Veralto Corp

Previous wording

You should read this discussion along with the Company’s MD&A and audited financial statements and Notes thereto as of and for the year ended December 31, 2025, included within the 2025 Annual Report on Form 10-K, and the unaudited financial statements and related Notes as of and for the three-month period ended April 3, 2026 included in this Quarterly Report on Form 10-Q (this “Report”).

Current wording

You should read this discussion along with the Company’s MD&A and audited financial statements and Notes thereto as of and for the year ended December 31, 2025, included within the 2025 Annual Report on Form 10-K, and the unaudited financial statements and related Notes as of and for the three and six-month periods ended July 3, 2026 included in this Quarterly Report on Form 10-Q (this “Report”).

Previous wording

Veralto Corporation’s unifying purpose is Safeguarding the World’s Most Vital Resources TM. Our diverse group of leading operating companies provide essential technology solutions that monitor, enhance and protect key resources around the globe. We are committed to the advancement of public health and safety and believe we are positioned to support our customers as they address large global challenges including environmental resource sustainability, water scarcity, management of severe weather events, food and pharmaceutical security, and the impact of an aging workforce. For decades, we have used our scientific expertise and innovative technologies to address complex challenges our customers face across regulated industries – including municipal utilities, food and beverage, pharmaceutical and industrials – where the consequence of failure is high. Through our core offerings in water analytics, water treatment, marking and coding, and packaging and color, customers look to our solutions to help ensure the safety, quality, efficiency and reliability of their products, processes and people globally. Veralto is headquartered in Waltham, Massachusetts with a workforce of nearly 17,000 employees (whom we refer to as “associates”) as of December 31, 2025, strategically located in approximately 50 countries.

Current wording

Veralto Corporation’s unifying purpose is Safeguarding the World’s Most Vital Resources TM. Our diverse group of leading operating companies provides essential technology solutions that monitor, enhance and protect key resources around the globe. We are committed to the advancement of public health and safety and believe we are positioned to support our customers as they address large global challenges including environmental resource sustainability, water scarcity, management of severe weather events, food and pharmaceutical security, and the impact of an aging workforce. For decades, we have used our scientific expertise and innovative technologies to address complex challenges our customers face across regulated industries – including municipal utilities, food and beverage, pharmaceutical and industrials – where the consequence of failure is high. Through our core offerings in water analytics, water treatment, marking and coding, and packaging and color, customers look to our solutions to help ensure the safety, quality, efficiency and reliability of their products, processes and people globally. Veralto is headquartered in Waltham, Massachusetts with a workforce of nearly 17,000 employees (whom we refer to as “associates”) as of December 31, 2025, strategically located in approximately 50 countries.

Previous wording

Veralto operates through two segments – Water Quality (“WQ”) and Product Quality & Innovation (“PQI”). Our businesses within these segments have strong globally recognized brands as a result of our leadership in served markets over several decades. Our WQ segment provides innovative products and services that improve the quality and reliability of water with leading brands including Hach, Trojan Technologies and ChemTreat. Our PQI segment enables our customers to promote consumer trust in their products and help enable product innovation with leading brands including Videojet, Linx, Esko, X-Rite and Pantone. We believe our leading positions result from the strength of our commercial organizations, our legacy of innovation, and our close and long-term connectivity to our customers and knowledge of their workflows, underpinned by our culture of continuous improvement. This has resulted in a large installed base of instruments that drive ongoing consumables and software sales to support our customers. As a result, our business generates recurring sales which represented approximately 62% of total sales during thethree months ended April 3, 2026. Our business model also supports a strong margin profile with limited capital expenditure requirements and has generated attractive cash flows. We believe these attributes allow us to deliver financial performance that is resilient across economic cycles.

