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

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Paragraph-level year-over-year comparison of Ingersoll Rand'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.

+266 added−238 removedSource: 10-K (2026-02-17) vs 10-K (2025-02-19)

Top changes in Ingersoll Rand's 2025 10-K

266 paragraphs added · 238 removed · 210 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeFor example, a distributor may exclusively carry our compressor technologies, and also source additional components of the broader industrial system in which those products operate from other suppliers. Our service personnel and product engineers provide the distributors’ service representatives with technical assistance and field training, particularly with respect to installation and repair of equipment.
Biggest changeWhile most distributors provide a broad range of products from different suppliers, we view our distributors as exclusive at the product category level (e.g. compressor, vacuum and blower). For example, a distributor may exclusively carry our compressor technologies, and also source additional components of the broader industrial system in which those products operate from other suppliers.
The breadth and depth of our product offering creates incremental business opportunities by allowing us to cross-sell our full product portfolio and uniquely address customers’ needs in one complete solution. We sell our products through an integrated network of direct sales representatives and independent distributors, which is strategically tailored to meet the dynamics of each target geography or end-market.
The breadth and depth of our product offering creates incremental business opportunities by allowing us to cross-sell our full product portfolio and uniquely address customers’ needs in one complete solution. We sell our products through an integrated network of direct sales representatives and independent distributors, which is tailored to meet the dynamics of each target geography or end-market.
We are committed to providing competitive pay, benefits, and equity that are valuable and meaningful to our employees. We provide a competitive total compensation package with a significant portion designed to foster a culture of ownership. We continue to offer our Ownership Works program to grant equity to all new and acquired employees regardless of level in the organization.
We are committed to providing competitive pay, benefits, and equity that are valuable and meaningful to our employees. We provide a competitive total compensation package with a significant portion designed to foster a culture of ownership. We continue to offer our Ownership Works program to grant equity to all eligible new and acquired employees regardless of level in the organization.
Our products and services are critical to the processes and systems in which they are utilized, which are often complex and the cost of failure or downtime is high. However, our products typically represent only a small portion of the costs of the overall systems or functions that they support.
Our products and services are critical to the processes and systems in which they are utilized, which are often complex and for which the cost of failure or downtime is high. However, our products typically represent only a small portion of the costs of the overall systems or functions that they support.
Precision and Science Technologies The Precision and Science Technologies segment designs, manufactures and markets a broad range of niche fluidics and powder handling solutions for the life sciences, food and beverage, water and wastewater, general manufacturing, chemical processing, clean energy, aerospace, and other end markets.
Precision and Science Technologies The Precision and Science Technologies segment designs, manufactures and markets a broad range of niche fluidics, liquid and powder handling solutions for the life sciences, food and beverage, water and wastewater, general manufacturing, chemical processing, clean energy, aerospace, and other end markets.
We are driven by an entrepreneurial spirit and ownership mindset, dedicated to helping make life better for our employees, customers, the planet, and our shareholders. These attributes, along with over 160 years of engineering heritage, generate strong brand loyalty for our products and foster long-standing customer relationships, resulting in leading market positions within each of our operating segments.
We are driven by an entrepreneurial spirit and ownership mindset, dedicated to helping make life better for our employees, customers, the planet, and our shareholders. These attributes, along with over 165 years of engineering heritage, generate strong brand loyalty for our products and foster long-standing customer relationships, resulting in leading market positions within each of our operating segments.
We also manufacture space suits, inflatable habitats, and lighter-than-air vehicles for human mobility and habitation and defense applications. Our customer base is composed of a wide range of end users in markets including life sciences, industrial manufacturing, water and waste water, chemical processing, 4 Table of Contents energy, food and beverage, agriculture and others.
We also manufacture space suits, inflatable habitats, and lighter-than-air vehicles for human mobility and habitation and defense applications. Our customer base is composed of a 4 Table of Content wide range of end users in markets including life sciences, industrial manufacturing, water and waste water, chemical processing, energy, food and beverage, agriculture and others.
Compression Products Sales to industrial end-markets include industrial air compression products, as well as associated aftermarket parts, consumables and services. Industrial air compressors compress air to create pressure to power machinery, industrial tools, material handling systems and automated equipment. Compressed air is also used in applications as diversified as snow making and fish farming, on high-speed trains and in hospitals.
Compression Products Sales to industrial end-markets include industrial air compression products, as well as associated aftermarket parts, consumables and services. Industrial air compressors compress air used to power machinery, industrial tools, material handling systems and automated equipment. Compressed air is also used in applications as diversified as snow making and fish farming, on high-speed trains and in hospitals.
Key technologies include positive displacement pumps, automated liquid handling systems, and single-use powder and liquid handling and containment systems. Positive Displacement (PD) Pumps Positive displacement pumps are essential to highly specialized flow applications across many industries. We are a market leader in positive displacement pumps, covering the main technology types including diaphragm, vane, piston, progressive cavity, peristaltic and gear.
Primary technologies include positive displacement pumps, automated liquid handling systems, and single-use powder and liquid handling and containment systems. Positive Displacement (PD) Pumps Positive displacement pumps are essential to highly specialized flow applications across many industries. We are a market leader in positive displacement pumps, covering the main technology types including diaphragm, vane, piston, progressive cavity, peristaltic and gear.
Within life science tools and systems, our primary offerings include single-use powder handling systems and isolators for disposable process and powder containment, and contract design and productions for services for silicone, thermoplastic, and specialty components and assemblies for medical devices. These offerings are sold primarily under the ILC Dover and Flexan brands.
Within life science tools and systems, our primary offerings include single-use powder and liquid handling systems and isolators for disposable process and containment applications, and contract design and productions for services for silicone, thermoplastic, and specialty components and assemblies for medical devices. These offerings are sold primarily under the ILC Dover and Flexan brands.
Our products are sold under more than 80 market-leading brands, including Ingersoll Rand and Gardner Denver, which we believe are globally recognized in their respective end-markets and known for product quality, reliability, efficiency and superior customer service.
Our products are sold under more than 90 market-leading brands, including Ingersoll Rand and Gardner Denver, which we believe are globally recognized in their respective end-markets and known for product quality, reliability, efficiency and superior customer service.
In May 2024, our Connections Engagement survey achieved an 88% participation rate, resulting in an engagement score of 81. This places Ingersoll Rand again in the top 10% of manufacturing organizations surveyed.
In May 2025, our Connections Engagement survey achieved an 88% participation rate, resulting in an engagement score of 81. This places Ingersoll Rand again in the top 10% of manufacturing organizations surveyed.
As a result, our customers place a high value on our application expertise, product reliability and the responsiveness of our service. To support our customers and market presence, we maintain significant global scale with over 60 key manufacturing facilities, and over 40 complementary service and repair centers across six continents and over 21,000 employees worldwide as of December 31, 2024.
As a result, our customers place a high value on our application expertise, product reliability, and the responsiveness of our service. To support our customers and market presence, we maintain significant global scale with over 60 key manufacturing facilities, and over 50 complementary service and repair centers across six continents and over 21,000 employees worldwide as of December 31, 2025.
We have an environmental policy that confirms our commitment to a clean environment and compliance with environmental laws. We have an active environmental management program aimed at complying with existing environmental regulations and reducing the generation of pollutants in the manufacturing processes.
We have an 9 Table of Content environmental policy that confirms our commitment to a clean environment and compliance with environmental laws. We have an active environmental management program aimed at complying with existing environmental regulations and reducing the generation of pollutants in the manufacturing processes.
Similarly, on our positive displacement progressive cavity sludge pumps, we sell monitoring devices and cloud-based software for real-time pump health and performance monitoring, which prevents costly downtime in water treatment plants as well as in industrial installations.
Similarly, on our positive displacement progressive cavity sludge pumps, we sell monitoring devices and cloud-based software 6 Table of Content for real-time pump health and performance monitoring, which prevents costly downtime in water treatment plants as well as in industrial installations.
As of December 31, 2024, we had over 21,000 employees, with approximately 6,300 of them working in the United States. Works councils and collective bargaining units represent a significant number of employees outside the United States, while approximately 380 employees in the United States are represented by labor unions. We believe that we maintain satisfactory relations with our employees.
As of December 31, 2025, we had over 21,000 employees, with approximately 6,100 of them working in the United States. Works councils and collective bargaining units represent a significant number of employees outside the United States, while approximately 370 employees in the United States are represented by labor unions. We believe that we maintain satisfactory relations with our employees.
To ensure the effectiveness of our human capital management practices, we evaluate various metrics, including voluntary turnover and engagement. In 2024, the voluntary turnover rate was 8.5% and 7.4% for hourly and salaried employees, respectively. In 2023, the voluntary turnover rate was 12.2% and 8.7% for hourly and salaried employees, respectively.
To ensure the effectiveness of our human capital management practices, we evaluate various metrics, including voluntary turnover and engagement. In 2025, the voluntary turnover rate was 8.1% and 7.8% for hourly and salaried employees, respectively. In 2024, the voluntary turnover rate was 8.5% and 7.4% for hourly and salaried employees, respectively.
Although there are several large manufacturers of compression, vacuum and blower products, the marketplace for these products remains highly fragmented due to the wide variety of product technologies, applications and selling channels. Our principal competitors in sales of compression, vacuum and blower products include Atlas Copco, Flowserve, IDEX Corporation and Kaeser Compressors.
Although there are several large manufacturers of compression, vacuum and blower products, the marketplace for these products remains highly fragmented due to the wide variety of product technologies, applications and selling channels. Our principal competitors in sales of compression, vacuum and blower products include Atlas Copco, Flowserve, IDEX Corporation, Kaeser Compressors, Kaishan Group Co., Ltd. and Elgi Equipments Limited.
Our large installed base of products provides a 3 Table of Contents recurring revenue stream through our aftermarket parts, consumables and services offerings. As a result, our aftermarket revenue is significant, representing 36.4% of total Company revenue in 2024.
Our large installed base of products provides a 3 Table of Content recurring revenue stream through our aftermarket parts, consumables and services offerings. As a result, our aftermarket revenue is significant, representing 36.5% of total Company revenue in 2025.
Turbo blowers and side channel and radial blowers are dynamic technologies that have the ability to accelerate gas or air through an impeller and transform their kinetic energy at the discharge with some limitation on flexibility.
Turbo blowers and side channel and radial blowers are dynamic technologies that accelerate gas or air through a rotating impeller and transform their kinetic energy at the discharge with some limitation on flexibility.
Recent Developments Recent Acquisitions The Company continued its focus on generating inorganic growth through acquisitions that strengthen our position in core product categories and broaden our exposure to high-growth, sustainable end markets. We completed or announced the acquisition of several businesses during 2024, including the following: • In February 2024, the Company completed the acquisition of Friulair S.r.l.
Recent Developments Recent Acquisitions The Company continued its focus on generating inorganic growth through acquisitions that strengthen our position in core product categories and broaden our exposure to high-growth, sustainable end markets. We completed or announced the acquisition of several businesses during 2025, including the following: • In February 2025, the Company completed the acquisition of SSI Aeration, Inc.
From that strategy, company objectives are finalized and 8 Table of Contents communicated from the Chief Executive Officer to initiate yearly objectives and development plans for all salaried employees. Team-specific objectives are also cascaded during this time.
From that strategy, company objectives are finalized and communicated from the Chief Executive Officer to initiate yearly objectives and development plans for all salaried employees at the beginning of each calendar year. Team-specific objectives are also cascaded during this time.
In many cases, blowers are a core component for the operation of the entire end-users’ systems. Management believes that we hold a leading position in our addressable portion of the global blower products market. We focus on several key technologies within blower products: rotary lobe, screw, claw and vane, turbo, side channel and radial blowers.
In many cases, blowers are a core component for the operation of the entire end-users’ systems. We focus on several key technologies within blower products: rotary lobe, screw, claw and vane, turbo, side channel and radial blowers.
This, along with our solid strategy, strong values, and clear expectations, has given us strong engagement and a competitive edge. 9 Table of Contents Because of the investments we have made in our employees, we continue to receive external recognition for being a great place to work.
This, along with our solid strategy, strong values, and clear expectations, has given us strong engagement and a competitive edge. Because of the investments we have made in our employees, we continue to receive external recognition for being a great place to work. Accolades include winning Great Place to Work in the United States and in several Latin American countries.
As an example of one such end-process, within packaging, a vacuum will be used on blister packaging, foil handling, labeling, carton erection, stacking and palletizing (placing, stacking or transporting goods on pallets), as well as central vacuum supply for entire packaging departments.
Within each of these processes are a multitude of sub-applications. As an example, within packaging, a vacuum will be used on blister packaging, foil handling, labeling, carton erection, stacking and palletizing (placing, stacking or transporting goods on pallets), as well as central vacuum supply for entire packaging departments.
Throughout the year, we provide training resources and materials to support both employees and managers. We track the completion of each phase through our human resources system. Competitive Pay, Benefits and Equity Our compensation and benefits philosophy is centered on two key fundamentals: (1) building long-term value for our stockholders, and (2) driving employee engagement and retention.
We track the completion of each phase through our human resources system. 8 Table of Content Competitive Pay, Benefits and Equity Our compensation and benefits philosophy is centered on two key fundamentals: (1) building long-term value for our stockholders, and (2) driving employee engagement and retention.
Our customers deploy our products across a wide array of applications in diverse end-markets. Compressors are used to increase the pressure of air or gas, vacuum products are used to remove air or gas in order to reduce the pressure below atmospheric levels, and blower products are used to produce a high volume of air or gas at low pressure.
Compressors are used to increase the pressure of air or gas, vacuum products are used to remove air or gas in order to reduce the pressure below atmospheric levels, and blower products are used to produce a high volume of air or gas at low pressure.
Our large installed base also provides for a significant stream of recurring aftermarket revenue. For example, the useful life of a compressor is, on average, between 10 and 12 years. However, a customer typically services the compressor at regular intervals, starting within the first two years of purchase and continuing throughout the life of the product.
Our large installed base also provides for a significant stream of recurring aftermarket revenue. For example, the useful life of a compressor is, on average, between 10 and 12 years, and requires service at regular intervals, beginning at the time of installation and continuing throughout the life of the product.
Accolades include winning Great Place to Work in the United States and in several Latin American countries. Through our Human Capital Management activities, we reflect our value of “We foster inspired teams.” We nurture and celebrate a culture that embraces diverse points of view, backgrounds, and experiences and truly empower our employees as owners.
Through our Human Capital Management activities, we reflect our value of “We foster inspired teams.” We nurture and celebrate a culture that embraces diverse points of view, backgrounds, and experiences and truly empower our employees as owners.
Our Segments Industrial Technologies and Services We design, manufacture, market and service a broad range of air and gas compression, vacuum and blower products, fluid transfer equipment, loading systems, power tools and lifting equipment, including associated aftermarket parts, consumables and services. We primarily sell under the Ingersoll Rand, Gardner Denver, Nash, CompAir, Elmo Rietschle, and over 30 other brands.
Our Segments Industrial Technologies and Services We design, manufacture, market and service a broad range of air and gas compression and treatment equipment, vacuum and blower products, fluid transfer equipment, loading systems, power tools and lifting equipment, and other specialized equipment including associated aftermarket parts, consumables and services.
These partnerships help us build a top talent pipeline. Talent Development and Employee Engagement We are dedicated to supporting our employees’ growth and development. We provide many development opportunities for early career employees, including global internships, engineering, marketing, and manufacturing career programs. In 2024, we won two Brandon Hall Group Excellence Awards.
These partnerships help us build a top talent pipeline. Talent Development and Employee Engagement We are dedicated to supporting our employees’ growth and development. We provide many development opportunities for early career employees, including global internships, engineering, marketing, and manufacturing career programs. We continuously strive to enhance our workforce’s technical, professional, and leadership capabilities at every level.
