UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________________ FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-37654 ____________ FORTIVE CORPORATION (Exact name of registrant as specified in its c ...

FORWARD LOOKING STATEMENTS & NON-GAAP FINANCIAL | --- | --- | |-------------------------------------------------------------------------------------------|-------| | | | | Barclays Industrial Select Conference FEBRUARY 22 ND , 2023 | | | Jim Lico, President & CEO, Fortive Chuck McLaughlin, Senior Vice President & CFO, Fortive | | MEASURES This presentation may contain references to financial measures not presented in accordance with generally accepted accounting principles ("GAAP"). We have not reconciled f ...

Financial Data and Key Metrics Changes - Fortive reported a 14% core revenue growth in Q4 2022, with adjusted gross and operating margins expanding by 50 and 110 basis points respectively [4][34] - Adjusted earnings per share grew by 11% to $0.88, while free cash flow increased by 62% to $428 million in the quarter, totaling $1.2 billion for the year [4][35][62] - The company achieved approximately 21% free cash flow margin, underscoring its ability to generate cash flow from a higher base [21][62] Business Line Data and Key Metrics Changes - Intelligent Operating Solutions (IOS) experienced a 13% core revenue growth, with double-digit growth across all regions [37] - Precision Technologies (PT) saw a 20% increase in core revenues, driven by high teens growth in North America and over 20% growth in Western Europe and China [10] - Advanced Healthcare Solutions (AHS) revenues increased by 5%, with mid-single-digit growth in North America but declines in Western Europe and China [11][12] Market Data and Key Metrics Changes - North America revenue grew low double-digits, while Western Europe saw mid-teens growth, driven by hardware products and favorable pricing [33] - Asia revenue increased high-teens, with low 20% growth in China, despite a significant drop in elective procedures impacting AHS [49] - The company reported strong demand in EMEA, with SaaS revenue growth in the region reaching double digits [8] Company Strategy and Development Direction - Fortive's strategy focuses on continuous improvement through the Fortive Business System, which has contributed to record gross margins and free cash flow generation [5][13] - The company is transitioning to a more recurring revenue model, with approximately 40% of sales expected to come from recurring SaaS revenue [51][118] - Fortive plans to leverage its strong backlog and pricing actions to drive growth and margin expansion in 2023 [36][51] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing supply chain and inflationary challenges but expressed confidence in the company's ability to navigate these issues [5][19] - The outlook for 2023 includes core revenue growth guidance of 3% to 5.5%, with expectations for margin expansion across strategic segments [54][62] - Management highlighted the importance of productivity initiatives and pricing actions to counteract macroeconomic headwinds [51][134] Other Important Information - Fortive achieved approximately 1,000 basis points of gross margin expansion since 2016, translating into higher operating margins [21] - The company is committed to sustainability, having set ambitious goals for greenhouse gas emissions reduction by 2029 [31][47] - Fortive's diverse leadership team and commitment to inclusion and diversity are seen as critical components of its corporate culture [30] Q&A Session Summary Question: Can you discuss the margin expansion for IOS? - Management indicated that margin expansion will be driven by productivity initiatives and normal revenue growth [88] Question: What is the expected pace of backlog conversion? - Management expects to work through about half of the excess backlog in 2023, depending on order rates and supply chain improvements [90][116] Question: How do you see the orders and revenue guidance for Tektronix? - Management noted that orders are expected to slow but emphasized that backlog will help mitigate the impact on revenue [99][100] Question: What is the outlook for discretionary procedures in China? - Management reported that January volumes were around 50% of prior year levels, with expectations for gradual improvement throughout the year [107] Question: What is the company's approach to potential acquisitions? - Management stated that they are open to strategic acquisitions but will maintain an investment-grade rating and be disciplined in their approach [111][134]

