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RELATED-PARTY TRANSACTIONS | 12 Months Ended
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Dec. 31, 2025
Related Party Transactions [Abstract] |
RELATED-PARTY TRANSACTIONS | NOTE 18. RELATED-PARTY TRANSACTIONS Related Party Agreements In connection with the Separation, on June 27, 2025, Fortive and Ralliant entered into a separation and distribution agreement with Fortive (the Separation and Distribution Agreement”) as well as various other related agreements (collectively the “Agreements”) that govern the Separation and the relationships between Fortive and Ralliant going forward, including the Employee Matters Agreement, the Tax Matters Agreement, the Transition Services Agreement, the Intellectual Property Matters Agreement, the FBS License Agreement, and the Fort Solutions License Agreement. Each agreement is defined below in its respective section. The Agreements provide for the allocation of assets, employees, liabilities, and obligations (including investments, property, employee benefits, and tax-related assets and liabilities) between Fortive and Ralliant attributable to periods prior to, at, and after the Separation and govern certain relationships between Fortive and Ralliant after the Separation. Separation and Distribution Agreement Ralliant entered into the Separation and Distribution Agreement with Fortive immediately prior to the distribution of its common stock to Fortive shareholders. The Separation and Distribution Agreement set forth the agreements with Fortive regarding the principal actions to be taken in connection with the Separation. It also sets forth other agreements that govern certain aspects of Ralliant’s relationship with Fortive following the Separation. Pursuant to the terms of the Separation and Distribution Agreement, the Company was subject to cash adjustment provisions, with payment of such adjustments to be made within five business days of the determination of the applicable final cash balance. Pursuant to the adjustment provisions, Ralliant’s aggregate cash balance at the time of the Separation, excluding any cash in certain restricted jurisdictions, was determined to have been greater than the reference cash balance of $150 million, and therefore, Ralliant was obligated to pay Fortive the excess. Subsequent to the Separation, Fortive notified Ralliant the aggregate cash balance exceeded such reference cash balance by approximately $41 million and Ralliant paid Fortive in accordance with the terms of the Separation and Distribution Agreement in the year ended December 31, 2025. The offset to the cash reimbursement was a reduction to Additional paid-in capital resulting from the cash settlement with the Former Parent. Employee Matters Agreement Ralliant and Fortive entered into an employee matters agreement that governs Ralliant’s and Fortive’s compensation and employee benefit obligations with respect to the employees and other service providers of each company, and generally will allocate liabilities and responsibilities relating to employment matters, employee compensation, and benefit plans and programs (the “Employee Matters Agreement”). The Employee Matters Agreement provided that each Fortive equity award held by Ralliant employees that was outstanding immediately prior to the completion of the distribution, would be assumed by Ralliant and converted into a Ralliant equity award denominated in shares of Ralliant common stock with a comparable value, based on an equity award adjustment ratio to be adopted by Fortive for purposes of making equitable adjustments to the Fortive equity awards held by Ralliant employees. The Employee Matters Agreement provided that, following the completion of the distribution, Ralliant employees generally will no longer participate in benefit plans sponsored or maintained by Fortive and will commence participation in Ralliant benefit plans, which are generally similar to the existing Fortive benefit plans. The Employee Matters Agreement also set forth the general principles relating to employee matters, including with respect to the assignment and transfer of employees, the assumption and retention of liabilities and related assets, workers’ compensation, payroll taxes, regulatory filings, leaves of absence, the provision of comparable benefits, employee service credit, the sharing of employee information, and the duplication or acceleration of benefits. Tax Matters Agreement In connection with the Separation, Ralliant and Fortive entered into a tax matters agreement that governs the parties’ respective rights, responsibilities, and obligations with respect to taxes, including responsibility for tax liabilities, entitlement to tax refunds and other tax benefits, allocation of tax attributes, preparation and filing of tax returns, control of audits and other tax proceedings, and other matters relating to taxes (the “Tax Matters Agreement”). In general, and subject to certain exceptions (including with respect to certain transaction taxes triggered by the separation), under the Tax Matters Agreement, Ralliant will be responsible for any U.S. federal, state, local, or foreign taxes (and any related interest, penalties, or audit adjustments) imposed with respect to tax returns that include only Ralliant and/or any of Ralliant’s subsidiaries. Ralliant will generally be responsible for preparing and filing any such tax returns, and will generally have the authority to control tax contests with respect thereto. Refer to Note 13 to the consolidated and combined financial statements included in this Annual Report for information about federal, state, and foreign tax filings and examinations by domestic and international taxing authorities under the Tax Matters Agreement. In addition, the Tax Matters Agreement imposes certain restrictions on Ralliant and its subsidiaries designed to preserve the tax-free status of the distribution and certain related transactions, as well as the intended tax treatment of certain transactions entered into pursuant to the internal restructuring. Ralliant (and its subsidiaries) will be barred from taking any action, or failing to take any action, if such action or failure to act would adversely affect, or could reasonably be expected to adversely affect, the tax-free status or other intended tax treatment of these transactions. In addition, for the two-year period following the distribution, Ralliant (and its subsidiaries) will be subject to specific restrictions on its ability to enter into certain capital-raising, strategic, or other corporate transactions, including restrictions on: (i) mergers and other acquisition or sale transactions involving Ralliant’s stock, (ii) any corporate transaction which would cause the Company to undergo a 50% or greater change in its stock ownership (as determined for purposes of Section 355(e) of the Internal Revenue Code (“the Code”)), (iii) redemptions or repurchases of its stock, (iv) liquidation transactions, (v) discontinuing the active conduct of its trade or business, (vi) issuance or sale of its stock or other securities (including securities convertible into its stock, but excluding certain compensatory arrangements), (vii) sales of assets outside of the ordinary course of business, and (viii) amendments to its certificate of incorporation (or other organizational documents) or other actions affecting the voting rights of the Company’s common stock. The Tax Matters Agreement provides special rules that allocate tax liabilities in the event the distribution, together with certain related transactions, as well as any transaction entered into pursuant to the internal reorganization that is intended to be tax-free for applicable tax law purposes, is not tax-free (or otherwise fails to qualify for its intended tax treatment). In general, under the Tax Matters Agreement, each party is expected to be responsible for any taxes, whether imposed on Ralliant or Fortive, that arise from (1) the failure of the distribution, together with certain related transactions, to qualify for tax-free treatment under the Code or (2) the failure of certain related transactions to qualify for their intended tax treatment, in each case, to the extent that the failure to so qualify is attributable to post-distribution actions by such party or transactions with respect to such party’s stock, or to a breach of certain representations or covenants made by that party in the Tax Matters Agreement or in any documents relating to the IRS ruling or opinions of tax advisors obtained in connection with the distribution, certain related transactions or the internal restructuring. Pursuant to the terms of the Tax Matters Agreement, Ralliant is required to reimburse Fortive or pay taxing authorities directly for an amount contractually agreed with Fortive of approximately $51.0 million. Of the approximately $51.0 million of tax transaction costs, $50.0 million was paid during 2025 and $1.1 million was accrued as a payable due to Fortive as of December 31, 2025. The total tax transaction costs of $51.0 million were recognized in the third quarter and were recorded as an offset to additional paid-in capital as the items represent a settlement with the Former Parent in accordance with the Tax Matters Agreement. Transition Services Agreement Ralliant and Fortive have entered into a transition services agreement that became effective upon the distribution, pursuant to which Fortive and its subsidiaries and Ralliant and its subsidiaries provide to each other, for an interim, transitional period, various services in order to help ensure an orderly transition following the separation and the distribution (the “Transition Services Agreement”). The cost of these services is negotiated between Ralliant and Fortive as set forth in the Transition Services Agreement. The Transition Services Agreement terminates on the expiration of the term of the last service provided under it, unless earlier terminated by either party under certain circumstances, including, but not limited to, in the event of any uncured material breach by the other party or its applicable affiliates. If no term period is provided for a specified service, then such service is to terminate on the second anniversary of the effective date of the Transition Services Agreement. The recipient of a particular service generally can terminate that service prior to the scheduled expiration date, subject to a minimum notice period equal to 30 days. Ralliant does not expect the net costs associated