Fortive Corp

NOTE 1. BUSINESS OVERVIEW

Fortive Corporation (“Fortive,” “the Company,” “we,” “us,” or “our”) innovates essential technologies to keep our 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.

We prepared the unaudited consolidated condensed financial statements included herein in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) applicable for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations; however, we believe the disclosures are adequate to make the information presented not misleading. Reclassifications of certain prior year amounts in the Consolidated Statements of Cash Flows have been made to conform to current year presentation. The unaudited consolidated condensed financial statements included herein should be read in conjunction with the audited annual consolidated financial statements as of and for the year ended December 31, 2025 and the footnotes (“Notes”) thereto included within our 2025 Annual Report on Form 10-K. Certain of our operations have been presented as discontinued operations. We present businesses whose disposal represents a strategic shift that has, or will have, a major effect on our operations and financial results as discontinued operations when the components meet the criteria for held for sale, are sold, or spun-off.

In our opinion, the accompanying financial statements contain all adjustments, which consist of only normal, recurring accruals necessary to fairly present our financial position, results of operations, comprehensive income, stockholders’ equity, and cash flows for the periods presented. The results of operations for the three and nine months ended October 2, 2026, are not necessarily indicative of the results for the full year.

Segment Presentation

We operate and report our results intwo segments, Intelligent Operating Solutions and Advanced Healthcare Solutions, each of which is further described below.

The IOS segment provides advanced instrumentation, software and services to tens of thousands of customers enabling their mission-critical workflows. These offerings include professional instruments used in applications including maintenance, repair, measurement and condition monitoring, facility and asset lifecycle software applications, connected worker safety and compliance solutions across a range of vertical end markets, including manufacturing, process industries, healthcare, utilities and power, communications and electronics, among others. Typical users of these safety, productivity and sustainability solutions include electrical engineers, electricians, electronic technicians, EHS professionals, network technicians, facility managers, first-responders, and maintenance professionals.

The AHS segment supplies critical workflow solutions enabling healthcare providers to deliver exceptional patient care more efficiently. Our offerings include instrument sterilization solutions, instrument tracking, biomedical test tools, radiation detection and safety monitoring, and end-to-end clinical productivity software and solutions. Our healthcare offerings help ensure critical safety standards are met, instruments and operating rooms are working at peak performance, and complex procedures are followed accurately in these mission-critical healthcare environments.

Acquisitions

In June 2026, we made a bolt-on acquisition in our AHS segment that is intended to accelerate our strategy and strengthen our product portfolio. We paid aggregate cash consideration of €51 million (approximately $58 million), net of acquired cash, to acquire a majority ownership interest. In early 2029, we will acquire the remaining ownership interest for contingent consideration of up to €20 million. We recorded approximately $52 million of goodwill, which is not tax deductible, and $20 million of intangible assets consisting of customer relationships, technology, and trade names. All other acquired assets and assumed liabilities were immaterial. The revenues and operating results in the three and nine-month periods ended October 2, 2026 were also immaterial.

The purchase price allocation is preliminary and is based on estimates and assumptions used in determining the fair value of the net assets acquired. Accordingly, the allocation may be adjusted as additional information becomes available regarding the fair value of assets acquired and liabilities assumed. Adjustments are recorded as soon as practicable within the measurement period, but in no event later than one year from the acquisition date. During the three and nine-month periods ended October 2, 2026, adjustments made to the purchase price allocation were immaterial.

Accumulated Other Comprehensive Loss

We designate a portion of the 3.7% Euro-denominated senior unsecured notes due 2029 as a net investment hedge on our investment in applicable foreign operations. As such, the after-tax foreign currency transaction gains and losses on the debt were deferred in the foreign currency translation component of Accumulated Other Comprehensive Income (Loss) (“AOCI”) as an offset to the foreign currency translation adjustments on our investments in foreign subsidiaries. Any amounts deferred in AOCI will remain until the hedged investment is sold or substantially liquidated.

We recognized after-tax foreign currency transaction gains of $9.8 million and $25.7 million during the three and nine-month periods ended October 2, 2026, respectively, and gains of $0.7 million and losses of $159.6 million during the three and nine-month periods ended September 26, 2025, respectively, on the debt that was deferred in the foreign currency translation component of AOCI as an offset to the foreign currency translation adjustments on our investments in foreign subsidiaries. We recorded no ineffectiveness from our net investment hedges during the three and nine-month periods ended October 2, 2026 and September 26, 2025. During the three and nine-month periods ended October 2, 2026 and September 26, 2025, the foreign currency transaction impacts associated with Euro-denominated notes not designated as a net investment hedge were immaterial.