Financial Performance Highlights - Q4 2022 revenue reached $1,530 million[5], while full-year revenue amounted to $5,826 million[5] - Fortive achieved a 62% growth in free cash flow in Q4 and 28% for the full year 2022[6] - The company's adjusted earnings per share were $0.88 in Q4 and $3.15 for the full year[5] - Fortive delivered 14% core revenue growth in Q4 and 10% in FY22[100] Revenue Growth Components - Total revenue growth for Q4 2022 was 11.3% and 10.9% for the full year[82] - Acquisitions contributed 1.4% to revenue growth in Q4 and 3.9% for the full year[83] - Currency translation had a negative impact of approximately 4% in Q4[30] Segment Performance - Intelligent Operating Solutions (IOS) saw core revenue growth of 13.1% in Q4 and 12.0% for the full year[85] - Precision Technologies (PT) experienced core revenue growth of 20.4% in Q4 and 13.2% for the full year[63] - Advanced Healthcare Solutions (AHS) reported core revenue growth of 5.3% in Q4 and 2.1% for the full year[65] Margin and Profitability - The company's adjusted gross margin increased by 50 bps[15] - Adjusted operating profit margin increased by 110 bps in Q4[12] - Fortive anticipates a 75 bps increase in adjusted operating profit margin for FY 2023[24] 2023 Outlook - Fortive projects core growth of 3% to 5% for FY 2023[23] - The company estimates revenue between $5,950 million and $6,100 million for FY 2023[24] - Adjusted EPS is projected to be between $3.25 and $3.40 for FY 2023[24]

Financial Data and Key Metrics Changes - Fortive Corporation reported a 12% core revenue growth year-over-year, with adjusted gross and operating margins expanding by 80 and 160 basis points respectively [5][14] - Adjusted earnings per share grew by 20% to $0.79, and free cash flow increased by 22% [5][15] - The company anticipates a foreign exchange headwind of approximately $175 million on revenue and $0.11 on EPS for the year [6] Business Line Data and Key Metrics Changes - Intelligent Operating Solutions (IOS) saw a 14% revenue increase, with broad-based growth across regions [8] - Facilities and Asset Lifecycle segment, including Gordian and Accruent, experienced double-digit revenue growth, driven by strong software demand [9] - Precision Technologies reported a 19% core revenue growth, with double-digit growth across major regions [10] - Advanced Healthcare Solutions (AHS) had a total revenue increase of 3%, but core revenue declined by 1% due to supply chain constraints [11] Market Data and Key Metrics Changes - North America revenue grew low double digits, with mid-teens growth in software [14] - Western Europe revenue increased mid-teens, while Asia revenue rose in the low 20% range, with mid-20% growth in China [14] - The company noted that hardware product backlog is more than double what it was at the beginning of 2021 [6] Company Strategy and Development Direction - Fortive is focused on leveraging its portfolio to create long-term sustainable competitive advantages and drive profitable growth [5][7] - The company is preparing for various macroeconomic scenarios in 2023, including moderating hardware product orders growth [6] - Fortive's strategy emphasizes sustainability, with over 60% of its products and services aligned with the United Nations' sustainable development goals [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to outperform despite potential economic challenges, citing strong demand and backlog [19] - The company expects supply chain normalization but acknowledges that challenges may persist into 2023 [19] - Management anticipates mid-single-digit growth in the healthcare market for 2023, with improvements expected in hospital operations [50][51] Other Important Information - Fortive's balance sheet remains strong, with a $2 billion revolving credit facility extended to 2027 and a new $1 billion delayed draw term loan [17] - The company has nearly doubled its free cash flow over the last three years, demonstrating strong cash compounding power [20] Q&A Session Summary Question: Can you parse out how much of the hardware backlog reflects incremental demand versus supply chain inefficiencies? - Management indicated that a significant portion of the backlog is due to demand, particularly at Tektronix, while Fluke is seeing a reduction in backlog as lead times normalize [26] Question: Can you break out the year-over-year margin decline in Advanced Healthcare Solutions? - The decline was primarily due to a bad debt reserve at Invetech, along with FX and inflation impacts [29][30] Question: Is there an assumption about seasonality orders affecting the backlog? - Management confirmed that while orders are expected to slow in Q4, they do not anticipate negative orders, and backlog will still be managed effectively [34][47] Question: What is the outlook for healthcare growth in 2023? - Management expects mid-single-digit growth in the healthcare market for 2023, with improvements anticipated as supply chain issues ease [50][51] Question: How is the company positioned regarding potential acquisitions? - Management noted that the acquisition environment is becoming more attractive, with opportunities being evaluated across public and private markets [44][54] Question: What is driving the strong growth in the Gordian and Accruent businesses? - The growth is attributed to the successful integration of ServiceChannel and improvements in net dollar retention [68]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________________ FORM 10-Q ________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: September 30, 2022 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-37654 _____________________ ...

6 FORTIVE | --- | --- | --- | |---------------------|-------|-------| | | | | | | | | | | | | | | | | | | | | | Second Quarter 2022 | | | | | | | | Earnings Release | | | FORWARD LOOKING STATEMENTS & NON-GAAP FINANCIAL MEASURES Statements in this presentation that are not strictly historical, including statements regarding anticipated financial results, economic conditions, future prospects, impact of supply chain constraints, duration and impact of COVID-19 pandemic and the corresponding government mandate ...

Financial Data and Key Metrics Changes - The company achieved 9% core revenue growth, 190 basis points adjusted operating margin expansion, and 18% adjusted earnings per share growth in Q2 2022, exceeding guidance [5][10] - Total revenue grew by 11% year-over-year, with core growth of 9%, while acquisitions contributed 5 points to total growth [23] - Adjusted earnings per share increased 18% to $0.78, reflecting strong volume growth and lower share count [28] Business Line Data and Key Metrics Changes - Intelligent Operating Solutions (IOS) saw revenues up 16% with core revenue growth of 12%, driven by strong demand in North America and Western Europe [13] - Precision Technologies reported total revenue growth of 6% and core revenue growth of 9%, with significant demand in industrial and medical sectors [17] - Advanced Healthcare Solutions (AHS) experienced total revenue growth of 9% but core revenue growth of only 3%, impacted by COVID-related challenges in China [19] Market Data and Key Metrics Changes - North America core revenues increased by high single digits, while Western Europe revenues grew mid-teens, indicating strong performance across regions [24][25] - China revenues increased mid-teens despite lockdowns, with a 20% order growth as customers sought to replenish inventories [26] - The company noted strong double-digit revenue growth in high-growth markets [26] Company Strategy and Development Direction - The company is focused on enhancing its recurring revenue profile and diversifying its end markets, with healthcare now being the largest revenue source [11][12] - The Fortive Business System (FBS) is emphasized as a key differentiator, driving innovation and operational efficiency [21][39] - The company plans to continue prioritizing M&A as a primary driver of capital deployment while maintaining a strong balance sheet [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to navigate supply chain challenges and inflation, expecting continued core growth in the second half of the year [9][10] - The company raised its full-year outlook, anticipating core revenue growth of 8% to 9.5% and adjusted earnings per share in the range of $3.07 to $3.13 [29][30] - Management highlighted the importance of backlog and recurring revenue as buffers against potential economic slowdowns [91][92] Other Important Information - The company achieved a free cash flow of $276 million in Q2, reflecting a 98% conversion rate [28] - Sustainability initiatives were highlighted, including early achievement of greenhouse gas emissions reduction targets [36][37] Q&A Session Summary Question: Concerns about AHS segment pricing and growth - Management acknowledged challenges in pricing and volumes, particularly in China, but anticipated acceleration in core growth for AHS in the second half [46][47] Question: Capital deployment and share buybacks - Management indicated that M&A remains a priority, with opportunistic share buybacks occurring as needed [51][52] Question: M&A pipeline and market conditions - Management noted that while private equity remains active, the market is experiencing longer transaction times and higher prices [55][56] Question: Performance in Western Europe - Management attributed strong performance in Western Europe to backlog management and favorable market conditions [57][59] Question: Insights on Tektronix order strength - Management highlighted innovation and strong demand in Tektronix, with a book-to-bill ratio of 1.3 [76][77] Question: Free cash flow dynamics - Management explained that the second half typically sees stronger free cash flow due to seasonal factors and working capital relief [100]

(9) FORTIVE | --- | --- | --- | --- | |---------------------------|-------|-------|-------| | | | | | | | | | | | Wolfe Industrial Growth & | | | | | Technology Conference | | | | 2 FORWARD LOOKING STATEMENTS & NON-GAAP FINANCIAL MEASURES Statements in this presentation that are not strictly historical, including statements regarding anticipated financial results, economic conditions, future prospects, anticipated market opportunities, business and acquisition opportunities, and any other statements identif ...

Financial Data and Key Metrics Changes - Total revenue growth of 9.3% year-over-year with core growth of 5.3% [34] - Adjusted gross margins increased by 60 basis points to 57.6% [37] - Adjusted operating margins increased to 23%, reflecting a 30 basis points expansion year-over-year [37] - Adjusted earnings per share rose 11% to $0.70, with free cash flow generation of $196 million [38] Business Line Data and Key Metrics Changes - Intelligent Operating Solutions (IOS) saw total revenue up 15% with core growth of 8.7%, driven by strong demand in North America and Western Europe [19] - Precision Technologies (PT) revenues grew 3.4% with core revenue growth of 4.6%, impacted by a low double-digit decline in China due to COVID lockdowns [22] - Advanced Healthcare Solutions (AHS) revenue increased 8.5% with core revenue growth of 0.6%, facing challenges in China and Western Europe [25] Market Data and Key Metrics Changes - North America revenue was up high single digits, with low teens growth in software and related services [35] - Western Europe revenues grew mid-single-digit, offsetting declines in advanced healthcare solutions [35] - China revenues declined low teens, but backlog in China showed high teens order growth [36] Company Strategy and Development Direction - The company aims to build a more resilient, less cyclical business model, focusing on high recurring revenue and software-enabled workflow solutions [46][47] - The M&A pipeline remains robust with an estimated capacity of approximately $5 billion over the next three years [15] - The company is committed to sustainability and innovation, with plans to publish its fifth sustainability report [30][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to weather potential economic slowdowns due to strong backlog and recurring revenue streams [56] - The company anticipates sustained core growth driven by strong customer demand and record backlog, with expectations for strong margin expansion [14] - Management highlighted the importance of countermeasures to mitigate supply chain challenges and improve operational performance [77] Other Important Information - The company executed a share buyback of approximately 1 million shares totaling $64 million in the first quarter [15] - The company has doubled its recurring revenue as a percentage of total revenue to approximately 40% since 2016 [47] Q&A Session Summary Question: What is the current situation in China regarding the economy and order pace? - Management noted that orders were up double-digit despite shutdowns, with commercial activities remaining strong [54] Question: How would the company handle a potential mild global recession? - Management indicated that the strong backlog would provide a buffer, allowing the company to dip into backlog if necessary [56] Question: Can you elaborate on the adjusted operating margin expectations? - Management explained that while revenues were flat, they expect margins to improve in Q2 due to various factors including service channel integration [62] Question: What is the outlook for orders in the current quarter? - Management reported good order strength across regions, with a positive outlook for durability in order patterns [66] Question: What tangible steps have been taken to improve volume output? - Management highlighted the effectiveness of countermeasures and improvements in supply chain management as key factors [76] Question: How is the performance of Accruent and Gordian? - Management confirmed that both businesses had a good quarter, with Accruent showing signs of growth and Gordian performing strongly [86]