Financial Analysis

ACQUISITIONS The Company continually evaluates potential acquisitions that either strategically fit with the Companys existing portfolio or expand the Companys portfolio into a new and attractive business area. The Company has completed a number of acquisitions that have been accounted for as purchases and have resulted in the recognition of goodwill in the Companys financial statements. This goodwill arises because the purchase prices for these businesses exceed the fair value of acquired identifiable net assets due to the purchase prices reflecting a number of factors including the future earnings and cash flow potential of these businesses, the multiple to earnings, cash flow and other factors at which similar businesses have been purchased by other acquirers, the competitive nature of the processes by which the Company acquired the businesses, the avoidance of the time and costs which would be required (and the associated risks that would be encountered) to enhance the Companys existing product offerings to key target markets and enter into new and profitable businesses and the complementary strategic fit and resulting synergies these businesses bring to existing operations. The Company makes an initial allocation of the purchase price at the date of acquisition based upon its understanding of the fair value of the acquired assets and assumed liabilities. The Company obtains the information used for the purchase price allocation during due diligence and through other sour …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

COMMITMENTS AND CONTINGENCIES The Company reviews the adequacy of its legal reserves on a quarterly basis and establishes reserves for loss contingencies that are both probable and reasonably estimable. For a further description of the Companys litigation and contingencies, refer to Note 16 of the Companys financial statements as of and for the year ended December 31, 2025 included within the 2025 Annual Report on Form 10-K. The Company generally accrues estimated warranty costs at the time of sale. In general, manufactured products are warranted against defects in material and workmanship when properly used for their intended purpose, installed correctly and appropriately maintained. Warranty periods depend on the nature of the product and range from the date of such sale up to twenty years. The amount of the accrued warranty liability is determined based on historical information such as past experience, product failure rates or number of units repaired, estimated cost of material and labor and in certain instances estimated property damage. As of July 3, 2026 and December 31, 2025, the Company had accrued warranty liabilities of $29 million and $30 million as of the end of each period, respectively. …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"FINANCING As of July 3, 2026, the Company was in compliance with all of its debt covenants. The components of the Companys debt were as follows: ($ in millions) Outstanding Amount Description and Aggregate Principal Amount July 3, 2026 December 31, 2025 5.50% senior unsecured notes due 9/18/2026 ($700 million) (the ""2026 Notes"") $ 700 $ 700 5.35% senior unsecured notes due 9/18/2028 ($700 million) (the ""2028 Notes"") 698 696 4.15% senior unsecured notes due 9/19/2031 (500 million) (the ""2031 Notes"") 569 584 4.85% senior unsecured notes due 1/15/2032 ($725 million) (the 2032 Notes) 719 5.45% senior unsecured notes due 9/18/2033 ($700 million) (the ""2033 Notes"") 693 693 Total debt 3,379 2,673 Less: current portion of long-term debt (700) (700) Long-term debt $ 2,679 $ 1,973 Unamortized debt discounts and debt issuance costs totaled $18 million and $14 million as of July 3, 2026 and December 31, 2025, respectively. Debt discounts and issuance costs are presented as a reduction of debt in the Consolidated Condensed Balance Sheets and are amortized as a component of interest expense over the term of the related debt. Refer to Note 12 of the 2025 Annual Report on Form 10-K for a description of the Companys debt financing. There were no amounts outstanding under the credit facility or commercial paper program as of July 3, 2026. Senior Unsecured Notes On June 1, 2026, the Company completed an underwritten offering of $725 million aggregate principal amount of senior unsecure …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following tables present the Companys revenues disaggregated by geographical region and revenue type for the three and six-month periods ended July 3, 2026 and July 4, 2025. Sales taxes and other usage-based taxes collected from customers are excluded from revenue. ($ in millions) Water Quality Product Quality & Innovation Total For the Three-Month Period Ended July 3, 2026: Geographical region: North America (a) $ 522 $ 193 $ 715 Western Europe 171 167 338 Other developed markets 19 14 33 High-growth markets (b) 196 192 388 Total $ 908 $ 566 $ 1,474 Revenue type: Recurring $ 541 $ 374 $ 915 Nonrecurring 367 192 559 Total $ 908 $ 566 $ 1,474 For the Three-Month Period Ended July 4, 2025: Geographical region: North America (a) $ 471 $ 184 $ 655 Western Europe 149 161 310 Other developed markets 16 13 29 High-growth markets (b) 189 188 377 Total $ 825 $ 546 $ 1,371 Revenue type: Recurring $ 491 $ 350 $ 841 Nonrecurring 334 196 530 Total $ 825 $ 546 $ 1,371 ($ in millions) Water Quality Product Quality & Innovation Total For the Six-Month Period Ended July 3, 2026: Geographical region: North America (a) $ 1,028 $ 380 $ 1,408 Western Europe 341 336 677 Other developed markets 36 27 63 High-growth markets (b) 377 371 748 Total $ 1,782 $ 1,114 $ 2,896 Revenue type: Recurring $ 1,068 $ 734 $ 1,802 Nonrecurring 714 380 1,094 Total $ 1,782 $ 1,114 $ 2,896 For the Six-Month Period Ended July 4, 2025: Geographical region: North America (a) $ 940 $ 370 $ 1,310 Western Europe …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

FAIR VALUE MEASUREMENTS Accounting standards define fair value based on an exit price model, establish a framework for measuring fair value for assets and liabilities required to be carried at fair value and provide for certain disclosures related to the valuation methods used within the valuation hierarchy as established within the accounting standards. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, or other observable characteristics for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from, or corroborated by, observable market data through correlation. Level 3 inputs are unobservable inputs based on the Companys assumptions. A financial assets or liabilitys classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety. A summary of financial assets and liabilities that are measured at fair value on a recurring basis were as follows: ($ in millions) Quoted Prices in Active Market (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total July 3, 2026 Assets: Cross-currency swap derivativ …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

GOODWILL AND OTHER INTANGIBLE ASSETS The following is a rollforward of the Companys goodwill: ($ in millions) Balance, December 31, 2025 $ 2,838 Attributable to 2026 acquisitions 356 Foreign currency translation and other (27) Balance, July 3, 2026 $ 3,167 The carrying value of goodwill by segment is summarized as follows: ($ in millions) July 3, 2026 December 31, 2025 Water Quality $ 1,548 $ 1,342 Product Quality & Innovation 1,619 1,496 Total $ 3,167 $ 2,838 The Company has not identified any goodwill impairment indicators in the three and six-month periods ended July 3, 2026. The Company reviews identified intangible assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The Company has not identified any impairment triggers in the three and six-month periods ended July 3, 2026. …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

INCOME TAXES The following table summarizes the Companys effective tax rate: Three-Month Period Ended Six-Month Period Ended July 3, 2026 July 4, 2025 July 3, 2026 July 4, 2025 Effective tax rate 16.6 % 22.1 % 18.9 % 22.1 % The Company operates globally, including in certain jurisdictions with higher statutory tax rates than the United States (U.S.). Therefore, based on earnings mix, the impact of operating in such jurisdictions may contribute to a higher effective tax rate compared to the U.S. federal statutory tax rate. The effective tax rate for the three-month period ended July 3, 2026 differs from the U.S. federal statutory rate of 21% principally due to the geographic mix of earnings described above, the favorable impact of tax law changes under the One Big Beautiful Bill Act (OBBBA), a net discrete benefit of $12 million related primarily to the impact of restructuring costs and amended return filings. The net discrete benefit decreased the effective tax rate by 2.9% for the three-month period ended July 3, 2026. The effective tax rate for the six-month period ended July 3, 2026 differs from the U.S. federal statutory rate of 21% principally due to the geographic mix of earnings described above, the favorable impact of tax law changes under the One Big Beautiful Bill Act (OBBBA), a net discrete benefit of $10 million related primarily to the impact of restructuring costs and amended return filings. The net discrete benefit decreased the effective tax rate by 0.6% for t …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Recent Accounting Pronouncements In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03, Income Statement reporting Comprehensive Income Expense Disaggregation Disclosures . The ASU requires entities to provide disaggregated disclosures of certain categories of expenses on an annual and interim basis including purchases of inventory, employee compensation, depreciation and intangible asset amortization for each income statement line item that contains those expenses. This ASU is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027 with early adoption permitted. The adoption of the standard will not impact the Companys consolidated financial statements. Upon adoption, for the year ending December 31, 2027, the Company will update the applicable interim and annual disclosures to align with the new standard. …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

