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BUSINESS OVERVIEW | 6 Months Ended
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Jun. 27, 2025
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
BUSINESS OVERVIEW | NOTE 1. BUSINESS OVERVIEW Fortive Corporation (“Fortive,” “the Company,” “we,” “us,” or “our”) is a provider of essential technologies for connected workflow solutions across a range of attractive end-markets. Our strategic segments - Intelligent Operating Solutions (“IOS”), Precision Technologies (“PT”), and Advanced Healthcare Solutions (“AHS”) - include well-known brands with leading positions in their markets. Our businesses design, develop, manufacture, and service professional and engineered products, software, and services, building upon leading brand names, innovative technologies, and significant market positions. Our research and development, manufacturing, sales, distribution, service, and administrative facilities are located in more than 50 countries around the world. We prepared the unaudited consolidated condensed financial statements included herein in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) applicable for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations; however, we believe the disclosures are adequate to make the information presented not misleading. The unaudited consolidated condensed financial statements included herein should be read in conjunction with the audited annual consolidated financial statements as of and for the year ended December 31, 2024 and the footnotes (“Notes”) thereto included within our 2024 Annual Report on Form 10-K. Reclassification of certain prior year amounts in the changes in Accumulated Other Comprehensive Income (Loss) by component table below have been made to conform to current year presentation. In our opinion, the accompanying financial statements contain all adjustments, which consist of only normal, recurring accruals necessary to fairly present our financial position, results of operations, comprehensive income, stockholders’ equity, and cash flows for the periods presented. The results of operations for the three and six months ended June 27, 2025, are not necessarily indicative of the results for the full year. Precision Technologies Separation On June 28, 2025 (the “Distribution Date”), the Company completed the separation (the “Separation” or the “PT Separation”) of its former Precision Technologies segment by distributing to Fortive shareholders on a pro rata basis all of the issued and outstanding common stock of Ralliant Corporation (“Ralliant”), the entity incorporated to hold the PT businesses. Refer to Note 2 for additional information. Segment Realignment and Divestiture In June 2024, we divested and transferred ownership of Invetech, excluding the Motion Solution Business, to its management team (the “Invetech Divestiture”). As a result, in the three and six-months period ended June 28, 2024, we recorded a net realized loss of $25.6 million, which is identified as “Loss from divestiture” in the Consolidated Condensed Statements of Earnings. The Invetech Divestiture did not represent a strategic shift with a major effect on the Company’s operations and financial results, and therefore the divested businesses are not reported as discontinued operations. Accumulated Other Comprehensive Loss Foreign currency translation adjustments are generally not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries. As of June 27, 2025, our outstanding €500 million Euro-denominated senior unsecured notes due 2026, €700 million Euro-denominated senior unsecured notes due 2029, €275 million Euro-denominated term loan, and ¥14.4 billion Yen-denominated term loan were designated as net investment hedges of our investment in applicable foreign operations. We recognized after-tax foreign currency transaction losses of $103.3 million and gains of $13.0 million during the three-month periods ended June 27, 2025 and June 28, 2024, respectively, and losses of $160.3 million and gains of $21.4 million during the six-month periods ended June 27, 2025 and June 28, 2024, respectively, on the debt that was deferred in the foreign currency translation component of Accumulated Other Comprehensive Income (Loss) (“AOCI”) as an offset to the foreign currency translation adjustments on our investments in foreign subsidiaries. Any amounts deferred in AOCI will remain until the hedged investment is sold or substantially liquidated. We recorded no ineffectiveness from our net investment hedges during the three and six-month periods ended June 27, 2025 and June 28, 2024. On the Distribution Date of the Separation, certain investments in foreign subsidiaries were transferred to Ralliant, resulting in a partial de-designation of net investment hedges on the outstanding foreign currency denominated debt instruments noted above. Foreign exchange gains and losses on any non-designated portion of the debt will be recognized in earnings beginning in Q3 2025. The changes in AOCI by component are summarized below ($ in millions):