We sell our products directly to end-use customers and to certain OEMs, and indirectly through independent distributors and sales representatives. We use a direct sales force to serve end-use customers and OEMs because these customers typically require higher levels of technical assistance, more coordinated shipment scheduling and more complex product service than customers that purchase through distributors.
We use a direct sales force to serve many end-use customers and OEMs who require higher levels of technical assistance, more coordinated shipment scheduling and more complex product service than customers that purchase through distributors. We have distribution centers and warehouses that stock parts, accessories and certain products to provide adequate and timely availability.
Rotary vane compressors feature high efficiency, compact compression technology and can be found throughout all sectors of industry, including automotive, food and beverage, energy and manufacturing with specialized solutions within transit, gas and snow making. Centrifugal compressors are most effective when in applications that demand larger quantities of oil-free air and are utilized across a wide range of industries.
Rotary vane compressors feature high efficiency, compact compression technology and can be found throughout all sectors of industry, including automotive, food and beverage, energy and 5 Table of Content manufacturing with specialized solutions within transit, gas and snow making.
Finally in the general industrial end-market, our pumps and accessories serve a broad range of niche applications such as in the handling of abrasive or chemically active fluids. 6 Table of Contents Controls and Software Equipment controls and software are of increasing importance in our flow control applications for both the optimization of current systems as well as to enable the Industrial Internet of Things (“IIoT”) evolution.
Controls and Software Equipment controls and software are of increasing importance in our flow control applications for both the optimization of current systems as well as to enable the Industrial Internet of Things (“IIoT”) evolution.
Our customer base is diverse, and we did not have any customer that individually provided more than 10% of 2024 consolidated revenues. Patents, Tradenames, and Other Intellectual Property We rely on a combination of intellectual property rights, including patents, tradenames, copyrights, trade secrets and contractual provisions to protect our intellectual property.
Patents, Tradenames, and Other Intellectual Property We rely on a combination of intellectual property rights, including patents, tradenames, copyrights, trade secrets and contractual provisions to protect our intellectual property.
Intense customer focus is at the center of our vision of becoming the industry’s first choice for innovative and application-critical flow creation equipment, services and solutions.
Intense customer focus is at the center of our vision of becoming the industry’s first choice for innovative and application-critical flow creation equipment, services and solutions. We strive to collaborate with our customers and become an essential part of their engineering process by drawing on our deep industry and application engineering experience.
Vacuum Products Industrial vacuum products are integral to manufacturing processes in applications for packaging, pneumatic conveying, drying, holding / lifting, distillation, evacuation, forming / pressing, removal and coating. Within each of these processes are a multitude of sub-applications.
Centrifugal compressors are most effective when in applications that demand larger quantities of oil-free air and are utilized across a wide range of industries. Vacuum Products Industrial vacuum products are integral to manufacturing processes in applications for packaging, pneumatic conveying, drying, holding / lifting, distillation, evacuation, forming / pressing, removal and coating.
We have distribution centers and warehouses that stock parts, accessories and certain products to provide adequate and timely availability. 7 Table of Contents In addition to our direct sales force, we are committed to developing and supporting our global network of distributors and representatives who provide a competitive advantage in the markets and industries we serve.
In addition to our direct sales force, we are committed to developing and supporting our global network of distributors and representatives who provide a competitive advantage in the markets and industries we serve. These distributors maintain an inventory of complete units and parts and provide aftermarket services to end-users.
Compressors can be either stationary or portable, depending on the requirements of the application or customer. 5 Table of Contents We focus on five basic types of air compression technologies: rotary screw, reciprocating piston, scroll, rotary vane and centrifugal compressors.
Compressors can be either stationary or portable, depending on the requirements of the application. We focus on five primary types of air compression technologies: rotary screw, reciprocating piston, scroll, rotary vane and centrifugal compressors. Rotary screw compressors (available in both oil-free and contact-cooled options) are well-suited for continuous processes due to their high reliability, compact size, and favorable noise profile.
We also provide our distributors with sales and product literature, advertising and sales promotions, order-entry and tracking systems and an annual restocking program. Furthermore, we participate in major trade shows and directly market our offerings to generate sales leads and support the distributors’ sales personnel.
Our service personnel and product engineers provide the distributors’ service representatives with technical assistance and field training, particularly with respect to installation and repair of equipment. We also provide our distributors with sales and product literature, advertising 7 Table of Content and sales promotions, order-entry and tracking systems and an annual restocking program.
Rotary screw compressors are a newer technology than reciprocating compressors and exhibit better suitability for continuous processes due to a more compact size, less maintenance and better noise profile. We believe our reciprocating piston compressors provide one of the broadest ranges of pressures in the market and are supported by increasing demand across wide-ranging attractive end-markets.
We believe our reciprocating piston compressors provide one of the broadest ranges of pressures in the market and are supported by increasing demand across wide-ranging attractive end-markets. Scroll compressors are commonly specified when oil-free air is needed, as in many medical, pharmaceutical, and food production applications.
The net borrowings included proceeds from the issuance of Senior Notes, partially offset by repayment of our Dollar Term Loan B and Dollar Term Loan. Dividends on Common Stock The Company paid cash dividends on our common stock of $32.3 million during the year ended December 31, 2024.
Dividends on Common Stock The Company paid cash dividends on our common stock of $31.8 million during the year ended December 31, 2025.
Capital Allocation Share Repurchases We repurchased $260.7 million of our common stock during the year ended December 31, 2024, including $250.0 million of repurchases under our share repurchase program. Debt Borrowings During the year ended December 31, 2024, we had net borrowings on long-term debt of $2,054.2 million.
Refer to Note 3 “Acquisitions” to our audited consolidated financial statements included elsewhere in this Form 10-K for further discussion of our acquisitions. Capital Allocation Share Repurchases We repurchased $1,018.0 million of our common stock during the year ended December 31, 2025, including $1,007.4 million of repurchases under our share repurchase program.
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(“Friulair”) for initial cash consideration of $143.3 million and contingent consideration of up to approximately $11.0 million.
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We primarily sell under the Ingersoll Rand, Gardner Denver, Nash, CompAir, Elmo Rietschle, and over 35 other brands. Our customers deploy our products across a wide array of applications in diverse end-markets.
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The business is a manufacturer of dryers, filters, aftercoolers, and accessories for the treatment of compressed air and its chiller product line. • In June 2024, the Company completed the acquisition of Astronaut Topco, LP and Astronaut Topco GP, LLC (collectively “ILC Dover”) for initial cash consideration of $2,349.7 million and contingent consideration of up to $75.0 million.
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(“SSI”) for cash consideration of $97.8 million. The business is a manufacturer of wastewater treatment plant equipment. The acquisition will enable Ingersoll Rand to combine several technologies like low pressure compressors with SSI’s aeration offerings to provide a comprehensive, end-to-end solution. • In July 2025, the Company completed the acquisition of Termomeccanica Industrial Compressors S.p.A.
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ILC Dover’s offerings include solutions for biopharmaceutical, pharmaceutical, and medical device markets as well as products for the space industry. • In October 2024, the Company completed the acquisition of Air Power Systems Co LLC (“APSCO”) for cash consideration of $113.2 million.
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(“TMIC”) and its subsidiary Adicomp S.p.A. (“Adicomp”) (collectively “TMIC/Adicomp”) for cash consideration of $193.2 million. TMIC is an international leader in the design and production of air and gas compressors and its subsidiary Adicomp provides engineered-to-order solutions in the renewable natural gas industry.
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The business is a provider of hydraulic and pneumatic products and engineered solutions serving diverse specialty work truck vehicles. APSCO’s offerings include hydraulic coolers, systems, and components in addition to pneumatic consoles, cylinders, valves, and switches. Refer to Note 4 “Acquisitions” to our audited consolidated financial statements included elsewhere in this Form 10-K for further discussion of our acquisitions.
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Rotary lobe blowers, screw blowers and claw and vane blowers are highly durable and versatile positive displacement technologies that generate consistent air or gas flow across a range of operating conditions and discharge pressures.
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Scroll compressors are most commonly seen where less oil-free air is needed, and is most commonly used in medical and food applications where the need for pure, clean and precise air is of great importance.
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Finally in the general industrial end-market, our pumps and accessories serve a broad range of niche applications such as in the handling of abrasive or chemically active fluids.
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Rotary lobe blowers, screw blowers and claw and vane blowers are positive displacement technologies that have the ability to consistently move the same volume of gas or air and vary the volume flow according to the speed of the machine itself enabling it to adapt the flow condition in a flexible manner despite pressure in the system.
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We have established strong and long-standing customer relationships with numerous industry leaders. We sell our products directly to end-use customers and to certain OEMs, EPCs (engineering, procurement, and construction firms) and indirectly through independent distributors and sales representatives.
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We strive to collaborate with our customers and become an essential part of their engineering process by drawing on our deep industry and application engineering experience to develop best-in-class products that are critical to the processes and systems in which they operate. We have established strong and long-standing customer relationships with numerous industry leaders.
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Furthermore, we participate in major trade shows and directly market our offerings to generate sales leads and support the distributors’ sales personnel. Our customer base is diverse, and we did not have any customer that individually provided more than 10% of 2025 consolidated revenues.
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These distributors maintain an inventory of complete units and parts and provide aftermarket services to end-users. While most distributors provide a broad range of products from different suppliers, we view our distributors as exclusive at the product category level (e.g. compressor, vacuum and blower).
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Throughout the year, we provide training resources and materials to support both employees and managers.
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The Brandon Hall Group recognizes organizations that have successfully deployed programs, strategies, and tools that have achieved measurable results. We received a gold award in the Talent Management Category for “Think and Act Like an Owner at Ingersoll Rand.” We continuously strive to enhance our workforce’s technical, professional, and leadership capabilities at every level.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeConversely, any failure to successfully develop and deploy AI in our business activities, products and services could adversely affect our competitiveness (particularly if our competitors successfully deploy AI in their businesses, products and services), and the development and deployment of AI will require additional investment and increase our costs.
Biggest changeCompetition for AI‑native talent is intense, and if we are unable to develop or recruit the necessary capabilities, we may be unable to fully realize potential efficiency gains, innovation opportunities or competitive advantages from AI, or to respond effectively to AI‑enabled competitive, technological or regulatory developments. 13 Table of Content Conversely, any failure to successfully develop and deploy AI in our business activities, products and services could adversely affect our competitiveness, particularly if our competitors successfully deploy AI, and the development and deployment of AI will require additional investment and increase our costs.
For example, we can increase the borrowing availability under the New Revolving Credit Facility by up to $1,000.0 million in the form of additional commitments in compliance with the New Revolving Credit Facility. If new debt is added to our current debt levels, the related risks that we now face could intensify.
For example, we can increase the borrowing availability under the Revolving Credit Facility by up to $1,000.0 million in the form of additional commitments in compliance with the Revolving Credit Facility. If new debt is added to our current debt levels, the related risks that we now face could intensify.
Our level of debt could have adverse consequences, including: making it more difficult for us to satisfy our obligations with respect to our debt; limiting our ability to obtain additional financing to fund future working capital, capital expenditures, investments or acquisitions, or other general corporate requirements; requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, investments or acquisitions and other general corporate purposes; increasing our vulnerability to adverse changes in general economic, industry and competitive conditions; exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under the New Revolving Credit Facility and portions of our Senior Notes which have been swapped to variable rates of interest; limiting our flexibility in planning for and reacting to changes in the industries in which we compete; placing us at a disadvantage compared to other, less leveraged competitors; increasing our cost of borrowing; and hampering our ability to execute on our growth strategy.
Our level of debt could have adverse consequences, including: making it more difficult for us to satisfy our obligations with respect to our debt; limiting our ability to obtain additional financing to fund future working capital, capital expenditures, investments or acquisitions, or other general corporate requirements; requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, investments or acquisitions and other general corporate purposes; increasing our vulnerability to adverse changes in general economic, industry and competitive conditions; exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under the Revolving Credit Facility and portions of our Senior Notes which have been swapped to variable rates of interest; limiting our flexibility in planning for and reacting to changes in the industries in which we compete; placing us at a disadvantage compared to other, less leveraged competitors; increasing our cost of borrowing; and hampering our ability to execute on our growth strategy.
If we cannot make scheduled payments on our debt, we will be in default and the lenders under the New Revolving Credit Facility could terminate their commitments to loan money. Despite our level of indebtedness, we and our subsidiaries may still be able to incur substantially more debt, including off-balance sheet financing, contractual obligations and general and commercial liabilities.
If we cannot make scheduled payments on our debt, we will be in default and the lenders under the Revolving Credit Facility could terminate their commitments to loan money. Despite our level of indebtedness, we and our subsidiaries may still be able to incur substantially more debt, including off-balance sheet financing, contractual obligations and general and commercial liabilities.
If any participant or group of participants with a significant portion of the commitments in our New Revolving Credit Facility fails to satisfy its or their respective obligations to extend credit under the facility and we are unable to find a replacement for such participant or participants on a timely basis (if at all), our liquidity may be adversely affected.
If any participant or group of participants with a significant portion of the commitments in our Revolving Credit Facility fails to satisfy its or their respective obligations to extend credit under the facility and we are unable to find a replacement for such participant or participants on a timely basis (if at all), our liquidity may be adversely affected.
We have access to capital through our New Revolving Credit Facility. Each financial institution which is part of the syndicate for our New Revolving Credit Facility is responsible on a several, but not joint, basis for providing a portion of the loans to be made under our facility.
We have access to capital through our Revolving Credit Facility. Each financial institution which is part of the syndicate for our Revolving Credit Facility is responsible on a several, but not joint, basis for providing a portion of the loans to be made under our facility.
For a complete description of the Company’s credit facilities and definitions of capitalized terms used in this section, see Note 12 “Debt” to our audited consolidated financial statements included elsewhere in this Form 10-K. Our fixed rate to floating rate swap contracts subject us to risks related to interest rate risk, counterparty credit worthiness and non-performance on these instruments.
For a complete description of the Company’s credit facilities and definitions of capitalized terms used in this section, see Note 11 “Debt” to our audited consolidated financial statements included elsewhere in this Form 10-K. Our fixed rate to floating rate swap contracts subject us to risks related to interest rate risk, counterparty credit worthiness and non-performance on these instruments.
Impairments, if any, could have a material adverse effect to our consolidated financial position or results of operations. See Note 9 “Goodwill and Other Intangible Assets” to our audited consolidated financial statements included elsewhere in this Form 10-K for additional information related to impairment testing for goodwill and other intangible assets and the associated charges taken.
Impairments, if any, could have a material adverse effect to our consolidated financial position or results of operations. See Note 8 “Goodwill and Other Intangible Assets” to our audited consolidated financial statements included elsewhere in this Form 10-K for additional information related to impairment testing for goodwill and other intangible assets and the associated charges taken.
Further, the specific future impacts of the Tax Act and Pillar 2 on holders of our common shares are uncertain and could in certain instances be adverse. We urge our stockholders to consult with their legal and tax advisors with respect to any such legislation and the potential tax consequences of investing in our common stock.
Further, the specific future impacts of OBBBA and Pillar 2 on holders of our common shares are uncertain and could in certain instances be adverse. We urge our stockholders to consult with their legal and tax advisors with respect to any such legislation and the potential tax consequences of investing in our common stock.
The Organization for Economic Co-operation and Development (“OECD”) has a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar 2), with certain aspects of Pillar 2 effective January 1, 2024 and other aspects effective January 1, 2025.
The Organization for Economic Co-operation and Development (“OECD”) has a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as “Pillar 2”), with certain aspects of Pillar 2 effective January 1, 2024 and other aspects effective January 1, 2025.
There also may be real or perceived social harm, unfairness, or other outcomes that undermine public confidence in the use and deployment of AI. Any of the foregoing may result in decreased demand for our products or harm to our business, financial statements or reputation.
There also may be real or perceived social harm, unfairness or other outcomes that undermine public confidence in the use and deployment of AI. Any of the foregoing may result in decreased demand for our products or harm to our business, financial condition or reputation.
See Note 1 “Summary of Significant Accounting Policies” and Note 17 “Income Taxes” to our audited consolidated financial statements included elsewhere in this Form 10-K for additional information related to our accounting for income tax matters.
See Note 1 “Summary of Significant Accounting Policies” and Note 16 “Income Taxes” to our audited consolidated financial statements included elsewhere in this Form 10-K for additional information related to our accounting for income tax matters.
Although we make a significant effort to avoid infringing known proprietary rights of third parties, the steps we take to prevent misappropriation, infringement or other violation of the intellectual property of others may not be successful and from time to 15 Table of Contents time we may receive notice that a third party believes that our products may be infringing certain patents, tradenames or other proprietary rights of such third party.
Although we make a significant effort to avoid infringing known proprietary rights of third parties, the steps we take to prevent misappropriation, infringement or other violation of the intellectual property of others may not be successful and from time to time we may receive notice that a third party believes that our products may be infringing certain patents, tradenames or other proprietary rights of such third party.
Under such laws and regulations, we can be subject to substantial fines and sanctions for violations and be required to install costly pollution control equipment or put into effect operational changes to limit pollution emissions or decrease the likelihood of accidental hazardous substance releases. We use and generate hazardous substances and waste in our manufacturing operations.
Under such laws and regulations, we can be subject to substantial fines and sanctions for violations and be required to install costly pollution control equipment or put into effect operational changes to limit pollution emissions or decrease the likelihood of accidental hazardous substance releases. 17 Table of Content We use and generate hazardous substances and waste in our manufacturing operations.
For a complete description of the Company’s debt and definitions of capitalized terms used in this section, see Note 12 “Debt” to our audited consolidated financial statements included elsewhere in this Form 10-K.
For a complete description of the Company’s debt and definitions of capitalized terms used in this section, see Note 11 “Debt” to our audited consolidated financial statements included elsewhere in this Form 10-K.
See Note 20 “Hedging Activities, Derivative Instruments and Credit Risk” to our audited consolidated financial statements included elsewhere in this Form 10-K. If the syndicate of financial institutions which are parties to our New Revolving Credit Facility (as defined herein) fail to extend credit under our New Revolving Credit Facility, our liquidity and results of operations may be adversely affected.
See Note 19 “Hedging Activities, Derivative Instruments and Credit Risk” to our audited consolidated financial statements included elsewhere in this Form 10-K. If the syndicate of financial institutions which are parties to our Revolving Credit Facility (as defined herein) fail to extend credit under our Revolving Credit Facility, our liquidity and results of operations may be adversely affected.
In addition, new laws and regulations, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination or the imposition of new cleanup requirements could require us to incur costs or become the basis for 17 Table of Contents new or increased liabilities that could have a material adverse effect on our business, financial condition, results of operations or liquidity.
In addition, new laws and regulations, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination or the imposition of new cleanup requirements could require us to incur costs or become the basis for new or increased liabilities that could have a material adverse effect on our business, financial condition, results of operations or liquidity.
Because substantially 16 Table of Contents all of our custom engineered product contracts are at a fixed price, we face the risk that cost overruns, delays, penalties or liquidated damages may exceed, erode or eliminate our expected profit margin, or cause us to record a loss on our projects.
Because substantially all of our custom engineered product contracts are at a fixed price, we face the risk that cost overruns, delays, penalties or liquidated damages may exceed, erode or eliminate our expected profit margin, or cause us to record a loss on our projects.
Failure to appropriately respond to this evolving landscape may result in legal liability, regulatory action, or brand and reputational harm. Our business could suffer if we experience employee work stoppages, union and work council campaigns or other labor difficulties. As of December 31, 2024, we had over 21,000 employees of which approximately 6,300 were located in the United States.
Failure to appropriately respond to this evolving landscape may result in legal liability, regulatory action, or brand and reputational harm. Our business could suffer if we experience employee work stoppages, union and work council campaigns or other labor difficulties. As of December 31, 2025, we had over 21,000 employees of which approximately 6,100 were located in the United States.
Significant negative industry or economic trends, disruptions to our business, inability to effectively integrate acquired businesses, unexpected significant changes or planned changes in use of our assets, changes in the structure of our business, divestitures, market capitalization declines, or increases in associated discount rates can impair our goodwill and other intangible assets.
Significant negative industry or economic trends, disruptions to our business, inability to effectively integrate acquired businesses, unexpected significant changes or planned changes in use of our assets, changes in the structure of our business, divestitures, 16 Table of Content market capitalization declines, or increases in associated discount rates can impair our goodwill and other intangible assets.
Various presidential 13 Table of Contents executive orders issued in early 2025 implement new obligations for Federal contractors/subcontractors to certify compliance with existing Federal anti-discrimination laws, encourages private employers to end programs supporting illegal Diversity, Equity, and Inclusion (“DEI”) discrimination and preferences, and directs Federal agencies to formulate enforcement plans to deter DEI programs in the private sector that advance unlawful discrimination or preferences.
Various presidential executive orders issued in early 2025 implement new obligations for Federal contractors/subcontractors to certify compliance with existing Federal anti-discrimination laws, encourages private employers to end programs supporting illegal Diversity, Equity, and Inclusion (“DEI”) discrimination and preferences, and directs Federal agencies to formulate enforcement plans to deter DEI programs in the private sector that advance unlawful discrimination or preferences.
Of those employees located outside of the United States, a significant portion are represented by works councils and labor unions, and of those employees located in the United States, approximately 380 are represented by labor unions.
Of those employees located outside of the United States, a significant portion are represented by works councils and labor unions, and of those employees located in the United States, approximately 370 are represented by labor unions.
We have substantial goodwill as a result of past acquisitions. As of December 31, 2024, the net carrying value of goodwill and other intangible assets, net represented $12.5 billion, or 70%, of our total assets. Goodwill and indefinite-lived intangible assets are evaluated for impairment annually, or more frequently if circumstances indicate impairment may have occurred.
We have substantial goodwill as a result of past acquisitions. As of December 31, 2025, the net carrying value of goodwill and other intangible assets, net represented $12.7 billion, or 70%, of our total assets. Goodwill and indefinite-lived intangible assets are evaluated for impairment annually, or more frequently if circumstances indicate impairment may have occurred.
Our ability to develop new products based on technological innovation, including those that incorporate artificial intelligence (“AI”) or drive sustainability, energy reduction and the reduction and/or recycling of water in our customers’ processes, can affect our competitive position and often requires the investment of significant resources.
Our ability to develop new products based on technological innovation, including those that incorporate AI or drive sustainability, energy reduction and the reduction and/or recycling of water in our customers’ processes, can affect our competitive position and often requires the investment of significant resources.
For example, AI algorithms may be flawed or may be based on datasets that are biased or insufficient. In addition, any disruption or failure in the AI functionality we incorporate into our business activities, products or services could adversely impact our business or result in delays or errors in our offerings.
For example, AI algorithms may be flawed or may be based on biased or insufficient datasets, and any disruption or failure in the AI functionality we incorporate into our business activities, products or services could adversely impact our business or result in delays or errors in our offerings.
Non-U.S. operations and United States export sales could be adversely affected as a result of: political or economic instability in certain countries; differences in foreign laws, including increased difficulties in protecting intellectual property and uncertainty in enforcement of contract rights; credit risks; currency fluctuations, in particular, changes in currency exchange rates between the U.S. dollar, Euro, British Pound and the Chinese Renminbi; exchange controls; changes in and uncertainties with respect to tariffs and import/export trade restrictions (including changes in United States trade policy toward other countries, such as the imposition of tariffs and the resulting consequences), as well as other changes in political policy in the United States, China, the U.K. and certain European countries (including the impacts of the U.K.’s withdrawal from the European Union); royalty and tax increases; nationalization of private enterprises, especially in China where we have material operations, supply chain dependencies and hold material cash balances; civil unrest and protests, strikes, acts of terrorism, war or other armed conflict (including the Russia-Ukraine war and the Israel-Hamas conflict); shipping products during times of crisis or war; and other factors inherent in foreign operations.
Non-U.S. operations and United States export sales could be adversely affected as a result of: political or economic instability in certain countries; differences in foreign laws, including increased difficulties in protecting intellectual property and uncertainty in enforcement of contract rights; credit risks; currency fluctuations, in particular, changes in currency exchange rates between the U.S. dollar, Euro, British Pound and the Chinese Renminbi; exchange controls; changes in and uncertainties with respect to tariffs and import/export trade restrictions, as well as other changes in political policy in the United States, China, the U.K. and certain European countries (including the impacts of the U.K.’s withdrawal from the European Union); royalty and tax increases; nationalization of private enterprises, especially in China where we have material operations, supply chain dependencies and hold material cash balances; civil unrest and protests, strikes, acts of terrorism, war or other armed conflict (including the 10 Table of Content Russia-Ukraine war and conflicts in the Middle East); shipping products during times of crisis or war; and other factors inherent in foreign operations.
Responding to and defending such claims, regardless of their merit, can be costly and time-consuming, can divert management’s attention and other resources, and we may not prevail.
Responding to and defending such claims, regardless of their merit, can be costly and 15 Table of Content time-consuming, can divert management’s attention and other resources, and we may not prevail.
We may not be able to implement any such alternative measures on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations.
We may not be able to 18 Table of Content implement any such alternative measures on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations.
Although the credit agreement governing the New Revolving Credit Facility contains restrictions on the incurrence of certain additional indebtedness, these restrictions are subject 18 Table of Contents to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial.
Although the credit agreement governing the Revolving Credit Facility contains restrictions on the incurrence of certain additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial.
If any of these systems fail, whether caused by fire, other natural disaster, power or telecommunications failure, acts of cyber terrorism, war, ransomware or otherwise, or they do not function correctly, we could suffer financial loss, business disruption, liability to our customers, regulatory intervention or damage to our reputation.
If any of these systems fail, whether caused by fire, other natural disaster, power or telecommunications failure, acts of cyber terrorism, war, ransomware, misuse or malicious use of artificial intelligence (“AI”) or otherwise, or they do not function correctly, we could suffer financial loss, business disruption, liability to our customers, regulatory intervention or damage to our reputation.
We face risks associated with our pension and other postretirement benefit obligations. We have both funded and unfunded pension and other postretirement benefit plans worldwide. As of December 31, 2024, our projected benefit obligations under our pension and other postretirement benefit plans exceeded the fair value of plan assets by $139.0 million (“unfunded status”).
We face risks associated with our pension and other postretirement benefit obligations. We have both funded and unfunded pension and other postretirement benefit plans worldwide. As of December 31, 2025, our projected benefit obligations under our pension and other postretirement benefit plans exceeded the fair value of plan assets by $132.5 million (“unfunded status”).
Depending on the particular product and application, we experience competition based on a number of factors, including price, quality, performance and availability. We compete against many companies, including divisions of larger companies with greater financial resources than we possess.
We actively compete with many companies producing similar products. Depending on the particular product and application, we experience competition based on a number of factors, including price, quality, performance and availability. We compete 11 Table of Content against many companies, including divisions of larger companies with greater financial resources than we possess.
We may be named as a defendant in product liability or other lawsuits asserting potentially large claims if an accident occurs at a location where our equipment and services have been or are being used. A natural disaster, catastrophe, pandemic, or other event could adversely affect our operations.
We may be named as a defendant in product liability or other lawsuits asserting potentially large claims if an accident occurs at a location where our equipment and services have been or are being used.
We do not expect Pillar 2 to have a material impact but we continue to monitor the tax law changes surrounding Pillar 2. 14 Table of Contents While we monitor proposals and other developments that would materially impact our tax burden and/or effective tax rate and investigate our options, we could still be subject to increased taxation on a going forward basis no matter what action we undertake if certain legislative proposals or regulatory changes are enacted, certain tax treaties are amended and/or our interpretation of applicable tax or other laws is challenged and determined to be incorrect.
While we monitor proposals and other developments that would materially impact our tax burden and/or effective tax rate and investigate our options, we could still be subject to increased taxation on a going forward basis no matter what action we undertake if certain legislative proposals or regulatory changes are enacted, certain tax treaties are amended and/or our interpretation of applicable tax or other laws is challenged and determined to be incorrect.
In addition, acquisitions outside of the United States often involve additional or increased risks including, for example: • managing geographically separated organizations, systems and facilities; • integrating personnel with diverse business backgrounds and organizational cultures; • complying with non-U.S. regulatory requirements; • fluctuations in currency exchange rates; • enforcement of intellectual property rights in some non-U.S. countries; • difficulty entering new non-U.S. markets due to, among other things, consumer acceptance and business knowledge of these new markets; and • general economic and political conditions. 11 Table of Contents The process of integrating operations could cause an interruption of, or loss of momentum in, the activities of one or more of our combined businesses and the possible loss of key personnel.
In addition, acquisitions outside of the United States often involve additional or increased risks including, for example: • managing geographically separated organizations, systems and facilities; • integrating personnel with diverse business backgrounds and organizational cultures; • complying with non-U.S. regulatory requirements; • fluctuations in currency exchange rates; • enforcement of intellectual property rights in some non-U.S. countries; • difficulty entering new non-U.S. markets due to, among other things, consumer acceptance and business knowledge of these new markets; and • general economic and political conditions.
As of December 31, 2024, we had total indebtedness of $4,757.5 million, and we had availability of $2,600 million under each of the New Revolving Credit Facility and Commercial Paper Program.
As of December 31, 2025, we had total indebtedness of $4,784.7 million, and we had availability of $2,600 million under each of the Revolving Credit Facility and Commercial Paper Program.
Environmental compliance costs and liabilities could adversely affect our financial condition. Our operations and properties are subject to increasingly stringent domestic and foreign laws and regulations relating to environmental protection, including laws and regulations governing air emissions, water discharges, waste management and workplace safety.
Our operations and properties are subject to increasingly stringent domestic and foreign laws and regulations relating to environmental protection, including laws and regulations governing air emissions, water discharges, waste management and workplace safety.
If dispositions are not completed in a timely manner, there may be a negative effect on our cash flows and/or our ability to execute our strategy. In addition, we may not realize some or all of the anticipated benefits of our dispositions.
If dispositions are not completed in a timely manner, there may be a negative effect on our cash flows and/or our ability to execute our strategy. In addition, we may not realize some or all of the anticipated benefits of our dispositions. We face competition in the markets we serve, which could materially and adversely affect our operating results.
We incurred restructuring charges of $31.2 million and $19.9 million in the years ended December 31, 2024 and 2023, respectively.
We incurred restructuring charges of $51.4 million and $31.2 million in the years ended December 31, 2025 and 2024, respectively.
A portion of our revenues and earnings is generated through fixed-price contracts for custom engineered products. Certain of these contracts provide for penalties or liquidated damages for failure to timely perform our obligations under the contract, or require that we, at our expense, correct and remedy to the satisfaction of the other party certain defects.
Certain of these contracts provide for penalties or liquidated damages for failure to timely perform our obligations under the contract, or require that we, at our expense, correct and remedy to the satisfaction of the other party certain defects.
Risks Related to Our Business We have exposure to the risks associated with instability in the global economy and financial markets, which may negatively impact our revenues, liquidity, suppliers and customers. Our financial performance depends, in large part, on conditions in the markets we serve and on the general condition of the global economy, which impacts these markets.
Risks Related to Our Business We have exposure to the risks associated with instability in the global economy, financial markets and our end markets, which may negatively impact our revenues, liquidity, suppliers and customers.
For the year ended December 31, 2024, 57% of our revenues were from customers in countries outside of the United States. We have manufacturing facilities in Germany, the United Kingdom, China, Italy, India and other countries. We intend to continue to expand our international operations to the extent that suitable opportunities become available.
We have manufacturing facilities in Germany, the United Kingdom, China, Italy, India and other countries. We intend to continue to expand our international operations to the extent that suitable opportunities become available.
Our operating results could be adversely affected by a loss or reduction of business with key customers or consolidation or the vertical integration of our customer base. The loss or reduction of significant contracts with any of our key customers could result in a material decrease of our future profitability and cash flows.
The loss or reduction of significant contracts with any of our key customers could result in a material decrease of our future profitability and cash flows.
Some of our operations involve risks of, among other things, property damage, which could curtail our operations.
A natural disaster, catastrophe, pandemic, or other event could adversely affect our operations. Some of our operations involve risks of, among other things, property damage, which could curtail our operations.
Failure to successfully manage divergent ESG-related expectations across stakeholders, including regulators, could erode stakeholder trust, impact our reputation, result in regulatory fines or other adverse action, and otherwise adversely affect our business. Uncertainties with respect to the development, and use of artificial intelligence in our business and products may result in harm to our business and reputation.
Failure to successfully manage divergent ESG-related expectations across stakeholders, including regulators, could erode stakeholder trust, impact our reputation, result in regulatory fines or other adverse action, and otherwise adversely affect our business. Our operating results could be adversely affected by a loss or reduction of business with key customers or consolidation or the vertical integration of our customer base.
In addition, our products are integral to the production process for some end-users and any failure of our products could result in a suspension of operations.
Customers use some of our products in potentially hazardous applications that can cause injury or loss of life and damage to property, equipment or the environment. In addition, our products are integral to the production process for some end-users and any failure of our products could result in a suspension of operations.
Any sustained weakness in demand for our products and services resulting from a contraction or uncertainty in the global economy could adversely impact our revenues and profitability. In addition, we believe that many of our suppliers and customers access global credit markets to provide liquidity, and in some cases, utilize external financing to purchase products or finance operations.
In addition, we believe that many of our suppliers and customers access global credit markets to provide liquidity, and in some cases, utilize external financing to purchase products or finance operations. If our customers are unable to access credit markets or lack liquidity, customer demand for our products and services may be impacted.
In the past, we have experienced disruptions to our supply deliveries for 12 Table of Contents raw materials and component parts due to reasons related to the pandemic and other recent economic conditions and may experience further supply disruptions.
In the past, we have experienced disruptions to our supply deliveries for raw materials and component parts due to reasons related to the pandemic and other recent economic conditions and may experience further supply disruptions. Any such disruption could have a material adverse effect on our ability to timely meet our commitments to customers and, therefore, our operating results.
We have begun incorporating AI into our business activities and our product and service offerings. As with many innovations, AI presents risks and challenges that could adversely impact our business. The development, adoption, and use of AI technologies are still in their early stages and ineffective or inadequate AI development or deployment practices could result in unintended consequences.
Uncertainties with respect to the development, and use of artificial intelligence in our business and products may result in harm to our business and reputation. We have begun incorporating AI into our business activities and our product and service offerings. As with many innovations, AI presents risks and challenges that could adversely impact our business.
The effects of exchange rate fluctuations on our future operating results are unpredictable because of the number of currencies in which we do business and the potential volatility of exchange rates. We are also subject to the risks of currency controls and devaluations.
Accordingly, currency exchange rates, and in particular unfavorable movement in the exchange rates between U.S. dollars and Euros, British Pounds and Chinese Renminbi, affect our operating results. The effects of exchange rate fluctuations on our future operating results are unpredictable because of the number of currencies in which we do business and the potential volatility of exchange rates.
Although historically not material, we cannot be certain that, in the future, expenses or losses for uncollectible amounts will not have a material adverse effect on our revenues, earnings and cash flows. A significant portion of our assets consists of goodwill and other intangible assets, the value of which may be reduced if we determine that those assets are impaired.
Although historically not material, we cannot be certain that, in the future, expenses or losses for uncollectible amounts will not have a material adverse effect on our revenues, earnings and cash flows. Environmental compliance costs and liabilities could adversely affect our financial condition.
Failure to adequately meet customer demand or maintain a high level or quality could have a material adverse effect on our business, results of operations and financial condition. Cost overruns, delays, penalties or liquidated damages could negatively impact our results, particularly with respect to fixed-price contracts for custom engineered products.
Cost overruns, delays, penalties or liquidated damages could negatively impact our results, particularly with respect to fixed-price contracts for custom engineered products. A portion of our revenues and earnings is generated through fixed-price contracts for custom engineered products.
The legal and regulatory landscape surrounding AI technologies is rapidly evolving and uncertain, including in the areas of intellectual property, cybersecurity and privacy and data protection. Compliance with new or changing laws, regulations or industry standards relating to AI may impose significant costs and may limit our ability to develop, deploy or use AI technologies.
The legal and regulatory landscape surrounding AI technologies is rapidly evolving and uncertain, including in the areas of intellectual property, cybersecurity and privacy and data protection.
A significant portion of our revenue, 55% for the year ended December 31, 2024, is denominated in currencies other than the U.S. dollar. Accordingly, currency exchange rates, and in particular unfavorable movement in the exchange rates between U.S. dollars and Euros, British Pounds and Chinese Renminbi, affect our operating results.
A significant movement in exchange rates could adversely impact our results of operations and cash flows. We conduct our business in many different currencies. A significant portion of our revenue, 54% for the year ended December 31, 2025, is denominated in currencies other than the U.S. dollar.
Cyclical weakness in the industries that we serve could adversely affect demand for our products and affect our profitability and financial performance. 10 Table of Contents More than half of our sales and operations are in non-U.S. jurisdictions and we are subject to the economic, political, regulatory and other risks of international operations.
More than half of our sales and operations are in non-U.S. jurisdictions and we are subject to the economic, political, regulatory and other risks of international operations. For the year ended December 31, 2025, 58% of our revenues were from customers in countries outside of the United States.
If our customers are unable to access credit markets or lack liquidity, customer demand for our products and services may be impacted. Furthermore, our products are sold in many industries, some of which are cyclical and may experience periodic contractions.
Furthermore, our products are sold in many industries, some of which are cyclical and may experience periodic contractions. Cyclical weakness in the industries that we serve could adversely affect demand for our products and affect our profitability and financial performance.
The nature of our products creates the possibility of significant product liability, warranty claims, and product recalls, which could harm our business. Customers use some of our products in potentially hazardous applications that can cause injury or loss of life and damage to property, equipment or the environment.
If we cannot compete successfully, our sales and operating results could be materially and adversely affected. The nature of our products creates the possibility of significant product liability, warranty claims, and product recalls, which could harm our business.
Removed
Any such disruption could have a material adverse effect on our ability to timely meet our commitments to customers and, therefore, our operating results. We face competition in the markets we serve, which could materially and adversely affect our operating results. We actively compete with many companies producing similar products.
Added
Our financial performance depends, in large part, on conditions in the markets we serve and on the general condition of the global economy, which impacts these markets. Any sustained weakness in demand for our products and services resulting from a contraction or uncertainty in the global economy could adversely impact our revenues and profitability.
Removed
If we cannot compete successfully, our sales and operating results could be materially and adversely affected. Our results of operations are subject to exchange rate and other currency risks. A significant movement in exchange rates could adversely impact our results of operations and cash flows. We conduct our business in many different currencies.
Added
The process of integrating operations could cause an interruption of, or loss of momentum in, the activities of one or more of our combined businesses and the possible loss of key personnel.
Removed
In 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (“Tax Act”).
Added
Changes in U.S. tariff policy or reciprocal tariffs by foreign governments, remain uncertain and could impact our financial results.
Removed
The Tax Act makes broad and complex changes to the U.S. tax code that affected 2017 and 2018, including, but not limited to (1) requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries that is payable over eight years and (2) bonus depreciation that will allow for full expensing of qualified property.
Added
The current U.S. presidential administration has implemented tariffs on imports from various countries, including tariffs on steel and aluminum products under Section 232 of the Trade Expansion Act of 1962, which also apply to certain derivative steel products used in our operations. Some affected countries have announced or imposed reciprocal tariffs on U.S. goods.
Removed
The Tax Act also established new tax laws that significantly affected recent and future tax years.
Added
These measures have contributed to higher costs for certain materials and components.
Added
The extent and duration of these tariffs, and their effect on economic conditions and our business, remain uncertain and depend on factors such as legal challenges, negotiations between the U.S. and other countries, potential relief measures, availability and cost of alternative supply sources, and demand for our products in affected markets.
Added
Tariffs may increase costs or reduce demand for our products, which could 12 Table of Content affect our financial results. In addition, competitors may experience different levels of exposure or have greater ability to mitigate these impacts. Our results of operations are subject to exchange rate and other currency risks.
Added
We are also subject to the risks of currency controls and devaluations.
Added
The development, adoption and use of AI technologies are still in their early stages, and ineffective or inadequate AI development, deployment or governance practices could result in unintended consequences.
Added
In addition, the successful development and deployment of AI in our business depends on our ability to timely and effectively upskill our existing workforce and attract and retain personnel with AI‑related skills and experience.
Added
Compliance with new or changing laws, regulations or industry standards relating to AI or failure to implement robust governance frameworks to address ethical considerations, such as fairness, transparency, and bias, may impose significant costs and may limit our ability to develop, deploy or use AI technologies.
Added
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law by the president of the United States.
Added
It includes a broad range of tax reform provisions affecting businesses, including extending and modifying certain key provisions (both U.S. and non-U.S.) of the Tax Cuts & Jobs Act of 2017, and expanding certain Inflation Reduction Act incentives while accelerating the phase-out of others.
Added
The impact of the OBBBA is currently reflected on our consolidated financial statements as of December 31, 2025 and we are continuing to assess the impact for future years.
Added
We will continue to closely monitor developments in Pillar 2 tax legislation, as the final rules could materially affect our effective tax rate and cash tax obligations.
Added
We are also subject to the examination of our tax returns and other tax matters by the U.S. Internal Revenue Service and other tax authorities and governmental bodies. We regularly assess the likelihood of an adverse outcome resulting from these examinations to determine the adequacy of its provision for taxes. The outcome of such examinations is inherently uncertain.
Added
If our effective tax rates were to increase, or if the ultimate determination of our taxes owed is for an amount in excess of amounts 14 Table of Content previously accrued, our business, results of operations, financial condition and stock price could be materially adversely affected.
Added
Failure to adequately meet customer demand or maintain a high level or quality could have a material adverse effect on our business, results of operations and financial condition. A significant portion of our assets consists of goodwill and other intangible assets, the value of which may be reduced if we determine that those assets are impaired.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+0 added−0 removed4 unchanged
Biggest changeOur Cybersecurity Governance Committee is responsible for monitoring and coordinating enterprise cybersecurity policy and strategy, and for providing guidance to key management and oversight bodies.
Biggest changeCross functional senior management comprise our Cybersecurity Governance Committee, which is responsible for monitoring and coordinating enterprise cybersecurity policy and strategy, and for providing guidance to key management and oversight bodies. Our cybersecurity program includes a risk-based incident response plan that provides a documented framework for handling incidents including coordination across multiple parts of the Company.
We periodically engage external subject matter experts who provide independent qualitative and quantitative assessments of the cybersecurity program maturity and response readiness. We also use processes to oversee and identify material risks from cybersecurity threats associated with our use of third-party technology and systems.
We periodically engage external subject matter experts who provide independent qualitative and quantitative assessments of the cybersecurity program maturity and response 19 Table of Content readiness. We also use processes to oversee and identify material risks from cybersecurity threats associated with our use of third-party technology and systems.
In addition, the Company leverages a monthly cybersecurity awareness training program for all employees that is further reinforced through frequent phishing simulations. Quarterly updates are provided by the CISO to the Cybersecurity Governance Committee comprised of cross functional senior management regarding the effectiveness of cybersecurity program and its ability to monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents.
In addition, the Company leverages a monthly cybersecurity awareness training program for all employees that is further reinforced through frequent phishing simulations. Quarterly updates are provided by the CISO to the Cybersecurity Governance Committee regarding the effectiveness of cybersecurity program and its ability to monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents.
Our CISO reports directly to the CIO and has 20 years of IT experience including leadership roles at various companies with enterprise responsibility for IT audit, IT infrastructure, and cybersecurity. The CISO reports to the Audit Committee on the effectiveness of the Company’s cybersecurity program controls aligned to the NIST CSF framework.
Our CISO reports directly to the CIO and has over 25 years of cyber security experience, including cyber leadership roles at various companies. The CISO reports to the Audit Committee on the effectiveness of the Company’s cybersecurity program controls aligned to the NIST CSF framework.
Our cybersecurity program includes a risk-based incident response plan that provides a documented framework for handling incidents including coordination across multiple parts of the Company. 19 Table of Contents As of the date of this report, we do not believe any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect the Company, including its business strategy, results of operations or financial condition.
As of the date of this report, we do not believe any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect the Company, including its business strategy, results of operations or financial condition.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeType of Significant Property Manufacturing Sales, Service and Warehouse Total Industrial Technologies and Services Americas 18 26 44 EMEIA (1) 18 30 48 APAC (2) 9 12 21 Industrial Technologies and Services Total 45 68 113 Precision and Science Technologies Americas 12 8 20 EMEIA (1) 11 3 14 APAC (2) 2 5 7 Precision and Science Technologies Total 25 16 41 Total (All Segments) Americas 30 34 64 EMEIA (1) 29 33 62 APAC (2) 11 17 28 Company Total 70 84 154 (1) Europe, Middle East, India and Africa (“EMEIA”) (2) Asia Pacific (“APAC”) Of the 154 significant properties included in the above table, 102 of the properties are leased and 52 of the properties are owned.
Biggest changeType of Significant Property Manufacturing Sales, Service and Warehouse Total Industrial Technologies and Services Americas 16 35 51 EMEIA (1) 20 40 60 APAC (2) 7 11 18 Industrial Technologies and Services Total 43 86 129 Precision and Science Technologies Americas 14 9 23 EMEIA (1) 11 3 14 APAC (2) 3 3 6 Precision and Science Technologies Total 28 15 43 Total (All Segments) Americas 30 44 74 EMEIA (1) 31 43 74 APAC (2) 10 14 24 Company Total 71 101 172 (1) Europe, Middle East, India and Africa (“EMEIA”) (2) Asia Pacific (“APAC”) Of the 172 significant properties included in the above table, 120 of the properties are leased and 52 of the properties are owned.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeFor a detailed discussion of certain of these proceedings, lawsuits and administrative actions, see Note 22, “Contingencies” to our audited consolidated financial statements included elsewhere in this Form 10-K. ITEM 4. MINE SAFETY DISCLOSURES Not Applicable. 20 Table of Contents PART II
Biggest changeFor a detailed discussion of certain of these proceedings, lawsuits and administrative actions, see Note 21, “Contingencies” to our audited consolidated financial statements included elsewhere in this Form 10-K. 20 Table of Content ITEM 4. MINE SAFETY DISCLOSURES Not Applicable. 21 Table of Content PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeCompany Purchases of Common Stock The following table contains detail related to the repurchase of our common stock based on the date of trade during the quarter ended December 31, 2024. 2024 Fourth Quarter Months Total Number of Shares Purchased (1) Average Price Paid Per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3) Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (3) October 1, 2024 - October 31, 2024 403,653 $ 99.11 403,653 $ 1,015,533,222 November 1, 2024 - November 30, 2024 153,121 $ 102.94 153,027 $ 999,783,985 December 1, 2024 - December 31, 2024 65,200 $ 103.56 65,200 $ 993,033,246 621,974 621,880 (1) Includes shares of common stock surrendered to us to satisfy tax withholding obligations in connection with the vesting of certain restricted stock units, comprised of 94 shares in the period from November 1, 2024 to November 30, 2024.