In the nine months ended October 2, 2026, we recognized a net gain of $4.6 million on a treasury lock contract designated as a cash flow hedge that is now settled. The gain is being amortized from AOCI to interest expense in the Consolidated Condensed Statements of Earnings over the remaining tenor of the related 5.25% senior unsecured notes due 2036.

The changes in AOCI by component are summarized below ($ in millions):

Restructuring

In the fourth quarter of 2024, we initiated a discrete restructuring plan that is expected to be completed by the end of 2026. The nature of the plan is related to the Separation and consisted primarily of targeted workforce reductions to realign cost structures. During the three months ended October 2, 2026 and September 26, 2025, we incurred charges of $1.5 million and $2.1 million, respectively. During the nine months ended October 2, 2026 and September 26, 2025, we incurred charges of $10.2 million and $13.5 million, respectively. These charges are recorded within Cost of sales and Selling, general, and administrative expenses in the Consolidated Statements of Earnings. The accrued restructuring costs as of October 2, 2026 and December 31, 2025 were approximately $7 million and $13 million, respectively, and are recorded within Accrued expenses and other current liabilities in the Consolidated Condensed Balance Sheets.

Tariff Refunds

On February 20, 2026, the Supreme Court of the United States issued a decision invalidating certain tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). As a result, the U.S. Customs and Border Protection (“CBP”) has established a system to process IEEPA tariff refund claims. We have submitted claims under this process and expect to continue to do so, as permitted. As refund claims are accepted by the CBP, we recognize the approved amounts within Cost of sales on the Consolidated Condensed Statements of Earnings. We recognized $18.0 million and $22.5 million of refund claims for the three and nine months ended October 2, 2026, substantially all of which has been received in cash.

Recently Issued Accounting Standards

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) — Disaggregation of Income Statement Expenses, which amends the disclosure requirements related to certain costs and expenses on an interim and annual basis. This standard is effective for fiscal year ending December 31, 2027, and interim periods within fiscal year ending December 31, 2028, and can be applied either on a prospective or retrospective basis. The adoption of the standard will not impact our consolidated financial statements. Upon adoption, we will update the applicable interim and annual disclosures to align with the new standard.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) — Targeted Improvements to the Accounting for Internal-Use Software, which clarifies and modernizes the software cost capitalization guidance by removing the previous “development stage” model and introducing a more judgment-based approach. This standard is effective for fiscal year ending December 31, 2028, and interim periods within 2028, with early adoption permitted, and could be applied using a prospective, retrospective or modified transition approach. We are currently in the process of evaluating the effects of this standard on our consolidated financial statements.

In May 2026, the FASB issued ASU 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818), which establishes accounting and disclosure requirements for environmental credits and related environmental credit obligations. This standard is effective for fiscal year ending December 31, 2028 and interim periods within 2028, with early adoption permitted, and must be applied on a retrospective basis. We anticipate that the impact on our consolidated financial statements will be immaterial.

Recently Adopted Accounting Standard

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326) — Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient to measure credit losses on current accounts receivable and current contracts assets. The practical expedient allows companies to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset when measuring credit losses. On January 1, 2026, we adopted this standard on a prospective basis; the impact on our consolidated financial statements was immaterial.

NOTE 2. DISCONTINUED OPERATIONS

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 amounts in this quarterly report refer to continuing operations.

As part of the Separation, Ralliant paid a $1.15 billion cash dividend to Fortive prior to the Distribution Date (the “Ralliant Dividend”), which is recorded within the Financing Activities section of the Consolidated Condensed Statements of Cash Flows.

In connection with the Separation, the Company incurred$46 million and$109 millionin Separation-related costs during the three and nine months ended September 26, 2025, respectively, which were recorded within net earnings (loss) from discontinued operations in the Consolidated Condensed Statements of Earnings. These costs were primarily related to professional fees associated with finance, tax, legal, banking and information technology services as well as redundant general and administrative costs.

Fortive and Ralliant entered into various agreements to effect the Separation and provide a framework for their relationship after the Separation, including a separation and distribution agreement, a transition services agreement, an employee matters agreement, a tax matters agreement, an intellectual property matters agreement, a Fortive Business System (“FBS”) license agreement and a Fort solutions license agreement. These agreements provide for the allocation between Fortive and Ralliant of assets, employees, liabilities and obligations (including investments, property, employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after the Separation and govern certain relationships between Fortive and Ralliant after the Separation. The amounts paid and received by Fortive for transition services provided under the above agreements as well as sales and purchases to and from Ralliant were not material to the Company’s results of operations during the three and nine months ended October 2, 2026.

