SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

~~________________________________________________~~


(Mark One)
☒x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

5438 Wade Park Boulevard, Suite 600

Registrant’s telephone number, including area code: (984) 275-6000

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading ~~symbol~~Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001 per share	VNT	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 ~~(the “Exchange Act”)~~ during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒x No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒x No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒x

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒x

~~The number~~As of October 30, 2023, there were 154,327,695 shares of the Registrant’s common stock ~~outstanding at October 28, 2022 was 157,993,435.~~outstanding.

~~VONTIER CORPORATION~~

ITEM 1. FINANCIAL STATEMENTS

VONTIER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(in millions, except ~~share and~~ per share amounts)

See the accompanying Notes to the Consolidated Condensed Financial Statements.

VONTIER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME

(in millions, except per share amounts)


	Three Months Ended				Nine Months Ended
	September 29, 2023		September 30, 2022		September 29, 2023		September 30, 2022
Sales	$	765.4	$	788.0	$	2,306.2	$	2,312.5
Cost of sales	(406.4)		(428.1)		(1,246.1)		(1,269.2)
Gross profit	359.0		359.9		1,060.1		1,043.3
Operating costs:
Selling, general and administrative expenses	(177.3)		(174.7)		(542.7)		(517.4)
Research and development expenses	(39.1)		(35.0)		(120.4)		(104.4)
Operating profit	142.6		150.2		397.0		421.5
Non-operating income (expense), net:
Interest expense, net	(22.8)		(17.9)		(70.7)		(46.1)
Gain on sale of business	0.3		—		34.4		—
Gain on previously held equity interests from combination of business	—		—		—		32.7
Unrealized (loss) gain on equity securities measured at fair value	—		(65.8)		—		17.2
Other non-operating (expense) income, net	(0.2)		1.4		(1.6)		1.3
Earnings before income taxes	119.9		67.9		359.1		426.6
Provision for income taxes	(29.3)		(17.8)		(88.4)		(93.0)
Net earnings	$	90.6	$	50.1	$	270.7	$	333.6

Net earnings per share:
Basic	$	0.59	$	0.32	$	1.74	$	2.07
Diluted	$	0.58	$	0.32	$	1.73	$	2.06
Weighted average shares outstanding:
Basic	154.8		158.2		155.3		161.5
Diluted	155.8		158.7		156.1		162.2

Net earnings	$	90.6	$	50.1	$	270.7	$	333.6
Other comprehensive income (loss), net of income taxes:
Foreign currency translation adjustments	(22.1)		(44.7)		(34.2)		(122.9)
Other adjustments	—		—		0.1		0.2
Total other comprehensive loss, net of income taxes	(22.1)		(44.7)		(34.1)		(122.7)
Comprehensive income	$	68.5	$	5.4	$	236.6	$	210.9

See the accompanying Notes to the Consolidated Condensed Financial Statements.

VONTIER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN EQUITY

(in millions, except per share amounts)

Three Months Ended Nine Months Ended
September 30, 2022 October 1, 2021 September 30, 2022 October 1, 2021
Sales of products $ 707.7 $ 699.7 $ 2,080.5 $ 2,005.1
Sales of services 80.3 68.8 232.0 195.4
Total sales 788.0 768.5 2,312.5 2,200.5
Cost of product sales (373.0) (371.8) (1,115.8) (1,067.3)
Cost of service sales (55.1) (50.3) (153.4) (156.5)
Total cost of sales (428.1) (422.1) (1,269.2) (1,223.8)
Gross profit 359.9 346.4 1,043.3 976.7
Operating costs:
Selling, general and administrative expenses (174.7) (147.8) (517.4) (458.1)
Research and development expenses (35.0) (31.2) (104.4) (97.3)
Operating profit 150.2 167.4 421.5 421.3
Non-operating income (expense), net:
Interest expense, net (17.9) (12.0) (46.1) (34.4)
Write-off of deferred financing costs — — — (3.4)
Gain on settlement of investment — 3.2 — 3.2
Gain on previously held equity interests from combination of business — — 32.7 —
Unrealized (loss)/gain on equity securities measured at fair value (65.8) — 17.2 —
Other non-operating income (expense), net 1.4 (0.2) 1.3 (0.3)
Earnings before income taxes 67.9 158.4 426.6 386.4
Provision for income taxes (17.8) (31.1) (93.0) (85.8)
Net earnings $ 50.1 $ 127.3 $ 333.6 $ 300.6
Net earnings per share:
Basic $ 0.32 $ 0.75 $ 2.07 $ 1.78
Diluted $ 0.32 $ 0.75 $ 2.06 $ 1.77
Average common stock and common equivalent shares outstanding:
Basic 158.2 169.1 161.5 168.9
Diluted 158.7 170.3 162.2 170.0
Net earnings $ 50.1 $ 127.3 $ 333.6 $ 300.6
Other comprehensive income (loss), net of income taxes:
Foreign currency translation adjustments (44.7) (7.0) (122.9) (24.7)
Other adjustments — 0.2 0.2 0.3
Total other comprehensive loss, net of income taxes (44.7) (6.8) (122.7) (24.4)
Comprehensive income $ 5.4 $ 120.5 $ 210.9 $ 276.2


	Common Stock			Treasury Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Noncontrolling Interests		Total
	Shares	Amount		Shares	Amount
Balance, December 31, 2022	169.7	$	—	13.7	$	(328.0)	$	27.6	$	770.8	$	106.1	$	3.0	$	579.5
Net earnings	—	—		—	—		—		82.8		—		—		82.8
Dividends on common stock ($0.025 per share)	—	—		—	—		—		(3.9)		—		—		(3.9)
Other comprehensive loss, net of income taxes	—	—		—	—		—		—		(3.7)		—		(3.7)
Stock-based compensation expense	—	—		—	—		6.1		—		—		0.7		6.8
Common stock-based award activity, net of shares for tax withholding	0.5	—		—	—		(3.1)		—		—		—		(3.1)
Purchase of treasury stock	—	—		0.9	(18.4)		—		—		—		—		(18.4)
Balance, March 31, 2023	170.2	—		14.6	(346.4)		30.6		849.7		102.4		3.7		640.0
Net earnings	—	—		—	—		—		97.3		—		—		97.3
Dividends on common stock ($0.025 per share)	—	—		—	—		—		(3.9)		—		—		(3.9)
Other comprehensive loss, net of income taxes	—	—		—	—		—		—		(8.3)		—		(8.3)
Stock-based compensation expense	—	—		—	—		7.0		—		—		1.5		8.5
Common stock-based award activity, net of shares for tax withholding	0.1	—		—	—		0.2		—		—		—		0.2
Purchase of treasury stock	—	—		1.1	(32.1)		—		—		—		—		(32.1)
Change in noncontrolling interests	—	—		—	—		—		—		—		(0.3)		(0.3)
Balance, June 30, 2023	170.3	—		15.7	(378.5)		37.8		943.1		94.1		4.9		701.4
Net earnings	—	—		—	—		—		90.6		—		—		90.6
Dividends on common stock ($0.025 per share)	—	—		—	—		—		(3.9)		—		—		(3.9)
Other comprehensive loss, net of income taxes	—	—		—	—		—		—		(22.1)		—		(22.1)
Stock-based compensation expense	—	—		—	—		7.7		—		—		1.1		8.8
Common stock-based award activity, net of shares for tax withholding	0.2	—		—	—		2.4		—		—		—		2.4
Purchase of treasury stock	—	—		0.4	(11.7)		—		—		—		—		(11.7)
Change in noncontrolling interests	—	—		—	—		—		—		—		(0.5)		(0.5)
Balance, September 29, 2023	170.5	$	—	16.1	$	(390.2)	$	47.9	$	1,029.8	$	72.0	$	5.5	$	765.0

See the accompanying Notes to the Consolidated Condensed Financial Statements.