Biggest changeCompany Purchases of Common Stock The following table contains detail related to the repurchase of our common stock based on the date of trade during the quarter ended December 31, 2025. 2025 Fourth Quarter Months Total Number of Shares Purchased (1) Average Price Paid Per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3) Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (3) October 1, 2025 - October 31, 2025 — $ — — $ 1,300,226,508 November 1, 2025 - November 30, 2025 3,430,348 $ 77.18 3,429,974 $ 1,035,579,896 December 1, 2025 - December 31, 2025 627,785 $ 79.66 627,697 $ 985,587,408 4,058,133 4,057,671 (1) Includes shares of common stock surrendered to us to satisfy tax withholding obligations in connection with the vesting of certain restricted stock units, comprised of 374 shares in the period from November 1, 2025 to November 30, 2025 and 88 shares in the period from December 1, 2025 to December 31, 2025.
This stockholder figure does not include a substantially greater number of holders whose shares are held of record by banks, brokers, and other financial institutions. Dividend Policy We declared and paid dividends of $0.08 per share to the holders of our common stock in each of the years ended December 31, 2024 and 2023.
This stockholder figure does not include a substantially greater number of holders whose shares are held of record by banks, brokers, and other financial institutions. Dividend Policy We declared and paid dividends of $0.08 per share to the holders of our common stock in each of the years ended December 31, 2025 and 2024.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Common Stock, $0.01 par value per share, trades on the New York Stock Exchange (“NYSE”) under the symbol “IR.” As of January 31, 2025, there were 2,121 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Common Stock, $0.01 par value per share, trades on the New York Stock Exchange (“NYSE”) under the symbol “IR.” As of January 31, 2026, there were 1,946 holders of record of our common stock.
Removed
These authorizations do not have any expiration date. ITEM 6. [Reserved]
Added
On May 1, 2025, the Company announced that its Board of Directors authorized a $1.0 billion increase to the Company’s share repurchase program. The authorizations do not have any expiration date.
Added
Under the repurchase program, Ingersoll Rand may from time to time repurchase shares of the Company’s common stock in the open market at prevailing market prices (including through Rule 10b5-1 plans), in privately negotiated transactions, a combination thereof, or through other transactions.
Added
The actual timing, number, manner, and value of any shares repurchased will depend on several factors, including the market price of the Company’s stock, general market and economic conditions, the Company’s liquidity requirements, applicable legal requirements, and other business considerations. ITEM 6. [Reserved]

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeFinancial Statements and Supplementary Data 37 Consolidated Statements of Operations - For the years ended December 31, 202 4 , 202 3 and 202 2 38 Consolidated Statements of Comprehensive Income - For the years ended December 31, 202 4 , 202 3 and 202 2 39 Consolidated Balance Sheets - As of December 31, 202 4 and 202 3 40 Consolidated Statements of Stockholders’ Equity - For the years ended December 31, 202 4 , 202 3 and 202 2 41 Consolidated Statements of Cash Flows - For the years ended December 31, 202 4 , 202 3 and 202 2 42 Notes to Consolidated Financial Statements 44
Biggest changeFinancial Statements and Supplementary Data 39 Consolidated Statements of Operations - For the years ended December 31, 202 5 , 202 4 and 202 3 40 Consolidated Statements of Comprehensive Income - For the years ended December 31, 202 5 , 202 4 and 202 3 41 Consolidated Balance Sheets - As of December 31, 202 5 and 202 4 42 Consolidated Statements of Stockholders’ Equity - For the years ended December 31, 202 5 , 202 4 and 202 3 43 Consolidated Statements of Cash Flows - For the years ended December 31, 202 5 , 202 4 and 20 23 44 Notes to Consolidated Financial Statements 45
Item 6. [Reserved] 21 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 21 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 35 Item 8.
Item 6. [Reserved] 22 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 22 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 36 Item 8.

Item 7. Management's Discussion & Analysis

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

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Biggest changeFor a discussion and analysis of the year ended December 31, 2023, compared to the same in 2022, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 23, 2024. 24 Table of Contents Consolidated Results of Operations for the Years Ended December 31, 2024 and 2023 Year Ended December 31, 2024 2023 Consolidated Statements of Operations Revenues $ 7,235.0 $ 6,876.1 Cost of sales 4,065.0 3,993.9 Gross Profit 3,170.0 2,882.2 Selling and administrative expenses 1,344.4 1,272.7 Amortization of intangible assets 373.0 367.5 Impairment of other intangible assets 13.9 — Other operating expense, net 138.6 77.7 Operating Income 1,300.1 1,164.3 Interest expense 213.2 156.7 Loss on extinguishment of debt 3.0 13.5 Other income, net (48.9) (37.0) Income Before Income Taxes 1,132.8 1,031.1 Provision for income taxes 262.5 240.0 Loss on equity method investments (24.0) (6.0) Net Income 846.3 785.1 Less: Net income attributable to noncontrolling interests 7.7 6.4 Net Income Attributable to Ingersoll Rand Inc. $ 838.6 $ 778.7 Percentage of Revenues Gross Profit 43.8 % 41.9 % Selling and administrative expenses 18.6 % 18.5 % Operating Income 18.0 % 16.9 % Net Income 11.7 % 11.4 % Adjusted EBITDA (1) 27.9 % 26.0 % Other Financial Data Adjusted EBITDA (1) $ 2,018.1 $ 1,786.8 Adjusted net income (1) 1,349.3 1,215.8 Cash flows - operating activities 1,396.7 1,377.4 Cash flows - investing activities (3,107.7) (1,060.5) Cash flows - financing activities 1,707.5 (337.5) Free cash flow (1) 1,247.6 1,272.0 (1) See “Non-GAAP Financial Measures” below for a reconciliation to the most directly comparable GAAP measure.
Biggest changeConsolidated Results of Operations for the Years Ended December 31, 2025 and 2024 Year Ended December 31, (In millions, except percentages) 2025 2024 Consolidated Statements of Operations Revenues $ 7,650.9 $ 7,235.0 Cost of sales 4,314.6 4,065.0 Gross Profit 3,336.3 3,170.0 Selling and administrative expenses 1,439.3 1,344.4 Amortization of intangible assets 387.5 373.0 Impairment of goodwill 229.7 — Impairment of other intangible assets 43.7 13.9 Other operating expense, net 91.5 138.6 Operating Income 1,144.6 1,300.1 Interest expense 253.9 213.2 Loss on extinguishment of debt — 3.0 Other income, net (44.6) (48.9) Income Before Income Taxes 935.3 1,132.8 Provision for income taxes 219.4 262.5 Loss on equity method investments (127.1) (24.0) Net Income 588.8 846.3 Less: Net income attributable to noncontrolling interests 7.4 7.7 Net Income Attributable to Ingersoll Rand Inc. $ 581.4 $ 838.6 Percentage of Revenues Gross Profit 43.6 % 43.8 % Selling and administrative expenses 18.8 % 18.6 % Operating Income 15.0 % 18.0 % Net Income 7.7 % 11.7 % Adjusted EBITDA (1) 27.4 % 27.9 % Other Financial Data Adjusted EBITDA (1) $ 2,093.8 $ 2,018.1 Adjusted net income (1) 1,348.1 1,349.3 Cash flows - operating activities 1,355.7 1,396.7 Cash flows - investing activities (660.6) (3,107.7) Cash flows - financing activities (1,053.8) 1,707.5 Free cash flow (1) 1,220.1 1,247.6 (1) See “Non-GAAP Financial Measures” below for a reconciliation to the most directly comparable GAAP measure.
Financing activities Cash provided by financing activities of $1,707.5 million in 2024 is primarily due to net borrowings of long-term debt of $2,054.2 million and proceeds from stock option exercises of $32.2 million, partially offset by purchases of treasury stock of $260.7 million, cash dividends on common stock of $32.3 million, payments of debt issuance costs of $32.3 million, and payments of deferred, contingent acquisition consideration of $23.4 million and payments to settle cross-currency swaps of $19.9 million.
Cash provided by financing activities of $1,707.5 million in 2024 is primarily due to net proceeds from long-term debt of $2,054.2 million and proceeds from stock option exercises of $32.2 million, partially offset by purchases of treasury stock of $260.7 million, cash dividends on common stock of $32.3 million, payments of debt issuance costs of $32.3 million, payments of deferred and contingent acquisition consideration of $23.4 million, and payments to settle cross-currency swaps of $19.9 million.
Impairment of Other Intangible Assets Impairment of other intangible assets was $13.9 million in 2024 due to the Company’s decision to rationalize a business within the Precision and Science Technologies segment. See Note 9 “Goodwill and Other Intangible Assets” to our audited consolidated financial statements included elsewhere in this Form 10-K for further details.
See Note 8 “Goodwill and Other Intangible Assets” to our audited consolidated financial statements included elsewhere in this Form 10-K for further details. Impairment of other intangible assets was $13.9 million in 2024 due to the Company’s decision to rationalize a business within the Precision and Science Technologies segment.
Based on our current level of operations and available cash, we believe our cash flow from operations, together with availability under the New Revolving Credit Facility and Commercial Paper Program, will provide sufficient liquidity to fund our current obligations, projected working capital requirements, debt service requirements and capital spending requirements for the foreseeable future.
Based on our current level of operations and available cash, we believe our cash flow from operations, together with availability under the Revolving Credit Facility and Commercial Paper Program, will provide sufficient liquidity to fund our current obligations, projected working capital requirements, debt service requirements and capital spending requirements for the foreseeable future.
The actual timing, number, manner and value of any shares repurchased will depend on several factors, including the market price of our stock, general market and economic conditions, our liquidity requirements, applicable legal requirement and other business considerations. A substantial portion of our cash is in jurisdictions outside the United States.
The actual timing, number, manner and value of any shares repurchased will depend on several factors, including the market price of our stock, general market and economic conditions, our liquidity requirements, applicable legal requirements and other business considerations. A substantial portion of our cash is in jurisdictions outside the United States.
Determining whether an impairment loss occurred requires comparing the carrying amount to the sum of undiscounted cash flows expected to be generated by the asset. Also see Note 9 “Goodwill and Other Intangible Assets” to our audited consolidated financial statements included elsewhere in this Form 10-K.
Determining whether an impairment loss occurred requires comparing the carrying amount to the sum of undiscounted cash flows expected to be generated by the asset. Also see Note 8 “Goodwill and Other Intangible Assets” to our audited consolidated financial statements included elsewhere in this Form 10-K.
Our products are sold under a collection of premier, market-leading brands, including Ingersoll Rand, Gardner Denver, Nash, CompAir, Thomas, Milton Roy, Seepex, Elmo Rietschle, ARO, Robuschi, ILC Dover, Emco Wheaton 21 Table of Contents and Runtech Systems, which we believe are globally recognized in their respective end-markets and known for product quality, reliability, efficiency and superior customer service.
Our products are sold under a collection of premier, market-leading brands, including Ingersoll Rand, Gardner Denver, Nash, CompAir, Thomas, Milton Roy, Seepex, Elmo Rietschle, ARO, Robuschi, ILC Dover, Emco Wheaton and Runtech Systems, which we believe are globally recognized in their respective end-markets and known for product quality, reliability, efficiency and superior customer service.
These attributes, along with over 160 years of engineering heritage, generate strong brand loyalty for our products and foster long-standing customer relationships, which we believe have resulted in leading market positions within each of our operating segments.
These attributes, along with over 165 years of engineering heritage, generate strong brand loyalty for our products and foster long-standing customer relationships, which we believe have resulted in leading market positions within each of our operating segments.
GILTI is the excess of the shareholder’s “net CFC tested income” over the net deemed tangible income return, which is currently defined as the excess of (1) 10% of the aggregate of the U.S. shareholder’s pro rata share of the qualified business asset investment of each CFC with respect to which it is a U.S. shareholder over (2) the amount of certain interest expense taken into account in the determination of net CFC-tested income.
GILTI is the excess of the shareholder’s “net CFC tested income” over the net 35 Table of Content deemed tangible income return, which is currently defined as the excess of (1) 10% of the aggregate of the U.S. shareholder’s pro rata share of the qualified business asset investment of each CFC with respect to which it is a U.S. shareholder over (2) the amount of certain interest expense taken into account in the determination of net CFC-tested income.
Changes in forecasted revenues or any of the other assumptions mentioned above could result in a material non-cash impairment charge in a future period. 33 Table of Contents We review identified intangible assets with defined useful lives and subject to amortization for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable.
Changes in forecasted revenues or any of the other assumptions mentioned above could result in a material non-cash impairment charge in a future period. We review identified intangible assets with defined useful lives and subject to amortization for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable.
Such factors bear directly on whether it is possible to reasonably estimate a range of potential loss and boundaries of high and low. 34 Table of Contents Recent Accounting Pronouncements See Note 2 “New Accounting Standards” to our audited consolidated financial statements included elsewhere in this Form 10-K for a discussion of recent accounting standards.
Such factors bear directly on whether it is possible to reasonably estimate a range of potential loss and boundaries of high and low. Recent Accounting Pronouncements See Note 2 “New Accounting Standards” to our audited consolidated financial statements included elsewhere in this Form 10-K for a discussion of recent accounting standards.
Provision (Benefit) for Income Taxes The provision or benefit for income taxes includes U.S. federal, state and local income taxes and all non-U.S. income taxes. We are subject to income tax in 48 jurisdictions outside of the United States.
Provision (Benefit) for Income Taxes The provision or benefit for income taxes includes U.S. federal, state and local income taxes and all non-U.S. income taxes. We are subject to income tax in 49 jurisdictions outside of the United States.
As a result, our customers place a high value on our application expertise, product reliability and the responsiveness of our service. To support our customers and market presence, we maintain significant global scale with over 60 key manufacturing facilities, and over 40 complementary service and repair centers across six continents and over 21,000 employees worldwide as of December 31, 2024.
As a result, our customers place a high value on our application expertise, product reliability and the responsiveness of our service. To support our customers and market presence, we maintain significant global scale with over 60 key manufacturing facilities, and over 50 complementary service and repair centers across six continents and over 21,000 employees worldwide as of December 31, 2025.
The discount rates (9.0% to 14.5%), terminal growth rates (2.5% to 3.0%), and EBITDA multiples are the most sensitive assumptions. A material non-cash impairment of goodwill could result from a number of circumstances, including different assumptions used in determining the fair value of these reporting units or changes to customer spending priorities.
The discount rates (8.0% to 10.0%), terminal growth rates (2.5% to 3.5%), and EBITDA multiples are the most sensitive assumptions. A material non-cash impairment of goodwill could result from a number of circumstances, including different assumptions used in determining the fair value of these reporting units or changes to customer spending priorities.
Our management closely monitors Segment Adjusted EBITDA to evaluate past performance and identify actions required to improve profitability. The segment measurements provided to, and evaluated by, the Chief Operating Decision Maker (“CODM”) are described in Note 24 “Segment Information” to our audited consolidated financial statements included elsewhere in this Form 10-K.
Our management closely monitors Segment Adjusted EBITDA to evaluate past performance and identify actions required to improve profitability. The segment measurements provided to, and evaluated by, the Chief Operating Decision Maker (“CODM”) are described in Note 23 “Segment Reporting” to our audited consolidated financial statements included elsewhere in this Form 10-K.