Assets from discontinued operations were $4.8 million as of October 2, 2026, which consisted primarily of receivables from Ralliant related to the tax matters agreement, and $20.8 million as of December 31, 2025, which consisted of receivables from Ralliant related to the tax matters agreement and pass-through arrangements. Net cash payments received from Ralliant as reimbursement for pass-through costs paid on Ralliant’s behalf were immaterial and $17 million in the three and nine months ended October 2, 2026, respectively, and were $45 million for thethree and nine months ended September 26, 2025. This activity is recorded within operating cash provided by discontinued operations in the Consolidated Condensed Statements of Cash Flows.

The key components of income from discontinued operations were as follows ($ in millions):

NOTE 3. FAIR VALUE MEASUREMENTS

Accounting standards define fair value based on an exit price model, establish a framework for measuring fair value for assets and liabilities required to be carried at fair value, and provide for certain disclosures related to the valuation methods used within the valuation hierarchy as established within the accounting standards. This hierarchy prioritizes the inputs into three broad levels as follows:

•Level 1 inputs are quoted prices (unadjusted) for identical assets or liabilities in active markets.

•Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, or other observable characteristics for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from, or corroborated by, observable market data through correlation.

•Level 3 inputs are unobservable inputs based on our assumptions. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Below is a summary of financial assets and liabilities that are measured at fair value on a recurring basis ($ in millions):

Certain management employees participate in our nonqualified deferred compensation program that permit such employees to defer a portion of their compensation, on a pretax basis, until after their termination of employment. All amounts deferred under the plan are unfunded, unsecured obligations and are recorded as a component of our compensation and other post-retirement benefits accruals within Other long-term liabilities in the accompanying Consolidated Condensed Balance Sheets. Participants may choose among alternative earning rates for the amounts they defer, which are primarily based on investment options within our defined contribution plans for the benefit of U.S. employees (“401(k) Programs”) (except that the earnings rates for amounts contributed unilaterally by the Company are entirely based on changes in the value of Fortive common stock). Changes in the deferred compensation liability under this program are recognized based on changes in the fair value of the participants’ accounts and are recorded within Selling, general and administrative expenses in the Consolidated Condensed Statements of Earnings.

On October 6, 2026, subsequent to quarter-end, the Company established a revocable grantor trust and funded it with an initial cash contribution of $34 million, which will be classified in Other assets, and 0.4 million shares of Fortive stock which will be accounted for as treasury shares. The trust assets are intended to support the Company's obligations under the nonqualified deferred compensation program discussed above.

Non-recurring Fair Value Measurements

Certain non-financial assets and financial assets that are not required to be measured at fair value on a recurring basis are reported at their carrying value. However, these assets are required to be assessed for impairment whenever events or circumstances indicate that their carrying value may not be fully recoverable, and at least annually for goodwill and indefinite-lived intangible assets. We evaluated events or circumstances that may indicate the carrying value of our non-financial assets may not be fully recoverable during the three and nine months ended October 2, 2026, and recordedno material impairments.

Fair Value of Financial Instruments

The carrying amount and fair value of financial instruments are as follows ($ in millions):

As of October 2, 2026 and December 31, 2025, the current portion of long-term debt and long-term debt, net of current maturities were categorized as Level 1.

The fair value of the long-term borrowings were based on quoted market prices. The difference between the fair value and the carrying amounts of long-term borrowings may be attributable to changes in market interest rates and/or our credit ratings subsequent to the borrowing. The fair value of cash and equivalents, trade accounts receivable, net, trade accounts payable, and commercial paper approximates their carrying amount due to the short-term maturities of these instruments.

NOTE 4. FINANCING

The components of our debt were as follows ($ in millions):

Refer to Note 8 of our 2025 Annual Report on Form 10-K for further details of our debt financing.

Commercial Paper Programs

We generally satisfy any short-term liquidity needs that are not met through operating cash flows and available cash primarily through issuances of commercial paper under our U.S. dollar and Euro-denominated commercial paper programs (“Commercial Paper Programs”). Under these programs, we may issue unsecured promissory notes with maturities not exceeding 397 days and 183 days, respectively. Proceeds from borrowings under the Commercial Paper Programs are typically available for general corporate purposes, including acquisitions.