VONTIER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN EQUITY (continued)

(in millions, except per share amounts)


	Common Stock			Treasury Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Noncontrolling Interests		Total
	Shares	Amount		Shares	Amount
Balance, December 31, 2021	169.2	$	—	—	$	—	$	1.5	$	386.7	$	181.7	$	3.8	$	573.7
Net earnings	—	—		—	—		—		250.2		—		—		250.2
Dividends on common stock ($0.025 per share)	—	—		—	—		—		(4.0)		—		—		(4.0)
Other comprehensive loss, net of income taxes	—	—		—	—		—		—		(15.0)		—		(15.0)
Stock-based compensation expense	—	—		—	—		6.1		—		—		—		6.1
Common stock-based award activity, net of shares for tax withholding	0.3	—		—	—		(2.0)		—		—		—		(2.0)
Purchase of treasury stock	—	—		8.5	(207.0)		—		(50.0)		—		—		(257.0)
Change in noncontrolling interests	—	—		—	—		—		—		—		(0.1)		(0.1)
Balance, April 1, 2022	169.5	—		8.5	(207.0)		5.6		582.9		166.7		3.7		551.9
Net earnings	—	—		—	—		—		33.3		—		—		33.3
Dividends on common stock ($0.025 per share)	—	—		—	—		—		(4.0)		—		—		(4.0)
Other comprehensive loss, net of income taxes	—	—		—	—		—		—		(63.0)		—		(63.0)
Stock-based compensation expense	—	—		—	—		7.0		—		—		—		7.0
Common stock-based award activity, net of shares for tax withholding	—	—		—	—		0.2		—		—		—		0.2
Purchase of treasury stock	—	—		2.3	(71.0)		—		50.0		—		—		(21.0)
Change in noncontrolling interests and other	—	—		—	—		—		(1.4)		—		(0.3)		(1.7)
Balance, July 1, 2022	169.5	—		10.8	(278.0)		12.8		660.8		103.7		3.4		502.7
Net earnings	—	—		—	—		—		50.1		—		—		50.1
Dividends on common stock ($0.025 per share)	—	—		—	—		—		(4.0)		—		—		(4.0)
Other comprehensive loss, net of income taxes	—	—		—	—		—		—		(44.7)		—		(44.7)
Stock-based compensation expense	—	—		—	—		5.9		—		—		—		5.9
Common stock-based award activity, net of shares for tax withholding	0.1	—		—	—		0.7		—		—		—		0.7
Purchase of treasury stock	—	—		0.8	(10.0)		—		—		—		—		(10.0)
Change in noncontrolling interests	—	—		—	—		—		—		—		(0.7)		(0.7)
Balance, September 30, 2022	169.6	$	—	11.6	$	(288.0)	$	19.4	$	706.9	$	59.0	$	2.7	$	500.0

See the accompanying Notes to the Consolidated Condensed Financial Statements.

~~VONTIER CORPORATION AND SUBSIDIARIES~~

~~CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY~~

~~($ and shares in millions)~~

Common Stock Treasury Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income/(loss) Noncontrolling
Interests Total
Shares Amount Shares Amount
Balance, December 31, 2021 169.2 $ — — $ — $ 1.5 $ 386.7 $ 181.7 $ 3.8 $ 573.7
Net earnings — — — — — 250.2 — — 250.2
Dividends on common stock ($0.025 per share) — — — — — (4.0) — — (4.0)
Other comprehensive loss, net of income taxes — — — — — — (15.0) — (15.0)
Stock-based compensation expense — — — — 6.1 — — — 6.1
Exercise of common stock options and stock award distributions, net of shares for tax withholding 0.3 — — — (2.0) — — — (2.0)
Purchase of treasury stock — — (8.5) (207.0) — (50.0) — — (257.0)
Change in noncontrolling interests — — — — — — — (0.1) (0.1)
Balance, April 1, 2022 169.5 $ — (8.5) $ (207.0) $ 5.6 $ 582.9 $ 166.7 $ 3.7 $ 551.9
Net earnings — — — — — 33.3 — — 33.3
Dividends on common stock ($0.025 per share) — — — — — (4.0) — — (4.0)
Other comprehensive loss, net of income taxes — — — — — — (63.0) — (63.0)
Stock-based compensation expense — — — — 7.0 — — — 7.0
Exercise of common stock options and stock award distributions, net of shares for tax withholding — — — — 0.2 — — — 0.2
Purchase of treasury stock — — (2.3) (71.0) 50.0 — — (21.0)
Change in noncontrolling interests and other — — — — — (1.4) — (0.3) (1.7)
Balance, July 1, 2022 169.5 $ — (10.8) $ (278.0) $ 12.8 $ 660.8 $ 103.7 $ 3.4 $ 502.7
Net earnings — — — 50.1 — — 50.1
Dividends on common stock ($0.025 per share) — — — — — (4.0) — — (4.0)

Other comprehensive loss, net of income taxes — — — — — — (44.7) — (44.7)
Stock-based compensation expense — — — — 5.9 — — — 5.9
Exercise of common stock options and stock award distributions, net of shares for tax withholding 0.1 — — — 0.7 — — — 0.7
Purchase of treasury stock — — (0.8) (10.0) — — — — (10.0)
Change in noncontrolling interests — — — — — — — (0.7) (0.7)
Balance, September 30, 2022 169.6 $ — (11.6) $ (288.0) $ 19.4 $ 706.9 $ 59.0 $ 2.7 $ 500.0

~~See the accompanying Notes to the Consolidated Condensed Financial Statements.~~

~~VONTIER CORPORATION AND SUBSIDIARIES~~

~~CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY~~

~~($ and shares in millions)~~

Common Stock Additional Paid-In Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Income/(loss) Noncontrolling
Interests Total
Shares Amount
Balance, December 31, 2020 168.5 $ — $ 7.6 $ (13.6) $ 193.8 $ 3.9 $ 191.7
Net earnings — — — 91.0 — — 91.0
Other comprehensive loss, net of income taxes — — — — (15.6) — (15.6)
Stock-based compensation expense — — 6.6 — — — 6.6
Exercise of common stock options and stock award distributions, net of shares for tax withholding 0.3 — (1.4) — — — (1.4)
Acquisition of noncontrolling interest — — (2.0) — — 0.1 (1.9)
Non-cash separation-related adjustments and other — — (2.1) — — — (2.1)
Change in noncontrolling interests — — — — — (0.3) (0.3)
Balance, April 2, 2021 168.8 $ — $ 8.7 $ 77.4 $ 178.2 $ 3.7 $ 268.0
Net earnings — — — 82.3 — — 82.3
Dividends on common stock ($0.025 per share) — — — (4.2) — — (4.2)
Other comprehensive loss, net of income taxes — — — — (2.0) — (2.0)
Stock-based compensation expense — — 6.4 — — — 6.4
Exercise of common stock options and stock award distributions, net of shares for tax withholding 0.1 — 2.5 — — — 2.5
Non-cash separation-related adjustments and other — — (3.8) — — — (3.8)
Change in noncontrolling interests — — — — — 0.1 0.1
Balance, July 2, 2021 168.9 $ — $ 13.8 $ 155.5 $ 176.2 $ 3.8 $ 349.3
Net earnings — — — 127.3 — — 127.3
Dividends on common stock ($0.025 per share) — — — (4.2) — — (4.2)
Other comprehensive loss, net of income taxes — — — — (6.8) — (6.8)
Stock-based compensation expense — — 6.3 — — — 6.3
Exercise of common stock options and stock award distributions, net of shares for tax withholding 0.1 — 2.5 — — — 2.5
Change in noncontrolling interests — — — — — 0.2 0.2
Balance, October 1, 2021 169.0 $ — $ 22.6 $ 278.6 $ 169.4 $ 4.0 $ 474.6
~~See the accompanying Notes to the Consolidated Condensed Financial Statements.~~

VONTIER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

See the accompanying Notes to the Consolidated Condensed Financial Statements.

VONTIER CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

NOTE 1. BUSINESS OVERVIEW AND BASIS OF PRESENTATION

Vontier Corporation (“~~Vontier,”~~Vontier” or the ~~“Company,” “we,” “us,” or “our”~~“Company”) is a global industrial technology company ~~that focuses on critical technical equipment, components, software~~uniting productivity, automation and ~~services for manufacturing, repair, and servicing in~~multi-energy technologies to meet the needs of a rapidly evolving, more connected mobility ~~infrastructure industry worldwide. The~~ecosystem. As of September 29, 2023, the Company supplies a wide range of mobility technologies and diagnostics and repair technologies solutions spanning advanced environmental sensors; fueling equipment; field payment hardware; point-of sale, workflow and monitoring software; vehicle tracking and fleet management; software solutions for traffic light control; and vehicle mechanics’ and technicians’ equipment. The Company markets its products and services to retail and commercial fueling operators, convenience store and in-bay car wash operators, tunnel car wash businesses, commercial vehicle repair businesses, municipal governments and public safety entities and fleet owners/operators on a global basis.

~~Vontier~~ operates through ~~one~~three reportable ~~segment comprised of two~~segments which align to the Company’s three operating segments: (i) Mobility Technologies, which provides digitally enabled equipment and solutions to support efficient operations across the mobility ~~technologies, which is a leading worldwide provider of solutions and services focused on fuel dispensing, remote fuel management,~~ecosystem, including point-of-sale and payment systems, ~~environmental compliance,~~ workflow automation solutions, telematics, data analytics, software platform for electric vehicle charging networks, and ~~control~~integrated solutions ~~vehicle tracking and fleet management (“telematics”) and traffic management (“smart city solutions”), and~~for alternative fuel dispensing; (ii) ~~diagnostics and repair technologies,~~Repair Solutions, which manufactures and distributes aftermarket vehicle repair tools, toolboxes, ~~and~~ automotive diagnostic equipment and software through a network of mobile franchisees; and ~~a full line of wheel-service equipment. Given the interrelationships of the products, technologies~~(iii) Environmental & Fueling Solutions, which provides environmental and ~~customers~~fueling hardware and ~~the resulting similar long-term economic characteristics, we meet the aggregation criteria~~software, and ~~have combined our two operating segments into a single reportable segment.~~

aftermarket solutions for global fueling infrastructure.

Basis of Presentation and Unaudited Interim Financial Information

The accompanying Consolidated Condensed Financial Statements present ~~our~~the Company’s historical financial position, results of operations, changes in equity and cash flows in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and are unaudited.

The interim Consolidated Condensed Financial Statements include the accounts of ~~the Company~~Vontier and its ~~subsidiaries and affiliates in which the Company has a controlling financial interest or is the primary beneficiary.~~subsidiaries. All intercompany ~~accounts~~balances and transactions have been eliminated upon consolidation. The Consolidated Condensed Financial Statements also reflect the impact of noncontrolling interests. Noncontrolling interests do not have a significant impact on the Company’s consolidated results of operations, therefore, net earnings and net earnings per share attributable to noncontrolling interests are not presented separately in the Company’s Consolidated Condensed Statements of Earnings and Comprehensive Income. Net earnings attributable to noncontrolling interests have been reflected in selling, general and administrative expenses (“SG&A”) and were insignificant in all periods presented.

In the opinion of the Company’s management, all adjustments of a normal recurring nature necessary for a fair presentation have been reflected. Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, has been omitted. The accompanying interim Consolidated Condensed Financial Statements and the related notes should be read in conjunction with the Company’s Consolidated and Combined Financial Statements and related notes included in the Company’s ~~2021~~ Annual Report on Form ~~10-K.~~10-K for the year ended December 31, 2022 (the “2022 Annual Report on Form 10-K”).

In the first quarter of 2023, the Company realigned its internal organization, as further discussed in Note 9. Segment Information, which resulted in a decrease in the number of reporting units for goodwill impairment testing from seven reporting units to five reporting units. For historical reporting units that were divided among the Company’s new reporting units after the realignment, the Company used the relative fair value method to reallocate goodwill to the new reporting units. The ~~Consolidated Condensed Financial Statements also reflect~~Company performed a qualitative goodwill impairment test immediately prior to and following the ~~impact~~change in reporting units. Based on the Company’s assessment, the Company determined on the basis of ~~noncontrolling interests. Noncontrolling interests do~~the qualitative and quantitative factors that the fair values of the reporting units were more likely than not ~~have~~greater than their respective carrying values both immediately prior to and following the change in reporting units, and therefore, a ~~significant impact on our consolidated results of operations, therefore net earnings~~quantitative test was not required.

Foreign Currency Translation and ~~net earnings per share attributable to noncontrolling interests~~Transactions

Exchange rate adjustments resulting from foreign currency transactions are ~~not presented separately~~recognized in ~~our Consolidated Condensed Statements of Earnings and Comprehensive Income.~~ Net earnings, ~~attributable to noncontrolling interests have been~~whereas effects resulting from the translation of financial statements are reflected as a component of Accumulated other comprehensive income within equity. Assets and liabilities of subsidiaries operating outside the United States with a functional currency other than U.S. dollars are translated into U.S. dollars using period-end exchange rates and income statement accounts are translated at weighted average exchange rates. Net foreign currency transaction gains or losses were not material in ~~selling, general and administrative expenses (“SG&A”) and were insignificant in all~~any of the periods presented.

~~Recently Issued Accounting Standards~~

In March 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and in January 2021 issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope. These ASUs provide temporary optional expedients and exceptions to existing guidance on contract modifications and hedge accounting to facilitate the market transition from existing reference rates, such as the London Interbank Offered Rate (“LIBOR”) which is being phased out beginning at the end of 2021, to alternate reference rates, such as the Secured Overnight Financing Rate. These standards were effective upon issuance and allowed application to contract changes as early as January 1, 2020. These provisions may impact the Company as contract modifications and other changes occur during the LIBOR transition period. The Company continues to evaluate the optional relief guidance provided

within these ASUs, has reviewed its debt securities and continues to evaluate commercial contracts that may utilize LIBOR as the reference rate. We will continue the assessment and monitor regulatory developments during the LIBOR transition period.

Recently Adopted Accounting Standards

In March 2022, the ~~FASB~~Financial Accounting Standards Board (“FASB”) issued ASU ~~No.~~ 2022-02, Financial Instruments – Credit Losses (Topic 326) –: Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”), which requires enhanced disclosure of certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty while eliminating certain current recognition and measurement accounting guidance. This ASU also requires the disclosure of current-period gross write-offs by year of origination for financing receivables and net investments in leases. ASU ~~No.~~ 2022-02 isbecame effective for ~~fiscal years beginning after December 15, 2022, including~~the Company’s annual and interim periods ~~within those fiscal years; this~~beginning on January 1, 2023. The Company has disclosed current-period gross write-offs in Note 3. Financing and Trade Receivables, while the other provisions of ASU ~~allows for early adoption in any interim period after issuance~~2022-02 did not have a material impact on the Company’s financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the ~~update.~~Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”) and in January 2021 issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, to defer the sunset date of ASU 2020-04 from December 31, 2022 to December 31, 2024. These ASUs provide temporary optional expedients and exceptions to existing guidance on contract modifications and hedge accounting to facilitate the market transition from existing reference rates, such as the London Inter-bank Offered Rate (“LIBOR”) which is being phased out, to alternate reference rates, such as the Secured Overnight Financing Rate (“SOFR”). These standards were effective upon issuance and allowed application to contract changes as early as January 1, 2020. The Company ~~is currently assessing~~has transitioned all debt that historically referenced LIBOR to alternate reference rates, utilizing certain practical expedients to account for the ~~impact this ASU will have on its consolidated financial statements.~~modifications prospectively.

NOTE 2. ACQUISITIONS

~~2021 Acquisitions~~The Company did not complete any acquisitions during the nine months ended September 29, 2023.

~~DRB Systems, LLC~~

OnDuring the nine months ended September ~~13, 2021,~~30, 2022, the Company completed the acquisition of Driivz Ltd. (“Driivz”) and Invenco Group Ltd. (“Invenco”), which are further discussed below, and acquired all of the outstanding equity interests ~~of DRB Systems, LLC (“DRB”), a leading provider of point of sale, workflow software and control solutions to the car wash industry, for $955.8 million~~ in cash. This acquisition aligns with the Company’s portfolio diversification strategy and enables opportunities in new end markets. With this acquisition, the Company expects to grow its retail solutions portfolio.

The acquisition of DRB was accounted for as a business combination and, accordingly, the assets acquired and the liabilities assumed have been recorded at their respective fair values as of the acquisition date. The goodwill is attributable to the workforce of the acquired business, future market opportunities and the expected synergies with the Company’s existing operations. The majority of goodwill derived from this acquisition is deductible for tax purposes.

~~The Company’s final purchase price allocation is as follows:~~

($ in millions) Preliminary Purchase Price Allocation Measurement Period Adjustments Final Purchase Price Allocation Weighted Average Amortization Period
Accounts receivable $ 17.3 $ (3.3) $ 14.0
Inventories 21.0 (0.1) 20.9
Prepaid and other current assets 3.8 (0.1) 3.7
Technology 142.1 0.5 142.6 9.0
Customer relationships 227.0 — 227.0 11.0
Trade names 36.0 — 36.0 14.0
Goodwill 587.4 (15.6) 571.8
Other assets 14.9 0.1 15.0
Trade accounts payable (5.8) — (5.8)
Accrued expenses and other current liabilities (44.6) 2.5 (42.1)
Other long-term liabilities (43.6) 16.3 (27.3)
Purchase price, net of cash acquired $ 955.5 $ 0.3 $ 955.8

To determine the fair value of the acquired intangible assets included above, management utilized significant unobservable inputs (Level 3 in the fair value hierarchy) and was required to make judgements and estimates about future results such as revenues, margin, net working capital andtwo other ~~valuation assumptions such as useful lives, royalty rates, attrition rates and discount rates. These assumptions are forward looking and could be affected by future economic and market conditions.~~

On February 7, 2022, the Company acquired the remaining 81% of the outstanding shares of Driivz ~~Ltd. (“Driivz”)~~ for ~~$152.6~~$152.5 million, net of cash received. Driivz, which is based in Israel, is a cloud-based subscription software platform supporting electric vehicle charging infrastructure (“EVCI”) providers with operations management, energy optimization, billing and roaming capabilities, as well as driver self-service apps. The acquisition of Driivz accelerates the Company’s portfolio diversification and e-mobility strategies and positions the Company to capitalize on the global EVCI market opportunities.