The weighted average interest rate, including the impact of the interest rate derivative contracts, was approximately 5.2% in 2024 and 5.3% in 2023. Loss on Extinguishment of Debt Loss on extinguishment of debt was $3.0 million in 2024, which was related to the payoff of the Dollar Term Loan B and Dollar Term Loan.
The weighted average interest rate, including the impact of the interest rate derivative contracts, was approximately 5.0% in 2025 and 5.3% in 2024. Loss on Extinguishment of Debt Loss on extinguishment of debt was $3.0 million in 2024, which was related to the payoff of the Dollar Term Loan B and Dollar Term Loan.
As a result, the availability of replacement parts, consumables and our repair and support services are key components of our value proposition. Our large installed base of products provides a recurring revenue stream through our aftermarket parts, consumables and services offerings. As a result, our aftermarket revenue is significant, representing 36.4% of total Company revenue in 2024.
As a result, the availability of replacement parts, consumables and our repair and support services are key components of our value proposition. Our large installed base of products provides a recurring revenue stream through our aftermarket parts, consumables and services offerings. As a result, our aftermarket revenue is significant, representing 36.5% of total Company revenue in 2025.
Foreign Currency Fluctuations A significant portion of our revenues, 55% for the year ended December 31, 2024, was denominated in currencies other than the U.S. dollar. Because much of our manufacturing facilities and labor force costs are outside of the United States, a significant portion of our costs are also denominated in currencies other than the U.S. dollar.
Foreign Currency Fluctuations A significant portion of our revenues, 54% for the year ended December 31, 2025, was denominated in currencies other than the U.S. dollar. Because much of our manufacturing facilities and labor force costs are outside of the United States, a significant portion of our costs are also denominated in currencies other than the U.S. dollar.
(e) Represents non-recoverable costs associated with a cybersecurity event. (f) Includes (i) effects of the amortization of prior service costs and amortization of losses in pension and other postemployment (“OPEB”) expense and (ii) other miscellaneous adjustments.
(e) Represents expected non-recoverable costs associated with a cybersecurity event, net of insurance recoveries. (f) Includes (i) effects of the amortization of prior service costs and amortization of losses in pension and other postemployment (“OPEB”) expense and (ii) other miscellaneous adjustments.
The increase in operating working capital was primarily due to higher accounts receivable, higher inventories, higher contract assets, and lower contract liabilities, partially offset by higher accounts payable. The increase in accounts receivable was primarily due to the timing of revenues in the quarter and seasonal changes in collection timing and to acquisitions completed in 2024.
The increase in operating working capital was primarily due to higher accounts receivable, higher inventories, and higher contract assets, partially offset by higher accounts payable and higher contract liabilities. The increase in accounts receivable was primarily due to the timing of revenues in the quarter and seasonal changes in collection timing.
This discussion contains forward-looking statements and involves numerous risks and uncertainties. Our actual results may differ materially from those anticipated in any forward-looking statements as a result of many factors, including those set forth under the “Special Note Regarding Forward-Looking Statements,” “Item 1A. Risk Factors” and elsewhere in this Form 10-K.
This discussion contains forward-looking statements and involves numerous risks and uncertainties. Our actual results may differ materially from those anticipated in any forward-looking statements as a result of many factors, including those set forth under the “Special Note Regarding Forward-Looking Statements,” “Item 1A.
The Company has determined that it will follow the period cost method (option 1 above). The Company recorded a tax expense of $4.6 million in 2024 for the GILTI provisions of the Tax Act. Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years.
The Company has determined that it will follow the period cost method (option 1 above). The Company recorded a tax expense of $13.0 million in 2025 for the GILTI provisions of the Tax Act. Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years.
The increase was primarily due to an increase in long term debt, partially offset by the interest rate derivative contracts discussed in Note 20 “ Hedging Activities, Derivative Instruments and Credit Risk ” to our audited consolidated financial statements included elsewhere in this Form 10-K.
The increase was primarily due to an increase in long term debt, partially offset by the interest rate derivative contracts discussed in Note 19 “Hedging Activities, Derivative Instruments and Credit Risk” to our audited consolidated financial statements included elsewhere in this Form 10-K.
Year Ended December 31, 2024 2023 Restructuring charges $ 31.2 $ 19.9 Facility reorganization, relocation and other costs 1.1 3.0 Total restructuring and related business transformation costs $ 32.3 $ 22.9 (d) Represents costs associated with successful and abandoned acquisitions, including third-party expenses, post-closure integration costs and non-cash charges and credits arising from fair value purchase accounting adjustments.
Year Ended December 31, (In millions) 2025 2024 Restructuring charges $ 51.4 $ 31.2 Facility reorganization, relocation and other costs 0.3 1.1 Total restructuring and related business transformation costs $ 51.7 $ 32.3 (d) Represents costs associated with successful and abandoned acquisitions, including third-party expenses, post-closure integration costs and non-cash charges and credits arising from fair value purchase accounting adjustments.
Amounts recorded for deferred tax assets related to tax attribute carryforwards, net of valuation allowances, were $43.0 million and $27.8 million as of December 31, 2024 and 2023, respectively, with the increase due to the utilization of attributes in the current year.
Amounts recorded for deferred tax assets related to tax attribute carryforwards, net of valuation allowances, were $42.9 million and $43.0 million as of December 31, 2025 and 2024, respectively, with the decrease due to the utilization of attributes in the current year.
Purchase Obligations Purchase obligations consist primarily of agreements to purchase inventory or services made in the normal course of business to meet operational requirements. As of December 31, 2024, the Company had purchase obligations of $802.8 million, with $733.4 million payable in the next 12 months.
Purchase Obligations Purchase obligations consist primarily of agreements to purchase inventory or services made in the normal course of business to meet operational requirements. As of December 31, 2025, the Company had purchase obligations of $830.9 million, with $756.4 million payable in the next 12 months.
Selling and Administrative Expenses Selling and administrative expenses consist of (i) salaries and other employee-related expenses for our selling and administrative functions and other activities not associated with the manufacture of products or delivery of services to customers; (ii) facility operating expenses for selling and administrative activities, including office rent, maintenance, depreciation and insurance; (iii) marketing and direct costs of selling products and services to customers including internal and external sales commissions; (iv) research and development expenditures; (v) professional and consultant fees; (vi) employee related stock-based compensation for our selling and administrative functions and (vii) other miscellaneous expenses.
Cost of sales for services includes the direct costs we incur, including direct labor, parts and other overhead costs including depreciation of equipment and facilities, to deliver repair, maintenance and other field services to our customers. 23 Table of Content Selling and Administrative Expenses Selling and administrative expenses consist of (i) salaries and other employee-related expenses for our selling and administrative functions and other activities not associated with the manufacture of products or delivery of services to customers; (ii) facility operating expenses for selling and administrative activities, including office rent, maintenance, depreciation and insurance; (iii) marketing and direct costs of selling products and services to customers including internal and external sales commissions; (iv) research and development expenditures; (v) professional and consultant fees; (vi) employee related stock-based compensation for our selling and administrative functions and (vii) other miscellaneous expenses.
Results of Continuing Operations Consolidated results should be read in conjunction with segment results and the Segment Information notes to our audited consolidated financial statements included elsewhere in this Form 10-K, which provide more detailed discussions concerning certain components of our consolidated statements of operations. All intercompany accounts and transactions have been eliminated within the consolidated results.
Results of Operations Consolidated results should be read in conjunction with segment results and the Segment Information notes to our audited consolidated financial statements included elsewhere in this Form 10-K, which provide more detailed discussions concerning certain components of our consolidated statements of operations.
Year Ended December 31, 2024 2023 Cash and cash equivalents $ 1,541.2 $ 1,595.5 Short-term borrowings and current maturities of long-term debt $ 3.1 $ 30.6 Long-term debt 4,754.4 2,693.0 Total debt $ 4,757.5 $ 2,723.6 We can increase the borrowing availability under the New Revolving Credit Facility by up to $1,000.0 million in the form of additional commitments on the terms set forth in the New Revolving Credit Facility.
Year Ended December 31, (In millions) 2025 2024 Cash and cash equivalents $ 1,248.8 $ 1,541.2 Short-term borrowings and current maturities of long-term debt $ 1.4 $ 3.1 Long-term debt 4,783.3 4,754.4 Total debt $ 4,784.7 $ 4,757.5 We can increase the borrowing availability under the Revolving Credit Facility by up to $1,000.0 million in the form of additional commitments on the terms set forth in the Revolving Credit Facility.
Our liquidity requirements are significant primarily due to debt service requirements. See Note 12 “Debt” to our audited consolidated financial statements included elsewhere in this Form 10-K for further details. Our principal sources of liquidity have been existing cash and cash equivalents, cash generated from operations and borrowings under the Senior Notes and former Senior Secured Credit Facilities.
See Note 11 “Debt” to our audited consolidated financial statements included elsewhere in this Form 10-K for further details. 31 Table of Content Our principal sources of liquidity have been existing cash and cash equivalents, cash generated from operations and borrowings under the Senior Notes and former Senior Secured Credit Facilities.
The useful lives of identifiable intangibles with determinable useful lives are based on a variety of factors, including but not limited to, the competitive environment, product cycles, order life cycles, historical customer attrition rates, market share, operating plans and the macroeconomic environment. The costs of determinable-lived intangible assets are amortized to expense over the estimated useful life.
Certain intangibles are expected to have indefinite lives while certain other identifiable intangible assets have determinable lives. The useful lives of identifiable intangibles with determinable useful lives are based on a variety of factors, including but not limited to, the competitive environment, product cycles, order life cycles, historical customer attrition rates, market share, operating plans and the macroeconomic environment.
Precision and Science Technologies Segment Results Years Ended December 31, Percent Change 2024 2023 2024 vs. 2023 Segment Orders $ 1,398.9 $ 1,203.5 16.2 % Segment Revenues $ 1,416.9 $ 1,243.3 14.0 % Segment Adjusted EBITDA $ 418.8 $ 372.8 12.3 % Segment Adjusted EBITDA Margin 29.6 % 30.0 % (40) bps 2024 vs. 2023 Segment Orders for 2024 were $1,398.9 million, an increase of $195.4 million, or 16.2%, compared to $1,203.5 million in 2023.
Precision and Science Technologies Segment Results Years Ended December 31, Percent Change (In millions, except percentages) 2025 2024 2025 vs. 2024 Segment Orders $ 1,596.3 $ 1,398.9 14.1 % Segment Revenues $ 1,594.5 $ 1,416.9 12.5 % Segment Adjusted EBITDA $ 478.0 $ 418.8 14.1 % Segment Adjusted EBITDA Margin 30.0 % 29.6 % 40 bps 2025 vs. 2024 Segment Orders for 2025 were $1,596.3 million, an increase of $197.4 million, or 14.1%, compared to $1,398.9 million in 2024.
Executive Overview Our Company Ingersoll Rand is a global market leader with a broad range of innovative and mission-critical air, fluid, clean energy and medical technologies, providing services and solutions to increase industrial productivity and efficiency.
Risk Factors” and elsewhere in this Form 10-K. 22 Table of Content Executive Overview Our Company Ingersoll Rand is a global market leader with a broad range of innovative and mission-critical air, fluid, clean energy and medical technologies, providing services and solutions to increase industrial productivity and efficiency.
Operating working capital used cash of $23.5 million in 2024 compared to generating cash of $40.4 million in 2023. Changes in account receivables used cash of $45.1 million in 2024 compared to using cash of $48.6 million in 2023. Changes in contract assets used cash of $4.8 million in 2024 compared to using cash of $7.8 million in 2023.
Operating working capital used cash of $73.4 million in 2025 compared to using cash of $23.5 million in 2024. Changes in account receivables used cash of $59.1 million in 2025 compared to using cash of $45.1 million in 2024. Changes in contract assets used cash of $43.7 million in 2025 compared to using cash of $4.8 million in 2024.
This increase is primarily attributable to higher net income and a decrease in income tax payments in 2024 compared to 2023, partially offset by an increase in interest payments in 2024 for our Senior Notes, an increase in incentive compensation paid in 2024 and cash used in operating working capital in 2024, compared to cash generated in operating working capital in 2023.
This decrease is primarily attributable to an increase in cash used in operating working capital in 2025, compared to 2024, an increase in interest payments for our Senior Notes in 2025 and an increase in pension contributions in 2025, partially offset by an increase in net income excluding non-cash adjustments and lower incentive compensation.
Segment Results for Years Ended December 31, 2024 and 2023 The following tables display Segment Orders, Segment Revenues, Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin (Segment Adjusted EBITDA as a percentage of Segment Revenues) for each of our Segments. 28 Table of Contents Industrial Technologies and Services Segment Result s Years Ended December 31, Percent Change 2024 2023 2024 vs. 2023 Segment Orders $ 5,706.6 $ 5,618.9 1.6 % Segment Revenues $ 5,818.1 $ 5,632.8 3.3 % Segment Adjusted EBITDA $ 1,754.8 $ 1,587.3 10.6 % Segment Adjusted EBITDA Margin 30.2 % 28.2 % 200 bps 2024 vs. 2023 Segment Orders for 2024 were $5,706.6 million, an increase of $87.7 million, or 1.6%, compared to $5,618.9 million in 2023.
Segment Results for Years Ended December 31, 2025 and 2024 The following tables display Segment Orders, Segment Revenues, Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin (Segment Adjusted EBITDA as a percentage of Segment Revenues) for each of our Segments. 28 Table of Content Industrial Technologies and Services Segment Results Years Ended December 31, Percent Change (In millions, except percentages) 2025 2024 2025 vs. 2024 Segment Orders $ 6,119.6 $ 5,706.6 7.2 % Segment Revenues $ 6,056.4 $ 5,818.1 4.1 % Segment Adjusted EBITDA $ 1,747.9 $ 1,754.8 (0.4) % Segment Adjusted EBITDA Margin 28.9 % 30.2 % (130) bps 2025 vs. 2024 Segment Orders for 2025 were $6,119.6 million, an increase of $413.0 million, or 7.2%, compared to $5,706.6 million in 2024.
Certain corporate expenses, including those related to our shared service centers in the United States and Europe, that directly benefit our businesses are allocated to our business segments.
Certain corporate expenses, including those related to our shared service centers in the United States and Europe, that directly benefit our businesses are allocated to our business segments. Certain corporate administrative expenses, including corporate executive compensation, treasury, certain information technology, internal audit and tax compliance, are not allocated to the business segments.
The increase was primarily due to the loss on asbestos sale of $58.8 million and higher restructuring charges of $11.3 million, partially offset by lower acquisition and other transaction related expenses of $5.1 million and lower foreign currency transaction losses, net of $1.9 million.
The decrease was primarily due to the loss on asbestos sale of $58.8 million in the 2024 period and lower acquisition and other transaction related expenses of $25.1 million, partially offset by higher restructuring charges of $20.2 million and higher foreign currency transaction losses, net of $15.4 million.
The multiples are developed by first calculating the market value of equity of the guideline companies and then adjusting these multiples for cash and debt to arrive at a BEV multiple. Identifying appropriate guideline companies and computing appropriate market multiples is subjective.
The application of the market multiples method entails the development of book value multiples based on the market value of the guideline companies. The multiples are developed by first calculating the market value of equity of the guideline companies and then adjusting these multiples for cash and debt to arrive at a BEV multiple.
The percentage of consolidated revenues derived from aftermarket parts and services was 36.4% in 2024 compared to 35.8% in 2023. Gross Profit Gross profit in 2024 was $3,170.0 million, an increase of $287.8 million, or 10.0%, compared to $2,882.2 million in 2023, and as a percentage of revenues was 43.8% in 2024 and 41.9% in 2023.