Interest expense on commercial paper is paid at maturity and is generally based on our credit ratings at the time of issuance and prevailing short-term interest rates.

Credit support for the Commercial Paper Programs is provided by afive-year $2.0 billion senior unsecured revolving credit facility that expires on March 17, 2031 (the “Revolving Credit Facility”) which, to the extent not otherwise providing credit support for our Commercial Paper Programs, can also be used for working capital and other general corporate purposes. As of October 2, 2026, no borrowings were outstanding under the Revolving Credit Facility. Refer to the section below for further discussion on the Revolving Credit Facility.

The details of our outstanding Commercial Paper Programs as of October 2, 2026 were as follows ($ in millions):

We classified our borrowings outstanding under the Commercial Paper Programs as of October 2, 2026 as Long-term debt in the accompanying Consolidated Condensed Balance Sheets as we had the intent and ability, as supported by availability under the Revolving Credit Facility, to refinance these borrowings for at least one year from the balance sheet date.

Senior Unsecured Notes Due 2031 and 2036

On May 14, 2026, we completed the registered offering of the following senior unsecured notes:

•$600 million in aggregate principal amount of our 4.75% senior unsecured notes due 2031 (the “2031 Notes”) issued at 99.771% of their principal amount and bearing interest at 4.75% per annum. The 2031 Notes mature on May 15, 2031 with interest payable in arrears on May 15 and November 15 of each year, beginning in November 2026.

•$500 million in aggregate principal amount of our 5.25% senior unsecured notes due 2036 (the “2036 Notes”) issued at 99.685% of their principal amount and bearing interest at 5.25% per annum. The 2036 Notes mature on May 15, 2036 with interest payable in arrears on May 15 and November 15 of each year, beginning in November 2026.

The net proceeds from the offering, after underwriting discounts and commissions and offering expenses, were approximately $1.1 billion. We used the net proceeds to repay the $900 million of outstanding principal of the 3.15% senior unsecured notes due 2026, and the accrued interest thereon, and for other general corporate purposes.

We may redeem the 2031 Notes and the 2036 Notes at our option, in whole or in part, at any time and from time to time. Prior to April 15, 2031 for the 2031 Notes and February 15, 2036 for the 2036 Notes (each, respectively, the “Par Call Date”), we may redeem the 2031 Notes and the 2036 Notes, as applicable, at the corresponding make-whole redemption price as specified in the indentures. On or after the applicable Par Call Date, the redemption price will equal 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest up to, but not including, the redemption date. The 2031 Notes and 2036 Notes contain customary covenants, none of which are considered restrictive to our operations.

If a change of control triggering event occurs, we will, in certain circumstances, be required to make an offer to repurchase the 2031 Notes and 2036 Notes from each holder at a purchase price equal to 101% of the principal amount thereof being repurchased, plus accrued and unpaid interest to, but not including, the repurchase date. A change of control triggering event is defined as the occurrence of both a change of control and a rating event, each as defined in the indentures. Except in connection with a change of control triggering event, the 2031 Notes and 2036 Notes do not have any credit rating downgrade triggers that would accelerate the maturity of the notes.

Revolving Credit Facility

On March 17, 2026, we entered into a third amended and restated credit agreement (the “Amended and Restated Credit Agreement”) which extended the availability period of the Revolving Credit Facility to March 17, 2031, withtwo one-year extension options at our request and with the consent of the lenders. The Amended and Restated Credit Agreement also contains an option permitting us to request an aggregate additional $1.0 billion as a revolving credit facility (or increase thereof), term loan facility, or combination thereof.

We are obligated to pay an annual facility fee for the Revolving Credit Facility of between 6 and 15 basis points varying according to our long-term debt credit rating. Borrowings under the Revolving Credit Facility in U.S. Dollars bear interest at a rate equal, at our option, to either (1) Term Secured Overnight Financing Rate (“Term SOFR”), plus a margin of between 69 and 110 basis points, depending on our long-term debt credit rating or (2) Base Rate (which is the highest of (a) the Federal funds rate plus 50 basis points, (b) the prime rate, (c) Term SOFR plus 100 basis points and (d)1.0%), plus a margin between zero and 10 basis points depending on our long-term debt credit rating.

The Amended and Restated Credit Agreement requires us to maintain a defined consolidated net leverage ratio of no greater than 3.75 to 1.00. The maximum consolidated net leverage ratio will be increased to 4.25 to 1.00 for the four consecutive full fiscal quarters immediately following the consummation of any acquisition by us in which the purchase price exceeds $250 million.