with the Transition Services Agreement to be materially different than the historical costs that have been allocated to Ralliant related to these same services prior to the Separation. Per the Transition Services Agreement, Fortive and the Company provide to each other certain specified services on a temporary basis, including various information technology, financial, and administrative services. The cost of these services are negotiated between the Company and Fortive as set forth in the Transition Services Agreement and were immaterial during the year ended December 31, 2025. Intellectual Property Matters Agreement Ralliant and Fortive entered into an intellectual property matters agreement pursuant to which Fortive granted to Ralliant a non-exclusive, royalty-free, fully paid-up, worldwide, irrevocable, sublicensable (subject to the restrictions below) license to use certain intellectual property rights retained by Fortive (the “Intellectual Property Matters Agreement”). Ralliant will be able to sublicense its rights in connection with activities relating to the Company and its affiliates’ business but not for independent use by third parties. Ralliant will also grant back to Fortive a non-exclusive, royalty-free, fully paid-up, worldwide, irrevocable, sublicensable (subject to the restrictions below) license to continue to use certain intellectual property rights owned by or transferred to Ralliant. Fortive will be able to sublicense its rights in connection with activities relating to Fortive’s and its affiliates’ retained business but not for independent use by third parties. This license-back will permit Fortive to continue to use certain of Ralliant’s intellectual property rights in the conduct of its remaining businesses. Ralliant believes that the license-back will have little impact on its businesses because Fortive’s use of intellectual property rights is generally limited to products and services that are not part of the Company’s businesses. The Intellectual Property Matters Agreement is intended to provide freedom to operate in the event that any of Fortive’s retained trade secrets (excluding Fortive Business System (“FBS”), copyrights, or patented technology is used in any of Ralliant’s businesses, and, as such, applies to all portions of Ralliant’s businesses. However, management believes there may be relatively little use of such retained trade secrets, copyrights, or patented technology in Ralliant’s businesses, and as a result, they do not believe that the Intellectual Property Matters Agreement has a material impact on any of Ralliant’s businesses. FBS License Agreement Ralliant and Fortive entered into a license agreement (the ”FBS License Agreement”) pursuant to which Fortive granted Ralliant a non-exclusive, royalty-free, fully paid-up, worldwide, sublicensable (subject to the restrictions below) license to use the FBS solely in support of Ralliant’s business. Ralliant will be able to sublicense such license to direct and indirect, wholly-owned subsidiaries (but only as long as such entities remain direct and indirect, wholly-owned subsidiaries), and to third parties to support its own business. In addition, in the unlikely event that either Ralliant or Fortive patents any invention claiming an improvement on FBS within the first two years of the term of the FBS License Agreement, the party who acquires that patent will license the other party under the same terms described above, but with no obligation to disclose any such improvements. Ralliant anticipates that FBS, which was rebranded as Ralliant Business System (“RBS”) as used by Ralliant following the distribution, will be used by its various businesses and functions to continuously improve performance. Fort Solutions License Agreement Ralliant and Fortive entered into a license agreement pursuant to which Fortive granted Ralliant a non-exclusive, royalty-free, fully paid-up, worldwide, license to use certain software modules, algorithms, processes, tools, feedback, and reports developed through the use of Fortive’s Fort Technology Platform (“Solutions”) used in Ralliant’s business as of the distribution date, solely in support of Ralliant’s business (the “Fort Solutions License Agreement”). Ralliant will be able to sublicense such license to direct and indirect, wholly-owned subsidiaries (but only as long as such entities remain direct and indirect, wholly-owned subsidiaries), and to third parties to support its own business. To the extent the Company provides Fortive with any feedback with respect to the Solutions the Company is licensed, Ralliant will grant Fortive a non-exclusive, royalty-free, fully paid-up, worldwide, license to use such feedback in Fortive’s own business. In addition, in the unlikely event that either Ralliant or Fortive patents any invention claiming an improvement on the Solutions that are licensed to the Company within the first two years of the term of the Fort Solutions License Agreement, the party who acquires that patent will license the other party under the same terms described above, but with no obligation to disclose any such improvements. Allocations of Expenses Prior to the Separation, Ralliant operated as part of Fortive and not as a standalone company. Certain shared costs were allocated to Ralliant by Fortive in the periods prior to the Separation, and were reflected as expenses in the accompanying consolidated and combined financial statements. Management considered the allocation methodologies used to be reasonable and appropriate reflections of the related expenses attributable to Ralliant for purposes of the carved-out financial statements; however, the expenses reflected in the accompanying consolidated and combined financial statements may not be indicative of the actual expenses that would have been incurred during the periods presented if Ralliant had operated as a separate standalone entity or the expenses that will be incurred in the future by Ralliant. Corporate Expenses Certain corporate overhead and other shared expenses incurred by Fortive and its subsidiaries have been allocated to Ralliant and are reflected in the accompanying Consolidated and Combined Statements of (Loss) Earnings. These amounts include, but are not limited to, items such as general management and executive oversight, costs to support Fortive information technology infrastructure, facilities, compliance, human resources, marketing, and legal functions and financial management and transaction processing, including public company reporting, consolidated tax filings and tax planning, Fortive benefit plan administration, risk management and consolidated treasury services, certain employee benefits and incentives, and stock-based compensation administration. These costs were allocated using a methodology that management believes is reasonable for the item being allocated. Allocation methodologies include Ralliant’s relative share of revenues, headcount, or functional spend as a percentage of the total. Insurance Programs Administered by Former Parent In addition to the corporate allocations noted above, Ralliant was allocated expenses related to certain insurance programs Fortive administered on behalf of Ralliant, including automobile liability, workers’ compensation, general liability, product liability, director’s and officer’s liability, cargo, and property insurance. These amounts were allocated using various methodologies, as described below. Included within the insurance cost allocation were amounts related to programs for which Fortive was self-insured up to a certain amount. For the self-insured component, costs were allocated to Ralliant based on incurred claims of Ralliant. Fortive has premium-based policies that cover amounts in excess of the self-insured retentions. Ralliant was allocated a portion of the total insurance cost incurred by Fortive based on its pro-rata portion of Fortive’s total underlying exposure base. An estimated liability relating to Ralliant’s known and incurred but not reported claims has been allocated to Ralliant and reflected in the accompanying Consolidated and Combined Balance Sheets. Medical Insurance Programs Administered by Former Parent In addition to the corporate allocations noted above, Ralliant was allocated expenses related to the medical insurance programs administered by Fortive on behalf of Ralliant. These amounts were allocated using actual medical claims incurred during the period for the employees attributable to Ralliant. Deferred Compensation Program Administered by Former Parent Certain employees of Ralliant participated in Fortive’s nonqualified deferred compensation programs, which permitted officers, directors, and certain management employees to defer a portion of their compensation, on a pretax basis, until their termination of employment. Participants may choose among alternative earnings rates for the amounts they defer, which are primarily based on investment options within Fortive’s 401(k) program (except that the earnings rates for amounts contributed unilaterally by Ralliant are entirely based on changes in the value of Fortive’s common stock). All amounts deferred under this plan were unfunded, unsecured obligations of Ralliant. The amounts of related party expenses allocated to Ralliant from Fortive and its non-Ralliant subsidiaries for the years ended December 31 were as follows:
| 2025 |  | 2024 |  | 2023
Allocated corporate expenses | $ | 20.3 |  |  | $ | 40.8 |  |  | $ | 37.9 |
Directly attributable expenses: |  |  |  |  |
Insurance programs expenses | 3.6 |  |  | 6.5 |  |  | 5.7 |
Medical insurance programs expenses | 30.5 |  | 62.5 |  |  | 57.0 |
Deferred compensation program expenses | 1.3 |  |  | 1.2 |  |  | 0.9 |
Total related party expenses | $ | 55.7 |  |  | $ | 111.0 |  |  | $ | 101.5 |
Revenue and Other Transactions Entered into in the Ordinary Course of Business Prior to the Separation, Ralliant operated as part of Fortive and not as a standalone company and certain of Ralliant’s revenue arrangements related to contracts entered into in the ordinary course of business with Fortive and its affiliates. Following the Separation, Ralliant continues to enter into revenue arrangements in the ordinary course of business with Fortive and its affiliates, although certain agreements were entered into or terminated as a result of the Separation. Ralliant’s sales to and purchases from Fortive were not material during the years ended December 31, 2025, 2024, and 2023.

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