Current wording

Veralto operates through two segments – Water Quality (“WQ”) and Product Quality & Innovation (“PQI”). Our businesses within these segments have strong globally recognized brands as a result of our leadership in served markets over several decades. Our WQ segment provides innovative products and services that improve the quality and reliability of water with leading brands including Hach, Trojan Technologies and ChemTreat. Our PQI segment enables our customers to promote consumer trust in their products and help enable product innovation with leading brands including Videojet, Linx, Esko, X-Rite and Pantone. We believe our leading positions result from the strength of our commercial organizations, our legacy of innovation, and our close and long-term connectivity to our customers and knowledge of their workflows, underpinned by our culture of continuous improvement. This has resulted in a large installed base of instruments that drive ongoing consumables and software sales to support our customers. As a result, our business generates recurring sales which represented approximately 62% of total sales during thesix-month period ended July 3, 2026. Our business model also supports a strong margin profile with limited capital expenditure requirements and has generated attractive cash flows. We believe these attributes allow us to deliver financial performance that is resilient across economic cycles.

Previous wording

During the three-month period ended April 3, 2026, overall revenues increased 6.7% and core sales increased 1.9% compared to the comparable period in 2025 primarily driven by core sales growth in the Water Quality segment. Currency exchange rates and acquisitions, net of divestitures increased reported sales by 3.5% and 1.3%, respectively, during the three-month period ended April 3, 2026 compared to the comparable period in 2025. For the definition of “core sales” refer to “—Results of Operations” below.

Current wording

During the three-month period ended July 3, 2026, overall revenues increased 7.6% and core sales increased 4.2% compared to the comparable period in 2025 primarily driven by core sales growth in the Water Quality segment. Currency exchange rates and acquisitions, net of divestitures increased reported sales by 1.0% and 2.4%, respectively, during the three-month period ended July 3, 2026 compared to the comparable period in 2025. For the six-month period ended July 3, 2026, overall revenues increased 7.1% and core sales increased 3.1%, compared to the comparable period in 2025. Currency exchange rates and acquisitions, net of divestitures increased reported sales by 2.2% and 1.8%, respectively, during the six-month period ended July 3, 2026 compared to the comparable period in 2025. For the definition of “core sales” refer to “—Results of Operations” below.

Previous wording

Geographically, the Company’s sales during the three-month period ended April 3, 2026 in developed markets increased year-over-year by 7.7%, driven by increased sales of 5.8% in North America, 12.3% in Western Europe, and 3.4% in other developed markets. Sales in high-growth markets increased 4.0% year-over-year. For the same period, core sales in developed markets increased 3.1% driven by increased core sales of 4.5% in North America and increased core sales of 0.6% in Western Europe. Core sales in high-growth markets decreased 0.6% driven by mid-single digit decrease in Latin America offset by low-single digit increase in China.

Current wording

Geographically, the Company’s sales during the three-month period ended July 3, 2026 in developed markets increased year-over-year by 9.3%, driven by increased sales of 9.2% in North America, 9.0% in Western Europe, and 13.8% in other developed markets. Sales in high-growth markets increased 2.9% year-over-year. For the same period, core sales in developed markets increased 6.3% driven by increased core sales of 7.0% in North America and increased core sales of 4.9% in Western Europe. Core sales in high-growth markets decreased 0.1%, driven by a low-single digit decreases in Latin America and in China.

Previous wording

The Company’s net earnings for the three-month period ended April 3, 2026 totaled $254 million, compared to $225 million for the three-month period ended April 4, 2025. The increase in net earnings was primarily driven by increased sales resulting from positive pricing actions and the impact of product mix, partially offset by higher cost of sales. Refer to “—Results of Operations” for further discussion of the year-over-year changes in net earnings for the three-month period ended April 3, 2026.

Current wording

The Company’s net earnings for the three and six-month periods ended July 3, 2026 totaled $241 million and $495 million, respectively, compared to $222 million and $447 million, respectively, for the three and six-month periods ended July 4, 2025. The increase in net earnings was primarily driven by increased sales resulting from positive pricing actions, the impact of acquisitions, and the positive impact of recoveries of tariffs previously collected under the International Emergency Economic Powers Act (“IEEPA”), partially offset by higher cost of sales and restructuring costs related to the 2026 Cost Optimization Program. Refer to “—Results of Operations” for further discussion of the year-over-year changes in net earnings for the three and six-month periods ended July 3, 2026.

Previous wording

Product Quality & Innovation: we expect improved growth as the year progresses, driven by consumer packaged goods market globally. Performance is expected to benefit from steady recurring revenue from a large installed base, new product offerings that help our customers convey the quality and safety of their products and build trust with consumers, and recovery in certain industrial end-markets in second half of the year.

Current wording

Product Quality & Innovation: we expect growth to accelerate as the year progresses, driven by steady demand from consumer packaged goods market globally and increasing adoption of digital workflow solutions. Performance is expected to benefit from steady recurring revenue from a large installed base, new product offerings that help our customers convey the quality and safety of their products and build trust with consumers, and recovery in certain industrial end-markets in second half of the year.

Previous wording

The Company’s ability to meet its expectations are subject to numerous risks, including, but not limited to, those described in “Item 1A. Risk Factors” within the Company’s 2025 Annual Report on Form 10-K and any subsequent updates in “Item 1A. Risk Factors” within Quarterly Reports on Form 10-Q.

Current wording

The Company’s ability to meet its expectations is subject to numerous risks, including, but not limited to, those described in “Item 1A. Risk Factors” within the Company’s 2025 Annual Report on Form 10-K and any subsequent updates in “Item 1A. Risk Factors” within Quarterly Reports on Form 10-Q.

Previous wording

On January 22, 2026, the Company completed the acquisition of In-Situ, Inc. (“In-Situ”), for a cash purchase price of approximately $426 million, net of cash acquired. In-Situ is a global leader in environmental water measurement and monitoring solutions with a leading portfolio of water quality sondes, water quality sensors and data management solutions that help customers monitor and measure the quality or quantity of surface and groundwater. In-Situ will be integrated into the Water Quality segment.

Current wording

On January 22, 2026, the Company completed the acquisition of In-Situ, Inc. (“In-Situ”), for a cash purchase price of approximately $426 million, net of cash acquired. In-Situ is a global leader in environmental water measurement and monitoring solutions with a leading portfolio of water quality sondes, water quality sensors and data management solutions that help customers monitor and measure the quality or quantity of surface and groundwater. In-Situ has been integrated into the Water Quality segment.

Previous wording

On April 7, 2026, subsequent to the completion of the quarter, the Company completed the acquisition of GlobalVision, for a cash purchase price of approximately CAD $270 million, net of cash acquired. GlobalVision leverages its core proprietary deterministic technology with AI-augmented functionality to help pharmaceutical and consumer packaged goods customers accelerate their speed to market and meet critical quality and packaging compliance regulations, verifying that packaging content remains accurate and compliant at every critical hand-off. GlobalVision will be integrated into the Product Quality & Innovation segment.

Current wording

On April 7, 2026, the Company completed the acquisition of GlobalVision, for a cash purchase price of approximately CAD $270 million ($195 million), net of cash acquired. GlobalVision leverages its core proprietary deterministic technology with AI-augmented functionality to help pharmaceutical and consumer-packaged goods customers accelerate their speed to market and meet critical quality and packaging compliance regulations, verifying that packaging content remains accurate and compliant at every critical hand-off. GlobalVision will be integrated into the Product Quality & Innovation segment.

Previous wording

Total sales increased 6.7% during the three-month period ended April 3, 2026, compared to the comparable period in 2025, primarily as a result of core sales growth driven by the factors discussed below by segment.

Current wording

Total sales increased 7.6% and 7.1% during the three and six-month periods ended July 3, 2026, respectively, compared to the comparable periods in 2025, primarily as a result of core sales growth driven by the factors discussed below by segment.

Previous wording

Currency exchange rates and acquisitions, net of divestitures, increased reported sales by 3.5% and 1.3%, respectively, during the three-month period ended April 3, 2026, compared to the comparable period in 2025. Price increases contributed 1.9% to sales growth on a year-over-year basis during the three-month period ended April 3, 2026, and are reflected as a component of core sales growth above.

Current wording

Currency exchange rates and acquisitions, net of divestitures, increased reported sales by 1.0% and 2.4%, respectively, during the three-month period ended July 3, 2026, compared to the comparable period in 2025. Currency exchange rates and acquisitions, net of divestitures, increased reported sales by 2.2% and 1.8%, respectively, during the six-month period ended July 3, 2026, compared to the comparable period in 2025. Price increases contributed 3.0% and 2.4% to sales growth on a year-over-year basis during the three and six-month periods ended July 3, 2026, respectively, and are reflected as a component of core sales growth above.

Previous wording

Cost of sales increased by $41 million, or 7.8%, on a year-over-year basis during the three-month period ended April 3, 2026, as compared to the comparable period in 2025, driven primarily by higher year-over-year labor costs.

Current wording

Cost of sales increased by $23 million or 4.2% and by $64 million or 5.9% on a year-over-year basis during the three and six-month periods ended July 3, 2026, respectively, as compared to the comparable periods in 2025, driven primarily by higher year-over-year sales volumes, increased labor costs and price increases due to inflation.

Previous wording

Gross profit margins decreased 30 basis points on a year-over-year basis during the three-month period ended April 3, 2026, as compared to the comparable period in 2025, driven by incremental year-over-year labor costs. The gross profit margin decrease was partially offset by positive pricing actions, the impact of product mix, and the net positive impact from the gross profit margin of recent acquisitions.

Current wording

Gross profit margins increased 120 basis points on a year-over-year basis during the three-month period ended July 3, 2026, as compared to the comparable period in 2025, driven by positive pricing actions, the impact of improved labor overhead and productivity, recoveries of tariffs previously collected under IEEPA, and the net positive impact from the gross profit margin of recent acquisitions, partially offset by increased labor costs and price increases due to inflation. Gross profit margins increased 40 basis points on a year-over-year basis during the six-month period ended July 3, 2026, as compared to the comparable period in 2025, driven by positive pricing actions, the impact of foreign currency exchange rates, recoveries of tariffs previously collected under IEEPA, and the net positive impact from the gross profit margin of recent acquisitions.

Previous wording

SG&A expenses as a percentage of sales were flat during the three-month period ended April 3, 2026, as compared to the comparable period in 2025.

Current wording

SG&A expenses as a percentage of sales increased 270 bps and 130 bps during the three and six-month periods ended July 3, 2026, respectively, as compared to the comparable periods in 2025, driven primarily by restructuring costs related to the 2026 Cost Optimization Program, incremental labor costs, and sales and marketing growth initiatives.

Previous wording

R&D expenses as a percentage of sales were flat during the three-month period ended April 3, 2026, as compared to the comparable period in 2025.

Current wording

R&D expenses as a percentage of sales were essentially flat during the three and six-month periods ended July 3, 2026 as compared to the comparable periods in 2025.

Previous wording

•Costs incurred in the first quarter of 2026 related to certain strategic initiatives, including transaction costs incurred related to the acquisitions of In-Situ and GlobalVision - 30 basis points

Current wording

•Costs incurred in 2026 related to certain strategic initiatives, including transaction costs incurred related to the acquisitions of In-Situ and GlobalVision - 30 basis points

Previous wording

Total Water Quality segment sales increased 10.1% year-over-year during the three-month period ended April 3, 2026, as compared to the comparable period in 2025, primarily as a result of core sales growth driven by the factors discussed below. Geographically, sales growth was driven by North America, which saw increases of 7.9%, and Western Europe, which saw increases of 20.6% for the three-month period ended April 3, 2026, compared to the comparable periods in 2025. Sales in high-growth markets increased 7.7% during the three-month period ended April 3, 2026, compared to the comparable periods in 2025.

Current wording

Total Water Quality segment sales increased 10.1% year-over-year during the three and six-month periods ended July 3, 2026 as compared to the comparable period in 2025, primarily as a result of core sales growth driven by the factors discussed below. Geographically, sales growth was driven by North America, which saw increases of 10.8% and 9.4%, and Western Europe, which saw increases of 14.8% and 17.6% for the three and six-month periods ended July 3, 2026, respectively, compared to the comparable periods in 2025. Sales in high-growth markets increased 3.7% and 5.6% during the three and six-month periods ended July 3, 2026, respectively, compared to the comparable periods in 2025.

Previous wording

Price increases in the segment contributed 1.8% to sales growth on a year-over-year basis during the three-month period ended April 3, 2026, and are reflected as a component of the change in core sales growth.

Current wording

Price increases in the segment contributed 2.9% and 2.4% to sales growth on a year-over-year basis during the three and six-month periods ended July 3, 2026, respectively, and are reflected as a component of the change in core sales growth.

Previous wording

Core sales in the Water Quality segment increased 3.8% year-over-year during the three-month period ended April 3, 2026. Geographically, core sales growth was driven by increases of 5.8% in North America and 4.7% in Western Europe during the three-month period ended April 3, 2026 compared to the comparable period in 2025. For the same period, core sales in high-growth markets increased 0.3%, driven by increases in certain Asian markets, partially offset by mid-single digit decreases in Latin America and low-single digit decreases in China.

Current wording

Core sales in the Water Quality segment increased 5.7% and 4.8% year-over-year during the three and six-month periods ended July 3, 2026, respectively. Geographically, core sales growth was driven by increases of 8.3% in North America and 9.3% in Western Europe during the three-month period ended July 3, 2026 compared to the comparable period in 2025. For the same period, core sales in high-growth markets decreased 1.5%, driven by mid-single digit decreases in Latin America and low-single digit decreases in China. Geographically, core sales growth was driven by increased core sales of 7.0% in North America and 6.9% in Western Europe during the six-month period ended July 3, 2026 compared to the comparable period in 2025. For the same period, core sales in high-growth markets decreased 0.6%, driven by mid-single digit decreases in Latin America and low-single digit decreases in China.

Previous wording

The increase in core sales during the three-month period ended April 3, 2026 was driven by the chemical treatment solutions business and, to a lesser extent, the analytical instrumentation business. Core sales in the chemical treatment solutions business increased 4.1% year-over-year in the three-month period ended April 3, 2026, as a result of increased core sales across most major end-markets. Core sales in the analytical instrumentation business increased 2.6% year-over-year for the three-month period ended April 3, 2026, as a result of increased core sales across Western Europe and North America.

Current wording

The increase in core sales during the three and six-month periods ended July 3, 2026 was driven by the chemical treatment solutions business and, to a lesser extent, the analytical instrumentation business. Core sales in the chemical treatment solutions business increased 10.7% and 7.4% year-over-year in the three and six-month periods ended July 3, 2026, respectively, as a result of increased core sales across North America. Core sales in the analytical instrumentation business increased 2.8% and 2.7% year-over-year for the three and six-month periods ended July 3, 2026, as a result of increased core sales across Western Europe and North America.

Previous wording

•Acquisition-related fair value adjustment to inventory related to the acquisition of In-Situ - 20 basis points

Current wording

•Costs incurred in 2026 related to certain strategic initiatives, including transaction costs incurred related to the acquisition of In-Situ - 20 basis points

Previous wording

Total Product Quality & Innovation segment sales increased 1.7% year-over-year during the three-month period ended April 3, 2026, primarily as a result of changes in core sales driven by the factors discussed below. Geographically, sales growth was driven by North America which saw increases of 0.5% and Western Europe which saw increases of 5.0% during the three-month period ended April 3, 2026, compared to the comparable period in 2025. Sales in high-growth markets increased 0.6% during the three-month period ended April 3, 2026, compared to the comparable periods in 2025.

Current wording

Total Product Quality & Innovation segment sales increased 3.8% and 2.8% year-over-year during the three and six-month periods ended July 3, 2026, respectively, primarily as a result of changes in core sales driven by the factors discussed below. Geographically, sales growth was driven by North America, which saw increases of 4.9% and 2.7%, and Western Europe, which saw increases of 3.7% and 4.3% during the three and six-month periods ended July 3, 2026, respectively, compared to the comparable periods in 2025. Sales in high-growth markets increased 2.1% and 1.4% during the three and six-month periods ended July 3, 2026, respectively, compared to the comparable periods in 2025.

Previous wording

Price increases in the segment contributed 2.0% to sales growth on a year-over-year basis during the three-month period ended April 3, 2026, and are reflected as a component of the change in core sales described below.

Current wording

Price increases in the segment contributed 3.0% and 2.5% to sales growth on a year-over-year basis during the three and six-month periods ended July 3, 2026, respectively, and are reflected as a component of the change in core sales described below.

Previous wording

Core sales in the Product Quality & Innovation segment decreased 1.0% year-over-year during the three-month period ended April 3, 2026, respectively. Geographically, the change in core sales was driven by decreases of 3.2% in Western Europe partially offset by increases of 1.2% in North America during the three-month period ended

Current wording

Core sales in the Product Quality & Innovation segment increased 2.0% and 0.5% year-over-year during the three and six-month periods ended July 3, 2026, respectively. Geographically, the change in core sales was driven by increases of 3.7% in North America and increases of 0.8% in Western Europe during the three-month period ended July 3, 2026 compared to the comparable period in 2025. For the same period, core sales in high-growth markets increased 1.4%, driven by increases in certain Asian markets, partially offset by low-single digit decreases in China and Latin America. Geographically, the change in core sales was driven by increases of 2.4% in North America partially offset by decreases of 1.2% in Western Europe during the six-month period ended July 3, 2026 compared to the comparable period in 2025. For the same period, core sales in high-growth markets were flat, driven by low-single digit decreases in Latin America offset by mid-single digit increases in China.

Previous wording

From a product line perspective, core sales in the marking and coding business increased 2.0% year-over-year during the three-month period ended April 3, 2026, driven by demand across most major end-markets and geographies. Core sales in the packaging and color solutions business decreased 7.5% year-over-year during the three-month period ended April 3, 2026, due to the impact of global macroeconomic conditions on certain product lines.

Current wording

From a product line perspective, core sales in the marking and coding business increased 3.5% and 2.8% year-over-year during the three and six-month periods ended July 3, 2026, respectively, driven by demand across most major end-markets and geographies. Core sales in the packaging and color solutions business decreased 1.4% and 4.4% year-over-year during the three and six-month periods ended July 3, 2026, respectively, due to the impact of global macroeconomic conditions on certain product lines.

Previous wording

•The net impact in 2026 of acquisitions and dispositions - 20 basis points

Current wording

•The net impact in 2026 of acquisitions and dispositions - 10 basis points

Previous wording

Other income (expense), net included a pre-tax gain of $7 million from the step acquisition of our previously held minority ownership interest in In-Situ during the three-month period ended April 3, 2026 and a $6 million loss on the disposition of a product line during the three-month period ended April 4, 2025.

Current wording

Other income (expense), net included a pre-tax gain of $7 million from the step acquisition of our previously held minority ownership interest in In-Situ during the six-month period ended July 3, 2026, and a loss on the disposition of a product line of $6 million during the six-month period ended July 4, 2025.

Previous wording

Net interest expense of $24 million and $27 million was recorded for thethree-month periods ended April 3, 2026, and April 4, 2025, respectively, arising from our outstanding indebtedness, which was incurred in September 2023.

Current wording

Net interest expense of $27 million and $51 million was recorded for thethree and six-month periods ended July 3, 2026, respectively, compared to net interest expense of$28 million and $55 million for thethree and six-month periods ended July 4, 2025, respectively, primarily arising from our outstanding indebtedness.

Previous wording

The Company operates globally, including in certain jurisdictions with higher statutory tax rates than the U.S. Therefore, based on earnings mix, the impact of operating in such jurisdictions contributes to a higher effective tax rate compared to the U.S. federal statutory tax rate.

Current wording

Year-Over-Year Changes in the Tax Provision and Effective Tax Rate The Company operates globally, including in certain jurisdictions with higher statutory tax rates than the United States (“U.S.”). Therefore, based on earnings mix, the impact of operating in such jurisdictions may contribute to a higher effective tax rate compared to the U.S. federal statutory tax rate.

Previous wording

The effective tax rate for the three-month period ended April 3, 2026 differs from the U.S. federal statutory rate of 21% principally due to the geographic mix of earnings described above and the favorable impact of tax law changes under the One Big Beautiful Bill Act (“OBBBA”), partially offset by a net discrete provision of $2 million related primarily to the impact of a gain on a minority interest holding. The net discrete provision increased the effective tax rate by 0.6% for the three-month period ended April 3, 2026.

Current wording

The effective tax rate for the three-month period ended July 3, 2026 differs from the U.S. federal statutory rate of 21% principally due to the geographic mix of earnings described above, the favorable impact of tax law changes under the One Big Beautiful Bill Act (“OBBBA”), a net discrete benefit of $12 million related primarily to the impact of restructuring costs and amended return filings. The net discrete benefit decreased the effective tax rate by 2.9% for the three-month period ended July 3, 2026.

Previous wording

The effective tax rate for the three-month period ended April 4, 2025 differs from the U.S. federal statutory rate of 21% principally due to the geographic mix of earnings described above, the unfavorable impact of a non-deductible loss on the sale of a product line of $2 million, and a net discrete benefit of $2 million related primarily to the impact of excess tax benefits from stock-based compensation. The net discrete items had no impact on the effective tax rate for the three-month period ended April 4, 2025.

Current wording

The effective tax rate for the six-month period ended July 4, 2025 differs from the U.S. federal statutory rate of 21% principally due to the geographic mix of earnings described above, the unfavorable impact of a non-deductible loss on the sale of a product line of $2 million, and a net discrete benefit of $2 million related primarily to the impact of excess tax benefits from stock-based compensation, partially offset by the impact of uncertain tax positions. The net discrete benefit decreased the effective tax rate by 0.3% for the six-month period ended July 4, 2025.

Previous wording

In 2026, comprehensive income decreased $64 million for the three-month period ended April 3, 2026 as compared to the comparable period in 2025, primarily driven by losses from foreign currency translation adjustments, partially offset by higher net earnings and unrealized gain on net investment hedges during the three-month period ended April 3, 2026. The Company recorded foreign currency translation losses of $47 million and an unrealized gain on net investment hedges of $12 million for the three-month period ended April 3, 2026, compared to foreign currency translation gains of $81 million, and an unrealized loss on net investment hedge of $22 million for the three-month period ended April 4, 2025. The foreign currency translation losses during the three-month period ended April 3, 2026 were driven by the strengthening of the U.S. dollar against most major foreign currencies in the period. The foreign currency translation gains during the three-month period ended April 4, 2025 were primarily driven by the weakening of the U.S. dollar against most major foreign currencies in the period. Foreign currency translation adjustments reflect the gain or loss resulting from the impact of the change in currency exchange rates on the Company’s foreign operations as they are translated to the Company’s reporting currency, the U.S. dollar.

Current wording

In 2026, comprehensive income decreased $114 million for the three-month period ended July 3, 2026 as compared to the comparable period in 2025, primarily driven by losses from foreign currency translation adjustments, partially offset by higher net earnings during the three-month period ended July 3, 2026. Comprehensive income decreased $178 million for the six-month period ended July 3, 2026 as compared to the comparable period in 2025, primarily driven by losses from foreign currency translation adjustments, partially offset by higher net earnings and unrealized gain on net investment hedges during the six-month period ended July 3, 2026. The Company recorded foreign currency translation losses of $12 million for the three-month period ended July 3, 2026, compared to foreign currency translation gains of $153 million, and an unrealized loss on net investment hedge of $32 million for the three-month period ended July 4, 2025. The foreign currency translation losses during the three-month period ended July 3, 2026 were driven by the strengthening of the U.S. dollar against most major foreign currencies in the period. The foreign currency translation gains during the three-month period ended July 4, 2025 were primarily driven by the weakening of the U.S. dollar against most major foreign currencies in the period. The Company recorded foreign currency translation losses of $59 million and an unrealized gain on net investment hedges of $12 million for the six-month period ended July 3, 2026, compared to foreign currency translation gains of $234 million, and an unrealized loss on net investment hedge of $54 million for the six-month period ended July 4, 2025. The foreign currency translation losses during the six-month period ended July 3, 2026 were driven by the strengthening of the U.S. dollar against most major foreign currencies in the period. The foreign currency translation gains during the six-month period ended July 4, 2025 were primarily driven by the weakening of the U.S. dollar against most major foreign currencies in the period. Foreign currency translation adjustments reflect the gain or loss resulting from the impact of the change in currency exchange rates on the Company’s foreign operations as they are translated to the Company’s reporting currency, the U.S. dollar.