As of October 2, 2026, we were in compliance with all applicable debt covenants.

NOTE 5. SALES

We derive revenue primarily from the sales of products, including software, and services. Revenue is recognized when control of promised products or services is transferred to customers in an amount that reflects the consideration we expect to be entitled to in exchange for those products, software, or services.

Product sales include revenue from the sale of products and equipment, which includes our software and software as a service (“SaaS”) product offerings and equipment rentals. Service sales include revenues from extended warranties, post-contract customer support (“PCS”), maintenance contracts or services, contract labor to perform ongoing service at a customer location, services related to previously sold products, and software implementation services.

Contract Assets — In certain circumstances, we record contract assets which include unbilled amounts typically resulting from sales under contracts when revenue recognized exceeds the amount billed to the customer, and right to payment is not based only on the passage of time. Contract assets were $143 million as of October 2, 2026 and $151 million as of December 31, 2025. Contract assets are recorded within Prepaid expenses and other current assets and Other assets in our Consolidated Condensed Balance Sheets.

Contract Costs — We incur and capitalize incremental costs to obtain certain contracts, typically sales-related commissions where the amortization period is greater than one year and costs associated with assets used by our customers in certain service arrangements. As of October 2, 2026 and December 31, 2025, we had $82 million and $75 million, respectively, in net revenue-related contract cost assets primarily related to certain software contracts. Revenue-related contract costs are recorded within Other assets in our Consolidated Condensed Balance Sheets. These assets are amortized over the period of benefit, which is typically between three andfive years. For incremental costs to obtain contracts with a duration of one year or less, we apply the practical expedient to expense such costs as incurred.

Contract Liabilities — Our contract liabilities consist of deferred revenue generally related to subscription-based software contracts, PCS and extended warranty sales, where we generally receive up-front payment and recognize revenue over the service or support term. We classify deferred revenue as current or noncurrent based on the timing of when we expect to recognize revenue. The current portion of deferred revenue is recorded within Accrued expenses and other current liabilities and the noncurrent portion of deferred revenue is recorded within Other long-term liabilities in our Consolidated Condensed Balance Sheets.

Our contract liabilities consisted of the following ($ in millions):

During the three and nine months ended October 2, 2026, we recognized revenue of $67 million and $354 million, respectively, related to our contract liabilities at December 31, 2025. The change in our contract liabilities from December 31, 2025 to October 2, 2026 was primarily due to the timing of billings and recognition of revenue for subscription-based software contracts, PCS, and extended warranty services.

Remaining Performance Obligations — Our remaining performance obligations represent the transaction price of firm, non-cancelable orders and the average contract value for software contracts, for which work has not been performed. We have excluded performance obligations with an original expected duration of one year or less from the amounts below.

The aggregate remaining performance obligations attributable to each of our segments are as follows ($ in millions):

The majority of remaining performance obligations are related to subscription-based software contracts, and service and support contracts, which we expect to fulfill approximately 75 percent within the nexttwo years, approximately 90 percent within the next three years, and substantially all within four years.

Disaggregation of Revenue

We disaggregate revenue from contracts with customers by sales of products and software and services, geographic location, and end market for each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.

Disaggregation of revenue is presented as follows ($ in millions):

NOTE 6. INCOME TAXES

Our effective tax rate for the three and nine months ended October 2, 2026 was 14.7% and 14.5%, respectively, as compared to 13.3% and 16.4%, for the three and nine months ended September 26, 2025, respectively. The year-over-year changes in the effective tax rate for the three and nine months ended October 2, 2026 were primarily attributable to changes in the tax effects of foreign earnings and a discrete deferred tax benefit. The decrease in the year-to-date period was also due to changes in valuation allowances.

Our effective tax rate for the three and nine months ended October 2, 2026, 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.

NOTE 7. STOCK-BASED COMPENSATION

The 2016 Stock Incentive Plan (the “Stock Plan”) provides for the grant of stock appreciation rights, restricted stock units, and performance stock units (collectively, “Stock Awards”), stock options, or any other stock-based award. As of October 2, 2026, approximately 11 million shares of our common stock were available for subsequent issuance under the Stock Plan. For a full description of our Stock Plan, refer to Note 13 of our 2025 Annual Report on Form 10-K.

Stock-based compensation has been recognized as a component of Selling, general and administrative expenses in the Consolidated Condensed Statements of Earnings based on the portion of the awards that are ultimately expected to vest.

The following summarizes the components of our stock-based compensation expense under the Stock Plan ($ in millions):

The following summarizes the unrecognized compensation cost for the Stock Plan awards and stock options as of October 2, 2026. This compensation cost is expected to be recognized over a weighted average period of approximatelytwo years, representing the remaining service period related to the awards. Future compensation amounts will be adjusted for any changes in estimated forfeitures ($ in millions):

Ralliant Separation

In the three and nine months ended September 26, 2025, we recorded $33 million of stock-based compensation expense related to certain Separation-related adjustments within Selling, general, and administrative expenses in the Consolidated Condensed Statement of Earnings. These adjustments were to preserve the intrinsic value of stock-based awards outstanding as of the date of the Separation and to accelerate recognition of compensation expense for certain Stock Awards held by executive officers who retired in connection with the Separation.

NOTE 8. LEASES

Operating lease costs for each period are presented as follows ($ in millions):

Supplemental information related to operating leases for each period is presented as follows ($ in millions):

For additional information about our leases, refer to Note 7 in our 2025 Annual Report on Form 10-K.

NOTE 9. NET EARNINGS PER SHARE

Basic net earnings per share (“EPS”) from continuing operations is calculated by dividing net earnings from continuing operations by the weighted average number of shares of common stock outstanding for the applicable period. Diluted EPS from continuing operations is similarly calculated, except that the calculation includes the dilutive effect of the assumed issuance of shares under stock-based compensation plans under the treasury stock method, except where the inclusion of such shares would have an anti-dilutive impact.

Anti-dilutive options to purchase shares excluded from the diluted EPS calculation were 1.7 million for the three and nine months ended October 2, 2026,4.4 million for the three months ended September 26, 2025, andnone for the nine months ended September 26, 2025.

Information related to the calculation of net earnings per share of common stock is summarized as follows ($ and shares in millions, except per share amounts):

Share Repurchase Programs

In February 2022, our Board of Directors (the “Board”) adopted a share repurchase program (the “General Share Repurchase Program”), under which our Board has made various authorizations for the repurchase of shares of our common stock. The Board has made a total cumulative authorization of 73.2 million shares as of October 2, 2026. In 2025, in connection with the Separation, our Board adopted a separate and incremental special purpose share repurchase program (the “Special Share Repurchase Program”) under which we may repurchase up to $550 million of our common stock exclusively from the proceeds we received from Ralliant in connection with the Separation.

As of October 2, 2026, there were 12.7 million shares and $66.7 million remaining authorized under the General Share Repurchase Program and Special Share Repurchase Program, respectively. There is no expiration date for these repurchase programs, and the timing and amount of repurchases under the programs are determined by our management based on market conditions, tax regulation and other factors. The repurchase programs may be suspended or discontinued at any time by the Board.

During the three and nine months ended October 2, 2026, the Company purchased 5.0 million and 17.2 million shares of its common stock at an average share price of $60.14 and $58.00, respectively. During the three and nine months ended September 26, 2025, the Company purchased 20.8 million and 25.2 million shares of its common stock at an average share price of $47.98 and $52.99, respectively. Common stock repurchases, in excess of issuances, are subject to a 1% excise tax in the United States, which is recorded as part of the cost basis of the shares acquired and shown within Common stock repurchases in the Consolidated Condensed Statements of Changes in Equity. The payment of the excise tax is recorded within All other financing activities in the Financing Activities section of the Consolidated Condensed Statements of Cash Flows.

NOTE 10. SEGMENT INFORMATION

We report our results intwo separate business segments consisting of Intelligent Operating Solutions and Advanced Healthcare Solutions. We determine our business segments based on the identification of segment managers and similarities in products, end markets, economic characteristics, technologies, and services, as well as the financial data utilized by the Company's chief executive officer. The Company's chief operating decision maker ("CODM") is the chief executive officer.

The CODM uses gross profit and operating profit at the segment level to assess performance and allocate resources, including those associated with merger and acquisition targets. The CODM also compares the actual results to expectations in assessing the performance of the segments. Operating expenses generally include selling, general and administrative expenses, and research and development expenses. Depreciation expense is allocated between Cost of sales and Selling, general, and administrative expenses. Amortization expense is recorded within Selling, general, and administrative expenses. The identifiable assets by segment are those used in each segment’s operations. Inter-segment amounts are not significant and are eliminated in the combined totals. Unallocated costs and other costs are not considered part of our evaluation of reportable segment operating performance.

Segment results are presented as follows ($ in millions):

Segment Assets: