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What changed in Fortive's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Fortive's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+247 added−304 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-25)

Top changes in Fortive's 2025 10-K

247 paragraphs added · 304 removed · 192 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeAcross the European Economic Area, the General Data Protection Regulation (“GDPR”), and similar laws in the United Kingdom and Switzerland impose strict requirements on how we process personal data, including, among other things, in certain circumstances a requirement for prompt notification of data breaches to supervisory authorities and/or to data subjects, with the risk of significant fines for non-compliance.
Biggest changeIn particular, a broad privacy law in California, the California Consumer Privacy Act (“CCPA”), which came into effect in January 2020 and was amended by the California Privacy Rights Act effective January 2023, has some of the same features as the GDPR (discussed below) and has prompted several other states to enact or consider similar legislation. 9 Table of Contents Across the European Economic Area, the General Data Protection Regulation (“GDPR”), and similar laws in the United Kingdom and Switzerland impose strict requirements on how we process personal data, including, among other things, in certain circumstances a requirement for prompt notification of data breaches to supervisory authorities and/or to data subjects, with the risk of significant fines for non-compliance.
Federal Anti-Kickback Statute prohibits persons from knowingly and willfully soliciting, offering, receiving, or providing remuneration (including any kickback or bribe), directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing or arranging for a good or service, for which payment may be made in whole or in part under a federal healthcare program, such as Medicare or Medicaid.
Federal Anti-Kickback Statute prohibits persons from knowingly and willfully soliciting, offering, receiving, or providing remuneration (including any 8 Table of Contents kickback or bribe), directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing or arranging for a good or service, for which payment may be made in whole or in part under a federal healthcare program, such as Medicare or Medicaid.
If we are found to have violated laws and regulations, it could materially adversely affect our business, reputation, results of operations and financial condition. Whistleblower Laws We operate in jurisdictions, such as the U.S. and European Union, with significant legal protection compliance for whistleblowers who make compliance reports about potential violations internally and to government authorities.
If we are found to have violated laws and regulations, it could materially adversely affect our business, reputation, results of operations and financial condition. 10 Table of Contents Whistleblower Laws We operate in jurisdictions, such as the U.S. and European Union, with significant legal protection compliance for whistleblowers who make compliance reports about potential violations internally and to government authorities.
For a discussion of the environmental laws and regulations that our operations, products, and services are subject to and other environmental contingencies, please refer to Note 13 to the consolidated financial statements included in this Annual Report.
For a discussion of the environmental laws and regulations that our operations, products, and services are subject to and other environmental contingencies, please refer to Note 12 to the consolidated financial statements included in this Annual Report.
For a further discussion of risks related to the materials and components required for our operations, please refer to “Item 1A. Risk Factors.” 6 Table of Contents Intellectual Property We own numerous patents, trademarks, copyrights, and trade secrets and hold licenses to use intellectual property owned by others.
For a further discussion of risks related to the materials and components required for our operations, please refer to “Item 1A. Risk Factors.” Intellectual Property We own numerous patents, trademarks, copyrights, and trade secrets and hold licenses to use intellectual property owned by others.
As a result, we are subject to various statutes and regulations that apply to companies doing business with governments and government-owned entities. For a discussion of risks related to government contracting requirements, please refer to “Item 1A.
As a result, we are subject to various statutes 7 Table of Contents and regulations that apply to companies doing business with governments and government-owned entities. For a discussion of risks related to government contracting requirements, please refer to “Item 1A.
Similar laws and regulations apply in many non-U.S. countries. Anti-Bribery and Anti-Corruption Laws Given the international scope of operation, we are subject to various U.S. and non-U.S. laws outlawing bribes, kickbacks, payoffs, and other improper payments. In particular, the U.S.
Similar laws and regulations apply in many non-U.S. countries. Anti-Bribery and Anti-Corruption Laws Given the international scope of our operations, we are subject to various U.S. and non-U.S. laws outlawing bribes, kickbacks, payoffs, and other improper payments. In particular, the U.S.
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.
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. 5 Table of Contents 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.
Risk Factors.” 10 Table of Contents Export/Import Regulations We sell products and services to customers all over the world and are required to comply with various U.S. export/import control and economic sanctions laws, such as: • the International Traffic in Arms Regulations administered by the U.S.
Risk Factors.” Export/Import Regulations We sell products and services to customers all over the world and are required to comply with various U.S. export/import control and economic sanctions laws, such as: • the International Traffic in Arms Regulations administered by the U.S.
Most of our sales in non-U.S. markets are made by our subsidiaries located outside the United States, though we also sell directly from the United States into non-U.S. markets through various representatives and distributors and, in some cases, directly.
Most of our sales in non-U.S. markets are made by our subsidiaries located outside the United States, though we also sell directly from the United States into non-U.S. markets through various representatives and distributors and, in some cases, directly. In countries with low sales volumes, we generally sell through representatives and distributors.
In addition, the government may assert that a claim including items and services resulting from a violation of the U.S. Federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act.
In addition, the government may assert that a claim including items and services resulting from a violation of the U.S. Federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act. Similar laws and regulations apply in many foreign countries.
Products and services in our Advanced Healthcare Solutions segment are marketed under a variety of brands, including ASP, CENSIS, CENSITRAC, EVOTECH, FLUKE BIOMEDICAL, LANDAUER, PROVATION, RAYSAFE, and STERRAD. ************************************ The following discussion includes information common to all of our segments.
Products and services in our Advanced Healthcare Solutions segment are marketed under a variety of brands, including ADVANCED STERILIZATION PRODUCTS “ASP”, CENSIS, FLUKE BIOMEDICAL, LANDAUER, and PROVATION. ************************************ The following discussion includes information common to all of our segments.
In countries with low sales volumes, we generally sell through representatives and distributors. 11 Table of Contents Available Information We maintain an internet website at www.fortive.com where we make available free of charge our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K and amendments to those reports, filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after filing such material with, or furnishing such material to, the SEC.
Available Information We maintain an internet website at www.fortive.com where we make available free of charge our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K and amendments to those reports, filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after filing such material with, or furnishing such material to, the SEC.
Reportable Segments We operate and report our results in three segments, Intelligent Operating Solutions, Precision Technologies, and Advanced Healthcare Solutions, each of which is further described below. Intelligent Operating Solutions Our Intelligent Operating Solutions segment provides advanced instrumentation, software and services to tens of thousands of customers enabling their mission-critical workflows.
Reportable Segments We operate and report our results in two segments, Intelligent Operating Solutions and Advanced Healthcare Solutions, both of which are further described below. Intelligent Operating Solutions Our Intelligent Operating Solutions segment provides advanced instrumentation, software and services to tens of thousands of customers enabling their mission-critical workflows.
While the remediation efforts taken by certain jurisdictions in response to events, such as the COVID-19 pandemic and the disruptions from the Ukraine/Russia conflict, have raised material and shipping costs, our supply chain was responsive to these dynamics, and we implemented solutions, including through FBS and working collaboratively with our suppliers, to effectively support our operations, and help countermeasure production material shortages and distribution limitations.
While recent volatility in global trade policy and the remediation efforts taken by certain jurisdictions in response to events, and the disruptions from the Ukraine/Russia conflict and other geopolitical tensions and conflicts, have raised material and shipping costs, our supply chain was responsive to these dynamics, and we implemented solutions, including through FBS and working collaboratively with our suppliers, to effectively support our operations, and help countermeasure production material shortages and distribution limitations.
In this Annual Report, the terms “Fortive” or the “Company” refer to either Fortive Corporation or to Fortive Corporation and its consolidated subsidiaries, as the context requires. Unless otherwise indicated, all amounts in this Annual Report refer to continuing operations.
In this Annual Report, the terms “Fortive” or the “Company” refer to either Fortive Corporation or to Fortive Corporation and its consolidated subsidiaries, as the context requires.
FBS enables us to operate our businesses with a focus on relentless execution, powered by our mindset and a set of tools and best practices consistently applied across our portfolio.
This cultural foundation is reinforced by the rigor of our disciplined operating cadence. FBS enables us to operate our businesses with a focus on relentless execution, powered by our mindset and a set of tools and best practices consistently applied across our portfolio.
Fortive Corporation is a Delaware corporation and was incorporated in 2015 in connection with the separation of Fortive from Danaher Corporation (“Danaher” or “Former Parent”) on July 2, 2016 as an independent, publicly-traded company, listed on the New York Stock Exchange.
The Separation was effected to qualify as a tax-free spin-off for Fortive shareholders for U.S. federal income tax purposes. Fortive Corporation is a Delaware corporation and was incorporated in 2015 in connection with the separation of Fortive from Danaher Corporation (“Danaher” or “Former Parent”) on July 2, 2016 as an independent, publicly-traded company, listed on the New York Stock Exchange.
After a device has received 510(k) clearance for a specific intended use, any change or modification that significantly affects its safety or effectiveness, such as a significant change in the design, materials, method of manufacture, or intended use, may require a new 510(k) clearance and payment of an FDA user fee. 8 Table of Contents Market access, sales, and marketing of medical devices in non-U.S. countries are subject to foreign regulatory requirements that vary widely from country to country.
After a device has received 510(k) clearance for a specific intended use, any change or modification that significantly affects its safety or effectiveness, such as a significant change in the design, materials, method of manufacture, or intended use, may require a new 510(k) clearance and payment of an FDA user fee.
Purpose and Values We are guided by our shared purpose to deliver essential technology for the people who accelerate progress. We strive to accelerate transformation in high-impact fields, such as workplace safety, engineering, and healthcare, delivering high-tech solutions and high impact for engineers, scientists, frontline workers, and patients around the world.
Purpose and Values We are guided by our shared purpose, innovating essential technologies to keep our world safe and productive. We strive to accelerate transformation in high-impact fields, such as workplace and industrial safety, and healthcare, delivering advanced technology solutions with high impact for frontline workers, healthcare professionals, patients, and more, worldwide.
Similar laws and regulations apply in many foreign countries. 9 Table of Contents Federal consumer protection and unfair competition laws broadly regulate marketplace activities and activities that potentially harm consumers.
Federal consumer protection and unfair competition laws broadly regulate marketplace activities and activities that potentially harm consumers.
These offerings include electrical test & measurement, 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. 5 Table of Contents 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.
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.
Fortive Business System Our teams across our operating companies are united by our culture of continuous improvement – characterized by the high expectations, inclusion, humility, and transparency embodied in the Fortive Business System (“FBS”). This cultural foundation is reinforced by the rigor of our disciplined operating cadence.
Unless otherwise indicated, all amounts in this Annual Report refer to continuing operations. 4 Table of Contents Fortive Business System Our teams across our operating companies are united by our culture of continuous improvement – characterized by the high expectations, inclusion, humility, and transparency embodied in the Fortive Business System (“FBS”).
Products and services within our Intelligent Operating Solutions segment are marketed under a variety of leading brands, including ACCRUENT, FLUKE, GORDIAN, INDUSTRIAL SCIENTIFIC, INTELEX, PRUFTECHNIK, and SERVICECHANNEL.
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. Products and services within our Intelligent Operating Solutions segment are marketed under a variety of leading brands, including FLUKE, SERVICECHANNEL, GORDIAN, ACCRUENT, INDUSTRIAL SCIENTIFIC, and INTELEX.
For example, sales of capital equipment and sterilization consumables are often stronger in the fourth calendar quarter and sales to OEMs are often stronger immediately preceding and following the launch of new products. However, as a whole, we are not subject to material seasonality. Human Capital Management Fortive is a global team, over 18,000 strong, energized by a powerful purpose.
For example, sales of capital equipment and sterilization consumables are often stronger in the fourth calendar quarter and sales to OEMs are often stronger immediately preceding and following the launch of new products.
Our Performance and Development processes drive results and career growth for our global teams. Performance for Growth rigorously deploys our strategies into cascaded goals throughout the organization, while Development for Growth translates our beliefs and values into desired leader competencies, at all levels of the organization.
Performance for Growth deploys our strategies into clear goals throughout the organization, while Development for Growth ensures excellence in how those results were achieved. This translates the behaviors that underpin our desired leader competencies, at all levels of the organization.
Our career development and reward systems advance our people strategy by attracting, growing, and retaining the exceptional people we need now and in the future. These business and career development systems strengthen our ability to deliver our employee value proposition, build our employer brand, drive professional growth for our people and results for our customers.
Career Development and Reward Systems Our career development systems advance our people strategy by attracting, developing, and retaining the exceptional people we need now and in the future. Specifically, our performance and development processes drive outcomes and career growth for our global teams.
Our results continue to inform both management and our Board of Directors on appropriate actions to enhance our culture and overall employee experience. Government Contracts Although the majority of our revenue in 2024 was from customers other than governmental entities, each of our segments has agreements relating to the sale of products and services to government entities.
We do not consider race, ethnicity, gender, or any other protected trait in our hiring, promotional, or other processes. Government Contracts Although the majority of our revenue in 2025 was from customers other than governmental entities, each of our segments has agreements relating to the sale of products and services to government entities.
We offer leading programs that inspire and reward superior performance, are equitable, and foster an inclusive, diverse, and healthy global workforce. We also invest in our people at every level through our growth and development experiences. These experiences range from leadership learning and FBS immersion to hands-on skill building in each of our three FBS pillars—growth, lean, and leadership.
Together, these systems provide a roadmap for the way we work, deliver results, and build amazing day-to-day experiences in the workplace. We also invest in our people at every level through our development experiences. These experiences range from leadership learning to curated skills-based learning pathways, to hands-on skill building in each of our three FBS pillars: growth, lean, and leadership.
We are continually evolving FBS to meet the changing needs of our portfolio and incorporating new technology enablers, like artificial intelligence and machine learning, to drive faster growth, more productivity, and greater impact. The execution of our disciplined acquisition strategy is strengthened by the value FBS creates and is a critical component of how we achieve sustained results over time.
In doing so, we have incorporated new technology enablers, like artificial intelligence and machine learning and are building new capabilities to drive accelerated innovation, greater commercial success and more recurring customer value. FBS is a critical component of how we achieve sustained success over time.
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.
We are headquartered in Everett, Washington and have a workforce of more than 10,000 research and development, manufacturing, sales, distribution, service, and administrative professionals in approximately 50 countries around the world. On June 28, 2025, we separated our Precision Technologies segment business into an independent publicly-traded company (the “Separation”) named Ralliant Corporation (“Ralliant”).
ITEM 1. BUSINESS General Fortive Corporation is a provider of essential technologies for connected workflow solutions across a range of attractive end-markets. Our strategic segments - Intelligent Operating Solutions, Precision Technologies, and Advanced Healthcare Solutions - include well-known brands with leading positions in their markets.
ITEM 1. BUSINESS General Fortive Corporation innovates essential technologies to keep our world safe and productive. Our strategic segments - Intelligent Operating Solutions and Advanced Healthcare Solutions - 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.
Products and services in our Precision Technologies segment are marketed under a variety of brands, including ANDERSON-NEGELE, GEMS, SETRA, HENGSTLER-DYNAPAR, QUALITROL, PACIFIC SCIENTIFIC, KEITHLEY and TEKTRONIX. Advanced Healthcare Solutions Our Advanced Healthcare Solutions segment supplies critical workflow solutions enabling healthcare providers to deliver exceptional patient care more efficiently.
Advanced Healthcare Solutions Our Advanced Healthcare Solutions segment supplies critical workflow solutions enabling healthcare providers to deliver exceptional patient care more efficiently.
Together, these provide a roadmap for the way we work, deliver results, and build high-performing teams. Additionally, we design our Total Rewards programs to attract and retain talented, curious people with a growth mindset and a passion for innovation, collaboration, and continuous improvement.
With our market-leading portfolio and performance and development approach, our people have the opportunity to accelerate their career across multiple industries, contribute to customer success, and make a meaningful impact in the world. Our Total Rewards programs are designed to attract and retain talented, curious people with a growth mindset and a passion for innovation, collaboration, and continuous improvement.
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On September 4, 2024, we announced our intention to separate our Precision Technologies segment business into an independent publicly-traded company (the “Separation”), which will be named Ralliant.
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We are continually evolving FBS to accelerate and sustain progress in every aspect of our business and deliver on our “Fortive Accelerated” strategy of faster profitable growth, disciplined capital allocation and building and maintaining investor trust.
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The Separation will create (i) a technology solutions company, retaining the Fortive name, with a portfolio of the brands currently operating under Fortive’s Intelligent Operating Solutions and Advanced Healthcare Solutions business segments, focused on resilient, high-quality recurring growth by delivering productivity and safety to customers, and (ii) a global technology company consisting of our brands currently operating under the Precision Technologies segment with a focus on precision instruments and highly engineered products essential for breakthrough innovation and aligned to powerful secular trends.
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However, as a whole, we are not subject to material seasonality. 6 Table of Contents People Strategy Our Fortive team of over 10,000 people around the world are united by a powerful purpose: innovating essential technologies to keep our world safe and productive. Our Fortive Accelerated growth strategy is the engine that drives that purpose forward, increasing our positive impact.
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The Separation is intended to qualify as a tax-free spin-off for Fortive shareholders for U.S. federal income tax purposes.
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The Fortive Accelerated strategy is built on three pillars: profitable organic growth acceleration powered by the amplified Fortive Business System (FBS), disciplined capital allocation, and a commitment to building investor trust. Our people are the foundation of this Fortive Accelerated growth strategy.
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The Company is targeting completion of the Separation early in the third quarter of 2025, subject to the satisfaction of certain conditions, including, among others, final approval of Fortive’s Board of Directors, satisfactory completion of financing, receipt of a favorable opinion of legal counsel and/or a private letter ruling from the U.S.
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Creating an outstanding employee experience, where each team member feels empowered, supported, and proud is a critical driver of our sustainable success.
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Internal Revenue Service with respect to the tax treatment of 4 Table of Contents the transaction for U.S. federal income tax purposes, the effectiveness of a Form 10 registration statement filed with the SEC, and other regulatory approvals.
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We advance our people strategy through thoughtful employee experience management – using deep understanding of our people, continuous feedback mechanisms, and a clear cultural compass to guide how we design and deliver our people practices, with a particular focus on our career development and rewards systems.
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We are committed to delivering on our financial commitments and engaging our leaders and teams to accelerate and sustain progress in every aspect of the business, including new product development and commercialization, finance, human capital management, and sustainability.
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We are committed to nurturing and continuously improving Fortive as an amazing place to work – so we can achieve more for our customers, our teams, and the world. Our Board of Directors, along with the Compensation Committee, oversee our people strategy, culture, and rewards systems.
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Precision Technologies On September 4, 2024, we announced our intention to separate our Precision Technologies segment into an independent publicly traded company, subject to the satisfaction of certain conditions, including, among others, final approval of Fortive’s Board of Directors, satisfactory completion of financing, receipt of a favorable opinion of legal counsel and/or a private letter ruling from the U.S.
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Culture Our inclusive growth culture underpins Fortive’s people strategy to deliver on our employee experience promise: For you. For us. For growth. We foster an inclusive environment supercharged by continuous improvement, innovation, and growth mindsets to enable team members to meaningfully grow their careers, make an impact, and feel true ownership in our shared success.
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Internal Revenue Service with respect to the tax treatment of the transaction for U.S. federal income tax purposes, the effectiveness of a Form 10 registration statement filed with the SEC, and other regulatory approvals.
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FBS has been infused with AI capabilities, streamlining and reinforcing our growth-oriented tools and training for team members. Collectively, these tools and experiences enhance development, strengthen performance, and prepare our team members for challenging opportunities and outsized impact.
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Our Precision Technologies 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.
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We offer leading programs that inspire and reward superior performance, paired with comprehensive benefits that enhance holistic well-being for every employee and their families. Fortive is committed to adhering to Equal Employment Opportunity (EEO) principles. All people are evaluated through a neutral merit-based process.
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Our expertise in materials, methods and measurements are reflected in our electrical test & measurement and sensing and material technologies offered to a broad set of customers and vertical end markets, including industrial, power and energy, automotive, medical equipment, food and beverage, aerospace and defense, semiconductor, and other general industries.
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Market access, sales, and marketing of medical devices in non-U.S. countries are subject to foreign regulatory requirements that vary widely from country to country.
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Customers for these products and services include design engineers for advanced electronic devices and equipment, process and quality engineers focused on improved process capability and productivity, facility maintenance managers driving increased uptime, and other customers for whom precise measurement, reliability, and compliance are critical in their applications.
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Our people strategy centers on empowering inclusive teams working together to solve problems no one could solve alone. We intentionally seek out different skills, backgrounds, and voices to deliver results for our customers and fulfill our employee promise – For you. For us. For growth.
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Our people strategy is defined by this inclusive growth culture and is advanced through FBS and our career development and reward systems. We continually measure, review, and refine our people strategy through measured employee experience processes. These key elements enable us to accelerate progress for our customers, our teams, and the world. Inclusive Growth Culture We are more together.
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Our inclusive growth culture sets the tone for Fortive’s people strategy and drives Fortive’s success. We know that a workforce empowered by inclusivity, continuous improvement, and FBS creates extraordinary long-term value for our customers, people and shareholders.
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We are focused on cultivating an inclusive workplace where everyone can contribute to their fullest potential, attracting and retaining top talent from a wide variety of candidate sources, and sustaining policies and practices to ensure that no group is inadvertently disadvantaged. Fortive is committed to adhering to EEO (equal employment opportunity) principles.
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All people are evaluated through a neutral merit-based process. We do not consider race, ethnicity, gender, or any other protected trait in our hiring, promotional, or other processes. Our Board of Directors, along with the Compensation Committee, also oversee our inclusive growth culture practices as an integral part of our people strategy and measurement actions.
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We are committed to continued transparency by publicly sharing our workforce representation and inclusion results through our website (where we provide our EEO-1 report), and our annual Sustainability Report. 7 Table of Contents Business, Career Development, and Reward Systems Our culture of continuous improvement inspires us to keep experimenting, growing, and learning.
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Collectively, these experiences build skills, strengthen performance, and prepare our people for challenging opportunities and outsized impact. With our strong and evolving portfolio, our people have the opportunity to accelerate their career across multiple industries, meaningfully contributing to customer success and impact in the world. Employee Experience and Feedback Our promise to employees is ‒ For you. For us.
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For growth. To achieve this promise, our leaders at all levels of the organization actively seek feedback with quarterly touchpoints to strengthen our inclusive growth culture. In our last comprehensive census survey in Q4 2024, over 85% of our global team responded, delivering continued strength in overall engagement and inclusion and belonging at high ratings of 76% and 84%, respectively.
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In particular, a broad privacy law in California, the California Consumer Privacy Act (“CCPA”), which came into effect in January 2020 and was amended by the California Privacy Rights Act effective January 2023, has some of the same features as the GDPR (discussed below) and has prompted several other states to enact or consider similar legislation.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur success will depend on several factors, including our ability to: • accurately identify customer needs and preferences and predict future needs and preferences; • allocate our research and development funding to products and services with higher growth prospects; • anticipate and respond to our competitors’ development of new products and services and technological innovations; • differentiate our offerings from our competitors’ offerings and avoid commoditization; • innovate and develop new technologies and applications, and acquire or obtain rights to third-party technologies that may have valuable applications in our served markets; • obtain adequate intellectual property rights with respect to key technologies before our competitors do; • successfully commercialize new technologies in a timely manner, price them competitively, and cost-effectively manufacture and deliver sufficient volumes of new products of appropriate quality on time; and • stimulate customer demand for and convince customers to adopt new technologies.
Biggest changeOur success will depend on several factors, including our ability to: • accurately identify customer needs and preferences and predict future needs and preferences; • allocate our research and development funding to products and services with higher growth prospects; • anticipate and respond to our competitors’ development of new products and services and technological innovations; • differentiate our offerings from our competitors’ offerings and avoid commoditization; • innovate and develop new technologies and applications, and acquire or obtain rights to third-party technologies that may have valuable applications in our served markets; • obtain adequate intellectual property rights with respect to key technologies before our competitors do; • successfully commercialize new technologies in a timely manner, price them competitively, and cost-effectively manufacture and deliver sufficient volumes of new products of appropriate quality on time; and • stimulate customer demand for and convince customers to adopt new technologies. 13 Table of Contents In addition, if we fail to accurately predict future customer needs and preferences or fail to produce viable technologies, we may invest heavily in research and development of products and services that do not lead to significant revenue, which would adversely affect our profitability.
Our failure to compete effectively and/or pricing pressures resulting from competition may adversely impact our financial results, and our expansion into new markets may result in greater-than-expected risks, liabilities and expenses. Our growth depends in part on the timely development and commercialization and customer acceptance of new and enhanced products and services based on technological innovation.
Our failure to compete effectively and/or pricing pressures resulting from competition may adversely impact our financial results, and our expansion into new markets may result in greater-than-expected risks, liabilities and expenses. Our growth depends in part on the timely development, commercialization and customer acceptance of new and enhanced products and services based on technological innovation.
These acquisitions, investments, joint ventures, and strategic relationships involve a number of financial, accounting, managerial, operational, legal, compliance, and other risks and challenges, including the following, any of which could adversely affect our financial results: • any business, technology, service, or product that we acquire or invest in could under-perform relative to our expectations and the price that we paid for it, or not perform in accordance with our anticipated timetable, or we could fail to operate any such business profitably; • we may incur or assume significant debt in connection with our acquisitions, investments, joint ventures, or strategic relationships, which could also cause a deterioration of our credit ratings, result in increased borrowing costs and interest expense, and diminish our future access to the capital markets; • acquisitions, investments, joint ventures, or strategic relationships could cause our financial results to differ from our own or the investment community’s expectations in any given period, or over the long-term; • pre-closing and post-closing earnings charges could adversely impact operating results in any given period, and the impact may be substantially different from period to period; • acquisitions, investments, joint ventures, or strategic relationships could create demands on our management, operational resources, and financial and internal control systems that we are unable to effectively address; • we could experience difficulty in integrating personnel, operations, and financial and other controls and systems and retaining key employees and customers; • we may be unable to achieve cost savings or other synergies anticipated in connection with an acquisition, investment, joint venture, or strategic relationship; 19 Table of Contents • we may assume by acquisition or strategic relationship unknown liabilities, known contingent liabilities that become realized, known liabilities that prove greater than anticipated, internal control deficiencies, or exposure to regulatory sanctions resulting from the acquired company’s or investee’s activities and the realization of any of these liabilities or deficiencies may increase our expenses, adversely affect our financial position, or cause us to fail to meet our public financial reporting obligations; • in connection with acquisitions and joint ventures, we may enter into post-closing financial arrangements such as purchase price adjustments, earn-out obligations, and indemnification obligations, which may have unpredictable financial results; • in connection with acquisitions and investments, we have recorded significant goodwill and other intangible assets on our balance sheet and if we are not able to realize the value of these assets, we may be required to incur charges relating to the impairment of these assets; and • we may have interests that diverge from those of our joint venture partners or other strategic partners and we may not be able to direct the management and operations of the joint venture or other strategic relationship in the manner we believe is most appropriate, exposing us to additional risk.
These acquisitions, investments, joint ventures, and strategic relationships involve a number of financial, accounting, managerial, operational, legal, compliance, and other risks and challenges, including the following, any of which could adversely affect our financial results: • any business, technology, service, or product that we acquire or invest in could under-perform relative to our expectations and the price that we paid for it, or not perform in accordance with our anticipated timetable, or we could fail to operate any such business profitably; • we may incur or assume significant debt in connection with our acquisitions, investments, joint ventures, or strategic relationships, which could also cause a deterioration of our credit ratings, result in increased borrowing costs and interest expense, and diminish our future access to the capital markets; • acquisitions, investments, joint ventures, or strategic relationships could cause our financial results to differ from our own or the investment community’s expectations in any given period, or over the long-term; • pre-closing and post-closing earnings charges could adversely impact operating results in any given period, and the impact may be substantially different from period to period; 18 Table of Contents • acquisitions, investments, joint ventures, or strategic relationships could create demands on our management, operational resources, and financial and internal control systems that we are unable to effectively address; • we could experience difficulty in integrating personnel, operations, and financial and other controls and systems and retaining key employees and customers; • we may be unable to achieve cost savings or other synergies anticipated in connection with an acquisition, investment, joint venture, or strategic relationship; • we may assume by acquisition or strategic relationship unknown liabilities, known contingent liabilities that become realized, known liabilities that prove greater than anticipated, internal control deficiencies, or exposure to regulatory sanctions resulting from the acquired company’s or investee’s activities and the realization of any of these liabilities or deficiencies may increase our expenses, adversely affect our financial position, or cause us to fail to meet our public financial reporting obligations; • in connection with acquisitions and joint ventures, we may enter into post-closing financial arrangements such as purchase price adjustments, earn-out obligations, and indemnification obligations, which may have unpredictable financial results; • in connection with acquisitions and investments, we have recorded significant goodwill and other intangible assets on our balance sheet and if we are not able to realize the value of these assets, we may be required to incur charges relating to the impairment of these assets; and • we may have interests that diverge from those of our joint venture partners or other strategic partners and we may not be able to direct the management and operations of the joint venture or other strategic relationship in the manner we believe is most appropriate, exposing us to additional risk.
Acquisitions and investments that align with our portfolio strategy may be difficult to identify and execute for a number of reasons, including high valuations, competition among prospective buyers, the availability of affordable funding in the capital markets and the need to satisfy applicable closing conditions and obtain antitrust and other regulatory approvals on acceptable terms.
In particular, acquisitions and investments that align with our portfolio strategy may be difficult to identify and execute for a number of reasons, including high valuations, competition among prospective buyers, the availability of affordable funding in the capital markets and the need to satisfy applicable closing conditions and obtain antitrust and other regulatory approvals on acceptable terms.
Our business is impacted by general economic conditions, and adverse economic conditions arising from any slower global economic growth, reduced demand or consumer confidence, energy, manufacturing or component supply constraints arising from international conflicts, high inflation rates and the corresponding interest rate policies, volatility in currency and credit markets, actual or anticipated default on sovereign debt, changes in global trade policies, unemployment and underemployment rates, reduced levels of capital expenditures, changes in government fiscal and monetary policies, political initiatives targeted at reducing government funding, government deficit reduction and budget negotiation dynamics, sequestration, other austerity measures, political and social instability, other geopolitical conflict, sanctions, natural disasters, public health crises, terrorist attacks, and other challenges affect us and our distributors, customers, and suppliers, including having the effect of: • reducing demand for our products, software, and services, limiting the financing available to our customers and suppliers, increasing order cancellations, and resulting in longer sales cycles and slower adoption of new technologies; • increasing the difficulty in collecting accounts receivable and the risk of excess and obsolete inventories; • increasing price competition in our served markets; • supply interruptions, which could disrupt our ability to produce our products; • increasing the risk of impairment of goodwill and other long-lived assets, and the risk that we may not be able to fully recover the value of other assets such as real estate and tax assets; • increasing the impact of currency translation; and • increasing the risk that counterparties to our contractual arrangements will become insolvent or otherwise unable to fulfill their contractual obligations which, in addition to increasing the risks identified above, could result in preference actions against us.
Our business is impacted by general economic conditions, and adverse economic conditions arising from any slower global economic growth, reduced demand or consumer confidence, energy, manufacturing or component supply constraints arising from international conflicts, high inflation rates and the corresponding interest rate policies, volatility in currency and credit markets, actual or anticipated default on sovereign debt, changes in global trade policies, unemployment and underemployment rates, immigration policies, reduced levels of capital expenditures, changes in government fiscal and monetary policies, political initiatives targeted at reducing government funding, government deficit reduction and budget negotiation dynamics, sequestration, other austerity measures, political and social instability, other geopolitical conflict, sanctions, natural disasters, public health crises, terrorist attacks, and other challenges affect us and our distributors, customers, and suppliers, including having the effect of: • reducing demand for our products, software, and services, limiting the financing available to our customers and suppliers, increasing order cancellations, and resulting in longer sales cycles and slower adoption of new technologies; • increasing the difficulty in collecting accounts receivable and the risk of excess and obsolete inventories; 11 Table of Contents • increasing price competition in our served markets; • supply interruptions, which could disrupt our ability to produce our products; • increasing the risk of impairment of goodwill and other long-lived assets, and the risk that we may not be able to fully recover the value of other assets such as real estate and tax assets; • increasing the impact of currency translation; and • increasing the risk that counterparties to our contractual arrangements will become insolvent or otherwise unable to fulfill their contractual obligations which, in addition to increasing the risks identified above, could result in preference actions against us.
Notwithstanding the opinion of tax counsel we have received, the IRS could determine on audit that any of the Separation Transactions is taxable if it determines that any of the corresponding facts, assumptions, representations, or undertakings are not correct or have been violated or if it disagrees with the conclusions in any of the applicable opinions.
Notwithstanding the opinions of tax counsel we have received, the IRS could determine on audit that any of the Separation Transactions is taxable if it determines that any of the corresponding facts, assumptions, representations, or undertakings are not correct or have been violated or if it disagrees with the conclusions in any of the applicable opinions.
An adverse outcome in any such audit or investigation could subject us to fines or other penalties; • we also have agreements to sell products and services to government entities and are subject to various statutes, regulations and other requirements that apply to companies doing business with government entities (approximately $417 million of our 2024 sales were made to the U.S. federal government).
An adverse outcome in any such audit or investigation could subject us to fines or other penalties; • we also have agreements to sell products and services to government entities and are subject to various statutes, regulations and other requirements that apply to companies doing business with government entities (approximately $417 million of our 2025 sales were made to the U.S. federal government).
Overall strengthening of the U.S. dollar during most of fiscal year 2024 has increased the effective price of our products sold in U.S. dollars into other countries, which may require us to lower our prices or adversely affect sales to the extent we do not increase local currency prices.
Overall strengthening of the U.S. dollar during most of fiscal year 2025 has increased the effective price of our products sold in U.S. dollars into other countries, which may require us to lower our prices or adversely affect sales to the extent we do not increase local currency prices.
As part of our business strategy we acquire businesses, make investments, and enter into joint ventures and other strategic relationships in the ordinary course, some of which may be material; please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) for additional details.
As part of our business strategy we acquire businesses, make investments, and enter into joint ventures and other strategic relationships in the ordinary course, some of which may be material; please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional details.
In addition, as a result of such claims of infringement or misappropriation, we could lose our rights to critical technology, be unable to license critical technology or sell critical products and services, be required to pay substantial damages or license fees with respect to the infringed rights, be required to license technology or other intellectual property rights from others, be required to cease marketing, manufacturing, or using certain products, or be required to redesign, re-engineer, or re-brand our products at substantial cost, any of which could adversely impact our competitive position and financial results.
In addition, as a result of such claims of infringement or misappropriation, we could lose our rights to critical technology, be unable to license critical technology or sell critical products and services, be required to pay substantial damages or license fees with respect to the infringed rights, be required to license technology or other intellectual property rights from others, be required to cease marketing, manufacturing, or using certain products, or be required to redesign, re-engineer, or re-brand our products at 15 Table of Contents substantial cost, any of which could adversely impact our competitive position and financial results.
Any of these risks could negatively affect our financial results and growth rate. Trade relations between the United States and other countries could have a material adverse effect on our business and financial results. We participate in various end markets outside the United States.
Any of these risks could negatively affect our financial results and growth rate. Trade relations between the United States and other countries have been volatile and could have a material adverse effect on our business and financial results. We participate in various end markets outside the United States.
We rely on information technology systems, some of which are managed by third parties and some of which are managed on a decentralized, independent basis by our operating companies, to process, transmit, and store electronic information (including 14 Table of Contents sensitive data such as confidential business information and personally identifiable data relating to employees, customers, and other business partners), and to manage or support a variety of critical business processes and activities.
We rely on information technology systems, some of which are managed by third parties and some of which are managed on a decentralized, independent basis by our operating companies, to process, transmit, and store electronic information (including sensitive data such as confidential business information and personally identifiable data relating to employees, customers, and other business partners), and to manage or support a variety of critical business processes and activities.
If any of these facts, assumptions, representations, or undertakings are incorrect or not satisfied, our stockholders and we may not be able to rely on the applicable opinion of tax counsel and could be subject to significant tax liabilities.
If any of these facts, assumptions, representations, or undertakings are incorrect or not satisfied, our stockholders and we may not be able to rely on the applicable opinions of tax counsel and could be subject to significant tax liabilities.
Any charges relating to such impairments would adversely affect our results of operations in the periods recognized. Refer to Note 2 and Note 5 to the consolidated financial results for a description of our policies relating to goodwill and acquired intangibles.
Any charges relating to such impairments would adversely affect our results of operations in the periods recognized. Refer to Note 2 and Note 4 to the consolidated financial results for a description of our policies relating to goodwill and acquired intangibles.
Therefore, even if we are successful in defending against any such actions brought against us, our business may be impaired; • we are also subject to the federal False Claims Act (the “FCA”), which imposes civil and criminal liability on individuals or entities that knowingly submit false or fraudulent claims for payment to the government or knowingly make, or cause to be made, a false statement in order to have a false claim paid, including qui tam or whistleblower suits.
Therefore, even if we are successful in defending against any such actions brought against us, our business may be impaired; • we are also subject to the federal False Claims Act (the “FCA”), which imposes civil and criminal liability on individuals or entities that knowingly submit false or fraudulent claims for payment to the government or knowingly make, or cause to be made, a false statement in order to have a false claim paid, including qui tam or whistleblower 21 Table of Contents suits.
We are subject to potential work stoppages, works council campaigns, and other labor disputes, any of which could adversely impact our productivity, results of operations, and reputation. 15 Table of Contents If we suffer loss to our facilities, supply chains, distribution systems, or information technology systems due to catastrophe or other events, our operations could be seriously harmed.
We are subject to potential work stoppages, works council campaigns, and other labor disputes, any of which could adversely impact our productivity, results of operations, and reputation. If we suffer loss to our facilities, supply chains, distribution systems, or information technology systems due to catastrophe or other events, our operations could be seriously harmed.
Any or all of these problems could result in the loss of customers, provide an opportunity for competing products to gain market acceptance, and otherwise adversely affect our profitability. Our financial results are subject to fluctuations in the cost and availability of commodities or components that we use in our operations.
Any or all of these problems could result in the loss of customers, provide an opportunity for competing products to gain market acceptance, and otherwise adversely affect our profitability. 12 Table of Contents Our financial results are subject to fluctuations in the cost and availability of commodities or components that we use in our operations.
Demand for our products and services is also sensitive to changes in customer order patterns, which 13 Table of Contents may be affected by announced price changes, changes in incentive programs, new product introductions, and customer inventory levels. Any of these factors could adversely affect our growth and results of operations in any given period.
Demand for our products and services is also sensitive to changes in customer order patterns, which may be affected by announced price changes, changes in incentive programs, new product introductions, and customer inventory levels. Any of these factors could adversely affect our growth and results of operations in any given period.
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.
We use artificial intelligence in our business and in certain of 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.
For example, in 2018, we split-off most of our automation and specialty platform in a Reverse Morris Trust transaction with Altra Industrial Motion Corp. and, in 2020, we spun-off our former Industrial Technologies segment. These transactions pose risks and challenges that could negatively impact our business.
For example, in 2018, we split-off most of our automation and specialty platform in a Reverse Morris Trust transaction with Altra Industrial Motion Corp. and, in 2020 and 2025, we spun-off our former Industrial Technologies segment and our former Precision Technologies segment, respectively. These transactions pose risks and challenges that could negatively impact our business.
Please refer to Note 9 to the consolidated financial results for additional details. Our ability to comply with these restrictions and covenants may be affected by events beyond our control.
Please refer to Note 8 to the consolidated financial results for additional details. Our ability to comply with these restrictions and covenants may be affected by events beyond our control.
We may also become subject to lawsuits as a result of past or future acquisitions or as a result of liabilities retained from, or representations, warranties, or indemnities provided in connection with, divested businesses. These lawsuits may include claims for compensatory damages, 16 Table of Contents punitive and consequential damages, and/or injunctive relief.
We may also become subject to lawsuits as a result of past or future acquisitions or as a result of liabilities retained from, or representations, warranties, or indemnities provided in connection with, divested businesses. These lawsuits may include claims for compensatory damages, punitive and consequential damages, and/or injunctive relief.
Our international business, including our business in high-growth markets outside the United States, is subject to risks that are customarily encountered in non-U.S. operations, as well as increased risks due to significant uncertainties related to political and economic changes, including: • interruption in the transportation of materials to us and finished goods to our customers; • impact of geopolitical conflict; • differences in terms of sale, including payment terms; • local product preferences and product requirements; 17 Table of Contents • changes in a country’s or region’s political or economic conditions, including changes in relationship with the United States, particularly with respect to China; • trade protection measures, sanctions, increased trade barriers, imposition of significant tariffs on imports or exports, embargoes, and import or export restrictions and requirements; • new conditions to, and possible restrictions of, existing free trade agreements; • epidemics, such as the coronavirus outbreak, that adversely impact travel, production, or demand; • unexpected changes in laws or regulatory requirements, including negative changes in tax laws in the U.S. and in countries in which we manufacture or sell our products; • limitations on ownership and on repatriation of earnings and cash; • the potential for nationalization of enterprises; • limitations on legal rights and our ability to enforce such rights; • difficulty in staffing and managing widespread operations; • differing labor regulations; • difficulties in implementing restructuring actions on a timely or comprehensive basis; and • differing protection of intellectual property.
Furthermore, our international business, including our business in high-growth markets outside the United States, is subject to additional risks that are customarily encountered in non-U.S. operations, as well as increased risks due to significant uncertainties related to political and economic changes, including: • interruption in the transportation of materials to us and finished goods to our customers; • differences in terms of sale, including payment terms; • local product preferences and product requirements; • changes in a country’s or region’s political or economic conditions, including changes in relationship with the United States; • trade protection measures, sanctions, increased trade barriers, imposition of significant tariffs on imports or exports, embargoes, and import or export restrictions and requirements; • new conditions to, and possible restrictions of, existing free trade agreements; • epidemics, such as the coronavirus outbreak, that adversely impact travel, production, or demand; • unexpected changes in laws or regulatory requirements, including negative changes in tax laws in the U.S. and in countries in which we manufacture or sell our products; • limitations on ownership and on repatriation of earnings and cash; • the potential for nationalization of enterprises; • limitations on legal rights and our ability to enforce such rights; • difficulty in staffing and managing widespread operations; • differing labor regulations; • difficulties in implementing restructuring actions on a timely or comprehensive basis; and • differing protection of intellectual property.
Each of these risks could negatively affect our businesses, financial condition, results of operations, and cash flows. Risk Related to Regulatory and Compliance Matters Changes in industry standards and governmental regulations may reduce demand for our products or services or increase our expenses.
Each of these risks could negatively affect our businesses, financial condition, results of operations, and cash flows. 19 Table of Contents Risk Related to Regulatory and Compliance Matters Changes in industry standards and governmental regulations may reduce demand for our products or services or increase our expenses.
Any of the attacks, breaches, or other disruptions or damage described above, as well as corresponding remediation efforts, can disrupt our operations, delay production and shipments, result in theft of our and our customers’ intellectual property and trade secrets, damage customer and business partner relationships and our reputation, or result in defective products or services, legal claims and proceedings, liability and penalties under privacy laws, and increased costs for security and remediation, each of which could adversely affect our business and financial results.
Any of the attacks, breaches, or other disruptions or damage described above, as well as corresponding investigation, containment, and remediation efforts, can disrupt our operations, delay production and shipments, result in theft of our and our customers’ intellectual property and trade secrets, disclosure of personal data, damage customer and business partner relationships and our reputation, or result in defective products or services, legal claims and proceedings, liability and penalties under privacy laws, and increased costs for security and remediation, each of which could adversely affect our business and financial results.
We entered into a separation and distribution agreement and related agreements with Vontier to govern the separation and distribution of Vontier and the relationship between the two companies going forward. These agreements provide for specific indemnity and liability obligations of each party and could lead to disputes between us.
We entered into a separation and distribution agreement and related agreements with Vontier and with Ralliant to govern the separation and distribution of Vontier and Ralliant, respectively, and the relationship between each of the two companies and Fortive going forward. These agreements provide for specific indemnity and liability obligations of each party and could lead to disputes between us.
In addition, security breaches of our systems or lack of sufficient control in our systems (or the systems of our customers, suppliers or other business partners) could result in the misappropriation, change, destruction, exfiltration or unauthorized disclosure of confidential information or personal data belonging to us or to our employees, partners, customers, or suppliers.
In addition, security breaches of our systems or lack of sufficient control in our systems (or the systems of our customers, suppliers or other business partners) could result, and have resulted, in the misappropriation, change, destruction, exfiltration or unauthorized disclosure of confidential information or personal data belonging to us or to our employees, partners, customers, or suppliers.
GAAP could adversely affect our reported financial results and may require significant changes to our internal accounting systems and processes. We prepare our consolidated financial results in conformity with generally accepted accounting principles in the United States of America (“GAAP”).
GAAP could adversely affect our reported financial results and may require significant changes to our internal accounting systems and processes. 22 Table of Contents We prepare our consolidated financial results in conformity with generally accepted accounting principles in the United States of America (“GAAP”).
The resolution of these contingencies has not had a material effect on our financial results but we cannot be certain that this favorable pattern will continue. Potential indemnification liabilities to Vontier pursuant to the separation agreement could materially and adversely affect our businesses, financial condition, results of operations, and cash flows.
The resolution of these contingencies has not had a material effect on our financial results but we cannot be certain that this favorable pattern will continue. Potential indemnification liabilities to Ralliant and Vontier pursuant to the respective separation agreements could materially and adversely affect our businesses, financial condition, results of operations, and cash flows.
In addition, with respect to the liabilities for which Vontier has agreed to indemnify us under these agreements, there can be no assurance that the indemnity rights we have against Vontier will be sufficient to protect us against the full amount of the liabilities, or that Vontier will be able to fully satisfy its indemnification obligations.
In addition, with respect to the liabilities for which Vontier or Ralliant has agreed to indemnify us under these agreements, there can be no assurance that the indemnity rights we have against Vontier or Ralliant, as applicable, will be sufficient to protect us against the full amount of the liabilities, or that Vontier and Ralliant will be able to fully satisfy its indemnification obligations.
If we are required to indemnify Vontier under the circumstances set forth in these agreements, we may be subject to substantial liabilities.
If we are required to indemnify Vontier or Ralliant under the circumstances set forth in these agreements, we may be subject to substantial liabilities.
These systems may be damaged, disrupted, accessed, or shut down due to attacks by computer hackers, nation states, cyber-criminals, computer viruses, error or malfeasance by employee or former employees, power outages, hardware failures, telecommunication or utility failures, catastrophes, or other similar events, and in any such circumstances our system redundancy and other disaster recovery planning may be ineffective or inadequate.
These systems can be, and in the past have been, damaged, disrupted, accessed, or shut down due to attacks by computer hackers, nation states, cyber-criminals, computer viruses, error or malfeasance by employee or former employees, power outages, hardware failures, telecommunication or utility failures, catastrophes, or other similar events, and in any such circumstances our system redundancy and other disaster recovery planning may be ineffective or inadequate.
Risk Related to our International Operations International economic, political, legal, compliance, and business factors could negatively affect our financial results. In 2024, approximately 46% of our sales were derived from customers outside the United States. Our principal markets outside the United States are in Europe and Asia.
Risk Related to our International Operations International economic, political, legal, compliance, and business factors could negatively affect our financial results. In 2025, approximately 44% of our sales were derived from customers outside the United States. Our principal markets outside the United States are in Europe and Asia.
During 2024, sales outside the United States accounted for approximately 46% of our total sales for the year. In addition, we have several facilities outside the United States, many of which serve multiple Fortive operating companies in manufacturing, distribution, product design, and selling, general and administrative functions.
During 2025, sales outside the United States accounted for approximately 44% of our total sales for the year. In addition, we have several facilities outside the United States, many of which serve multiple Fortive operating companies in manufacturing, distribution, product design, and selling, general and administrative functions.
As of December 31, 2024, we had approximately $3.7 billion of long-term debt, including the current portion of long-term debt, on a consolidated basis. We may also obtain additional long-term debt and lines of credit to meet future financing needs.
As of December 31, 2025, we had approximately $3.2 billion of long-term debt, including the current portion of long-term debt, on a consolidated basis. We may also obtain additional long-term debt and lines of credit to meet future financing needs.
For additional information regarding these risks, please refer to Note 13 to the consolidated financial results.
For additional information regarding these risks, please refer to Note 12 to the consolidated financial results.
Like many multinational corporations, our information technology systems have been subject to computer viruses, malicious codes, and other cyber-attacks that have resulted in disruption of our operations, unauthorized access to confidential information and increased the cost of operations through containment, investigation and remediation efforts, including cybersecurity incidents in the fourth quarter of 2023.
Like many multinational corporations, our information technology systems have been subject to computer viruses, malicious codes, and other cyber-attacks that have resulted in disruption of our operations, unauthorized access to confidential information and increased the cost of operations through containment, investigation and remediation efforts.
These regulations and standards are complex, change frequently, have tended to become more 20 Table of Contents stringent over time, and may be inconsistent across jurisdictions.
These regulations and standards are complex, change frequently, have tended to become more stringent over time, and may be inconsistent across jurisdictions.
We have received or expect to receive an opinion from outside tax counsel to the effect that each of the Separation Transactions qualifies as a transaction that is described in Sections 355(a) and 368(a)(1)(D) of the Internal Revenue Code.
We have received opinions from outside tax counsel to the effect that each of the Separation Transactions qualifies as a transaction that is described in Sections 355(a) and 368(a)(1)(D) of the Internal Revenue Code.
The opinion relies or will rely on certain facts, assumptions, representations, and undertakings from the applicable parties regarding the past and future conduct of the companies’ respective businesses and other matters.