Previous wording

Management assesses the Company’s liquidity in terms of its ability to generate cash to fund its operating, investing and financing activities. The Company continues to generate substantial cash from operating activities and believes that its operating cash flow and other sources of liquidity will be sufficient to allow it to continue to invest in existing businesses, consummate strategic acquisitions, make interest payments on its outstanding indebtedness, and manage its capital structure on a short and long-term basis. The Company has an upcoming debt maturity in 2026 (refer to Note 9 for additional information), and is currently evaluating various alternatives with respect to this maturity. The Company has not made a decision at this time, and the timing, structure and terms of any such transactions will depend on capital market conditions and other factors. There can be no assurance that such transactions will be pursued or completed on terms acceptable to the Company.

Current wording

Management assesses the Company’s liquidity in terms of its ability to generate cash to fund its operating, investing and financing activities. The Company continues to generate substantial cash from operating activities and believes that its operating cash flow and other sources of liquidity will be sufficient to allow it to continue to invest in existing businesses, consummate strategic acquisitions, make interest payments on its outstanding indebtedness, and manage its capital structure on a short and long-term basis.

Previous wording

•Operating cash flows increased $25 million, or 16%, during the three-month period ended April 3, 2026 as compared to the comparable period in 2025, primarily driven by higher net income, partially offset by changes in net working capital.

Current wording

•Operating cash flows increased $26 million, or 5%, during the six-month period ended July 3, 2026 as compared to the comparable period in 2025, primarily driven by higher net income, partially offset by changes in net working capital.

Previous wording

•Net cash used in investing activities increased $428 million for the three-month period ended April 3, 2026 as compared to the comparable period in 2025, primarily driven by cash paid for the acquisition of In-Situ during the first quarter of 2026.

Current wording

•Net cash used in investing activities increased $594 million for the six-month period ended July 3, 2026 as compared to the comparable period in 2025, primarily driven by cash paid for the acquisitions of In-Situ and GlobalVision during the six-month period ended July 3, 2026.

Previous wording

•Net cash used in financing activities increased $306 million for the three-month period ended April 3, 2026 as compared to the comparable period in 2025 primarily driven by payments for share repurchases under the Company’s share repurchase program during the first quarter of 2026.

Current wording

•Net cash from financing activities increased $267 million for the six-month period ended July 3, 2026 as compared to the comparable period in 2025 primarily driven by net proceeds from the issuance of long-term debt offset by payments for share repurchases under the Company’s share repurchase program during the six-month period ended July 3, 2026.

Previous wording

In the first quarter of 2026, the Company declared a regular quarterly dividend of $0.13 per share of Company common stock payable on April 30, 2026 to holders of record as of March 31, 2026.

Current wording

In the second quarter of 2026, the Company declared a regular quarterly dividend of $0.13 per share of Company common stock payable on July 31, 2026 to holders of record as of June 30, 2026.

Previous wording

As of April 3, 2026, the Company held approximately $1.4 billion of cash and cash equivalents that were on deposit with financial institutions or invested in highly liquid investment-grade debt instruments with a maturity of 90 days or less. Of the cash and cash equivalents, approximately $175 million was held within the United States and approximately $1,256 million was held outside ofthe United States. The Company will continue to have cash requirements to support general corporate purposes, which may include working capital needs, capital expenditures, acquisitions and investments, paying interest and servicing debt, paying taxes and any related interest or penalties, funding its restructuring activities and pension plans as required, paying dividends to shareholders, repurchasing shares of the Company’s common stock and supporting other business needs.

Current wording

As of July 3, 2026, the Company held approximately $2.1 billion of cash and cash equivalents that were on deposit with financial institutions or invested in highly liquid investment-grade debt instruments with a maturity of 90 days or less. Of the cash and cash equivalents, approximately $1,004 million was held within the United States and approximately $1,115 million was held outside ofthe United States. The Company will continue to have cash requirements to support general corporate purposes, which may include working capital needs, capital expenditures, acquisitions and investments, paying interest and servicing debt, paying taxes and any related interest or penalties, funding its restructuring activities and pension plans as required, paying dividends to shareholders, repurchasing shares of the Company’s common stock and supporting other business needs.