The percentage of consolidated revenues derived from aftermarket parts and services was 36.5% in 2025 compared to 36.4% in 2024. 26 Table of Content Gross Profit Gross profit in 2025 was $3,336.3 million, an increase of $166.3 million, or 5.2%, compared to $3,170.0 million in 2024, and as a percentage of revenues was 43.6% in 2025 and 43.8% in 2024.
Changes in foreign exchange rates can therefore impact our results of operations and are quantified when significant to our discussion. Factors Affecting the Comparability of our Results of Operations Certain factors affecting the comparability of our current and historical results of operations are summarized below.
Changes in foreign exchange rates can therefore impact our results of operations and are quantified when significant to our discussion.
Year Ended December 31, 2024 2023 Net Income $ 846.3 $ 785.1 Plus: Interest expense 213.2 156.7 Provision for income taxes 262.5 240.0 Depreciation expense (a) 105.0 87.9 Amortization expense (b) 373.0 367.5 Impairment of other intangible assets 13.9 — Restructuring and related business transformation costs (c) 32.3 22.9 Acquisition and other transaction related expenses and non-cash charges (d) 59.8 63.9 Stock-based compensation 58.8 51.9 Foreign currency transaction losses, net 3.2 5.1 Loss on equity method investments 24.0 6.0 Loss on extinguishment of debt 3.0 13.5 Adjustments to LIFO inventories 6.7 12.0 Cybersecurity incident costs (e) 0.5 2.3 Loss on asbestos sale 58.8 — Interest income on cash and cash equivalents (43.3) (28.8) Other adjustments (f) 0.4 0.8 Adjusted EBITDA $ 2,018.1 $ 1,786.8 Minus: Interest expense $ 213.2 $ 156.7 Income tax provision, as adjusted (g) 385.2 345.2 Depreciation expense 105.0 87.9 Amortization of non-acquisition related intangible assets 8.7 10.0 Interest income on cash and cash equivalents (43.3) (28.8) Adjusted Net Income $ 1,349.3 $ 1,215.8 Free Cash Flow from Continuing Operations: Cash flows from operating activities from continuing operations $ 1,396.7 $ 1,377.4 Minus: Capital expenditures 149.1 105.4 Free Cash Flow from Continuing Operations $ 1,247.6 $ 1,272.0 (a) Depreciation expense excludes $4.0 million and $3.7 million of depreciation of rental equipment for the years ended December 31, 2024 and 2023, respectively. 27 Table of Contents (b) Represents $364.3 million and $357.5 million of amortization of intangible assets arising from acquisitions (customer relationships, technology, tradenames and backlog) and $8.7 million and $10.0 million of amortization of non-acquisition related intangible assets, in each case for the years ended December 31, 2024 and 2023, respectively.
Year Ended December 31, (In millions) 2025 2024 Net Income $ 588.8 $ 846.3 Plus: Interest expense 253.9 213.2 Provision for income taxes 219.4 262.5 Depreciation expense (a) 113.8 105.0 Amortization expense (b) 387.5 373.0 Impairment of goodwill and other intangible assets 273.4 13.9 Restructuring and related business transformation costs (c) 51.7 32.3 Acquisition and other transaction related expenses and non-cash charges (d) 26.0 59.8 Stock-based compensation 53.0 58.8 Foreign currency transaction losses, net 18.6 3.2 Loss on equity method investments 127.1 24.0 Loss on extinguishment of debt — 3.0 Adjustments to LIFO inventories 17.8 6.7 Cybersecurity incident costs (e) (1.3) 0.5 Loss on asbestos sale — 58.8 Interest income on cash and cash equivalents (30.0) (43.3) Other adjustments (f) (5.9) 0.4 Adjusted EBITDA $ 2,093.8 $ 2,018.1 Minus: Interest expense $ 253.9 $ 213.2 Income tax provision, as adjusted (g) 397.9 385.2 Depreciation expense 113.8 105.0 Amortization of non-acquisition related intangible assets 10.1 8.7 Interest income on cash and cash equivalents (30.0) (43.3) Adjusted Net Income $ 1,348.1 $ 1,349.3 Free Cash Flow from: Cash flows from operating activities $ 1,355.7 $ 1,396.7 Minus: Capital expenditures 135.6 149.1 Free Cash Flow $ 1,220.1 $ 1,247.6 (a) Depreciation expense excludes $4.5 million and $4.0 million of depreciation of rental equipment for the years ended December 31, 2025 and 2024, respectively.
Operating working capital increased $157.6 million to $1,418.6 million as of December 31, 2024 from $1,261.0 million as of December 31, 2023. Operating working capital as of December 31, 2024 was 19.6% of 2024 revenues as compared to 18.3% as of December 31, 2023 as a percentage of 2023 revenues.
Operating working capital increased $189.9 million to $1,608.5 million as of December 31, 2025 from $1,418.6 million as of December 31, 2024. Operating working capital as of December 31, 2025 was 21.0% of 2025 revenues as compared to 19.6% as of December 31, 2024 as a percentage of 2024 revenues.
Liabilities on our consolidated balance sheet related to legal proceedings, lawsuits and administrative actions are not significant. A more detailed discussion of certain of these proceedings, lawsuits and administrative actions is set forth in “Item 3.
We believe that such proceedings, lawsuits and administrative actions will not materially adversely affect our operations, financial condition, liquidity or competitive position. Liabilities on our consolidated balance sheet related to legal proceedings, lawsuits and administrative actions are not significant. A more detailed discussion of certain of these proceedings, lawsuits and administrative actions is set forth in “Item 3.
Estimates of fair value represent management’s best estimate of assumptions and about future events and uncertainties, including 32 Table of Contents significant judgments related to future cash flows, discount rates, competitive trends, margin and revenue growth assumptions including royalty rates, customer attrition rates and others.
Estimates of fair value represent management’s best estimate of assumptions and about future events and uncertainties, including significant judgments related to future cash flows, discount rates, competitive trends, margin and revenue growth assumptions including royalty rates, customer attrition rates and others. Inputs used are generally obtained from historical data supplemented by current and anticipated market conditions and growth rates.
Interest Expense Interest expense was $213.2 million in 2024, an increase of $56.5 million, compared to $156.7 million in 2023.
Interest Expense Interest expense was $253.9 million in 2025, an increase of $40.7 million, compared to $213.2 million in 2024.
Segment Adjusted EBITDA in 2024 was $418.8 million, an increase of $46.0 million, or 12.3%, from $372.8 million in 2023. Segment Adjusted EBITDA Margin decreased 40 bps to 29.6% from 30.0% in 2023.
Segment Adjusted EBITDA in 2025 was $478.0 million, an increase of $59.2 million, or 14.1%, from $418.8 million in 2024. Segment Adjusted EBITDA Margin increased 40 bps to 30.0% from 29.6% in 2024.
Adjusted EBITDA as a percentage of revenues increased 190 basis points to 27.9% in 2024 from 26.0% in 2023.
Adjusted EBITDA as a percentage of revenues decreased 50 basis points to 27.4% in 2025 from 27.9% in 2024.
The purchase obligation amounts do not represent the entire anticipated purchases in the future, but represent only those items for which we are contractually obligated as of December 31, 2024. For this reason, these amounts will not provide a complete and reliable indicator of our expected future cash outflows.
The purchase obligation amounts do not represent the entire anticipated purchases in the future, but represent only those items for which we are contractually obligated as of December 31, 2025.
In addition to our consolidated GAAP financial measures, we review various non-GAAP financial measures, including Adjusted EBITDA, Adjusted Net Income and Free Cash Flow.
How We Assess the Performance of Our Business We manage operations through the two business segments described above. In addition to our consolidated GAAP financial measures, we review various non-GAAP financial measures, including Adjusted EBITDA, Adjusted Net Income and Free Cash Flow.
The increase in Segment Orders was primarily due to acquisitions of $190.5 million or 15.8% and higher organic orders of $5.5 million or 0.5%, partially offset by the unfavorable impact of foreign currencies of $0.6 million or 0.0%. Segment Revenues for 2024 were $1,416.9 million, an increase of $173.6 million, or 14.0%, compared to $1,243.3 million in 2023.
The increase in Segment Orders was primarily due to acquisitions of $275.5 million or 4.8%, higher organic orders of $79.9 million or 1.4% and the favorable impact of foreign currencies of $57.6 million or 1.0%. Segment Revenues for 2025 were $6,056.4 million, an increase of $238.3 million, or 4.1%, compared to $5,818.1 million in 2024.
We test intangible assets with indefinite lives for impairment annually utilizing a discounted cash flow valuation referred to as the relief from royalty method. We estimated forecasted revenues for a period of five years with discount rates ranging from 8.0% to 10.5%, terminal growth rates of 2.5% to 3.5%, and royalty rates ranging from 0.5% to 4.0%.
We estimated forecasted revenues for a period of five years with discount rates ranging from 8.5% to 10.5%, terminal growth rates of 2.5% to 3.5%, and royalty rates ranging from 0.5% to 4.0%.
Changes in inventory generated cash of $39.8 million in 2024 compared to generating cash of $117.3 million in 2023. Changes in accounts payable generated cash of $13.3 million in 2024 compared to using cash of $23.9 million in 2023.
Changes in inventory used cash of $26.1 million in 2025 compared to generating cash of $39.8 million in 2024. Changes in accounts payable generated cash of $78.7 million in 2025 compared to generating cash of $13.3 million in 2024. Changes in contract liabilities used cash of $23.2 million in 2025 compared to using cash of $26.7 million in 2024.
The increase in Adjusted EBITDA as a percentage of revenues is primarily attributable to higher pricing, input cost productivity improvements, and product mix. Adjusted Net Income Adjusted Net Income increased $133.5 million to $1,349.3 million in 2024 compared to $1,215.8 million in 2023.
The decrease in Adjusted EBITDA as a percentage of revenues is primarily attributable to input cost inflation and product mix. Adjusted Net Income Adjusted Net Income decreased $1.2 million to $1,348.1 million in 2025 compared to $1,349.3 million in 2024.
We also have the ability to seek additional borrowings, subject to credit agreement restrictions. 29 Table of Contents For a description of our material indebtedness, see Note 12 “Debt” to our audited consolidated financial statements included elsewhere in this Form 10-K.
We also have the ability to seek additional borrowings, subject to credit agreement restrictions. For a description of our material indebtedness, see Note 11 “Debt” to our audited consolidated financial statements included elsewhere in this Form 10-K. As of December 31, 2025, we had $2,600.0 million of unused availability under both the Revolving Credit Facility and Commercial Paper Program.
Revenues Revenues for 2024 were $7,235.0 million, an increase of $358.9 million, or 5.2%, compared to $6,876.1 million in 2023. The increase in revenues was primarily due to acquisitions of $471.2 million and higher pricing of $153.3 million, partially offset by lower organic volumes of $241.9 million and unfavorable impact of foreign currencies of $23.7 million.
Revenues Revenues for 2025 were $7,650.9 million, an increase of $415.9 million, or 5.7%, compared to $7,235.0 million in 2024. The increase in revenues was primarily due to acquisitions of $419.9 million and the favorable impact of foreign currencies of $92.0 million, partially offset by lower organic revenues of $96.0 million.
We expect capital expenditures will be approximately 2% of consolidated revenues in 2025. Net cash paid in acquisitions was $2,958.7 million and $963.0 million in 2024 and 2023, respectively. Net proceeds from the disposal of property, plant and equipment were $6.1 million and $7.6 million in 2024 and 2023, respectively.
Investing activities Cash flows used in investing activities included capital expenditures of $135.6 million (1.8% of consolidated revenues) and $149.1 million (2.1% of consolidated revenues) in 2025 and 2024, respectively. We expect capital expenditures will be approximately 2% of consolidated revenues in 2026. Net cash paid in acquisitions was $525.0 million and $2,958.7 million in 2025 and 2024, respectively.
We use discount rates that are commensurate with the risks and uncertainty inherent in the respective businesses and in our internally developed forecasts. Discount rates used in our 2024 reporting unit valuations ranged from 7.5% to 14.5% and terminal growth rates ranged from 2.5% to 3.5%.
We use discount rates that are commensurate with the risks and uncertainty inherent in the respective businesses and in our internally developed forecasts.
Free cash flow Free cash flow decreased $24.4 million to $1,247.6 million in 2024 from $1,272.0 million in 2023 primarily due to the increase in cash provided by operating activities of $19.3 million discussed above, being more than offset by the increase in capital expenditures of $43.7 million.
Free cash flow Free cash flow decreased $27.5 million to $1,220.1 million in 2025 from $1,247.6 million in 2024 primarily due to the decrease in cash provided by operating activities of $41.0 million discussed above, partially offset by the decrease in capital expenditures of $13.5 million.
Cash Flows The following table reflects the major categories of cash flows for the years ended December 31, 2024 and 2023, respectively. 2024 2023 Cash flows provided by (used in) continuing operations: Cash flows provided by operating activities $ 1,396.7 $ 1,377.4 Cash flows used in investing activities (3,107.7) (1,060.5) Cash flows provided by (used in) financing activities 1,707.5 (337.5) Free cash flow (1) 1,247.6 1,272.0 (1) See “Non-GAAP Financial Measures” for a reconciliation to the most directly comparable GAAP measure.
(In millions) 2025 2024 Cash flows provided by operating activities $ 1,355.7 $ 1,396.7 Cash flows used in investing activities (660.6) (3,107.7) Cash flows provided by (used in) financing activities (1,053.8) 1,707.5 Free cash flow (1) 1,220.1 1,247.6 (1) See “Non-GAAP Financial Measures” for a reconciliation to the most directly comparable GAAP measure.
Cash used in financing activities of $337.5 million in 2023 is primarily due to purchases of treasury stock of $263.0 million, cash dividends on common stock of $32.4 million, net repayments of long-term debt of $27.6 million, payments of debt issuance costs of $18.5 million, and payments of deferred and contingent acquisition consideration of $17.5 million, partially offset by proceeds from stock option exercises of $30.3 million.
Financing activities Cash used in financing activities of $1,053.8 million in 2025 is primarily due to purchases of treasury stock of $1,018.0 million, cash dividends on common stock of $31.8 million, and payments of deferred and contingent acquisition consideration of $8.0 million, partially offset by proceeds from stock option exercises of $15.3 million.
Provision (Benefit) for Income Taxes The provision for income taxes was $262.5 million resulting in a 23.2% effective tax rate in 2024 compared to a provision for income taxes of $240.0 million resulting in a 23.3% effective tax provision rate in 2023. The increase in the tax provision is primarily due to an increase in pre-tax book income.
The decrease was primarily due to a decrease in interest income from holdings of cash and cash equivalents. Provision (Benefit) for Income Taxes The provision for income taxes was $219.4 million resulting in a 23.5% effective tax rate in 2025 compared to a provision for income taxes of $262.5 million resulting in a 23.2% effective tax provision rate in 2024.
The increase in Segment Revenues was primarily due to acquisitions of $217.8 million or 17.5% and higher pricing of $28.0 million or 2.3%, partially offset by lower organic volumes of $72.2 million or 5.8%. The percentage of Segment Revenues derived from aftermarket parts and service was 21.6% in 2024 compared to 20.3% in 2023.
The increase in Segment Revenues was primarily due to acquisitions of $147.0 million or 10.4%, the favorable impact of foreign currencies of $23.2 million or 1.6%, and higher organic revenues of $7.4 million or 0.5%. The percentage of Segment Revenues derived from aftermarket parts and service was 20.6% in 2025 compared to 21.6% in 2024.
The increase in Adjusted EBITDA was primarily due to higher pricing of $153.3 million, acquisitions of $105.6 million, favorable cost productivity and 26 Table of Contents product mix of $60.4 million, and lower selling and administrative costs of $22.5 million, partially offset by lower organic sales volume of $104.5 million and the unfavorable impact of foreign currencies of $5.2 million.
The increase in Adjusted EBITDA was primarily due to acquisitions of $92.5 million and the favorable impact of foreign currencies of $25.6 million, partially offset by lower organic gross profit of $35.1 million and higher selling and administrative costs of $3.6 million.
Under the market multiples approach, fair value is determined based on multiples derived from the stock prices of publicly traded guideline companies to develop a business enterprise value (“BEV”) for our reporting units. The application of the market multiples method entails the development of book value multiples based on the market value of the guideline companies.
Discount rates used in our 2025 reporting unit valuations ranged from 8.0% to 10.0% and terminal growth rates ranged from 2.5% to 3.5%. 34 Table of Content Under the market multiples approach, fair value is determined based on multiples derived from the stock prices of publicly traded guideline companies to develop a business enterprise value (“BEV”) for our reporting units.
The increase in Segment Adjusted EBITDA was primarily due to higher pricing of $125.3 million or 7.9%, favorable cost productivity and product mix of $72.9 million or 4.6%, and acquisitions of $53.6 million or 3.4%, partially offset by lower organic sales volumes of $71.0 million or 4.5%, higher selling and administrative expenses of $9.2 million or 0.6%, and the unfavorable impact of foreign currencies of $5.6 million or 0.4%.
The decrease in Segment Adjusted EBITDA was primarily due to lower organic gross profit of $49.7 million or 2.8% and higher selling and administrative expenses of $31.1 million or 1.8%, partially offset by acquisitions of $54.6 million or 3.1%, and the favorable impact of foreign currencies of $20.3 million or 1.2%.
Operating activities Cash provided by operating activities increased $19.3 million to $1,396.7 million in 2024 from $1,377.4 million in 2023.
Operating activities Cash provided by operating activities decreased $41.0 million to $1,355.7 million in 2025 from $1,396.7 million in 2024.
The increase in Segment Orders was primarily due to acquisitions of $253.7 million or 4.5%, partially offset by organic decline of $141.1 million or 2.5% and the unfavorable impact of foreign currencies of $24.9 million or 0.4%. Segment Revenues for 2024 were $5,818.1 million, an increase of $185.3 million, or 3.3%, compared to $5,632.8 million in 2023.
The increase in Segment Orders was primarily due to acquisitions of $148.7 million or 10.6%, higher organic orders of $25.7 million or 1.8%, and the favorable impact of foreign currencies of $23.0 million or 1.6%. Segment Revenues for 2025 were $1,594.5 million, an increase of $177.6 million, or 12.5%, compared to $1,416.9 million in 2024.
The fair value estimates are based on historical information and on future expectations and assumptions deemed reasonable by management, but which are inherently uncertain. See Note 4 “Acquisitions” to our audited consolidated financial statements included elsewhere in this Form 10-K for further information regarding the fair value determination of each of the classes of identifiable intangible assets.
See Note 3 “Acquisitions” to our audited consolidated financial statements included elsewhere in this Form 10-K for further information regarding the fair value determination of each of the classes of identifiable intangible assets. Determining the useful life of an intangible asset also requires judgment.
Amortization of Intangible Assets Amortization of intangible assets was $373.0 million in 2024, an increase of $5.5 million compared to $367.5 million in 2023. The increase was primarily attributable to amortization of intangible assets recognized for acquisitions completed in the second half of 2023 and in 2024, partially offset by certain intangible assets becoming fully amortized during the period.
The increase was primarily attributable to amortization of intangible assets recognized for acquisitions completed throughout 2024 and 2025 and amortization related to certain tradenames that were determined to no longer have indefinite lives during the period, partially offset by certain intangible assets becoming fully amortized during the period.
This section discusses our results of continuing operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
All intercompany accounts and transactions have been eliminated within the consolidated results. 25 Table of Content This section discusses our results of operations for the year ended December 31, 2025 as compared to the year ended December 31, 2024.
Contingencies We are a party to various legal proceedings, lawsuits and administrative actions, which are of an ordinary or routine nature for a company of our size and in our sector. We believe that such proceedings, lawsuits and administrative actions will not materially adversely affect our operations, financial condition, liquidity or competitive position.
For this reason, these amounts will not provide a complete and reliable indicator of our expected future cash outflows. 33 Table of Content Contingencies We are a party to various legal proceedings, lawsuits and administrative actions, which are of an ordinary or routine nature for a company of our size and in our sector.
The increase in accounts payable was primarily due to the timing of vendor cash disbursements and acquisitions completed in 2024. The decrease in contract liabilities was primarily due to the timing of customer milestone payments for in-process engineered to order contracts, partially offset by acquisitions completed in 2024.
The increase in contract liabilities was primarily due to the timing of customer milestone payments for in-process engineered to order contracts. Cash Flows The following table reflects the major categories of cash flows for the years ended December 31, 2025 and 2024, respectively.
Our deferred income tax liability as of December 31, 2024 is $41.8 million which consists mainly of withholding taxes. 30 Table of Contents Working Capital 2024 2023 Net Working Capital Current assets $ 4,163.5 $ 4,050.4 Less: Current liabilities 1,818.9 1,827.3 Net working capital $ 2,344.6 $ 2,223.1 Operating Working Capital Accounts receivable $ 1,335.4 $ 1,234.2 Plus: Inventories (excluding LIFO) 1,134.2 1,073.6 Plus: Contract assets 111.2 85.6 Less: Accounts payable 843.6 801.2 Less: Contract liabilities 318.6 331.2 Operating working capital $ 1,418.6 $ 1,261.0 Net working capital increased $121.5 million to $2,344.6 million as of December 31, 2024 from $2,223.1 million as of December 31, 2023.
Working Capital (In millions) 2025 2024 Net Working Capital Current assets $ 4,248.0 $ 4,163.5 Less: Current liabilities 2,066.3 1,818.9 Net working capital $ 2,181.7 $ 2,344.6 Operating Working Capital Accounts receivable $ 1,518.0 $ 1,335.4 Plus: Inventories (excluding LIFO) 1,269.9 1,134.2 Plus: Contract assets 163.9 111.2 Less: Accounts payable 996.1 843.6 Less: Contract liabilities 347.2 318.6 Operating working capital $ 1,608.5 $ 1,418.6 Net working capital decreased $162.9 million to $2,181.7 million as of December 31, 2025 from $2,344.6 million as of December 31, 2024.
We have instituted a global sourcing strategy to take advantage of coordinated purchasing opportunities of key materials across our manufacturing plant locations. Cost of sales for services includes the direct costs we incur, including direct labor, parts and other overhead costs including depreciation of equipment and facilities, to deliver repair, maintenance and other field services to our customers.
We have instituted a global sourcing strategy to take advantage of coordinated purchasing opportunities of key materials across our manufacturing plant locations.
Certain corporate administrative expenses, including corporate executive compensation, treasury, certain information technology, internal audit and tax compliance, are not allocated to the business segments. 22 Table of Contents Amortization of Intangible Assets Amortization of intangible assets includes the periodic amortization of intangible assets, including customer relationships, tradenames, developed technology, backlog and internal-use software.
Amortization of Intangible Assets Amortization of intangible assets includes the periodic amortization of intangible assets, including customer relationships, tradenames, developed technology, backlog and internal-use software.
Liquidity Our liquidity needs primarily arise from working capital needs for normal operating costs, servicing debt, funding acquisitions and capital expenditures.
As of December 31, 2025, we were in compliance with all of our debt covenants and no event of default had occurred or was ongoing. Liquidity Our liquidity needs primarily arise from working capital needs for normal operating costs, servicing debt, funding acquisitions and capital expenditures.
Acquisitions Part of our strategy for growth is to acquire complementary businesses that provide access to new technologies or geographies or expand our offerings. While acquisitions, as discussed further in Note 4, are not individually significant or significant in the aggregate, they may be relevant when comparing our results from period to period.
While acquisitions, as discussed further in Note 3, are not individually significant or significant in the aggregate, they may be relevant when comparing our results from period to period. See Note 3 “Acquisitions” to our audited consolidated financial statements included elsewhere in this Form 10-K for further discussion of these acquisitions.
We considered various public companies that had reasonably similar qualitative factors as our reporting units while also considering quantitative factors such as revenue growth, profitability and total assets. No goodwill impairments were recorded in 2024 and the cushion of all reporting units was at least 60%, with the exception of two reporting units in our Precision and Science Technologies segment.
Identifying appropriate guideline companies and computing appropriate market multiples is subjective. We considered various public companies that had reasonably similar qualitative factors as our reporting units while also considering quantitative factors such as revenue growth, profitability and total assets.
Inputs used are generally obtained from historical data supplemented by current and anticipated market conditions and growth rates. Significant judgment is required in estimating the fair value of identifiable intangible assets and in assigning their respective useful lives.
Significant judgment is required in estimating the fair value of identifiable intangible assets and in assigning their respective useful lives. The fair value estimates are based on historical information and on future expectations and assumptions deemed reasonable by management, but which are inherently uncertain.

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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 changeThe following table presents the impact of hypothetical changes in market interest rates across the yield curve by 100 basis points, including the effect of our interest rate swaps for the years ended December 31, 2024 and 2023 on our interest expense. 2024 2023 Increase (decrease) in market interest rates 100 basis points $ 7.5 $ 7.4 (100) basis points (7.5) (7.4) Foreign Currency Risk We are exposed to foreign currency risks that arise from our global business operations.
Biggest change(In millions) 2025 2024 Increase (decrease) in market interest rates 100 basis points $ 10.0 $ 7.5 (100) basis points (10.0) (7.5) Foreign Currency Risk We are exposed to foreign currency risks that arise from our global business operations.
In addition, to mitigate the risk arising from entering into transactions in currencies other than our functional currencies, we typically settle intercompany trading balances at least quarterly. The table below presents the percentage of revenues and gross profit by functional currency for the years ended December 31, 2024 and 2023. U.S.
In addition, to mitigate the risk arising from entering into transactions in currencies other than our functional currencies, we typically settle intercompany trading balances at least quarterly. The table below presents the percentage of revenues and gross profit by functional currency for the years ended December 31, 2025 and 2024. U.S.
As of December 31, 2024, we had no variable rate debt outstanding. At times we use interest rate swaps and interest rate caps to offset or mitigate our exposure to interest rate movements. The outstanding interest rate swaps qualify and are designated as fair value hedges.
As of December 31, 2025, we had no variable rate debt outstanding. At times we use interest rate swaps and interest rate caps to offset or mitigate our exposure to interest rate movements. The outstanding interest rate swaps qualify and are designated as fair value hedges.
Dollar Euro Chinese Renminbi British Pound Other Year Ended December 31, 2024 Revenues 45 % 27 % 11 % 4 % 13 % Gross profit 46 % 28 % 12 % 3 % 11 % Year Ended December 31, 2023 Revenues 45 % 26 % 13 % 4 % 12 % Gross profit 45 % 27 % 14 % 3 % 11 % We utilize foreign currency denominated debt obligations supplemented from time to time with cross currency interest rate swaps designated as net investment hedges to selectively hedge portions of our investment in non-U.S. subsidiaries.
Dollar Euro Chinese Renminbi British Pound Other Year Ended December 31, 2025 Revenues 46 % 25 % 10 % 4 % 15 % Gross profit 48 % 26 % 11 % 3 % 12 % Year Ended December 31, 2024 Revenues 45 % 27 % 11 % 4 % 13 % Gross profit 46 % 28 % 12 % 3 % 11 % We utilize foreign currency denominated debt obligations and/or cross currency interest rate swaps designated as net investment hedges from time to time to selectively hedge portions of our investment in non-U.S. subsidiaries.
In 2024 and 2023, the relative strengthening of the U.S. dollar against foreign currencies had a unfavorable impact on our revenues and results of operations. While future changes in foreign currency exchange rates are difficult to predict, our revenues and earnings may be adversely affected if the U.S. dollar strengthens against foreign currencies.
While future changes in foreign currency exchange rates are difficult to predict, our revenues and earnings may be adversely affected if the U.S. dollar strengthens against foreign currencies.
The table below presents, for the year ended December 31, 2024, the hypothetical effect of a 10% appreciation in the average exchange rate of the U.S. dollar relative to the principal foreign currencies in which our revenues and gross profit are denominated.
See Note 19 “Hedging Activities, Derivative Instruments and Credit Risk” to our audited consolidated financial statements included elsewhere in this Form 10-K. 37 Table of Content The table below presents, for the year ended December 31, 2025, the hypothetical change from the effect of a 10% appreciation in the average exchange rate of the U.S. dollar relative to the principal foreign currencies in which our revenues and gross profit are denominated.
The currency effects of the designated debt obligations and cross currency interest rate swaps are reflected in accumulated other comprehensive income within our stockholders’ equity, where they partially offset the currency translation effects of our investments in non-U.S. subsidiaries, which in turn partially offset gains and losses recorded on our net investments globally. 35 Table of Contents These currency translation effects and offsetting impacts of our derivatives for the years ended December 31, 2024 and 2023 are summarized in Note 15 “Accumulated Other Comprehensive Income (Loss)” to our audited consolidated financial statements included elsewhere in this Form 10-K.
The currency effects of the designated debt obligations and cross currency interest rate swaps are reflected in accumulated other comprehensive income within our stockholders’ equity, where they partially offset the currency translation effects of our investments in non-U.S. subsidiaries, which in turn partially offset gains and losses recorded on our net investments globally.
As of December 31, 2024, we were party to nine foreign currency forward contracts, all of which are carried on our balance sheet at fair value. See Note 20 “Hedging Activities, Derivative Instruments and Credit Risk” to our audited consolidated financial statements included elsewhere in this Form 10-K.
As of December 31, 2025, we were party to ten foreign currency forward contracts, all of which are carried on our balance sheet at fair value.
As of December 31, 2024, we were a variable rate payer on 7 interest rate swap contracts that effectively convert a total of $750.0 million of the Company’s fixed rate borrowings to variable rate borrowings. See Note 20 “Hedging Activities, Derivative Instruments and Credit Risk” to our audited consolidated financial statements included elsewhere in this Form 10-K.
As of December 31, 2025, we were a variable rate payer on nine interest rate swap contracts that effectively convert a total of $1,000.0 million of the Company’s fixed rate borrowings to variable rate borrowings.
Year Ended December 31, 2024 Euro Chinese Renminbi British Pound Revenues $ 193.4 $ 79.3 $ 28.9 Gross profit 88.4 36.5 10.2 36 Table of Contents
Year Ended December 31, 2025 (In millions) Euro Chinese Renminbi British Pound Revenues $ 194.4 $ 78.4 $ 28.8 Gross profit 87.9 35.6 9.6 38 Table of Content
Added
See Note 19 “Hedging Activities, Derivative Instruments and Credit Risk” to our audited consolidated financial statements included elsewhere in this Form 10-K. 36 Table of Content The following table presents the annualized impact of hypothetical changes in market interest rates across the yield curve by 100 basis points, including the effect of our interest rate swaps for the years ended December 31, 2025 and 2024 on our interest expense.
Added
In 2025, the relative weakening of the U.S. dollar against foreign currencies had a favorable impact on our revenues and results of operations. In 2024 the relative strengthening of the U.S. dollar against foreign currencies had an unfavorable impact on our revenues and results of operations.
Added
These currency translation effects and offsetting impacts of our derivatives for the years ended December 31, 2025 and 2024 are summarized in Note 14 “Accumulated Other Comprehensive Income (Loss)” to our audited consolidated financial statements included elsewhere in this Form 10-K.