The opinions rely on certain facts, assumptions, representations, and undertakings from the applicable parties regarding the past and future conduct of the companies’ respective businesses and other matters.
Even if we successfully innovate and develop new and enhanced products and services, we may incur substantial costs in doing so, and our profitability may suffer. Our ability to attract, develop, and retain senior leaders and other key employees is critical to our success.
Even if we successfully innovate and develop new and enhanced products and services, we may incur substantial costs in doing so, and our profitability may suffer. Our ability to successfully manage our leadership transition in connection with the completed Separation and attract, develop, and retain senior leaders and other key employees is critical to our success.
In addition, competition for acquisitions and investments may result in higher purchase prices. Changes in accounting or regulatory requirements or instability in the credit markets could also adversely impact our ability to consummate acquisitions and investments. Our acquisition of businesses, investments, joint ventures, and other strategic relationships could negatively impact our financial results.
Changes in accounting or regulatory requirements or instability in the credit markets could also adversely impact our ability to consummate acquisitions and investments. Our acquisition of businesses, investments, joint ventures, and other strategic relationships could negatively impact our financial results.
We may incorporate artificial intelligence (“AI”) solutions into our products, services and features, and we may leverage AI, including generative AI, in our product development, our operations, and our software programming.
We incorporate artificial intelligence (“AI”) solutions into certain of our products, services and features, and we have leveraged AI, including generative AI, in our product development, our operations, and our software programming.
Any increased sanctions, tariffs or other trade barriers or restrictions on global trade, especially trade with China, could adversely impact our business and financial results. Foreign currency exchange rates, including the volatility thereof, may adversely affect our financial results.
Any increased sanctions, tariffs, other trade barriers or restrictions or uncertainty on global trade adopted by or against the United States could adversely impact our business and financial results. Foreign currency exchange rates, including the volatility thereof, may adversely affect our financial results.
We cannot assure you that our liabilities arising from past or future releases of, or exposures to, hazardous substances will not exceed our estimates or adversely affect our reputation and financial results or that we will not be subject to additional claims for personal injury or remediation in the future based on our past, present or future business activities. 21 Table of Contents Our businesses are subject to extensive regulation, including healthcare regulations; failure to comply with those regulations could adversely affect our financial results and our business, including our reputation.
We cannot assure you that our liabilities arising from past or future releases of, or exposures to, hazardous substances will not exceed our estimates or adversely affect our reputation and financial results or that 20 Table of Contents we will not be subject to additional claims for personal injury or remediation in the future based on our past, present or future business activities.
Disruptions in, or breaches in security of, our information technology systems have adversely affected, and in the future could adversely affect, our business.
Disruptions in, or breaches in security of, our information technology systems, exfiltration of confidential or sensitive data, and other cyberattacks have adversely affected, and in the future could adversely affect, our business.
As of December 31, 2024, the net carrying value of our goodwill and other intangible assets totaled approximately $13.5 billion. In accordance with GAAP, we periodically assess these assets to determine if they are impaired.
We may be required to recognize impairment charges for our goodwill and other intangible assets. As of December 31, 2025, the net carrying value of our goodwill and other intangible assets totaled approximately $9.5 billion. In accordance with GAAP, we periodically assess these assets to determine if they are impaired.
Our future performance is dependent upon our ability to attract, motivate and retain executives and other key employees. The loss of services of executives and other key employees or the failure to attract, motivate and develop new executives or other key employees could prevent us from successfully implementing and executing business strategies, and therefore adversely affect our financial results.
Unplanned loss of services of executives and other key employees or the failure to attract, motivate and develop new executives or other key employees could prevent us from successfully implementing and executing business strategies, and therefore adversely affect our financial results. Our success also depends on our ability to attract, develop and retain a talented employee base.
We could incur significant liability if our separation from Danaher, our separation of our Automation and Specialty business, or our separation of Vontier or our pending separation of the PT segment (collectively, the “Separation Transactions”) are determined to be a taxable transaction.
We could incur significant liability if our separation from Danaher, our separation of Vontier or our separation of Ralliant (together, the “Separation Transactions”) are determined to be a taxable transaction.
Work stoppages, works council campaigns, and other labor disputes could adversely impact our productivity and results of operations. We have various non-U.S. collective labor arrangements.
In addition, the consolidation of distributors and customers in certain of the industries in which we operate could adversely impact our profitability. Work stoppages, works council campaigns, and other labor disputes could adversely impact our productivity and results of operations. We have various non-U.S. collective labor arrangements.
If we are not competitive or successful in our recruiting efforts, if we cannot attract or retain key employees, or if we do not adequately ensure effective succession planning or transfer of knowledge for our key employees, or if our employees leave us given uncertainties relating to the separation, resulting in the inability to operate our business with employees possessing the appropriate expertise, our ability to deliver and execute on our operational, development, or portfolio strategies would be adversely affected.
If we are not competitive or successful in our recruiting efforts, if we cannot attract or retain key employees, if we do not adequately ensure effective succession planning or transfer of knowledge for our key employees, or if some of our key employees are unable to enter, or choose to leave, the United States given uncertainties relating to immigration laws or immigration enforcement actions, our ability to deliver and execute on our operational, development, or portfolio strategies would be adversely affected.
Some of these distributors and other partners also sell our competitors’ products or compete with us directly, and if they favor competing products for any reason they may fail to market our products effectively.
Certain of our businesses sell a significant amount of their products to key distributors and other channel partners that have valuable relationships with customers and end-users. Some of these distributors and other partners also sell our competitors’ products or compete with us directly, and if they favor competing products for any reason they may fail to market our products effectively.
If growth in the global economy or in any of the markets we serve slows for a significant period, if there is significant deterioration in the global economy or such markets, if there is instability in global capital and credit markets, or if improvements in the global economy do not benefit the markets we serve, our business and financial results would be adversely affected. 12 Table of Contents 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.
If growth in the global economy or in any of the markets we serve slows for a significant period, if there is significant deterioration in the global economy or such markets, if there is instability in global capital and credit markets, or if improvements in the global economy do not benefit the markets we serve, our business and financial results would be adversely affected.
Recalls, downtime, removals, and product liability and similar claims (regardless of their validity or ultimate outcome) can result in significant costs, as well as negative publicity and damage to our reputation that could reduce demand for our products and services.
Recalls, downtime, removals, and product liability and similar claims (regardless of their validity or ultimate outcome) can result in significant costs, as well as negative publicity and damage to our reputation that could reduce demand for our products and services. 14 Table of Contents Adverse changes in our relationships with, or the financial condition, performance, purchasing patterns, or inventory levels of, key distributors and other channel partners could adversely affect our financial results.
Even if we successfully defend against claims of infringement or misappropriation, we may incur significant costs and diversion of management attention and resources, which could adversely affect our business and financial results. We are subject to a variety of litigation and other legal and regulatory proceedings in the course of our business that could adversely affect our financial results.
We are subject to a variety of litigation and other legal and regulatory proceedings in the course of our business that could adversely affect our financial results.
There continues to be significant uncertainty about the future relationship between the United States and other countries, including with respect to trade policies, treaties, government regulations, sanctions and tariffs. In particular, there continues to be uncertainty about U.S. foreign trade policy with respect to China, including any changes to the trade policies that may be adopted by the Trump administration.
As a result, there continues to be significant uncertainty about, and volatility in, the future relationship between the United States and other countries, especially with respect to trade policies, treaties, government regulations, sanctions and tariffs.
These principles are subject to interpretation by the Financial Accounting Standards Board (“FASB”), the SEC, and various bodies formed to interpret and create appropriate accounting principles and guidance.
These principles are subject to interpretation by the Financial Accounting Standards Board (“FASB”), the SEC, and various bodies formed to interpret and create appropriate accounting principles and guidance. Any new or amended standards may result in different accounting principles, which may significantly impact our reported results or could result in volatility of our financial results.
Our competitors or other third parties may incorporate AI into their products or operational processes more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our results of operations.
Our competitors or other third parties may incorporate AI into their products or operational processes more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our results of operations. 16 Table of Contents In addition, there are significant risks involved in developing and deploying AI and there can be no assurance that the usage of AI will enhance our products or services or be beneficial to our business, including our efficiency or profitability.
In addition, the consolidation of distributors and customers in certain of the industries in which we operate could adversely impact our profitability. Our restructuring activities could have long-term adverse effects on our business. We have implemented, and may continue to implement significant restructuring activities across our businesses to adjust our cost structure.
We have implemented, and may continue to implement significant restructuring activities across our businesses to adjust our cost structure, including restructuring activities relating to our recent separation of Ralliant.
Removed
In addition, if we fail to accurately predict future customer needs and preferences or fail to produce viable technologies, we may invest heavily in research and development of products and services that do not lead to significant revenue, which would adversely affect our profitability.
Added
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 and supply chain disruptions, our profitability may suffer.
Removed
In particular, the markets for highly skilled employees and leaders in the technology and healthcare industries remain competitive. Our success also depends on our ability to attract, develop and retain a talented employee base.
Added
In connection with the Separation and as part of our long-term succession planning, we transitioned each of our Chief Executive Officer, Chief Financial Officer, and Chief People Officer roles in 2025 and early 2026.
Removed
Adverse changes in our relationships with, or the financial condition, performance, purchasing patterns, or inventory levels of, key distributors and other channel partners could adversely affect our financial results. Certain of our businesses sell a significant amount of their products to key distributors and other channel partners that have valuable relationships with customers and end-users.
Added
Our future performance is dependent upon our ability to manage successfully the leadership transitions and continue to attract, motivate and retain key leaders and other key employees.
Removed
In addition, there are significant risks involved in developing and deploying AI and there can be no assurance that the usage of AI will enhance our products or services or be beneficial to our business, including our efficiency or profitability.
Added
We collect, store, have access to and otherwise process certain confidential or sensitive data, including proprietary business information, customer data, personal data, and other information that is subject to privacy and security laws, regulations and/or customer-imposed controls.
Removed
Risk Related to Our Acquisitions, Investments, and Dispositions Our plans to separate into two independent, publicly traded companies may not be completed on the currently contemplated timeline or at all and may not achieve the intended benefits, including the anticipated tax treatment.
Added
Even if we successfully defend against claims of infringement or misappropriation, we may incur significant costs and diversion of management attention and resources, which could adversely affect our business and financial results. Our restructuring activities could have long-term adverse effects on our business.
Removed
On September 4, 2024, we announced our intention to separate our Precision Technologies segment business into an independent publicly-traded company (the “Separation”), which will be named Ralliant.
Added
Regional conflicts, including the Russian invasion of Ukraine, conflict in the Middle East, tension between China and Taiwan, could result in sanctions, regional market instability, increased energy and transportation costs, and other adverse regional financial and economic conditions, any of which can impact the demand for, or our ability to sell, our products and services in the impacted regions.
Removed
The Separation will create (i) a technology solutions company, retaining the Fortive name, with a portfolio of the brands currently operating under Fortive’s Intelligent Operating Solutions and Advanced Healthcare Solutions business segments, focused on resilient, high-quality recurring growth by delivering productivity and safety to customers, and (ii) a global technology company consisting of our brands currently operating under the Precision Technologies segment with a focus on precision instruments and highly engineered products essential for breakthrough innovation and aligned to powerful secular trends.
Added
Recent economic, foreign and political policies and enforcement actions, including trade restrictions, withdrawal from global trade agreements, uncertainty relating to the future rate or enforceability of tariffs and reciprocal tariffs, including as a result of the recent ruling by the Supreme Court of the United States invalidating certain tariffs previously imposed under the 17 Table of Contents International Emergency Economic Powers Act (“the IEEPA Ruling”), changes to immigration laws or enforcement, uncertainty relating to availability of refunds on tariffs that have been invalidated, expectations or actions of customers, suppliers and other distribution or supply chain partners on pricing or costs as a result of the IEEPA Ruling, uncertainty relating to the status of prior trade agreements between the United States and other countries that had been adopted in response to tariffs that have subsequently been invalidated by the IEEPA Ruling, and other similar actions may result in increased transaction and operating costs, adverse regional and global economic conditions, reduced ability to attract talent, supply chain constraints, responsive economic and nationalism outside the United States, and volatile regulatory environment, any of which may adversely affect our business or demand for our products and services.
Removed
The Separation is intended to qualify as a tax-free spin-off for Fortive shareholders for U.S. federal income tax purposes.
Added
In particular, there continues to be uncertainty about U.S. foreign trade policy with respect to China, including any changes to the trade policies that have been adopted, and that may result from the IEEPA Ruling, including any alternative legislative or executive actions that may be adopted to reimpose similar tariffs.
Removed
The Company is targeting completion of the Separation early in the third quarter of 2025, subject to the satisfaction of certain conditions, including, 18 Table of Contents among others, final approval of Fortive’s Board of Directors, satisfactory completion of financing, receipt of a favorable opinion of legal counsel and/or a private letter ruling from the U.S.
Added
Risk Related to Our Investments and Dispositions Our strategy requires us to execute and deliver disciplined capital allocation. Our Fortive Accelerated strategy requires us to execute and deliver disciplined capital allocation, including investments in organic growth, identifying and successfully acquiring businesses at appropriate prices, and to make other appropriate investments that support our long-term strategy.
Removed
Internal Revenue Service with respect to the tax treatment of the transaction for U.S. federal income tax purposes, the effectiveness of a Form 10 registration statement filed with the SEC, and other regulatory approvals. All assets, liabilities, revenues and expenses of Ralliant are included in the consolidated results of the Company in the accompanying consolidated financial statements.
Added
Our businesses are subject to extensive regulation, including healthcare regulations; failure to comply with those regulations could adversely affect our financial results and our business, including our reputation.
Removed
Our ability to effectuate the Separation, the structure of the Separation, and the anticipated benefits of the Separation may be adversely and materially impacted by adverse market conditions, possible delays in obtaining various tax rulings, regulatory approvals or clearances or otherwise satisfying the required conditions of the Separation, costs or inefficiencies associated with dis-synergies related to the Separation, uncertainty of the financial markets, our business performance, and unanticipated delays in establishing infrastructure or processes for Ralliant.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

3 edited+0 added−1 removed16 unchanged
Biggest changeIn addition to this component of our overall risk management process, we have separate cybersecurity-specific risk assessment and management processes that are managed centrally and executed at both the corporate and operating company levels.
Biggest changeAs part of this process, both corporate and operating company leaders collaborate with subject matter experts to identify and assess cybersecurity threats and implement relevant countermeasures. In addition to this component of our overall risk management process, we have separate cybersecurity-specific risk assessment and management processes that are managed centrally and executed at both the corporate and operating company levels.
As part of our cybersecurity controls and processes: • we have designed our cybersecurity program based on the National Institute of Security and Technology (“NIST”) framework, Generally Accepted Privacy Program (“GAPP”) guiding principles, and ISO 27001/2 standards; • our cybersecurity team, led by our Chief Information Officer (“CIO”) and Chief Information Security Officer (“CISO”) coordinates with our privacy and information governance team within our legal department to help ensure compliance with applicable regulatory and reporting requirements; • the CIO and CISO undertake an annual review of the cybersecurity strategy and initiatives for Fortive and each of the operating companies, with monthly reviews of performance relative to strategic initiatives with the Chief Executive Officer (“CEO”) and the other executive officers; • the CIO and CISO participate in product design efforts with operating company leaders to enhance our product security; • through the compliance training program, we conduct mandatory cybersecurity management, data privacy and incident training for all employees; • we conduct regular phishing email simulations for all employees and all contractors with access to corporate email systems to enhance awareness and responsiveness to possible threats; • through policy, practice and contract provisions, we require employees, as well as third-party vendors who process data, to treat customer and other personal information and data with care and in compliance with regulations; • we run tabletop exercises conducted by leading third-party cybersecurity experts, with involvement by the broader IT team, legal team, communications team, executive management team, and the Board, to simulate a response to a cybersecurity incident and use the findings to improve our processes and technologies; • we conduct regular network and endpoint monitoring, vulnerability assessments, and penetration testing designed to improve our information systems; • we review and update, and provide training, on cybersecurity incident response plans, business continuity plans, and cyber incident escalation plans, including the involvement of our Disclosure Committee (which includes our CISO as a regular member); • as part of that cyber incident escalation plan, our Disclosure Committee reviews cybersecurity incidents to assess materiality and consider disclosure requirements; • the CISO meets with the information security teams at the operating companies on a monthly basis, or as needed, to review escalated items, compliance with incident response plans, and performance against strategic targets; • the CIO and the CISO meet with the CEOs of our operating segments and the presidents of our operating companies to discuss IT strategies, updates, and initiatives, including those related to cybersecurity; • the CIO and the CISO meet with the Audit Committee on a quarterly basis and the full Board on an annual basis to provide updates on the cybersecurity program, including controls and processes, strategies, achievements, risks, and recent incidents; • the CIO and the CISO also meet with the full Board on an annual basis as part of the overall enterprise risk management review; and 25 Table of Contents • the CISO, as a member of the Disclosure Committee, meets with other members of the Disclosure Committee to discuss materiality and disclosure with respect to cybersecurity matters.
As part of our cybersecurity controls and processes: • we have designed our cybersecurity program based on the National Institute of Security and Technology (“NIST”) framework, Generally Accepted Privacy Program (“GAPP”) guiding principles, and ISO 27001/2 standards; • our cybersecurity team, led by our Chief Information Officer (“CIO”) and Chief Information Security Officer (“CISO”) coordinates with our privacy and information governance team within our legal department to help ensure compliance with applicable regulatory and reporting requirements; • the CIO and CISO undertake an annual review of the cybersecurity strategy and initiatives for Fortive and each of the operating companies, with monthly reviews of performance relative to strategic initiatives with the Chief Executive Officer (“CEO”) and the other executive officers; • the CIO and CISO participate in product design efforts with operating company leaders to enhance our product security; • through the compliance training program, we conduct mandatory cybersecurity management, data privacy and incident training for all employees; • we conduct regular phishing email simulations for all employees and all contractors with access to corporate email systems to enhance awareness and responsiveness to possible threats; • through policy, practice and contract provisions, we require employees, as well as third-party vendors who process data, to treat customer and other personal information and data with care and in compliance with regulations; • we run tabletop exercises conducted by leading third-party cybersecurity experts, with involvement by the broader IT team, legal team, communications team, executive management team, and the Board, to simulate a response to a cybersecurity incident and use the findings to improve our processes and technologies; • we conduct regular network and endpoint monitoring, vulnerability assessments, and penetration testing designed to improve our information systems; • we review and update, and provide training, on cybersecurity incident response plans, business continuity plans, and cyber incident escalation plans, including the involvement of our Disclosure Committee (which includes our CISO as a regular member); • as part of that cyber incident escalation plan, our Disclosure Committee reviews cybersecurity incidents to assess materiality and consider disclosure requirements; • the CISO meets with the information security teams at the operating companies on a monthly basis, or as needed, to review escalated items, compliance with incident response plans, and performance against strategic targets; • the CIO and the CISO meet with the CEOs of our operating segments and the presidents of our operating companies to discuss IT strategies, updates, and initiatives, including those related to cybersecurity; • the CIO and the CISO meet with the Audit Committee on a quarterly basis and the full Board on an annual basis to provide updates on the cybersecurity program, including controls and processes, strategies, achievements, risks, and recent incidents; 24 Table of Contents • the CIO and the CISO also meet with the full Board on an annual basis as part of the overall enterprise risk management review; and • the CISO, as a member of the Disclosure Committee, meets with other members of the Disclosure Committee to discuss materiality and disclosure with respect to cybersecurity matters.
ITEM 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy Our process for assessing, identifying, and managing material risks associated with cybersecurity threats, including risks related to disruptions to our operations, compromise of our intellectual property rights, data privacy, litigation and other legal liability and reputational impacts, is an important component of our overall enterprise risk management process.
ITEM 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy 23 Table of Contents Our process for assessing, identifying, and managing material risks associated with cybersecurity threats, including risks related to disruptions to our operations, compromise of our intellectual property rights, data privacy, litigation and other legal liability and reputational impacts, is an important component of our overall enterprise risk management process.
Removed
As part of this process, 24 Table of Contents both corporate and operating company leaders collaborate with subject matter experts to identify and assess cybersecurity threats and implement relevant countermeasures.

Item 2. Properties

Properties — owned and leased real estate

4 edited+0 added−0 removed0 unchanged
Biggest changeParticularly outside the United States, facilities may serve more than one business segment and may be used for multiple purposes, such as administration, sales, manufacturing, warehousing, and/or 26 Table of Contents distribution. The approximate number of significant facilities by business segment is: Intelligent Operating Solutions 20, Precision Technologies 30, and Advanced Healthcare Solutions 10.
Biggest changeParticularly outside the United States, facilities may serve more than one business segment and may be used for multiple purposes, such as administration, sales, manufacturing, warehousing, and/or distribution. The approximate number of significant facilities by business segment is: Intelligent Operating Solutions 25 and Advanced Healthcare Solutions 15.
We consider our facilities suitable and adequate for the purposes for which they are used and do not anticipate difficulty in renewing existing leases as they expire or in finding alternative facilities. We believe our properties and equipment have been well-maintained. Please refer to Note 8 to the consolidated financial statements for additional information with respect to our lease commitments.
We consider our facilities suitable and adequate for the purposes for which they are used and do not anticipate difficulty in renewing existing leases as they expire or in finding alternative facilities. We believe our properties and equipment have been well-maintained. Please refer to Note 7 to the consolidated financial statements for additional information with respect to our lease commitments.
ITEM 2. PROPERTIES Our corporate headquarters is located in Everett, Washington in a facility that we own. As of December 31, 2024, our facilities included approximately 60 significant facilities, which are used for manufacturing, distribution, warehousing, research and development, general administrative, and/or sales functions.
ITEM 2. PROPERTIES Our corporate headquarters is located in Everett, Washington in a facility that we own. As of December 31, 2025, our facilities included approximately 40 significant facilities, which are used for manufacturing, distribution, warehousing, research and development, general administrative, and/or sales functions.
Approximately 35 of these facilities are located in the United States in over 15 states and approximately 25 are located outside the United States in 15 countries, including Canada and countries in Asia Pacific, Europe, and Latin America.
Approximately 20 of these facilities are located in the United States in over 10 states and approximately 20 are located outside the United States in over 10 countries, including Canada and 25 Table of Contents countries in Asia Pacific, Europe, and Latin America.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
Biggest changePlease refer to Note 13 to the consolidated financial statements for information regarding legal proceedings and contingencies, and for a discussion of risks related to legal proceedings and contingencies, refer to "Item 1A. Risk Factors."
Biggest changePlease refer to Note 12 to the consolidated financial statements for information regarding legal proceedings and contingencies, and for a discussion of risks related to legal proceedings and contingencies, refer to "Item 1A. Risk Factors."

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

5 edited+5 added−8 removed0 unchanged
Biggest changeMcLaughlin has served as Senior Vice President, Chief Financial Officer since July 2016. Prior to July 2016, Mr. McLaughlin served as Senior Vice President-Diagnostics Group CFO for Danaher’s Diagnostics business from May 2012 to July 2016, and as Senior Vice President-Chief Financial Officer of Danaher’s Beckman Coulter business from July 2011 to July 2016. Tamara S.
Biggest changeUnderwood has served as Senior Vice President, Chief Legal Officer of Fortive since January 2025 and as Senior Vice President, General Counsel from May 2016 to January 2025. Prior to joining Fortive, Mr.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. INFORMATION ABOUT OUR EXECUTIVE OFFICERS Set forth below are the names, ages, positions, and experience of our executive officers as of February 25, 2025. All of our executive officers hold office at the pleasure of our Board. Name Age Position Officer Since James A.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. INFORMATION ABOUT OUR EXECUTIVE OFFICERS Set forth below are the names, ages, positions, and experience of our executive officers as of February 25, 2026. All of our executive officers hold office at the pleasure of our Board.
Soroye was the Managing Director of the Property Intelligence and Risk Management segment of CoreLogic from September 2013 to August 2021. Peter C. Underwood has served as Senior Vice President, General Counsel of Fortive since May 2016. Prior to joining Fortive, Mr.
Soroye was the Managing Director of the Property Intelligence and Risk Management segment of CoreLogic from September 2013 to August 2021. Mark Okerstrom has served as Senior Vice President, Chief Financial Officer of Fortive since March 2025. Prior to joining Fortive, Mr.
Underwood served as Vice President, General Counsel and Secretary of Regal Beloit Corporation, a manufacturer of electric motors, from 2010 through May 2016. Stacey A. Walker has served as a Senior Vice President, Human Resources of Fortive since July 2016. Prior to July 2016, Ms.
Underwood served as Vice President, General Counsel and Secretary of Regal Beloit Corporation, a manufacturer of electric motors, from 2010 through May 2016. 26 Table of Contents PART II
Simmons served as a Partner of Bain & Company where he served as a Director in its Private Equity Practice and led its Technology, Media, and Telecommunications practice. Olumide Soroye has served as President and CEO of Intelligent Operating Solutions since August 2021 and President and CEO of Advanced Healthcare Solutions since January 2025. Prior to joining Fortive, Mr.
Underwood 56 Senior Vice President – Chief Legal Officer 2016 Olumide Soroye has served as President and CEO and a Director of Fortive since June 2025. Prior to June 2025, Mr. Soroye served as President and CEO of Intelligent Operating Solutions from August 2021 and President and CEO of Advanced Healthcare Solutions from January 2025. Prior to joining Fortive, Mr.
Removed
Lico 59 President and Chief Executive Officer 2016 Charles E. McLaughlin 63 Senior Vice President – Chief Financial Officer 2016 Tamara S. Newcombe 59 President and CEO of Precision Technologies 2022 Jonathan L. Schwarz 53 Senior Vice President – Corporate Development 2016 Edward R.
Added
Name Age Position Officer Since Olumide Soroye 53 President and Chief Executive Officer 2021 Mark Okerstrom 53 Senior Vice President – Chief Financial Officer 2025 Amee Desjourdy 53 Senior Vice President – Chief People Officer 2026 Peter C.
Removed
Simmons 51 Senior Vice President – Strategy 2021 Olumide Soroye 52 President and CEO of Intelligent Operating Solutions and Advanced Healthcare Solutions 2021 Peter C. Underwood 55 Senior Vice President – General Counsel 2016 Stacey A. Walker 54 Senior Vice President – Human Resources 2016 James A.
Added
Okerstrom served as an advisor at Bain & Company from April 2024 to March 2025 and as an advisor at Advent International from November 2024 to March 2025. In addition, Mr. Okerstrom served as President and Chief Operating Officer of Convoy, Inc. from August 2020 to October 2023. Prior to joining Convoy, Inc., Mr.
Removed
Lico has served as Chief Executive Officer and President, as well as a member of the Board since July 2016. Prior to July 2016, Mr. Lico served in leadership positions in a variety of different functions and businesses at Danaher after joining Danaher in 1996, including as Executive Vice President from 2005 to 2016. Charles E.
Added
Okerstrom served in various roles, including as Chief Executive Officer, President, Chief Financial Officer, Executive Vice President of Operations, and Senior Vice President of Corporate Development, at Expedia Group, Inc. from 2006 to 2019. Amee Desjourdy has served as Senior Vice President – Chief People Officer of Fortive since January 2026. Prior to joining Fortive, Ms.
Removed
Newcombe has served as President and CEO of Precision Technologies since January 2022 and President and CEO of Advanced Healthcare Solutions from June 2023 to January 2025. Prior to January 2022, Ms.
Added
Desjourdy served in Chief Human Resource Officer roles at Hitachi Ltd from July 2022 to January 2026. Prior to joining Hitachi Ltd, Ms. Desjourdy was Chief People Officer of Brightcove, a software company providing secure and scalable streaming platform to organizations, from February 2020 to July 2022. Prior to joining Brightcove, Ms.
Removed
Newcombe was Group President from May 2021 to December 2021, President of Tektronix from April 2019 to December 2021, and Commercial President of Tektronix from February 2017 to April 2019. Prior to joining Tektronix, Ms. Newcombe was Vice President of Sales at Cisco Systems, Inc. from November 2009 to February 2017. Jonathan L.
Added
Desjourdy served as the Chief People and Culture Officer of Quanterix, a biotehcnology company, from 2019 to 2020 and as the Chief Human Resources Officers of Global Partners LP, an energy company, from 2014 to 2019. Peter C.
Removed
Schwarz has served as Senior Vice President, Corporate Development since February 2021 and as Vice President, Strategy and Corporate Development from April 2019 to February 2021 and as Vice President, Corporate Development from July 2016 to April 2019. Prior to July 2016, Mr. Schwarz served as Vice President-Corporate Development of Danaher from 2010 to July 2016. Edward R.
Removed
Simmons has served as Senior Vice President, Strategy of Fortive since February 2021. From June 2018 to December 2020, Mr. Simmons was the President of Vista Consulting Group for Vista Equity Partners, a leading private investment firm focused on software, data, and technology-enabled businesses. In addition, from September 1999 through May 27 Table of Contents 2018, Mr.
Removed
Walker served as Vice President-Talent Management of Danaher from January 2014 to July 2016 after serving as Vice President-Talent Planning from December 2012 to December 2013 and as Vice President-Human Resources for Danaher’s Chemtreat business from 2008 to November 2012. 28 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+7 added−2 removed0 unchanged
Biggest changePeriod Total number of shares (or units) purchased Average price paid per share (or unit) Total number of shares (or units) purchased as part of publicly announced plans or programs Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs September 28 - October 27 — $ — N/A N/A October 28 - November 27 6,200,000 75.01 6,200,000 7,990,143 November 28 - December 31 — — N/A N/A Total 6,200,000 $ 75.01 6,200,000 7,990,143 Recent Issuances of Unregistered Securities None.
Biggest changePeriod Total number of shares (or units) purchased Average price paid per share (or unit) Total number of shares (or units) purchased as part of publicly announced plans or programs (a) Maximum number of shares (or units) that may yet be purchased under the General Share Repurchase Program Maximum approximate dollar value that may yet be purchased under the Special Share Repurchase Program September 27 - October 26 — $ — — 8,258,190 $ 78,204,249 October 27 - November 26 3,794,362 51.03 3,794,362 16,628,911 78,204,249 November 27 - December 31 1,319,684 54.03 1,319,684 15,503,263 67,483,059 Total 5,114,046 $ 51.80 5,114,046 15,503,263 67,483,059 (a) The total amount includes 194,036 shares purchased under the Special Repurchase Program.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock has been traded on the New York Stock Exchange under the symbol FTV since July 2, 2016. As of February 21, 2025, there were approximately 1,600 holders of record of our common stock.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock has been traded on the New York Stock Exchange under the symbol FTV since July 2, 2016. As of February 20, 2026, there were approximately 1,523 holders of record of our common stock.
There is no expiration date for the repurchase program, and the timing and amount of repurchases under the program are determined by the Company's management based on market conditions and other factors. The repurchase program may be suspended or discontinued at any time by the Board of Directors.
There is no expiration date for the repurchase programs, and the timing and amount of repurchases under the programs are determined by our management based on market conditions, tax regulations and other factors. The repurchase programs may be suspended or discontinued at any time by the Board.
Any future declaration and payments of dividends, including any change in the amount of quarterly dividend, on our common stock will be determined by our Board of Directors and will depend on our business conditions, financial results and other factors our Board deems relevant.
We currently pay a quarterly dividend of $0.06 per share on our common stock. Any future declaration and payments of dividends, including any change in the amount of quarterly dividend, on our common stock will be determined by our Board of Directors and will depend on our business conditions, financial results and other factors our Board deems relevant.
During the fiscal year ended December 31, 2024, the Company purchased 12.0 million shares of its common stock at an average share price of $73.93, including 6.2 million shares at an average share price of $75.01 during the fourth quarter of 2024. The following table provides details about our share repurchases during the fiscal quarter ended December 31, 2024.
During the fiscal year ended December 31, 2025, the Company purchased 30.4 million shares of its common stock at an average share price of $52.79. The following table provides details about our share repurchases during the fiscal quarter ended December 31, 2025.
Issuer Purchases of Equity Securities On February 17, 2022, the Company's Board of Directors approved a share repurchase program authorizing the Company to repurchase up to 20 million shares of the Company's outstanding common stock from time to time on the open market or in privately negotiated transactions.
Issuer Purchases of Equity Securities On February 17, 2022, our Board approved a share repurchase program authorizing us to repurchase up to 20 million shares of our outstanding common stock (the “General Share Repurchase Program”).
Removed
In the fourth quarter of 2023, we increased the quarterly dividend paid from $0.07 per share to $0.08 per share on our common stock.
Added
Under this program, shares may be repurchased from time to time on the open market or in privately negotiated transactions, including under accelerated share repurchase programs or under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (“10b5-1 Plans”).
Removed
On January 23, 2024, the Company’s Board of Directors increased the number of shares authorized under the share repurchase program by an additional 11 million shares, with 8 million remaining authorized under the share repurchase program as of December 31, 2024.
Added
On May 27, 2025, in connection with the Separation, our Board adopted a separate and incremental special purpose share repurchase program (the “Special Purpose Share Repurchase Program”) under which we may purchase up to $550 million in our common stock exclusively from the proceeds we received as a dividend from Ralliant in connection with the Separation (the “Ralliant Dividend”) (as defined herein), together with any other cash received from Ralliant in connection with the Separation (collectively, the “Ralliant Cash Proceeds”).
Added
Repurchases of shares of our common stock using the Ralliant Cash Proceeds will only be made through the Special Purpose Share Repurchase Program. On May 27, 2025 and November 5, 2025, our Board increased the number of shares authorized under the General Share Repurchase Program by an additional 15.6 million and 12.1 million shares, respectively.
Added
As of December 31, 2025, there were 15.5 million shares remaining authorized under the General Share Repurchase Program and $67.5 million remaining authorized under the Special Share Repurchase Program, respectively.
Added
Company Stock Performance This performance graph shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. 27 Table of Contents The following graph shows a comparison of five-year cumulative total shareholder return, calculated on a dividend-reinvested basis, for the Company, the S&P 500 Index, and the S&P 500 Industrials Index.
Added
The graph assumes $100 was invested in each of the Company’s common stock, the S&P 500 Index, and the S&P 500 Industrial Index as of the market close on December 31, 2020.
Added
Past stock performance is not necessarily indicative of future stock price performance. 12/31/2021 12/30/2022 12/29/2023 12/27/2024 12/31/2025 Fortive Corporation 108.14 91.47 105.27 107.67 105.68 S&P 500 128.71 105.40 133.10 166.40 196.16 S&P 500 Industrials 121.12 114.48 135.24 158.87 189.72 *Assumes $100 was invested for each annual period. ITEM 6. [RESERVED] Not applicable.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

79 edited+20 added−62 removed54 unchanged
Biggest changeIntelligent Operating Solutions Selected Financial Data For the Year Ended December 31 ($ in millions) 2024 2023 Sales $ 2,714.7 $ 2,612.2 Operating profit 704.6 628.8 Depreciation 40.5 33.9 Amortization 188.3 185.5 Operating profit as a % of sales 26.0 % 24.1 % Depreciation as a % of sales 1.5 % 1.3 % Amortization as a % of sales 6.9 % 7.1 % Components of Sales Growth 2024 vs. 2023 Total revenue growth (GAAP) 3.9 % Impact of: Acquisitions and divestitures (0.8) % Currency exchange rates 0.3 % Core revenue growth (Non-GAAP) 3.4 % 2024 COMPARED TO 2023 The sales growth in 2024 was driven primarily by favorable pricing across the segment and increased volume in our gas detection products, as well as software and service offerings in facility and assets lifecycle applications, including software as a service (“SaaS”).
Biggest changeFor further detail, refer to the Intelligent Operating Solutions and Advanced Healthcare Solutions sections below. 30 Table of Contents Operating Profit Margins 2025 vs. 2024 Operating profit margin was 17.3% in 2025, compared to 17.6% in 2024, resulting in a decrease of 30 basis points due to: • The year-over-year increase from favorable pricing across the segments and benefits from productivity measures and FBS initiatives, partially offset by volume decline and higher employee compensation in both segments; additionally, within the year, the unfavorable impact from tariffs was mitigated by countermeasures — favorable 105 basis points • The year-over-year effect of all other items, including -100 basis points primarily from incremental stock-based compensation costs related to the Separation , -55 basis points in discrete restructuring charges, partially offset by +20 basis points from amortization expense for existing businesses — unfavorable 135 basis points 2024 vs. 2023 Operating profit margin was 17.6% 2024, compared to 14.7% in 2023, resulting in an increase of 290 basis points due to: • The year-over-year increase in price and volume from existing businesses and benefits from productivity measures were partially offset by higher employee compensation, growth investments and the impact of unfavorable changes in foreign exchange rates — favorable 170 basis points • The year-over-year effect of all other items, including +70 basis points in discrete restructuring charges, +55 basis points from amortization expense associated with existing businesses and impairment of intangible assets in 2023, offset by -5 basis points from net effects of acquired businesses — favorable 120 basis points INTELLIGENT OPERATING SOLUTIONS Selected Financial Data For the Year Ended December 31 ($ in millions) 2025 2024 2023 Sales $ 2,856.3 $ 2,793.2 $ 2,684.5 Operating profit 738.3 708.0 629.9 Depreciation 49.3 40.5 33.9 Amortization 187.1 188.3 185.5 Operating profit as a % of sales 25.8 % 25.3 % 23.5 % Depreciation as a % of sales 1.7 % 1.4 % 1.3 % Amortization as a % of sales 6.6 % 6.7 % 6.9 % Components of Sales Growth 2025 vs. 2024 2024 vs. 2023 Total revenue growth (GAAP) 2.3 % 4.1 % Excluding impact of: Acquisitions and Divestitures 0.4 % (0.8) % Currency exchange rates (0.6) % 0.2 % Core revenue growth (Non-GAAP) 2.1 % 3.5 % Sales growth in 2025 was driven by favorable pricing of 2.2%, including actions taken to mitigate unfavorable tariff impacts.
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.
Credit support for these 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.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of Fortive’s financial condition and results of operations for the fiscal years ended December 31, 2024 and December 31, 2023 should be read in conjunction with our audited consolidated financial statements and accompanying notes included in Part II, Item 8 of this Form 10-K.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of Fortive’s financial condition and results of operations for the fiscal years ended December 31, 2025, December 31, 2024, and December 31, 2023 should be read in conjunction with our audited consolidated financial statements and accompanying notes included in Part II, Item 8 of this Form 10-K.
The discounted cash flow model requires judgmental assumptions about projected revenue growth, future operating margins, discount rates, and terminal values. There are inherent uncertainties related to these assumptions and management’s judgment in applying them to the analysis of goodwill impairment. In 2024, we performed goodwill impairment testing for our reporting units.
The discounted cash flow model requires judgmental assumptions about projected revenue growth, future operating margins, discount rates, and terminal values. There are inherent uncertainties related to these assumptions and management’s judgment in applying them to the analysis of goodwill impairment. In 2025, we performed goodwill impairment testing for our reporting units.
If our judgments regarding revenue recognition prove incorrect, our reported revenues in particular periods may be adversely affected. Historically, our estimates of revenue have been materially correct. Income Taxes : For a description of our income tax accounting policies, refer to Note 2 and Note 12 to the consolidated financial statements.
If our judgments regarding revenue recognition prove incorrect, our reported revenues in particular periods may be adversely affected. Historically, our estimates of revenue have been materially correct. Income Taxes : For a description of our income tax accounting policies, refer to Note 2 and Note 11 to the consolidated financial statements.
The amount of income taxes we pay is subject to audit by federal, state, and foreign tax authorities, which may result in proposed assessments (see “-Results of Operations - Income Taxes” and Note 12 to the consolidated financial statements). We review our global tax positions on a quarterly basis.
The amount of income taxes we pay is subject to audit by federal, state, and foreign tax authorities, which may result in proposed assessments (see “-Results of Operations - Income Taxes” and Note 11 to the consolidated financial statements). We review our global tax positions on a quarterly basis.
The portion of sales attributable to the impact of currency translation is calculated as the difference between (a) the period-to-period change in sales (excluding sales impact from acquired businesses) and (b) the period-to-period change in sales (excluding sales impact from acquired businesses) after applying the current period foreign exchange rates to the prior year 30 Table of Contents period.
The portion of sales attributable to the impact of currency translation is calculated as the difference between (a) the period-to-period change in sales (excluding sales impact from acquired businesses) and (b) the period-to-period change in sales 29 Table of Contents (excluding sales impact from acquired businesses) after applying the current period foreign exchange rates to the prior year period.
Our annual goodwill impairment analysis in 2024 indicated that, in all instances, the fair values of our reporting units exceeded their carrying values and consequently did not result in an impairment charge.
Our annual goodwill impairment analysis in 2025 indicated that, in all instances, the fair values of our reporting units exceeded their carrying values and consequently did not result in an impairment charge.
If our access to the commercial paper market is adversely affected due to a downgrade, change in market conditions, or otherwise, we would expect to rely on a combination of available cash, operating cash flow, and the Revolving Credit Facility to provide short-term funding.
If our access to the commercial paper market is adversely affected due to a downgrade, change in market conditions, or otherwise, we would expect to rely on a combination of available cash, operating cash flow, and the Revolving Credit Facility to provide 36 Table of Contents short-term funding.
Refer to Notes 2, 3 and 5 to the consolidated financial statements for a description of our policies relating to goodwill, acquired intangibles, and acquisitions. In performing our goodwill impairment testing, we estimate the fair value of our reporting units primarily using a market based approach.
Refer to Notes 2 and 4 to the consolidated financial statements for a description of our policies relating to goodwill, acquired intangibles, and acquisitions. In performing our goodwill impairment testing, we estimate the fair value of our reporting units primarily using a market based approach.
We generally address our exposure to these risks through our normal operating and financing activities. In addition, our broad-based business activities help to reduce the impact that volatility in any particular area or related areas may have on our operating profit as a whole. Interest Rate Risk We manage interest cost using a mixture of fixed-rate and variable-rate debt.
We generally address our exposure to these risks through our normal operating and financing activities. In addition, our broad-based business activities help to reduce the impact that volatility in any particular area or related areas may have on our operating profit as a whole. Interest Rate Risk We utilize a mixture of fixed-rate and variable-rate debt.
Our MD&A is divided into seven sections: • Basis of Presentation • Overview • Results of Operations • Financial Instruments and Risk Management • Liquidity and Capital Resources • Critical Accounting Estimates • New Accounting Standards OVERVIEW General Fortive is a multinational business with global operations with approximately 46% of our sales derived from customers outside the United States in 2024.
Our MD&A is divided into seven sections: • Basis of Presentation • Overview • Results of Operations • Financial Instruments and Risk Management • Liquidity and Capital Resources • Critical Accounting Estimates • New Accounting Standards OVERVIEW General Fortive is a multinational business with global operations with approximately 44% of our sales derived from customers outside the United States in 2025.
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.
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.
As a result, we are exposed to movements in the exchange rates of various currencies against the U.S. dollar. The effect of a change in currency exchange rates on our net investment in international subsidiaries is reflected in the accumulated other comprehensive income (loss) (“AOCI”) component of equity.
As a result, we are exposed to movements in the exchange rates of various currencies against the USD. The effect of a change in currency exchange rates on our net investment in international subsidiaries is reflected in the accumulated other comprehensive income (loss) (“AOCI”) component of equity.
In addition, significant obligations are detailed in our tax matters agreements in connection with the separation of Fortive from Danaher on July 1, 2016, the split-off of the Automation and Specialty business on October 1, 2018, and the Vontier separation on October 9, 2020.
In addition, significant obligations are detailed in our tax matters agreements in connection with the separation of Fortive from Danaher on July 1, 2016, the split-off of the Automation and Specialty business on October 1, 2018, the Vontier separation on October 9, 2020, and the PT Separation on June 28, 2025.
We have made an election regarding the amount of earnings that we do not intend to repatriate due to local working capital needs, local law restrictions, high foreign remittance costs, previous investments in physical assets and acquisitions, or future growth needs.
Repatriation Foreign cumulative earnings remain subject to foreign remittance taxes. We have made an election regarding the amount of earnings that we do not intend to repatriate due to local working capital needs, local law restrictions, high foreign remittance costs, previous investments in physical assets and acquisitions, or future growth needs.
We also face translational exchange rate risk related to the translation of financial statements of our foreign operations into U.S. dollars, our functional currency. Costs incurred and sales recorded by subsidiaries operating outside of the United States are translated into U.S. dollars using exchange rates effective during the respective period.
We also face translational exchange rate risk related to the translation of financial statements of our foreign operations into U.S. dollars (“USD”), our functional currency. Costs incurred and sales recorded by subsidiaries operating outside of the United States with functional currencies other than the USD, are translated into USD using exchange rates effective during the respective period.
As a company with global operations, our businesses are affected by worldwide, regional, and industry-specific economic, regulatory, and political factors.
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.
An increase in our 2024 effective tax rate of 1.0% would have resulted in an additional income tax provision for the year ended December 31, 2024 of approximately $10 million. 45 Table of Contents NEW ACCOUNTING STANDARDS For a discussion of new accounting standards relevant to our businesses, refer to Note 2 to the consolidated financial statements.
An increase in our 2025 effective tax rate of 1.0% would have resulted in an additional income tax provision for the year ended December 31, 2025 of approximately $6 million. NEW ACCOUNTING STANDARDS For a discussion of new accounting standards relevant to our businesses, refer to Note 2 to the consolidated financial statements. 41 Table of Contents
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 high-growth markets, trends and costs associated with a global labor force, and consolidation of our competitors.
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.
If these audits result in payments or assessments different from our reserves, our future results may include unfavorable adjustments to our tax liabilities and our financial statements could be adversely affected. The Company is subject to examination in the United States, various states and foreign jurisdiction for the tax years 2014 to 2024.
If these audits result in payments or assessments different from our reserves, our future results may include unfavorable adjustments to our tax liabilities and our financial statements could be adversely affected. We are subject to examination in the United States, various states and foreign jurisdiction for the tax years 2011 to 2024.
Based on this hypothetical 10% decrease, the excess of the estimated fair value over carrying value (expressed as a multiple of the carrying value for the respective reporting unit) for each of our reporting units ranged from approximately 1.5x to approximately 11.8x.
Based on this hypothetical 10% decrease, the excess of the estimated fair value over carrying value (expressed as a multiple of the carrying value for the respective reporting unit) for each of our reporting units ranged from approximately 1.3x to approximately 4.3x.
Management believes the exclusion of the effect of acquisitions and divestitures and currency translation may facilitate the assessment of underlying business trends and may assist in comparisons of long-term performance. References to sales volume from existing businesses refer to the impact of both price and unit sales.
Management believes the exclusion of the effect of acquisitions and divestitures and currency translation may facilitate the assessment of underlying business trends and may assist in comparisons of long-term performance. References to core sales growth refer to the impact of both price and unit sales.
The excess of the estimated fair value over carrying value (expressed as a multiple of the carrying value for the respective reporting unit) for each of our reporting units as of the annual testing date ranged from approximately 1.6x to approximately 13.1x.
The excess of the estimated fair value over carrying value (expressed as a multiple of the carrying value for the respective reporting unit) for each of our reporting units as of the annual testing date ranged from approximately 1.5x to approximately 4.7x.
Revenue Recognition : We derive revenue from the sale of products and services. Revenue is recognized when control over the promised products or services is transferred to the customer in an amount that reflects the consideration that we expect to receive in exchange for those goods or services.
Revenue is recognized when control over the promised products or services is transferred to the customer in an amount that reflects the consideration that we expect to receive in exchange for those goods or services.
Financing activities during 2024 reflected the following transactions: • On January 2, 2024, we drew down an additional $450 million of the Delayed-Draw Term Loan due 2024 as part of the funding for the acquisition of EA. • On February 13, 2024, we completed the sale of our registered offering of the 2026 Notes and the 2029 Notes, yielding net proceeds of approximately $1.3 billion. • On February 13 2024, we repaid $1.0 billion in outstanding principal of the Delayed-Draw Term Loan due 2024, using net proceeds from the 2026 Notes and 2029 Notes. • We repaid $597 million in net commercial paper repayments under the U.S. dollar-denominated commercial paper program. • We repurchased 12 million shares of our common stock for approximately $890 million, including excise tax payments, under our share repurchase program. • We made dividend payments to common shareholders totaling $111 million. • All other financing activities primarily include activities related to the stock incentive plan.
Financing activities during 2024 reflected the following transactions: • We repaid 597 million in net commercial paper activities. • We repurchased 12 million shares of our common stock for approximately $890 million. • We made dividend payments to common shareholders totaling $111 million. • On January 2, 2024, we drew down an additional $450 million of the Delayed-Draw Term Loan due 2024. • On February 13, 2024, we completed the sale of our registered offering of the 2026 Notes and the 2029 Notes, yielding net proceeds of approximately $1.3 billion. • On February 13 2024, we repaid $1.0 billion in outstanding principal of the Delayed-Draw Term Loan due 2024, using net proceeds from the 2026 Notes and 2029 Notes. • All other financing activities primarily include activities related to the stock incentive plan.
We also may from time to time access the capital markets, including to take advantage of favorable interest rate environments or other market conditions. Foreign cumulative earnings remain subject to foreign remittance taxes.
We also may from time to time access the capital markets, including to take advantage of favorable interest rate environments or other market conditions.
Certain of these projected interest payments may differ in the future based on changes in market interest rates. (c) Includes future lease payments for operating leases having initial noncancelable lease terms in excess of one year.
(b) Interest payments on long-term debt are projected for future periods using the interest rates in effect as of December 31, 2025. Certain of these projected interest payments may differ in the future based on changes in market interest rates. (c) Includes future lease payments for operating leases having initial noncancelable lease terms in excess of one year.
As a result, our primary interest rate exposure results from changes in short-term interest rates. As these shorter duration obligations mature, we anticipate issuing additional short-term commercial paper obligations and/or term loans to refinance all or part of these borrowings. The annual effective rate associated with our outstanding variable-rate obligation was approximately 4.85% with interest expense of $59 million.
As these shorter duration obligations mature, we anticipate issuing additional short-term commercial paper obligations and/or term loans to refinance all or part of these borrowings. The annual effective rate associated with our outstanding variable-rate obligations during the year was approximately 4.1% with interest expense of $36 million.
As of December 31, 2024, no borrowings were outstanding under the Revolving Credit Facility. The availability of the Revolving Credit Facility as a standby liquidity facility to repay maturing commercial paper is an important factor in maintaining the existing credit ratings of the Commercial Paper Programs when we have outstanding borrowings.
The availability of the Revolving Credit Facility as a standby liquidity facility to repay maturing commercial paper is an important factor in maintaining the existing credit ratings of our U.S. dollar-denominated commercial paper program when we have outstanding borrowings.
Commodity Price Risk For a discussion of risks relating to commodity prices, refer to “Item 1A. Risk Factors.” LIQUIDITY AND CAPITAL RESOURCES We assess our liquidity in terms of our ability to generate cash to fund our operating, investing, and financing activities.
Risk Factors.” LIQUIDITY AND CAPITAL RESOURCES We assess our liquidity in terms of our ability to generate cash to fund our operating, investing, and financing activities.
Under the Shelf Registration Statement, we may from time to time sell shares of common stock, preferred stock, debt securities, depositary shares, purchase contracts, purchase units, warrants and subscription rights in one or more offerings.
Under the Shelf Registration Statement, we may from time to time sell shares of common stock, preferred stock, debt securities, depository shares, purchase contracts, purchase units, warrants and subscription rights in one or more offerings. We continue to monitor the financial markets, the stability of U.S. and international banks and general global economic conditions.
Currency exchange rates unfavorably impacted 2024 reported sales by 0.6% as compared to 2023, as the U.S. dollar was, on average, stronger against most major currencies during 2024 as compared to exchange rate levels during 2023.
Currency exchange rates favorably impacted 2025 reported sales by 0.4% as compared to 2024, as the USD was, on average, weaker against most major currencies during 2025 as compared to exchange rate levels during 2024.
Acquired Intangibles and Goodwill : Our business acquisitions, including EA, typically result in the recognition of goodwill, developed technology, and other intangible assets, which affect the amount of future period amortization expense and possible impairment charges that we may incur.
For a detailed discussion on the application of these and other accounting estimates, refer to Note 2 to the consolidated financial statements. Acquired Intangibles and Goodwill : Our business acquisitions typically result in the recognition of goodwill, developed technology, and other intangible assets, which affect the amount of future period amortization expense and possible impairment charges that we may incur.
We have generally accepted the exposure to exchange rate movements without using derivative financial instruments to manage this risk. Both positive and negative movements in currency exchange rates against the U.S. dollar will therefore continue to affect the reported amount of sales, profit, and assets and liabilities in our consolidated financial statements.
Both positive and negative movements in currency exchange rates against the U.S. dollar will therefore continue to affect the reported amount of sales, profit, and assets and liabilities in our consolidated financial statements. Credit Risk We are exposed to potential credit losses in the event of nonperformance by counterparties to our financial instruments.
On December 14, 2023, we repaid the remaining $750 million in outstanding principal and accrued interest thereon using the proceeds from the Delayed-Draw Term Loan due 2024 and available cash. • We repurchased 4 million shares of our common stock for approximately $273 million under our share repurchase program. • Dividend payments to common shareholders totaling $102 million.
Financing activities during 2023 reflected the following transactions: • We borrowed $840 million in net commercial paper activities. • We repurchased 4 million shares of our common stock for approximately $273 million under our share repurchase program. • We made dividend payments to common shareholders totaling $102 million. • On December 14, 2023, we drew down $550 million of the $1.3 billion Delayed-Draw Term Loan due 2024. • On August 24, 2023 and December 14, 2023, we repaid $250 million and $750 million in outstanding principal of the Delayed-Draw Term Loan due 2023, respectively, using the proceeds from the Delayed-Draw Term Loan due 2024 and available cash.
R&D expenses, consisting principally of internal and contract engineering personnel costs, increased slightly during 2024 as compared to 2023 due to the incremental costs from our recent acquisitions and ongoing investments in innovation. NON-OPERATING INCOME (EXPENSE), NET Interest costs Net interest expense was $152.8 million during 2024, compared to $123.5 million during 2023.
R&D, consisting principally of internal and contract engineering personnel costs, increased year over year during both 2025 and 2024 due to ongoing investments in innovation. 33 Table of Contents NON-OPERATING INCOME (EXPENSE), NET Interest costs Net interest expense was $120.5 million during 2025, compared to $152.8 million during 2024.
For example, the Organisation for Economic Co-operation and Development continues to advance proposals for modernizing international tax rules, including the introduction of global minimum tax standards.
For example, the OECD continues to advance proposals for modernizing international tax rules, including the introduction of global minimum tax standards and the more recent Side-by-Side System.
We emphasize safety and liquidity of principal over yield on those funds. In addition, concentrations of credit risk arising from receivables from customers are limited due to the diversity of our customers. Our businesses perform credit evaluations of their customers’ financial conditions as appropriate and also obtain collateral or other security when appropriate.
In addition, concentrations of credit risk arising from receivables from customers are limited due to the diversity of our customers. Our businesses perform credit evaluations of their customers’ financial conditions as appropriate and also obtain collateral or other security when appropriate. Commodity Price Risk For a discussion of risks relating to commodity prices, refer to “Item 1A.
As of December 31, 2024, on an annualized basis, a hypothetical 10 basis points increase in market interest rates on our variable-rate debt obligations would have increased our interest expense by approximately $1.0 million in 2024.
As of December 31, 2025, on an annualized basis, the impact to our interest expense in 2025 from a hypothetical 10 basis points increase in market interest rates on our variable-rate debt obligations would be immaterial.
Operating cash flows were $1.5 billion in 2024, representing an increase of $173 million, or 12.8%, as compared to 2023, primarily attributable to the following factors: • Year-over-year increases of $35 million in Operating cash flow from net earnings, net of non-cash items (Amortization, Depreciation, Stock-based compensation, Gain on sale of property, Loss from divestiture, and Loss from equity investments). • The aggregate changes in accounts receivable, inventories, and trade accounts payable generated $79 million of cash during 2024 compared to using $9 million of cash during 2023.
Operating cash flows from continuing operations were approximately $1.036 billion in 2025, $1.029 billion in 2024, and $833 million in 2023, representing a year over year increase of $7 million, or 1% in 2025, and $195 million, or 23.4% in 2024, primarily attributable to the following factors: • Year-over-year increase of $44 million and $97 million in 2025 and 2024, respectively, in Operating cash flow from net earnings, net of non-cash items (Amortization, Depreciation, Stock-based compensation, and Loss from equity investments). • The aggregate changes in accounts receivable, inventories, and trade accounts payable generated $1.1 million, $28 million, and $9 million of cash during 2025, 2024, and 2023, respectively.
If changes in financial markets or other areas of the economy or downgrade in our credit rating adversely affect our access to the capital markets and other financing sources, we would expect to rely on a combination of available cash and existing available capacity under our credit facilities to provide short-term funding. 39 Table of Contents Overview of Cash Flows and Liquidity Following is an overview of our cash flows and liquidity ($ in millions): Year Ended December 31, 2024 2023 Net cash provided by operating activities $ 1,526.8 $ 1,353.6 Cash paid for acquisitions, net of cash received $ (1,721.8) $ (95.8) Purchases of property, plant and equipment (120.4) (107.8) Proceeds from sale of property 61.2 7.4 Cash infusion into divestiture (14.0) — All other investing activities (1.0) 0.8 Net cash used in investing activities $ (1,796.0) $ (195.4) Net proceeds from (repayments of) commercial paper borrowings $ (596.5) $ 839.9 Proceeds from borrowings (maturities longer than 90 days), net of issuance costs 1,733.5 549.3 Repayment of borrowings (maturities greater than 90 days) (1,000.0) (1,000.0) Repurchase of common shares (889.6) (272.9) Payment of dividends (111.2) (102.0) All other financing activities 71.1 18.0 Net cash provided by (used in) financing activities $ (792.7) $ 32.3 Operating Activities 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.
Overview of Cash Flows and Liquidity Following is an overview of our cash flows and liquidity ($ in millions): Year Ended December 31, 2025 2024 2023 Total operating cash provided by continuing operations $ 1,035.7 $ 1,028.5 $ 833.4 Purchases of property, plant and equipment $ (105.1) $ (86.1) (78.6) Cash paid for acquisitions, net of cash received (25.7) (3.6) $ (95.8) All other investing activities 11.2 0.9 1.4 Total investing cash used in continuing operations $ (119.6) $ (88.8) $ (173.0) Net proceeds from (repayments of) commercial paper borrowings $ 0.9 $ (596.5) 839.9 Repurchase of common shares (1,610.1) (889.6) (272.9) Payment of dividends (92.2) (111.2) (102.0) Proceeds from borrowings (maturities greater than 90 days), net of issuance costs — 1,733.5 $ 549.3 Repayment of borrowings (maturities greater than 90 days) (715.7) (1,000.0) (1,000.0) Proceeds from Ralliant Dividend 1,150.0 — — All other financing activities 40.8 71.1 18.0 Total financing cash provided by (used in) continuing operations $ (1,226.3) $ (792.7) $ 32.3 Operating Activities 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.
The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.
The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base these estimates and judgments on historical experience, the current economic environment, and on various other assumptions that are believed to be reasonable under the circumstances.
Our effective tax rate for 2024 differs from the U.S. federal statutory rate of 21% due primarily to the positive and negative effects of the Tax Cuts and Jobs Act (“TCJA”), U.S. federal permanent differences, the impacts of credits and deductions provided by law, including those associated with state income taxes, a decrease in our uncertain tax positions, non-deductible transaction costs related to the Separation and the effect of changes in tax rates enacted in the current period.
Risk Factors.” Effective Tax Rate Our effective tax rate was 11.5%, 4.7%, 5.7% during 2025, 2024, and 2023, respectively. 34 Table of Contents Our effective tax rate for 2025, 2024 and 2023 differs from the U.S. federal statutory rate of 21% due primarily to the positive and negative effects of foreign income taxed at a different rate, the U.S. federal permanent differences, the impacts of credits and deductions provided by law, including those associated with state income taxes, decreases in our uncertain tax positions and the effect of changes in tax rates enacted.
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.
In addition, our access to the capital markets and other financing sources is impacted by any change in our credit rating.
We evaluated events or circumstances that may indicate the carrying value of our intangible assets may not be fully recoverable during the year ended December 31, 2024, and recorded no impairments. 44 Table of Contents If actual results are not consistent with management’s estimates and assumptions, goodwill and other intangible assets may be overstated and a charge would need to be taken against net earnings which would adversely affect our financial statements.
If actual results are not consistent with management’s estimates and assumptions, goodwill and other intangible assets may be overstated and a charge would need to be taken against net earnings which would adversely affect our financial statements. 40 Table of Contents Revenue Recognition : We derive revenue from the sale of products and services.
As of December 31, 2024, an increase of 100 basis points in interest rates would have decreased the fair value of our fixed-rate long-term debt by approximately $101 million.
A change in interest rates impacts the fair value of our fixed-rate debt but not our earnings or cash flows because the interest on such debt is fixed. As of December 31, 2025, an increase of 100 basis points in interest rates would have decreased the fair value of our fixed-rate debt by approximately $86 million.
We base these estimates and judgments on historical 43 Table of Contents experience, the current economic environment, and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ materially from these estimates and judgments. We believe the following accounting estimates are most critical to an understanding of our financial statements.
Actual results may differ materially from these estimates and judgments. We believe the following accounting estimates are most critical to an understanding of our financial statements.
The amount of cash flow generated from or used by the aggregate of 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. • The aggregate change in prepaid expenses and other assets, accrued expenses and other liabilities, and changes in deferred income taxes used $40 million of cash in 2024 as compared to using $91 million in 2023.
The amount of cash flow generated from or used in a period depends upon how effectively we manage the cash conversion cycle, which can be impacted by timing of revenue and collection from customers, vendor cash disbursement, and purchases of materials and components for certain businesses. • The aggregate change in prepaid expenses and other assets, accrued expenses and other liabilities, and changes in deferred income taxes used $53 million, $42 million, and $122 million of cash in 2025, 2024, and 2023, respectively.
As of December 31, 2024, our variable-rate debt obligations consist of U.S. dollar denominated commercial paper and senior unsecured term facilities denominated in either Euros or Japanese Yen (refer to Note 9 to the consolidated financial statements for information regarding our outstanding indebtedness as of December 31, 2024).
As of December 31, 2025, our variable-rate debt obligations consist of U.S. dollar-denominated commercial paper (refer to Note 8 to the consolidated financial statements for information regarding our outstanding indebtedness). As a result, our primary interest rate exposure results from changes in short-term interest rates.
($ in millions) Total Due within one year of December 31, 2024 Due later than one year from December 31, 2024 Debt and leases: Long-term debt principal payments (a) $ 3,718.8 $ 376.3 $ 3,342.5 Interest payments on long-term debt (b) 759.4 133.9 625.5 Operating lease obligations (c) 197.3 38.4 158.9 Other: Purchase obligations (d) 445.7 366.2 79.5 Other liabilities reflected on the balance sheet under GAAP (e)(f) 2,266.2 1,148.0 1,118.2 Total $ 7,387.4 $ 2,062.8 $ 5,324.6 (a) The amount due within one year of December 31, 2024 is related to the Euro Term Loan due 2025 and Yen Term Loan due 2025.
($ in millions) Total Due within one year of December 31, 2025 Due later than one year from December 31, 2025 Debt and leases: Long-term debt principal payments (a) $ 3,213.5 $ 1,191.3 $ 2,022.2 Interest payments on long-term debt (b) 657.5 105.1 552.4 Operating lease obligations (c) 106.7 25.4 81.3 Other: Purchase obligations (d) 211.6 202.8 8.8 Other liabilities reflected on the balance sheet under GAAP (e)(f) 1,533.6 883.7 649.9 Total $ 5,722.9 $ 2,408.3 $ 3,314.6 (a) The amount due within one year of December 31, 2025 is related to the 3.7% Euro-denominated senior unsecured notes due 2026 and 3.15% senior unsecured notes due 2026.
OPERATING EXPENSES For the Year Ended December 31 ($ in millions) 2024 2023 Sales $ 6,231.8 $ 6,065.3 Selling, general, and administrative (“SG&A”) expenses 2,173.5 2,062.6 Research and development (“R&D”) expenses 414.0 397.8 SG&A as a % of sales 34.9 % 34.0 % R&D as a % of sales 6.6 % 6.6 % SG&A expenses increased during 2024 as compared to 2023, primarily due to higher intangible amortization and incremental operating costs from our recent acquisitions, transaction and separation costs, and employee compensation, partially offset by benefits from productivity measures and lower discrete restructuring costs.
OPERATING EXPENSES For the Year Ended December 31 ($ in millions) 2025 2024 2023 Sales $ 4,159.1 $ 4,080.9 $ 3,913.9 Selling, general, and administrative (“SG&A”) 1,661.7 1,651.5 1,666.1 Research and development (“R&D”) 259.2 251.3 237.0 SG&A as a % of sales 40.0 % 40.5 % 42.6 % R&D as a % of sales 6.2 % 6.2 % 6.1 % SG&A increased in 2025 as compared to 2024, primarily due to incremental stock-based compensation related to the Separation, higher employee compensation costs, discrete restructuring charges, and innovation and commercial investments to support strategic growth initiatives, all partially offset by reductions of excess costs subsequent to the Separation and benefits from productivity measures and FBS initiatives.
COMPREHENSIVE INCOME Comprehensive income decreased by $172 million in 2024 as compared to 2023, primarily due to an unfavorable change in foreign currency translation adjustments of $149 million, offset by an increase in net income of $33 million and a favorable change in pension benefit adjustments of $11 million. 37 Table of Contents FINANCIAL INSTRUMENTS AND RISK MANAGEMENT We are exposed to market risk from changes in interest rates, foreign currency exchange rates, credit risk and commodity prices, each of which could impact our financial statements.
Comprehensive income decreased by $172 million in 2024 as compared to 2023, primarily due to an unfavorable change in foreign currency translation adjustments of $149 million, partially offset by a $74 million increase in net earnings from continuing operations and a favorable change in pension benefit adjustments of $11 million.