RESTRUCTURING 2026 Cost Optimization Program In April 2026, the Company announced a restructuring program (the 2026 Cost Optimization Program) to simplify business processes and streamline our organization, optimize our cost structure, and strengthen our competitive positioning to better serve our customers. The plan consists of (i) workforce reductions across our business and functions, (ii) site consolidations, and (iii) functional transformation initiatives. The 2026 Cost Optimization Program will impact corporate functions and both business segments and is expected to be substantially completed by the end of 2028. The Company expects to incur total restructuring charges in connection with the 2026 Cost Optimization Program ranging from approximately $85 million to $105 million, with $20 million to $27 million expected to be incurred by the Water Quality segment and $60 million to $68 million expected to be incurred by the Product Quality & Innovation segment. The following table presents the components of restructuring and transformation-related expenses which are included in the Cost of sales and Selling, general and administrative expenses line items in the Consolidated Condensed Statements of Earnings: ($ in millions) Three-Month Period Ended Six-Month Period Ended By component: July 3, 2026 July 3, 2026 Severance and related benefit costs: Water Quality $ 4 $ 4 Product Quality & Innovation 22 22 Other 3 3 Total restructuring expense $ 29 $ 29 The following tab …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

REVENUE The following tables present the Companys revenues disaggregated by geographical region and revenue type for the three and six-month periods ended July 3, 2026 and July 4, 2025. Sales taxes and other usage-based taxes collected from customers are excluded from revenue. ($ in millions) Water Quality Product Quality & Innovation Total For the Three-Month Period Ended July 3, 2026: Geographical region: North America (a) $ 522 $ 193 $ 715 Western Europe 171 167 338 Other developed markets 19 14 33 High-growth markets (b) 196 192 388 Total $ 908 $ 566 $ 1,474 Revenue type: Recurring $ 541 $ 374 $ 915 Nonrecurring 367 192 559 Total $ 908 $ 566 $ 1,474 For the Three-Month Period Ended July 4, 2025: Geographical region: North America (a) $ 471 $ 184 $ 655 Western Europe 149 161 310 Other developed markets 16 13 29 High-growth markets (b) 189 188 377 Total $ 825 $ 546 $ 1,371 Revenue type: Recurring $ 491 $ 350 $ 841 Nonrecurring 334 196 530 Total $ 825 $ 546 $ 1,371 ($ in millions) Water Quality Product Quality & Innovation Total For the Six-Month Period Ended July 3, 2026: Geographical region: North America (a) $ 1,028 $ 380 $ 1,408 Western Europe 341 336 677 Other developed markets 36 27 63 High-growth markets (b) 377 371 748 Total $ 1,782 $ 1,114 $ 2,896 Revenue type: Recurring $ 1,068 $ 734 $ 1,802 Nonrecurring 714 380 1,094 Total $ 1,782 $ 1,114 $ 2,896 For the Six-Month Period Ended July 4, 2025: Geographical region: North America (a) $ 940 $ 370 $ 1,310 Western …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

SEGMENT INFORMATION The Company operates and reports its results in two separate business segments consisting of the Water Quality and Product Quality & Innovation segments. The Companys Water Quality segment provides proprietary precision instrumentation, consumables, software, services and advanced water treatment technologies to help measure, analyze and treat the worlds water in municipal, industrial, commercial, residential, research and natural resource applications. The Companys Product Quality & Innovation segment provides equipment, consumables, software and services for various marking and coding, traceability, printing, packaging design and quality management, packaging converting and color and appearance management applications for consumer-packaged goods and industrial products. Resources are allocated and performance is assessed by the President & Chief Executive Officer (CEO), whom the Company has determined to be the Chief Operating Decision Maker (CODM). The CODM evaluates the performance of its segments and allocates resources to them based on operating profit. The CODM also compares actual results to expectations in assessing performance of the segments. Operating profit represents total revenues less operating expenses, excluding nonoperating income and expense and income taxes. Operating profit amounts in the Other segment consist of unallocated corporate costs and other costs not considered part of managements evaluation of reportable segment …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing