectively, including countermeasures to mitigate unfavorable tariff impacts, and volume increases in gas detection offerings. These benefits were offset by modest declines in professional instrumentation. Additionally, foreign currency exchange rates impacted sales results as indicated above.

Current wording

Sales growth in the third quarter and year-to-date period were driven by favorable pricing of 2.4%, and 2.1%, respectively, including countermeasures to mitigate unfavorable tariff impacts. Volume declined slightly in the third quarter, and declined modestly in the year-to-date period, driven by declines in professional instrumentation, partially offset by increases in facilities and asset lifecycle software and gas detection.

Previous wording

•The year-over-year increase in price and efficiency gains achieved from productivity measures through our FBS initiatives were offset by a net decrease in sales volume in the segment, higher employee compensation, investments in growth initiatives, and the unfavorable impact from tariffs net of countermeasures — unfavorable 30 basis points

Current wording

•The year-over-year increase in price and gains achieved from productivity measures through our FBS initiatives partially offset by volume decline, higher employee compensation, and unfavorable impact from tariffs net of countermeasures — favorable 110 basis points and 90 basis points, in the third quarter and year-to-date period, respectively

Previous wording

•Year-over-year increases due to favorable pricing, gains from productivity measures through our FBS initiatives, offset by a net volume decline in the segment, higher employee compensation, and investments in growth initiatives — unfavorable 10 basis points

Current wording

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

Previous wording

•The year-over-year effect of amortization from existing businesses — favorable 10 basis points

Current wording

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

Previous wording

The year-over-year decrease in gross profit during both the second quarter and year-to-date period was due to an overall volume decline, higher employee compensation, discrete restructuring charges, and the unfavorable impact from tariffs net of countermeasures. These impacts were partially offset by favorable pricing, gains from productivity measures and FBS initiatives. Additionally, the effect of foreign currency exchanges rates was favorable in the second quarter but unfavorable in the year-to-date period.

Current wording

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

Previous wording

The year-over-year increase in SG&A during both the second quarter and year-to-date period were primarily due to costs incurred in 2025 related to the Separation, higher employee compensation, investment for growth initiatives, and discrete restructuring charges, all partially offset by benefits from productivity measures through our FBS initiatives. Additionally, in the year-to-date period, there were lower costs incurred related to acquisitions when compared to last year.

Current wording

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

Previous wording

R&D, consisting principally of internal and contract engineering personnel costs, increased during the second quarter and the year-to-date period as compared to the comparable periods of 2024 due to ongoing investments in innovation and higher compensation.

Current wording

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

Previous wording

Net interest expense for the second quarter and year-to-date period was $32.1 million and $64.1 million as compared to $38.7 million and $82.7 million in the comparable periods in 2024. The year-over-year decrease in net interest expense was primarily due to overall debt mix consisting of lower fixed rate debt instruments, and lower interest rate on floating rate debt instruments. For discussion of our outstanding indebtedness, refer to Note 5 to the consolidated condensed financial statements.

Current wording

Net interest expense for the third quarter and year-to-date period was $25.4 million and $89.5 million as compared to $37.1 million and $119.8 million in the comparable periods in 2024. The year-over-year decrease in net interest expense was primarily due to a decrease in outstanding debt and lower interest rates on floating rate debt instruments. For discussion of our outstanding indebtedness, refer to Note 4 to the consolidated condensed financial statements.

Previous wording

Other non-operating income for the second quarter and year-to-date period was $1.9 million and $1.7 million, as compared to expense of $8.8 million and $33.0 million in the comparable periods in 2024. The year-over-year change in both the second quarter and year-to-date was primarily due to losses from our equity investments recognized in the comparable prior year periods. Additionally there was a charitable contribution made in the first quarter of 2024. For further discussion of the charitable contribution, refer to Note 1 to the consolidated condensed financial statements.

Current wording

Other non-operating income for the third quarter and year-to-date period was $0.8 million and $3.1 million, as compared to expense of $25.8 million and $58.2 million in the comparable periods in 2024. The year-over-year change in both the third quarter and year-to-date was primarily due to losses from our equity investments recognized in the comparable prior year periods. Additionally, in the first quarter of 2024, there was a charitable contribution made to the Fortive Foundation, a related party, without any donor imposed conditions or restrictions.

Previous wording

Our effective tax rate for the three and six-month period ended June 27, 2025 was 13.2% and 14.0%, respectively, as compared to 14.7% and 13.0%, respectively, for the three and six-month period ended June 28, 2024. The decrease in the effective tax rate for the three-month period ended June 27, 2025 as compared to the three-month period ended June 28, 2024 was primarily related to a change in mix of earnings in the comparable prior year period. The increase in the effective tax rate for the six-month period ended June 27, 2025 as compared to the six-month period ended June 28, 2024 was primarily related to a discrete tax credit in the comparable prior year period from cash repatriation.

Current wording

Our effective tax (benefit) rate for the three and nine months ended September 26, 2025 was 13.3% and 16.4%, respectively, as compared to (2.2)% and 11.3%, respectively, for the three and nine months ended September 27, 2024. The increase in the effective tax rate for the three months ended September 26, 2025 as compared to the three months ended September 27, 2024 was primarily related to changes in applicable statutory tax rates, resulting in a discrete benefit in the comparable prior year period. The increase in the effective tax rate for the nine months ended September 26, 2025 as compared to the nine months ended September 27, 2024 was primarily related to changes in applicable statutory tax rates.

Previous wording

Our effective tax rate for the three and six-month period ended June 27, 2025 , differs from the U.S. federal statutory rate of 21% due primarily to the impact of credits and deductions provided by law, including those associated with state income taxes, and changes in our uncertain tax position reserves.

Current wording

Our effective tax rate for the three and nine months ended September 26, 2025, differs from the U.S. federal statutory rate of 21% due primarily to the impact of credits and deductions provided by law, including those associated with state income taxes, and changes in our uncertain tax position reserves.

Previous wording

The One Big Beautiful Bill Act (“OBBBA”) enacted in the U.S on July 4, 2025 resulted in significant income tax provisions with effective dates spanning from 2025 through 2027. Changes from OBBBA include modifications to allow for immediate expensing of certain business investments and provides certain permanent extensions and modifications to the U.S. international tax framework. We are currently assessing the impact of OBBBA on our consolidated financial statements.

Current wording

H.R.1, also known as the One Big Beautiful Bill Act, enacted in the U.S on July 4, 2025 resulted in significant income tax provisions with effective dates spanning from 2025 through 2027. Changes from H.R.1 include modifications to allow for immediate expensing of certain business investments and provides certain permanent extensions and modifications to the U.S. international tax framework. There is no material impact of H.R.1 to our continuing operations financial statements.

Previous wording

Comprehensive income increased by $101 million during the second quarter as compared to the comparable period in 2024 due to favorable changes in foreign currency translation of $129 million, partially offset by a $29 million decrease in net income.

Current wording

Comprehensive income decreased by $267 million during the third quarter as compared to the comparable period in 2024 due to unfavorable changes in foreign currency translation of $100 million, partially offset by a $6 million increase in net earnings from continuing operations. Additionally, there was a $172 million decrease in net earnings from discontinued operations.

Previous wording

Comprehensive income increased by $212 million during the year-to-date period as compared to the comparable period in 2024 due primarily to favorable changes in foreign currency translation adjustments of $276 million, partially offset by a $64 million decrease in net income.

Current wording

Comprehensive income decreased by $55 million during the year-to-date period as compared to the comparable period in 2024 due primarily to favorable changes in foreign currency translation adjustments of $176 million and a $52 million increase in net earnings from continuing operations. Additionally, there was a $283 million decrease in net earnings from discontinued operations.

Previous wording

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

Current wording

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

Previous wording

As of June 27, 2025, we held approximately $1,833 million of cash and equivalents, including the proceeds from the Ralliant Dividend, that were invested in highly liquid investment-grade instruments with a maturity of 90 days or less, of which approximately 32% was held outside of the United States.

Current wording

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

Previous wording

Credit support for the Commercial Paper Programs is provided by a five-year $2.0 billion senior unsecured revolving credit facility that expires on October 18, 2027 (the “Revolving Credit Facility”) which, to the extent not otherwise providing credit support for the commercial paper programs, can also be used for working capital and other general corporate purposes. As of June 27, 2025, no borrowings were outstanding under the Revolving Credit Facility.

Current wording

We have generally satisfied any short-term liquidity needs that are not met through operating cash flows and available cash through issuances of commercial paper under our U.S. dollar-denominated commercial paper program. Credit support for this program is provided by a five-year $2.0 billion senior unsecured revolving credit facility that expires on October 18, 2027 (the “Revolving Credit Facility”) which, to the extent not otherwise providing credit support for the commercial paper programs, can also be used for working capital and other general corporate purposes. As of September 26, 2025, no borrowings were outstanding under the Revolving Credit Facility. We also may from time to time access the capital markets, including to take advantage of favorable interest rate environments or other market conditions.

Previous wording

We continue to monitor the financial markets, the stability of U.S. and international banks and general global economic conditions. In addition, our access to the capital markets and other financing sources is impacted by any change in our credit rating. If changes in financial markets or other areas of the economy or downgrade in our credit rating adversely affect our access to the capital markets and other financing sources, we would expect to rely on a combination of available cash and existing available capacity under our credit facilities to provide short-term funding.

Current wording

We continue to monitor the financial markets, the stability of U.S. and international banks and general global economic conditions. In addition, our access to the capital markets and other financing sources is impacted by any change in our credit rating. If changes in financial markets or other areas of the economy or downgrade in our credit rating adversely affect our access to the capital markets and other financing sources, we would expect to rely on a combination of available cash and existing available capacity under our credit facilities to provide short-term funding. As of September 26, 2025, we expect to have sufficient liquidity to satisfy our cash needs for the foreseeable future.

Previous wording

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

Current wording

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

Previous wording

Operating cash flows were $553 million during the year-to-date period, representing a decrease of $13 million when compared to the comparable period of 2024. The year-over-year change in operating cash flows was primarily attributable to the following factors:

Current wording

Operating cash flows from continuing operations were $692 million during the year-to-date period, representing a decrease of $9 million when compared to the comparable period of 2024. The year-over-year change in operating cash flows was primarily attributable to the following factors:

Previous wording

•Year-over-year decrease of $25 million in Operating cash flows from net earnings, net of non-cash items (Amortization, Depreciation, Stock-based compensation, Gain on sale of property, and Loss from divestiture).

Current wording

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

Previous wording

•The aggregate changes in accounts receivable, inventories, and trade accounts payable generated $32 million of cash during the year-to-date period as compared to generating $43 million in the comparable period of 2024. The amount of cash flow generated from or used by the aggregate of trade accounts receivable, inventories, and trade accounts payable depends upon how effectively we manage the cash conversion cycle, which generally represents the number of days that elapse from the day we pay for the purchase of raw materials and components to the collection of cash from our customers, and can be significantly impacted by the timing of collections and payments in a period.

Current wording

•The aggregate changes in accounts receivable, inventories, and trade accounts payable generated $12 million of cash during the year-to-date period as compared to generating $48 million in the comparable period of 2024. The amount of cash flow generated from or used by the aggregate of trade accounts receivable, inventories, and trade accounts payable depends upon how effectively we manage the cash conversion cycle, which generally represents the number of days that elapse from the day we pay for the purchase of raw materials and components to the collection of cash from our customers, and can be significantly impacted by the timing of collections and payments in a period.

Previous wording

•The aggregate changes in prepaid expenses and other assets, and accrued expenses and other liabilities used $145 million of cash in the year-to-date period as compared to using $169 million of cash in the comparable period of 2024. The year-over-year changes were driven by timing differences related to payments of employee compensation, income taxes, interest.

Current wording

•The aggregate changes in prepaid expenses and other assets, and accrued expenses and other liabilities used $85 million of cash in the year-to-date period as compared to using $66 million of cash in the comparable period of 2024. The year-over-year changes were driven by timing differences related to contract assets, contract liabilities, and payments of income taxes and interest.

Previous wording

Cash flows from financing activities consist primarily of cash flows associated with the issuance and repayment of debt and commercial paper, payments of cash dividends to shareholders and share repurchases.

Current wording

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