We place cash and cash equivalents with various high-quality financial institutions throughout the world and exposure is limited at any one institution. Although we typically do not obtain collateral or other security to secure these obligations, we regularly monitor the third party depository institutions that hold our cash and cash equivalents.
Although we typically do not obtain collateral or other security to secure these obligations, we regularly monitor the third party depository institutions that hold our cash and cash equivalents. We emphasize safety and liquidity of principal over yield on those funds.
RESULTS OF OPERATIONS Components of Sales Growth 2024 vs. 2023 Total revenue growth (GAAP) 2.7 % Impact of: Acquisitions and divestitures (2.0) % Currency exchange rates 0.6 % Core revenue growth (Non-GAAP) 1.3 % Operating Profit Margins 2024 vs. 2023 Operating profit margins were 19.4% in 2024, an increase of 70 basis points as compared to 18.7% in 2023.
RESULTS OF OPERATIONS Components of Sales Growth 2025 vs. 2024 2024 vs. 2023 Total revenue growth (GAAP) 1.9 % 4.3 % Excluding impact of: Acquisitions and Divestitures 0.2 % (0.6) % Currency exchange rates (0.4) % 0.6 % Core revenue growth (Non-GAAP) 1.7 % 4.3 % Sales growth in 2025 was driven by favorable pricing of 2.2%, partially offset by a volume decline of 0.6%.
For a discussion of risks related to these and other tax matters, please refer to “Item 1A. Risk Factors.” Effective Tax Rate Our effective tax rate was 14.1% during 2024 and 12.6% during 2023, respectively.
For a discussion of risks related to these and other tax matters, please refer to “Item 1A.
A 10% depreciation in major currencies relative to the U.S. dollar as of December 31, 2024 would have resulted in a reduction of foreign currency-denominated net assets and stockholders’ equity of approximately $326 million.
A 10% depreciation in major currencies relative to the USD as of December 31, 2025 would have resulted in a reduction of foreign currency-denominated net assets and stockholders’ equity of approximately $179 million. 35 Table of Contents As of December 31, 2025, a portion of the €700 million Euro-denominated senior unsecured notes due 2029 remained designated as a net investment hedge on our investment in applicable foreign operations.
If the exchange rates in effect as of December 31, 2024 were to prevail throughout 2025, currency exchange rates would negatively impact 2025 estimated sales by approximately 1.4% relative to our performance in 2024. In general, additional strengthening of the U.S. dollar against other major currencies would further negatively impact our sales and results of operations on an overall basis.
If the exchange rates in effect as of December 31, 2025 were to prevail throughout 2026, currency exchange rates would positively impact 2026 estimated sales by approximately 0.8% relative to our performance in 2025.
Accordingly, foreign currency transaction gains or losses on the debt were 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 recognized after-tax foreign currency transaction losses of $161.1 million, gains of $60.4 million, and losses of $1.2 million during the years ended December 31, 2025, 2024, and 2023, 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.
For further discussion of this transaction, refer to Note 3 to the consolidated financial statements. 36 Table of Contents Other non-operating expense, net Other non-operating expense was $58.6 million during 2024, compared to $19.4 million during 2023.
For a discussion of our outstanding indebtedness, refer to Note 8 to the accompanying consolidated financial statements. Other non-operating expense, net Other non-operating expense was $2.5 million, $57.2 million, and $17.4 million during 2025, 2024, and 2023, respectively.
Year-over-year changes in operating profit margin comparisons were comprised of the following: • Year-over-year sales increases due to favorable pricing and higher volume from existing businesses, and benefits from productivity measures, partially offset by higher employee compensation, and unfavorable changes in foreign currency exchange rates — favorable 200 basis points • The year-over-year effect of amortization from existing businesses — favorable 70 basis points • The year-over-year effect of costs relating to discrete restructuring plans — favorable 110 basis points COST OF SALES AND GROSS PROFIT For the Year Ended December 31 ($ in millions) 2024 2023 Sales $ 6,231.8 $ 6,065.3 Cost of sales (2,500.8) (2,471.2) Gross profit 3,731.0 3,594.1 Gross profit margin 59.9 % 59.3 % Gross profit increased during 2024 as compared to 2023, primarily due to favorable pricing from existing businesses, contributions from our acquired businesses, increased volume from the IOS and AHS segments, benefits from productivity measures and FBS initiatives, partially offset by net volume reductions in the PT segment, higher employee compensation, and unfavorable changes in foreign currency exchange rates.
Core revenue growth in 2024 was driven by modest to moderate growth across all regions. 32 Table of Contents Operating Profit Margins 2025 vs. 2024 Operating profit margin decreased 20 basis points during 2025 as compared to 2024 resulting from: • Year-over-year increases due to favorable pricing and gains achieved from FBS and from productivity initiatives, partially offset by modest volume decline and higher employee compensation — unfavorable 20 basis points • The year-over-year effect of all other items, including +20 basis points from amortization expense for existing businesses, -20 basis points in discrete restructuring charges — relatively flat 2024 vs. 2023 Operating profit margin increased 400 basis points during 2024 as compared to 2023 resulting from: • Year-over-year increases due to favorable pricing and higher volume, and benefits from productivity measures, partially offset by higher employee compensation and unfavorable changes in foreign currency exchange rates — favorable 215 basis points • The year-over-year effect of all other items, including +115 basis points in discrete restructuring charges and +70 basis points from amortization expense for existing businesses — favorable 185 basis points COST OF SALES AND GROSS PROFIT For the Year Ended December 31 ($ in millions) 2025 2024 2023 Sales $ 4,159.1 $ 4,080.9 $ 3,913.9 Cost of sales (1,518.0) (1,461.8) (1,436.8) Gross profit 2,641.1 2,619.1 2,477.1 Gross profit margin 63.5 % 64.2 % 63.3 % Gross profit increased during 2025 as compared to 2024, primarily due to favorable pricing, gains from FBS and productivity measures all partially offset by volume declines, higher employee compensation, and discrete restructuring charges.
Credit Risk We are exposed to potential credit losses in the event of nonperformance by counterparties to our financial instruments. Financial instruments that potentially subject us to credit risk consist of cash and highly-liquid investment grade cash 38 Table of Contents equivalents and receivables from customers.
Financial instruments that potentially subject us to credit risk consist of cash and highly-liquid investment grade cash equivalents and receivables from customers. We place cash and cash equivalents with various high-quality financial institutions throughout the world and exposure is limited at any one institution.
The year-over-year changes were driven by timing differences related to contract assets, contract liabilities, and payments of income taxes, interest, and restructuring.
The year-over-year changes were driven by timing differences related to contract assets, contract liabilities, payments of income taxes and interest, employee compensation and benefits, and restructuring activities. 37 Table of Contents Investing Activities Investing cash outflows from continuing operations increased by $31 million in 2025 due to higher capital expenditures and net cash flows related to acquisitions and divestitures.
These guarantees are not recorded on our balance sheet and $41 million in commitments expire within one year of December 31, 2024 and $20 million later than one year from December 31, 2024. During 2024, we contributed $1 million and $8 million to our U.S. and non-U.S. defined benefit pension plans, respectively.
These guarantees are not recorded on our balance sheet and $17 million in commitments expire within one year of December 31, 2025 and $13 million later than one year from December 31, 2025. 39 Table of Contents As of December 31, 2025 we expect to have sufficient liquidity to satisfy our cash needs for the foreseeable future.
Our businesses design, develop, 29 Table of Contents manufacture, and service professional and engineered products, software, and services, building upon leading brand names, innovative technologies, and significant market positions.
Our strategic segments - Intelligent Operating Solutions and Advanced Healthcare Solutions - 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.
We will continue to deploy FBS to actively manage these challenges and utilize pricing and other countermeasures to offset the aforementioned dynamics.
We continue to monitor 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.
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. This MD&A is designed to provide a reader of our financial statements with a narrative from the perspective of management.
This MD&A is designed to provide a reader of our financial statements with a narrative from the perspective of management.
The year-over-year increase was primarily due to an increase in losses from equity investments of $22.1 million and a charitable contribution of $20.0 million made in the first quarter of 2024. For further discussion of these transactions, refer to Note 6 and Note 1 to the consolidated financial statements, respectively.
The year over year changes were primarily due to losses from equity investments incurred in 2024 and 2023, and a charitable contribution of $20.0 million made to the Fortive Foundation, a related party, without any donor imposed conditions or restrictions, in the first quarter of 2024.
The timing of cash flows associated with these obligations is based upon management’s estimates over the terms of these arrangements and is largely based upon historical experience. (f) Includes non-contractual obligations of $173 million of noncurrent gross unrecognized tax benefits.
(e) Primarily consist of obligations under contract liabilities, post-retirement benefits, pension benefit obligations, net tax liabilities, and deferred compensation obligations. The timing of cash flows associated with these obligations is based upon management’s estimates over the terms of these arrangements and is largely based upon historical experience. Refer to Note 6 to the consolidated financial statements for additional information.
The amount of foreign remittance taxes that may be applicable to such earnings is not readily determinable given local law restrictions that may apply to a portion of such earnings, unknown changes in foreign tax law that may occur during the applicable restriction periods caused by applicable local corporate law for cash repatriation, and the various tax planning alternatives we could employ if we repatriated these earnings. 42 Table of Contents Cash Requirements The following table sets forth a summary of our short-term and long-term cash requirements as of December 31, 2024 under (1) long-term debt principal and interest obligations, (2) leases, (3) purchase obligations and (4) other long-term liabilities reflected on our balance sheet under GAAP.
Cash Requirements The following table sets forth a summary of our short-term and long-term cash requirements as of December 31, 2025 under (1) long-term debt principal and interest obligations, (2) leases, (3) purchase obligations and (4) other long-term liabilities reflected on our consolidated balance sheet.
Refer to Note 12 to the consolidated financial statements for additional information on unrecognized tax benefits.
Refer to Note 8 to the consolidated financial statements for additional information regarding the Company’s financing activities and indebtedness and access to additional capital.
Advanced Healthcare Solutions Selected Financial Data For the Year Ended December 31 ($ in millions) 2024 2023 Sales $ 1,287.7 $ 1,229.4 Operating profit 155.6 101.6 Depreciation 20.2 21.2 Amortization 181.0 181.4 Operating profit as a % of sales 12.1 % 8.3 % Depreciation as a % of sales 1.6 % 1.7 % Amortization as a % of sales 14.1 % 14.8 % Components of Sales Growth 2024 vs. 2023 Total revenue growth (GAAP) 4.7 % Impact of: Currency exchange rates 1.4 % Core revenue growth (Non-GAAP) 6.1 % 2024 COMPARED TO 2023 The sales results for 2024 were driven by growth in our existing businesses due to price increases across the segment and volume increases primarily in our sterilization and dosimetry products.
Core revenue growth in 2024 was driven by modest growth across all regions. 31 Table of Contents Operating Profit Margins 2025 vs. 2024 Operating profit margin increased 50 basis points during 2025 as compared to 2024 resulting from: • The year-over-year increase in price and gains achieved from FBS and productivity initiatives which were partially offset by slight volume decline and higher employee compensation; additionally, within the year, the unfavorable impact from tariffs was mitigated by countermeasures — favorable 85 basis points • The year-over-year effect of all other items, including -60 basis points in discrete restructuring charges, offset by +20 basis points from amortization expense for existing businesses, and +5 basis points from lower net acquisition and divestiture-related costs — unfavorable 35 basis points 2024 vs. 2023 Operating profit margin increased 180 basis points during 2024 as compared to 2023 resulting from: • The year-over-year increase in price and volume from existing businesses, partially offset by higher employee compensation, customer acquisition costs and marketing costs to support growth initiatives — favorable 95 basis points • The year-over-year effect of all other items, including +50 basis points from lower discrete restructuring charges than in the prior year, +50 basis points from amortization expense for existing businesses and impairment of intangible assets incurred in 2023, offset by -15 basis points from net effects of acquired businesses — favorable 85 basis points ADVANCED HEALTHCARE SOLUTIONS Advanced Healthcare Solutions Selected Financial Data For the Year Ended December 31 ($ in millions) 2025 2024 2023 Sales $ 1,302.8 $ 1,287.7 $ 1,229.4 Operating profit 138.6 138.5 83.8 Depreciation 19.5 20.2 21.2 Amortization 180.3 181.0 181.4 Operating profit as a % of sales 10.6 % 10.8 % 6.8 % Depreciation as a % of sales 1.5 % 1.6 % 1.7 % Amortization as a % of sales 13.8 % 14.1 % 14.8 % Components of Sales Growth 2025 vs. 2024 2024 vs. 2023 Total revenue growth (GAAP) 1.2 % 4.7 % Excluding impact of: Currency exchange rates (0.4) % 1.4 % Core revenue growth (Non-GAAP) 0.8 % 6.1 % Sales growth in 2025 was driven by favorable pricing of 2.2%.
We expect capital spending to be between approximately $120 million and $150 million in 2025, though actual expenditures will ultimately depend on business conditions. 40 Table of Contents Financing Activities and Indebtedness Financing cash flows consist primarily of cash flows associated with the issuance and repayments of debt and commercial paper, payments of cash dividends to shareholders and share repurchases.
Financing Activities and Indebtedness Financing cash flows from continuing operations consist primarily of the issuance and repayments of debt including commercial paper, payments of cash dividends to shareholders and share repurchases. Financing activities used cash of $1.23 billion in 2025, used cash of $793 million in 2024, and generated cash of $32 million in 2023.
However, the timing of these liabilities is uncertain, and therefore, they have been included in the “due later than one year from December 31, 2024” column. The amounts also include our obligation under the TCJA for the transition tax on cumulative foreign earnings and profits, which we expect to pay over eight years.
(f) Includes non-contractual obligations of $159 million of noncurrent gross unrecognized tax benefits, including interest and penalties. However, the timing of these liabilities is uncertain, and therefore, they have been included in the “due later than one year from December 31, 2025” column. Refer to Note 11 to the consolidated financial statements for additional information on unrecognized tax benefits.
Core revenue growth included favorable pricing of 2.7%, partially offset by volume decline of 1.4%. Geographically, core revenue in developed markets increased by low single-digits during 2024, driven by low single-digit growth in North America, while Western Europe decreased slightly.
Sales growth in 2024 was driven by favorable pricing of 2.9% and a volume increase of 1.4%. Geographically, core revenue growth in 2025 was driven primarily by strengthening demand in North America, led by the IOS segment, partially offset by modest declines in Europe.
Refer to Note 9 to the consolidated financial statements for additional information regarding the Company’s financing activities and indebtedness, including the Company’s outstanding debt as of December 31, 2024, the Company’s commercial paper program, and the Revolving Credit Facility. Refer to Note 15 to the consolidated financial statements for a description of the Company’s share repurchase program.
The amount due later than one year from December 31, 2025 includes $650 million outstanding borrowings under the Commercial Paper Programs. Refer to Note 8 to the consolidated financial statements for additional information regarding the Company’s indebtedness as of December 31, 2025.
This Item generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
This Item generally discusses 2025, 2024, and 2023 items and year-to-year comparisons between 2025 and 2024, and 2024 and 2023. Fortive Corporation (“Fortive,” “the Company,” “we,” “us,” or “our”) innovates essential technologies to keep our world safe and productive.
Year-over-year changes in operating profit margin were comprised of the following: • Year-over-year increase in price from existing businesses, volume growth in IOS and AHS, and benefits from productivity measures were partially offset by a volume decline in certain businesses and end markets within our PT segment, higher employee compensation and investment growth initiatives.
Within the year, the unfavorable impact of tariffs were mitigated by the countermeasures deployed. Gross profit increased during 2024 as compared to 2023, primarily due to favorable pricing and increased volume from existing businesses, benefits from productivity measures and FBS initiatives, partially offset by higher employee compensation, and unfavorable changes in foreign currency exchange rates.
Our cash and cash equivalents were invested in highly liquid investment-grade instruments with a maturity of 90 days or less.
Refer to Note 14 to the consolidated financial statements for a description of the Company’s share repurchase program. 38 Table of Contents Cash and Cash Requirements Cash As of December 31, 2025, we held approximately $376 million of cash and cash equivalents that were invested in highly liquid investment-grade instruments with a maturity of 90 days or less, of which approximately 80% was held outside of the United States.
Removed
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 are not included, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) in Part II, Item 7 of the Company’s Annual Report on Form 10-K filed for the fiscal year ended December 31, 2023 with the Securities and Exchange Commission on February 27, 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The information required by this item is included under the heading “Financial Instruments and Risk Management” in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” 46 Table of Contents
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The information required by this item is included under the heading “Financial Instruments and Risk Management” in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” 42 Table of Contents

Other FTV 10-K year-over-year comparisons