| Foreign currency translation adjustments |  | Pension & post-retirement plan benefit adjustments (a) |  | Total
For the Three Months Ended June 27, 2025: |  |  |  |  |
Balance, March 28, 2025 | $ | (361.3) |  |  | $ | (34.0) |  |  | $ | (395.3) |
Other comprehensive income (loss) before reclassifications: |  |  |  |  |
Increase (decrease): | 120.7 |  |  | — |  |  | 120.7 |
Income tax impact | (12.7) |  |  | — |  |  | (12.7) |
Other comprehensive income (loss) before reclassifications, net of income taxes | 108.0 |  |  | — |  |  | 108.0 |
Amounts reclassified from AOCI into income: |  |  |  |  |
Increase (decrease) | — |  | (d) | — |  | (c, d) | — |
Income tax impact | — |  |  | — |  | (d) | — |
Amounts reclassified from AOCI into income, net of income taxes | — |  |  | — |  |  | — |
Net current period other comprehensive income (loss), net of income taxes | 108.0 |  |  | — |  |  | 108.0 |
Balance, June 27, 2025 | $ | (253.3) |  |  | $ | (34.0) |  |  | $ | (287.3) |
For the Three Months Ended June 28, 2024: |  |  |  |  |
Balance, March 29, 2024 | $ | (368.2) |  |  | $ | (34.3) |  |  | $ | (402.5) |
Other comprehensive income (loss) before reclassifications: |  |  |  |  |
Increase (decrease): | (33.1) |  |  | — |  |  | (33.1) |
Income tax impact | 5.0 |  |  | — |  |  | 5.0 |
Other comprehensive income (loss) before reclassifications, net of income taxes | (28.1) |  |  | — |  |  | (28.1) |
Amounts reclassified from AOCI into income: |  |  |  |  |
Increase (decrease) | 7.0 |  | (b) | 0.1 |  |  | 7.1 |
Income tax impact | — |  |  | (0.1) |  |  | (0.1) |
Amounts reclassified from AOCI into income, net of income taxes | 7.0 |  |  | — |  |  | 7.0 |
Net current period other comprehensive income (loss), net of income taxes | (21.1) |  |  | — |  |  | (21.1) |
Balance, June 28, 2024 | $ | (389.3) |  |  | $ | (34.3) |  |  | $ | (423.6) |
(a) Includes balances relating to defined benefit plans, supplemental executive retirement plans, and other postretirement employee benefit plans.
(b) This amount relates to the cumulative translation adjustment recognized in earnings upon the Invetech Divestiture. Refer to Note 1 for additional details.
(c) This component of AOCI is included in the computation of net periodic pension cost (refer to Note 10 in our 2024 Annual Report on Form 10-K for additional details).
(d) Amount was rounded to zero.
| Foreign currency translation adjustments |  | Pension & post-retirement plan benefit adjustments (a) |  | Total
For the Six Months Ended June 27, 2025: |  |  |  |  |
Balance, December 31, 2024 | $ | (431.4) |  |  | $ | (34.0) |  |  | $ | (465.4) |
Other comprehensive income (loss) before reclassifications: |  |  |  |  |
Increase (decrease): | 198.7 |  |  | — |  |  | 198.7 |
Income tax impact | (20.6) |  |  | — |  |  | (20.6) |
Other comprehensive income (loss) before reclassifications, net of income taxes | 178.1 |  |  | — |  |  | 178.1 |
Amounts reclassified from AOCI into income: |  |  |  |  |
Increase (decrease) | — |  | (d) | — |  | (c, d) | — |
Income tax impact | — |  |  | — |  | (d) | — |
Amounts reclassified from AOCI into income, net of income taxes | — |  |  | — |  |  | — |
Net current period other comprehensive income (loss) | 178.1 |  |  | — |  |  | 178.1 |
Balance, June 27, 2025 | $ | (253.3) |  |  | $ | (34.0) |  |  | $ | (287.3) |
For the Six Months Ended June 28, 2024: |  |  |  |  |
Balance, December 31, 2023 | $ | (291.7) |  |  | $ | (34.4) |  |  | $ | (326.1) |
Other comprehensive income (loss) before reclassifications: |  |  |  |  |
Increase (decrease): | (113.2) |  |  | — |  |  | (113.2) |
Income tax impact | 8.6 |  |  | — |  |  | 8.6 |
Other comprehensive income (loss) before reclassifications, net of income taxes | (104.6) |  |  | — |  |  | (104.6) |
Amounts reclassified from AOCI into income: |  |  |  |  |
Increase (decrease) | 7.0 |  | (b) | 0.2 |  | (c) | 7.2 |
Income tax impact | — |  |  | (0.1) |  |  | (0.1) |
Amounts reclassified from AOCI into income, net of income taxes | 7.0 |  |  | 0.1 |  |  | 7.1 |
Net current period other comprehensive income (loss) | (97.6) |  |  | 0.1 |  |  | (97.5) |
Balance, June 28, 2024 | $ | (389.3) |  |  | $ | (34.3) |  |  | $ | (423.6) |
(a) Includes balances relating to defined benefit plans, supplemental executive retirement plans, and other postretirement employee benefit plans.
(b) This amount relates to the cumulative translation adjustment recognized in earnings upon the Invetech Divestiture. Refer to Note 1 for additional details.
(c) This component of AOCI is included in the computation of net periodic pension cost (refer to Note 10 in our 2024 Annual Report on Form 10-K for additional details).
(d) Amount was rounded to zero.
Allowance for Doubtful Accounts All trade accounts and unbilled receivables are recorded in the Consolidated Condensed Balance Sheets adjusted for any write-offs and net of allowances for credit losses. The allowances for credit losses represent management’s best estimate of the credit losses expected from our unbilled and trade accounts receivable portfolios over the life of the underlying assets. Additions to the allowances are charged to current period earnings, amounts determined to be uncollectible are charged directly against the allowances, while amounts recovered on previously written-off accounts increase the allowances. During the three and six-month periods ending June 27, 2025 and June 28, 2024, the activity was immaterial. Property Sale On March 14, 2024, we sold land and certain office buildings in our PT segment for $90 million, for which we received $20 million in cash proceeds and a $70 million promissory note secured by a letter of credit, with principal received in August and November 2024. The promissory note was recorded within Prepaid expenses and other current assets. During the six-month period ended June 28, 2024, we recorded a gain on sale of property of $63.1 million in the Consolidated Condensed Statements of Earnings. Concurrently, using a portion of the proceeds from the property sale, we pledged a charitable contribution of $20 million to the Fortive Foundation (the “Foundation”), which had no donor imposed conditions or restrictions. The Foundation, a not-for-profit entity established to expand our philanthropic efforts, is a related party due to certain Fortive executives serving as members of the entity’s board of directors. The charitable contribution was recorded within the “Other non-operating expense, net” line in the Consolidated Condensed Statements of Earnings. Restructuring In the fourth quarter of 2024, we initiated a discrete restructuring plan that is expected to be completed by December 31, 2025. The nature of the plan initiated in 2024 was related to the Separation and consisted primarily of targeted workforce reductions to realign cost structures. During the three and six-month periods ended June 27, 2025, we incurred charges of $8 million and $12 million, respectively. Accrued restructuring costs were $8 million as of June 27, 2025 and were $13 million as of December 31, 2024, and are recorded within Accrued expenses and other current liabilities in the Consolidated Condensed Balance Sheets. Recently Issued Accounting Standard In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures, which amends certain disclosure requirements related to income taxes on an annual basis. This standard is effective for fiscal year ending December 31, 2025. This standard should be applied on a prospective basis, with retrospective application permitted. The adoption of the standard will not impact our consolidated financial statements; however, we are currently evaluating the impact of the new disclosure requirements on the notes to the financial statements. We will update the applicable annual disclosures to align with the new standard. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) — Disaggregation of Income Statement Expenses, which amends the disclosure requirements related to certain costs and expenses on an interim and annual basis. This standard is effective for fiscal year ending December 31, 2027, and interim periods within fiscal year ending December 31, 2028. This standard should be applied either on a prospective basis or retrospective basis. The adoption of the standard will not impact our combined financial statements; however, we are currently evaluating the impact of the new disclosure requirements on the notes to the financial statements. Upon adoption, we will update the applicable interim and annual disclosures to align with the new standard.

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