The acquisition of Driivz was accounted for as a business combination and, accordingly, the assets acquired and the liabilities assumed have been recorded at their respective fair values as of the acquisition date. The goodwill is attributable to the workforce of the acquired business, future market opportunities and the expected synergies with the Company’s existing operations. The majority of the goodwill derived from this acquisition is not ~~expected to be~~ deductible for tax purposes.

The Company’s ~~estimate of the~~final purchase price allocation is as follows:

($ in millions) Driivz Weighted Average Amortization Period
Accounts receivable $ 1.0
Technology 56.3 8.0
Customer relationships 28.1 13.0
Trade names 9.2 16.0
Goodwill 127.4
Other assets 2.9
Trade accounts payable (0.1)
Accrued expenses and other current liabilities (12.4)
Other long-term liabilities (16.8)
Purchase price, net of cash received $ 195.6


($ in millions)	Driivz		Weighted Average Amortization Period
Accounts receivable	$	1.0
Technology	56.3		8.0
Customer relationships	28.1		13.0
Trade names	9.2		16.0
Goodwill	125.7
Other assets	2.9
Accrued expenses and other current liabilities	(12.5)
Other long-term liabilities	(15.2)
Purchase price, net of cash received	$	195.5

WeThe Company recorded certain adjustments to the preliminary purchase price allocation during the ~~nine months ended September 30, 2022~~measurement period resulting in a net decrease of ~~$3.5~~$5.2 million to goodwill. ~~Revenue and operating profit attributable to the acquisitions was insignificant for the nine months ended September 30, 2022.~~

The carrying value of the Company’s approximately 19% interest in Driivz prior to the acquisition was $10.3 million, which historically was carried at cost. In connection with the acquisition, this investment was remeasured to a fair value of $43.0 million resulting in the recognition of an aggregate noncash gain of $32.7 million during the ~~first quarter of~~nine months ended September 30, 2022, which was included in Gain on previously held equity interests from combination of business in the Consolidated Condensed Statements of Earnings and Comprehensive Income. To determine the fair value of the acquired intangible assets and previously held equity interests, management utilized significant unobservable inputs (Level 3 in the fair value hierarchy) and was required to make judgements and estimates about future results such as revenues, margin, net working capital and other valuation assumptions such as useful lives, royalty rates, attrition rates and discount rates. These assumptions are forward looking and could be affected by future economic and market conditions.

~~Acquisition-related costs related to Driivz are included in Selling, general and administrative expenses in the Consolidated Condensed Statement of Earnings and were $1.2 million.~~

The Company has not disclosed post-acquisition or ~~pro-forma~~pro forma revenue and earnings attributable to Driivz as it did not have a material effect on the Company’s results. Driivz is presented in the Company’s Mobility Technologies segment.

The purchase price allocation has not been finalized for Driivz as the analysis of the assets acquired and liabilities assumed has not been completed. The procedures to finalize may result in further adjustments to our purchase accounting that could result in additional measurement period adjustments, which could have a material effect on the consolidated financial statements. The accounting for the acquisition will be completed no later than one year from the acquisition date, in accordance with GAAP.

On August 31, 2022, the Company acquired all of the outstanding equity interests of Invenco ~~Group Ltd. (“Invenco”)~~ for ~~$85.7~~$83.1 million, net of cash received. The ~~initial~~ purchase price includes contingent consideration initially measured at ~~$9.2~~$6.1 million, which can reach up to ~~$100~~$100.0 million based on achieving certain revenue targets. Invenco, which is based in New Zealand, is a global provider of ~~self service~~self-service payment and microservice solutions with a range of products including outdoor payment terminals, electronic payment servers, payment switches, and cloud services. The acquisition of Invenco further advances the Company’s portfolio diversification and accelerates ~~our~~its digital strategy.

The acquisition of Invenco was accounted for as a business combination and, accordingly, the assets acquired and the liabilities assumed have been recorded at their respective fair values as of the acquisition date. The ~~consideration paid~~final purchase price allocation was ~~allocated~~ as follows: (i) ~~$38.4~~$35.7 million to definite-lived intangible assets consisting of developed technology, customer relationships and a trade name with a weighted average amortization period of approximately ~~eight~~five years, (ii) ~~$27.3~~$33.0 million to goodwill and (iii) ~~$20.0~~$14.4 million to other net assets. The goodwill is attributable to the workforce of the acquired business, future market opportunities and the expected synergies with the Company’s existing operations. The majority of the goodwill derived from this acquisition is not ~~expected to be~~ deductible for tax purposes.

~~Acquisition-related costs related~~ The Company recorded certain adjustments to ~~Invenco are included~~the preliminary purchase price allocation during the measurement period resulting in ~~Selling, general and administrative expenses in the Consolidated Condensed Statement~~a net increase of ~~Earnings and were $1.1 million.~~$5.7 million to goodwill.

The Company has not disclosed post-acquisition or ~~pro-forma~~pro forma revenue and earnings attributable to Invenco as it did not have a material effect on the Company’s results.

~~The purchase price allocation has not been finalized for~~ Invenco as the analysis of the assets acquired and liabilities assumed has not been completed. The procedures to finalize may result in further adjustments to our purchase accounting that could result in additional measurement period adjustments, which could have a material effect on the consolidated financial statements. The accounting for the acquisition will be completed no later than one year from the acquisition date, in accordance with GAAP.

~~To determine the preliminary fair value of the acquired intangible assets included above for Invenco, management utilized significant unobservable inputs (Level 3~~is presented in the ~~fair value hierarchy). The assumptions used are forward looking and could be affected by future economic and market conditions.~~

In addition to the acquisitions noted above, in 2022 we acquired all of the outstanding equity interests in two other businesses for $45.5 million, net of cash received. The initial purchase price includes $4.5 million of contingent consideration, which is based on future revenues of the acquired business and is unlimited. Both of these acquisitions align with the Company’s ~~portfolio diversification strategy and enable opportunities in new end markets.~~

These purchase price allocations have not been finalized as the analysis of the assets and liabilities acquired has not been completed. The procedures to finalize may result in further adjustments to our purchase accounting that could result in additional measurement period adjustments, which could have a material effect on the consolidated financial statements. The accounting for the acquisition will be completed no later than one year from the acquisition date, in accordance with GAAP.

~~The Company has not disclosed post-acquisition or pro-forma revenue and earnings attributable to these acquisitions as it did not have a material effect on the Company’s results.~~

~~Acquisition-related costs related to other acquisitions are included in Selling, general and administrative expenses in the Consolidated Condensed Statement of Earnings and were $1.3 million.~~

Mobility Technologies segment.

NOTE 3. FINANCING AND TRADE RECEIVABLES

The Company’s financing receivables are comprised of commercial purchase security agreements with the Company’s end customers (“PSAs”) and commercial loans to the Company’s franchisees (“Franchisee Notes”). in the Repair Solutions segment. Financing receivables are generally secured by the underlying tools and equipment financed.

PSAs are installment sales contracts originated between the franchisee and technicians or independent shop owners which enable these customers to purchase tools and equipment on an extended-term payment plan. PSA payment terms are generally up to five years. Upon origination, the Company assumes the PSA by crediting the franchisee’s trade accounts receivable. As a result, originations of PSAs are non-cash transactions. The Company records PSAs at amortized cost.

Franchisee Notes have payment terms of up to 10 years and include financing to fund business startup costs including: (i) installment loans to franchisees used generally to finance inventory, equipment, and franchise fees; and (ii) lines of credit to finance working capital, including additional purchases of inventory.

Revenues associated with the Company’s interest income related to financing receivables are recognized to approximate a constant effective yield over the contract term. Accrued interest is included in Accounts receivable, less allowance for credit losses on the Consolidated Condensed Balance Sheets and iswas insignificant as of September ~~30, 2022~~29, 2023 and December 31, ~~2021.~~

~~Product sales to franchisees and the related financing income is included in Cash flows from operating activities in the accompanying Consolidated Condensed Statements of Cash Flows.~~2022.

The components of financing receivables with payments due in less than twelve months that are ~~recorded~~presented in Accounts receivable, less allowance for credit losses on the Consolidated Condensed Balance Sheets were as follows:

($ in millions) September 30, 2022 December 31, 2021
Gross current financing receivables:
PSAs $ 96.1 $ 98.4
Franchisee Notes 15.8 15.5
Current financing receivables, gross $ 111.9 $ 113.9
Allowance for credit losses:
PSAs $ 14.5 $ 16.9
Franchisee Notes 6.1 6.5
Total allowance for credit losses 20.6 23.4
Total current financing receivables, net $ 91.3 $ 90.5
Net current financing receivables:
PSAs, net $ 81.6 $ 81.5
Franchisee Notes, net 9.7 9.0
Total current financing receivables, net $ 91.3 $ 90.5


($ in millions)	September 29, 2023		December 31, 2022
Gross current financing receivables:
PSAs	$	98.3	$	96.6
Franchisee Notes	21.7		18.4
Current financing receivables, gross	$	120.0	$	115.0

Allowance for credit losses:
PSAs	$	13.8	$	13.1
Franchisee Notes	7.0		6.5
Total allowance for credit losses	$	20.8	$	19.6

Net current financing receivables:
PSAs, net	$	84.5	$	83.5
Franchisee Notes, net	14.7		11.9
Total current financing receivables, net	$	99.2	$	95.4

The components of Long-term financing receivables, less allowance for credit losses, which consists of financing receivables with payments due beyond one year, were as follows:

~~Net deferred origination costs were insignificant as~~As of September ~~30, 2022~~29, 2023 and December 31, ~~2021. As of September 30,~~ 2022, ~~and December 31, 2021, we had a~~the net unamortized discount on our financing receivables ~~of $16.7 million.~~was $18.1 million and $16.8 million, respectively.

It is the Company’s general practice to not engage in contract or loan modifications of existing arrangements for troubled debt restructurings. In limited instances, the Company may modify certain impaired receivables with customers in bankruptcy or other legal proceedings, or in the event of significant natural disasters. Restructured financing receivables as of September 30, 2022 and December 31, 2021 were insignificant.

Credit score and distributor tenure are the primary indicators of credit quality for the Company’s financing receivables. Depending on the contract, payments for financing receivables are due on a monthly or weekly basis. Weekly payments are converted into a monthly equivalent for purposes of calculating delinquency. Delinquencies are assessed at the end of each month following the monthly equivalent due date and are considered delinquent once past due.

The amortized cost basis and current period gross write-offs of PSAs and Franchisee Notes by origination year as of and for the nine months ended September ~~30, 2022,~~29, 2023, is as follows:

PSAs are considered past due when a contractual payment has not been made. If a customer is making payments on its account, interest will continue to accrue. The table below sets forth the aging of the Company’s PSA balances as of:
($ in millions) 30-59 days past due 60-90 days past due Greater than 90 days past due Total past due Total not considered past due Total Greater than 90 days past due and accruing interest
September 30, 2022 $ 3.4 $ 1.7 $ 6.4 $ 11.5 $ 307.6 $ 319.1 $ 6.4
December 31, 2021 3.3 1.7 6.5 11.5 306.6 318.1 6.5


($ in millions)	30-59 days past due		60-90 days past due		Greater than 90 days past due		Total past due		Total not considered past due		Total		Greater than 90 days past due and accruing interest
September 29, 2023	$	3.5	$	1.8	$	6.8	$	12.1	$	326.4	$	338.5	$	6.8
December 31, 2022	3.6		1.8		6.9		12.3		308.3		320.6		6.9

Franchisee Notes are considered past due when payments have not been made for 21 days after the due date. Past due Franchisee Notes (where the franchisee had not yet separated) were insignificant as of September ~~30, 2022~~29, 2023 and December 31, ~~2021.~~2022.

Uncollectable Status

PSAs are deemed uncollectable and written off when they are both contractually delinquent and no payment has been received for 180 days.

Franchisee Notes are deemed uncollectable and written off after a distributor separates and no payments have been received for one year.

The Company stops accruing interest and other fees associated with financing receivables when (i) a customer is placed in uncollectable status and repossession efforts have begun; (ii) upon receipt of notification of bankruptcy; (iii) upon notification of the death of a customer; or (iv) other instances in which management concludes collectability is not reasonably assured.

Allowance for Credit Losses Related to Financing Receivables

The Company calculates the allowance for credit losses considering several factors, including the aging of its financing receivables, historical credit loss and portfolio delinquency experience and current economic conditions. The Company also evaluates financing receivables with identified exposures, such as customer defaults, bankruptcy or other events that make it unlikely it will recover the amounts owed to it. In calculating such reserves, the Company evaluates expected cash flows, including estimated proceeds from disposition of collateral, and calculates an estimate of the potential loss and the probability of loss. When a loss is considered probable on an individual financing receivable, a specific reserve is recorded.

The following is a rollforward of the PSAs and Franchisee Notes components of the Company’s allowance for credit losses related to financing receivables as of:
September 30, 2022 December 31, 2021
($ in millions) PSAs Franchisee Notes Total PSAs Franchisee Notes Total
Allowance for credit losses, beginning of year $ 54.1 $ 11.8 $ 65.9 $ 54.3 $ 12.5 $ 66.8
Provision for credit losses 14.4 3.5 17.9 24.9 4.2 29.1
Write-offs (23.9) (3.8) (27.7) (27.5) (5.6) (33.1)
Recoveries of amounts previously charged off 1.7 0.1 1.8 2.4 0.7 3.1
Allowance for credit losses, end of period $ 46.3 $ 11.6 $ 57.9 $ 54.1 $ 11.8 $ 65.9

The ending balance as of September 30, 2022 of $57.9 million is included in the Consolidated Condensed Balance Sheets in Accounts receivable, less allowance for credit losses and Long-term financing receivables less allowance for credit losses in the amounts of $20.6 million and $37.3 million, respectively. The ending balance as of December 31, 2021 of $65.9 million is included in the Consolidated Condensed Balance Sheets in Accounts receivable less allowance for credit losses and Long-term financing receivables less allowance for credit losses in the amounts of $23.4 million and $42.5 million, respectively.


	September 29, 2023
($ in millions)	PSAs		Franchisee Notes		Total
Allowance for credit losses, beginning of year	$	45.5	$	11.8	$	57.3
Provision for credit losses	22.2		2.3		24.5
Write-offs	(28.1)		(2.4)		(30.5)
Recoveries of amounts previously charged off	1.7		0.3		2.0
Allowance for credit losses, end of period	$	41.3	$	12.0	$	53.3

Allowance for Credit Losses Related to Trade Accounts Receivables

The following is a rollforward of the allowance for credit losses related to the Company’s trade accounts receivables, ~~(excluding~~excluding financing ~~receivables)~~receivables, and the Company’s trade accounts receivable cost basis as of:

($ in millions) September 30, 2022 December 31, 2021
Cost basis of trade accounts receivable $ 433.6 $ 406.3
Allowance for credit losses balance, beginning of year 15.5 18.1
Provision for credit losses 3.3 7.7
Write-offs (3.9) (10.2)
Reclassification to held for sale (0.3) —
Foreign currency and other (0.9) (0.1)
Allowance for credit losses balance, end of period 13.7 15.5
Net trade accounts receivable balance $ 419.9 $ 390.8

~~NOTE 4. GOODWILL~~

~~The following is a rollforward of our carrying value of goodwill:~~

($ in millions)

September 29, 2023

~~Balance, December 31, 2021~~Cost basis of trade accounts receivable

~~1,667.2~~438.3

~~Measurement period adjustments for prior year acquisition~~

~~(12.9)~~

~~Addition to goodwill for current year acquisitions (including measurement period adjustments)~~

~~182.4~~

~~Reclassification to held for sale~~

~~(56.0)~~

~~FX translation~~Allowance for credit losses balance, beginning of year

~~(68.3)~~14.6

~~Balance, September 30, 2022~~Provision for credit losses

4.2

Write-offs

(4.8)

Foreign currency and other

(0.4)

Allowance for credit losses balance, end of period

13.6

Net trade accounts receivable balance

~~1,712.4~~424.7

~~Accumulated impairment charges were $85.3 million~~NOTE 4. INVENTORIES

The classes of inventory as of September ~~30, 2022~~29, 2023 and December 31, ~~2021. No impairment charges were recorded during the nine months ended September 30, 2022.~~2022 are summarized as follows:


($ in millions)	September 29, 2023		December 31, 2022
Finished goods	$	128.7	$	136.6
Work in process	20.5		34.8
Raw materials	165.1		174.6
Total	$	314.3	$	346.0

NOTE 5. FINANCING

The Company had the following debt outstanding as of:
($ in millions) September 30, 2022 December 31, 2021
Short-term borrowings:
India Credit Facility $ 1.7 $ 1.5
Other short-term borrowings and bank overdrafts 6.0 2.2
Total short-term borrowings $ 7.7 $ 3.7
Long-term debt:
Two-Year Term Loans due 2023 $ 600.0 $ 600.0
Three-Year Term Loans due 2024 400.0 400.0
1.800% senior unsecured notes due 2026 500.0 500.0
2.400% senior unsecured notes due 2028 500.0 500.0
2.950% senior unsecured notes due 2031 600.0 600.0
Revolving Credit Facility due 2026 50.0 —
Total long-term debt 2,650.0 2,600.0
Less: discounts and debt issuance costs (14.1) (16.2)
Total long-term debt, net $ 2,635.9 $ 2,583.8

~~Debt issuance costs~~


($ in millions)	September 29, 2023		December 31, 2022
Short-term borrowings:
Short-term borrowings and bank overdrafts	$	6.3	$	4.6

Long-term debt:
Three-Year Term Loans due 2024	$	160.0	$	400.0
Three-Year Term Loans due 2025	600.0		600.0
1.800% senior unsecured notes due 2026	500.0		500.0
2.400% senior unsecured notes due 2028	500.0		500.0
2.950% senior unsecured notes due 2031	600.0		600.0
Revolving Credit Facility due 2026	—		—
Total long-term debt	2,360.0		2,600.0
Less: discounts and debt issuance costs	(11.8)		(14.3)
Total long-term debt, net	$	2,348.2	$	2,585.7

The Company’s long-term debt requires, among others, that ~~have been netted against~~ the ~~aggregate principal amounts~~Company maintains certain financial covenants, and the Company was in compliance with all of ~~the components~~these covenants as of ~~debt in the short-term borrowings section above are immaterial. Given the nature of the short-term borrowings, the carrying value approximates fair value at both~~ September ~~30, 2022 and December 31, 2021.~~29, 2023.

Credit Facilities

Revolving Credit Facility

On April 28, 2021, the Company refinanced its existing credit agreement. The amended and restated credit agreement (the “A&R Credit Agreement”) extended the term of the $750.0 million senior unsecured multi-currency revolving credit facility (the “Revolving Credit Facility”) from September 29, 2023 to April 28, 2026 and reduced the interest rate.

The Revolving Credit Facility bears interest at a variable rate equal to ~~LIBOR~~SOFR plus an 11.4 basis points SOFR adjustment, plus a ratings-based margin which was 117.5 basis points as of September ~~30, 2022.~~

29, 2023. As of September ~~30, 2022, $50.0~~29, 2023, there were no borrowings outstanding and $750.0 million ~~was outstanding~~of borrowing capacity under the Revolving Credit Facility.

Three-Year Term Loans Due 2024

The Three-Year Term Loans Due 2024, which mature on October 28, 2024, bear interest at a variable rate equal to SOFR plus an 11.4 basis points SOFR adjustment, plus a ratings-based margin which was 112.5 basis points as of September 29, 2023. The interest rate was 6.56% per annum as of September 29, 2023. The Company is not obligated to make repayments prior to the maturity date, but did voluntarily repay $75.0 million and $240.0 million during the three and nine months ended September 29, 2023, respectively. The Company is not permitted to re-borrow once repayment is made. There was no material difference between the carrying value and the estimated fair value of the debt outstanding as of September 29, 2023.

Three-Year Term Loans Due 2025

The Three-Year Term Loans Due 2025 (together with the Three-Year Term Loans Due 2024, the “Term Loans”) bear interest at a variable rate equal to SOFR plus a 10.0 basis points credit spread adjustment plus a ratings-based margin which was 125.0 basis points as of September 29, 2023. The interest rate was 6.67% per annum as of September 29, 2023. As of September 29, 2023, there was no material difference between the carrying value and the estimated fair value of the debt outstanding.

~~Three-Year Term Loans Due 2024~~

The A&R Credit Agreement also extended the term of the $400.0 million Three-Year Term Loans Due 2024 from October 6, 2023 to October 28, 2024 and reduced the interest rate. The Three-Year Term Loans bear interest at a variable rate equal to LIBOR plus a ratings-based margin which was 112.5 basis points as of September 30, 2022. The interest rate was 4.24% per annum as of September 30, 2022. We are not obligated to make repayments prior to the maturity date. There was no material difference between the carrying value and the estimated fair value of the debt outstanding.

~~Two-Year Term Loans Due 2023~~

The Two-Year Term Loans Due 2023 bear interest at a variable rate equal to LIBOR plus a ratings-based margin which was 75.0 basis points as of September 30, 2022. The interest rate was 3.87% per annum as of September 30, 2022. The Two-Year Term Loans Due 2023 mature on September 13, 2023. We are not obligated to make repayments prior to the maturity date. There was no material difference between the carrying value and the estimated fair value of the debt outstanding.

~~The A&R Credit Agreement requires, among others, that we maintain certain financial covenants, and we were in compliance with all of these covenants as of September 30, 2022.~~

On October 28, 2022, the Company entered into an agreement to refinance the Two-Year Term Loans Due 2023 into a new $600 million Three-year delayed draw term loan. The Company plans to draw on this loan in full on or before December 30, 2022 and use the proceeds to pay off the existing Two-Year Term Loans Due 2023. Accordingly, the Two-Year Term Loans Due 2023 remain classified as long-term as of September 30, 2022.

Senior Unsecured Notes

~~On March 10, 2021, we completed the private placement of each of the following series of~~The Company’s senior unsecured notes (collectively, the ~~“Notes”~~“Registered Notes”) ~~to qualified institutional buyers under rule 144A~~consist of the ~~Securities Act of 1933, as amended (the “Securities Act”) and outside the United States to non-U.S. persons in compliance with Regulation S under the Securities Act:~~following:

•$500.0 million aggregate principal amount of senior notes due April 1, 2026 ~~(the “2026 Notes”) issued at 99.855% of their principal amount and~~ bearing interest at the rate of 1.800% per year;

•$500.0 million aggregate principal amount of senior notes due April 1, 2028 ~~(the “2028 Notes”) issued at 99.703% of their principal amount and~~ bearing interest at the rate of 2.400% per year; and

•$600.0 million aggregate principal amount of senior notes due April 1, 2031 ~~the (the “2031 Notes”) issued at 99.791% of their principal amount and~~ bearing interest at the rate of 2.950% per year.

In connection with the issuance of the Notes, we entered into a registration rights agreement, pursuant to which we are obligated to use commercially reasonable efforts to file with the U.S. Securities and Exchange Commission, and cause to be declared effective within 365 days, a registration statement with respect to an offer to exchange (the “Registered Exchange Offer”) each series of Notes for registered notes with terms that are substantially identical to the Notes of each series. We completed the Registered Exchange Offer on January 18, 2022. Substantially all of the Notes were tendered and exchanged for the corresponding Registered Notes in the Registered Exchange Offer.

The Registered Notes are fully and unconditionally guaranteed (the “Guarantees”), on a joint and several basis, by Gilbarco Inc. and Matco Tools Corporation, two of our wholly-owned subsidiaries (the “Guarantors”). Interest on the Registered Notes is payable semi-annually in arrears on April 1 and October 1 of each year, and commenced on October 1, 2021. The Registered Notes and the Guarantees are the Company’s and the Guarantors’ general senior unsecured obligations.

The Registered Notes contain customary covenants, including limits on the incurrence of certain secured debt and sale-leaseback transactions. None of these covenants are considered restrictive to our operations and as of September 30, 2022 we were in compliance with all of the covenants under the Registered Notes.

The estimated fair value of the Registered Notes was ~~$1.2~~$1.3 billion as of September ~~30, 2022.~~29, 2023. The fair value of the Registered Notes was determined based upon Level 2 inputs including indicative prices based upon observable market data. The difference between the fair value and the carrying amounts of the Registered Notes may be attributable to changes in market interest rates and/or ~~our~~the Company’s credit ratings subsequent to the incurrence of the borrowing.

Short-term Borrowings

~~India Credit Facility~~

The Company has a credit facility with Citibank, N.A. with borrowing capacity of up to 850.0 million Indian Rupees (or $10.4 million as of September 30, 2022) to facilitate working capital needs for certain businesses in India. As of September ~~30, 2022, the Company had $8.7 million borrowing capacity remaining. The effective interest rate associated with outstanding borrowings was 7.00% as of September 30, 2022.~~

~~Other~~

~~As of September 30, 2022,~~29, 2023, certain of ~~our~~the Company’s businesses were in a cash overdraft position, and such overdrafts are included in Short-term borrowings on the Consolidated Condensed Balance ~~Sheet.~~Sheets. Additionally, the Company has other short-term borrowing arrangements with various banks to facilitate short-term cash flow requirements in certain countries also included in Short-term borrowings on the Consolidated Condensed Balance ~~Sheet.~~

~~Interest payments associated with~~Sheets. Given the ~~above~~nature of the short-term borrowings, ~~were not significant for~~ the ~~nine months ended~~carrying value approximates fair value as of September ~~30, 2022 and October 1, 2021.~~29, 2023.

2014

NOTE 6. ACCUMULATED OTHER COMPREHENSIVE INCOME ~~(LOSS)~~

Foreign currency translation adjustments are generally not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries.

The changes in Accumulated other comprehensive ~~income/(loss)~~income by component are summarized below:
($ in millions) Foreign Currency Translation Adjustments
Other Adjustments (a)
Total
For the Three Months Ended September 30, 2022:
Balance, July 1, 2022 $ 106.7 $ (3.0) $ 103.7
Other comprehensive income (loss) before reclassifications, net of income taxes (44.7) — (44.7)
Amounts reclassified from accumulated other comprehensive income (loss):
Increase — 0.1 0.1
Income tax impact — (0.1) (0.1)
Amounts reclassified from accumulated other comprehensive income, net of income taxes — — (b) —
Net current period other comprehensive income (loss), net of income taxes (44.7) — (44.7)
Balance, September 30, 2022 $ 62.0 $ (3.0) $ 59.0
For the Three Months Ended October 1, 2021:
Balance, July 2, 2021 $ 180.6 $ (4.4) $ 176.2
Other comprehensive income (loss) before reclassifications, net of income taxes (7.0) — (7.0)
Amounts reclassified from accumulated other comprehensive income (loss):
Increase — 0.2 0.2
Amounts reclassified from accumulated other comprehensive income, net of income taxes — 0.2 (b) 0.2
Net current period other comprehensive income (loss), net of income taxes (7.0) 0.2 (6.8)
Balance, October 1, 2021 $ 173.6 $ (4.2) $ 169.4
(a) Includes balances relating to defined benefit plans and supplemental executive retirement plans.
(b) This accumulated other comprehensive income component is included in the computation of net periodic pension cost.


($ in millions)	Foreign Currency Translation Adjustments		Other Adjustments (b)			Total
For the Three Months Ended September 29, 2023:
Balance, June 30, 2023	$	95.7	$	(1.6)		$	94.1
Other comprehensive loss before reclassifications, net of income taxes	(22.1)		—			(22.1)





Net current period other comprehensive loss, net of income taxes	(22.1)		—			(22.1)
Balance, September 29, 2023	$	73.6	$	(1.6)		$	72.0

For the Three Months Ended September 30, 2022:
Balance, July 1, 2022	$	106.7	$	(3.0)		$	103.7
Other comprehensive loss before reclassifications, net of income taxes	(44.7)		—			(44.7)
Amounts reclassified from accumulated other comprehensive income:
Increase	—		0.1		(a)	0.1
Income tax impact	—		(0.1)			(0.1)
Amounts reclassified from accumulated other comprehensive income, net of income taxes	—		—			—
Net current period other comprehensive loss, net of income taxes	(44.7)		—			(44.7)
Balance, September 30, 2022	$	62.0	$	(3.0)		$	59.0

(a) This accumulated other comprehensive income component is included in the computation of net periodic pension cost.
(b) Includes balances relating to defined benefit plans and supplemental executive retirement plans.

2115

($ in millions) Foreign Currency Translation Adjustments
Other Adjustments (a)
Total
For the Nine Months Ended September 30, 2022:
Balance, December 31, 2021 $ 184.9 $ (3.2) $ 181.7
Other comprehensive income (loss) before reclassifications, net of income taxes (122.9) — (122.9)
Amounts reclassified from accumulated other comprehensive income (loss):
Increase — 0.3 0.3
Income tax impact — (0.1) (0.1)
Amounts reclassified from accumulated other comprehensive income, net of income taxes — 0.2 (b) 0.2
Net current period other comprehensive income (loss), net of income taxes (122.9) 0.2 (122.7)
Balance, September 30, 2022 $ 62.0 $ (3.0) $ 59.0
For the Nine Months Ended October 1, 2021:
Balance, December 31, 2020 $ 198.3 $ (4.5) $ 193.8
Other comprehensive income (loss) before reclassifications, net of income taxes (24.7) — (24.7)
Amounts reclassified from accumulated other comprehensive income (loss):
Increase — 0.4 0.4
Income tax impact — (0.1) (0.1)
Amounts reclassified from accumulated other comprehensive income, net of income taxes — 0.3 (b) 0.3
Net current period other comprehensive income (loss), net of income taxes (24.7) 0.3 (24.4)
Balance, October 1, 2021 $ 173.6 $ (4.2) $ 169.4
(a) Includes balances relating to defined benefit plans and supplemental executive retirement plans.
(b) This accumulated other comprehensive income component is included in the computation of net periodic pension cost.


($ in millions)	Foreign Currency Translation Adjustments			Other Adjustments (b)			Total
For the Nine Months Ended September 29, 2023:
Balance, December 31, 2022	$	107.8		$	(1.7)		$	106.1
Other comprehensive loss before reclassifications, net of income taxes	(34.5)			—			(34.5)
Amounts reclassified from accumulated other comprehensive income:
Sale of business	0.3		(c)	—			0.3
Increase	—			0.1		(a)	0.1

Amounts reclassified from accumulated other comprehensive income, net of income taxes	0.3			0.1			0.4
Net current period other comprehensive (loss) income, net of income taxes	(34.2)			0.1			(34.1)
Balance, September 29, 2023	$	73.6		$	(1.6)		$	72.0

For the Nine Months Ended September 30, 2022:
Balance, December 31, 2021	$	184.9		$	(3.2)		$	181.7
Other comprehensive loss before reclassifications, net of income taxes	(122.9)			—			(122.9)
Amounts reclassified from accumulated other comprehensive income:
Increase	—			0.3		(a)	0.3
Income tax impact	—			(0.1)			(0.1)
Amounts reclassified from accumulated other comprehensive income, net of income taxes	—			0.2			0.2
Net current period other comprehensive (loss) income, net of income taxes	(122.9)			0.2			(122.7)
Balance, September 30, 2022	$	62.0		$	(3.0)		$	59.0

(a) This accumulated other comprehensive income component is included in the computation of net periodic pension cost.
(b) Includes balances relating to defined benefit plans and supplemental executive retirement plans.
(c) Reclassified to Gain on sale of business in the Consolidated Condensed Statements of Earnings and Comprehensive Income.

NOTE 7. SALES

Revenue is recognized when control of promised products or services is transferred to customers in an amount that reflects the consideration we expect to be entitled to in exchange for those products or services.

Contract Assets

In certain circumstances, ~~we record~~ contract assets are recorded which include unbilled amounts typically resulting from sales under contracts when revenue recognized exceeds the amount billed to the customer, and right to payment is subject to contractual performance obligations ~~and not~~rather than subject only ~~subject~~ to the passage of time. Contract assets were ~~$12.6~~$7.1 million and ~~$10.4~~$12.3 million as of September ~~30, 2022~~29, 2023 and December 31, ~~2021,~~2022, respectively, and are included in Prepaid expenses and other current assets in the accompanying Consolidated Condensed Balance Sheets.

Contract Costs

~~We incur~~The Company incurs direct incremental costs to obtain certain contracts, typically ~~sales-related commissions and~~ costs associated with assets used by our customers in certain service ~~arrangements.~~arrangements and sales-related commissions. As of September ~~30, 2022~~29, 2023 and December 31, ~~2021, we~~2022, the Company had ~~$75.7~~$86.6 million and ~~$78.4~~$88.6 million, respectively, in net revenue-related capitalized contract costs primarily related to assets used by ~~our~~the Company’s customers in certain software contracts, which are recorded in Prepaid expenses and other current assets, for the current portion, and Other assets, for the noncurrent portion, in the accompanying Consolidated Condensed Balance Sheets. ~~These assets have estimated useful lives between 3 and 5 years and are amortized on a straight-line basis.~~

~~Impairment losses recognized on our revenue-related contract assets were insignificant during the three and nine months ended September 30, 2022 and October 1, 2021.~~

Contract Liabilities

The Company’s contract liabilities consist of deferred revenue generally related to customer deposits, post contract support (“PCS”) and extended warranty sales. In these arrangements, the Company generally receives up-front payment and recognizes revenue over the support term of the contracts where applicable. Deferred revenue is classified as current or noncurrent based on the timing of when revenue is expected to be recognized and is included in Accrued expenses and other current liabilities and Other long-term liabilities, respectively, in the accompanying Consolidated Condensed Balance Sheets.

The Company’s contract liabilities consisted of the following:
($ in millions) September 30, 2022 December 31, 2021
Deferred revenue - current $ 141.8 $ 133.7
Deferred revenue - noncurrent 48.4 56.3
Total contract liabilities $ 190.2 $ 190.0


($ in millions)	September 29, 2023		December 31, 2022
Deferred revenue, current	$	140.0	$	135.2
Deferred revenue, noncurrent	49.2		48.7
Total contract liabilities	$	189.2	$	183.9

During the three and nine months ended September ~~30, 2022, we~~29, 2023, the Company recognized ~~$22.8~~$15.8 million and ~~$102.1~~$96.4 million ~~respectively,~~ of revenue related to the Company’s contract liabilities at December 31, ~~2021.~~2022, respectively. The change in contract liabilities from December 31, ~~2021~~2022 to September ~~30, 2022~~29, 2023 was primarily due to the timing of cash receipts and sales of PCS and extended warranty ~~services as well as the impact of current year acquisitions.~~services.

Remaining Performance Obligations

Remaining performance obligations represent the transaction price of firm, noncancelable orders and the annual contract value for software-as-a-service contracts with ~~expected customer delivery dates beyond~~an original duration greater than one year ~~from September 30, 2022~~ for which work has not been performed. The Company has excluded performance obligations with an original expected duration of one year or less. ~~Performance~~Remaining performance obligations as of September ~~30, 2022 are $348.7~~29, 2023 were $397.4 million, the majority of which are related to the annual contract value for software-as-a-service contracts. The Company expects approximately 3540 percent of the remaining performance obligations will be fulfilled within the next two years, 6570 percent within the next three years, and substantially all within four years.

Disaggregation of Revenue

~~The Company disaggregates revenue~~Revenue from contracts with customers is disaggregated by sales of products and services and geographic location ~~solution and major product group,~~for each of our reportable segments, as it best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

Disaggregation of revenue was as ~~follows:~~
Three Months Ended Nine Months Ended
($ in millions) September 30, 2022 October 1, 2021 September 30, 2022 October 1, 2021
Sales:
Sales of products $ 707.7 $ 699.7 $ 2,080.5 $ 2,005.1
Sales of services 80.3 68.8 232.0 195.4
Total $ 788.0 $ 768.5 $ 2,312.5 $ 2,200.5
Geographic:
North America (a)
$ 603.2 $ 547.0 $ 1,746.5 $ 1,568.2
Western Europe 48.3 68.7 168.1 191.3
High growth markets 101.5 115.8 299.4 337.1
Rest of world 35.0 37.0 98.5 103.9
Total $ 788.0 $ 768.5 $ 2,312.5 $ 2,200.5
Solution:
Retail fueling hardware $ 213.5 $ 243.6 $ 608.8 $ 648.9
Auto repair 158.3 156.1 492.8 485.2
Service and other recurring revenue 118.7 118.0 362.7 361.4
Environmental 68.0 73.3 204.3 198.4
Retail solutions 154.3 96.4 415.6 285.1
Software-as-a-service 42.9 45.7 131.8 139.2
Alternative energy (b)
21.6 21.7 61.5 43.6
Smart cities 8.5 9.6 27.8 26.7
Other (b)
2.2 4.1 7.2 12.0
Total $ 788.0 $ 768.5 $ 2,312.5 $ 2,200.5
Major Product Group:
Mobility technologies $ 605.6 $ 588.6 $ 1,746.5 $ 1,641.6
Diagnostics and repair technologies 182.4 179.9 566.0 558.9
Total $ 788.0 $ 768.5 $ 2,312.5 $ 2,200.5
follows for the three months ended September 29, 2023:


($ in millions)	Mobility Technologies		Repair Solutions		Environmental & Fueling Solutions		Other		Total
Sales:
Sales of products	$	215.3	$	159.5	$	290.9	$	20.1	$	685.8
Sales of services	32.4		0.7		40.7		5.8		79.6
Total	$	247.7	$	160.2	$	331.6	$	25.9	$	765.4

Geographic:
North America (a)	$	173.8	$	160.2	$	205.8	$	25.6	$	565.4
Western Europe	22.1		—		38.6		—		60.7
High growth markets	32.2		—		74.0		0.3		106.5
Rest of world	19.6		—		13.2		—		32.8
Total	$	247.7	$	160.2	$	331.6	$	25.9	$	765.4

(a) Includes total sales in the United States of $543.1 million.

Disaggregation of revenue was as follows for the three months ended September 30, 2022:


($ in millions)	Mobility Technologies		Repair Solutions		Environmental & Fueling Solutions		Other		Total
Sales:
Sales of products	$	198.3	$	152.2	$	325.9	$	31.3	$	707.7
Sales of services	30.2		0.5		42.6		7.0		80.3
Total	$	228.5	$	152.7	$	368.5	$	38.3	$	788.0

Geographic:
North America (a)	$	168.2	$	152.7	$	244.6	$	37.7	$	603.2
Western Europe	15.0		—		33.3		—		48.3
High growth markets	26.3		—		74.8		0.4		101.5
Rest of world	19.0		—		15.8		0.2		35.0
Total	$	228.5	$	152.7	$	368.5	$	38.3	$	788.0

(a) Includes total sales in the United States of $567.4 ~~million and $526.7 million~~million.

Disaggregation of revenue was as follows for the ~~three~~nine months ended September 29, 2023:


($ in millions)	Mobility Technologies		Repair Solutions		Environmental & Fueling Solutions		Other		Total
Sales:
Sales of products	$	637.6	$	498.2	$	859.0	$	69.9	$	2,064.7
Sales of services	94.8		1.8		125.7		19.2		241.5
Total	$	732.4	$	500.0	$	984.7	$	89.1	$	2,306.2

Geographic:
North America (a)	$	508.8	$	500.0	$	611.2	$	87.8	$	1,707.8
Western Europe	66.1		—		121.7		—		187.8
High growth markets	97.8		—		210.5		1.3		309.6
Rest of world	59.7		—		41.3		—		101.0
Total	$	732.4	$	500.0	$	984.7	$	89.1	$	2,306.2

(a) Includes total sales in the United States of $1,613.4 million.

Disaggregation of revenue was as follows for the nine months ended September 30, ~~2022 and October 1, 2021, respectively, and~~2022:


($ in millions)	Mobility Technologies		Repair Solutions		Environmental & Fueling Solutions		Other		Total
Sales:
Sales of products	$	560.6	$	465.1	$	948.6	$	106.2	$	2,080.5
Sales of services	86.1		1.7		123.4		20.8		232.0
Total	$	646.7	$	466.8	$	1,072.0	$	127.0	$	2,312.5

Geographic:
North America (a)	$	463.0	$	466.8	$	691.7	$	125.0	$	1,746.5
Western Europe	55.7		—		112.4		—		168.1
High growth markets	73.3		—		224.3		1.8		299.4
Rest of world	54.7		—		43.6		0.2		98.5
Total	$	646.7	$	466.8	$	1,072.0	$	127.0	$	2,312.5

(a) Includes total sales in the United States of $1,672.4 ~~million and $1,513.3 million for the nine months ended September 30, 2022 and October 1, 2021, respectively.~~million.

~~(b)~~ ~~Certain prior year amounts were reclassified from “Other” and “E-mobility” to “Alternative energy” to conform with current year presentation.~~

NOTE 8. INCOME TAXES

~~Our~~The Company’s effective tax rate for the three and nine months ended September ~~30, 2022~~29, 2023 was ~~26.2%~~24.4% and ~~21.8%~~24.6%, respectively, as compared to ~~19.6%~~26.2% and ~~22.2%~~21.8% for the three and nine months ended ~~October 1, 2021.~~September 30, 2022, respectively. The ~~year-over-year increase~~decrease in the effective tax rate for the three months ended September ~~30, 2022~~29, 2023 as compared to the comparable period in the prior year was primarily due to a loss from the ~~recording~~sale of ~~our investment in Tritium~~equity securities measured at fair ~~value.~~value in the prior year. The ~~year-over-year decrease~~increase in the effective tax rate for the nine months ended September ~~30, 2022~~29, 2023 as compared to the comparable period in the prior year was primarily due to ~~an increase in~~ non-taxable income related to our previously held equity interest in Driivz ~~and a decrease~~ in ~~state taxes.~~

the prior year.

~~Our~~The Company’s effective tax rate for ~~both periods in 2022~~the three and ~~2021~~nine months ended September 29, 2023 differs from the U.S. federal statutory rate of 21% primarily due to the effect of state taxes and foreign taxable earnings at a rate different from the U.S. federal statutory rate. The Company’s effective tax rate for the three and nine months ended September 30, 2022 differs from the U.S. federal statutory rate of 21% primarily due to the effect of state taxes and foreign taxable earnings at a rate different from the U.S. federal statutory rate, which for the nine months ended September 30, 2022, was offset by ~~the increase in~~ non-taxable income related to ~~our~~the Company’s previously held equity interest in Driivz.

NOTE 9. ~~LEASES~~SEGMENT INFORMATION

In the first quarter of 2023, the Company realigned its internal organization to align with the Company’s strategy, resulting in changes to the Company’s operating segments. Historically, the Company operated through one reportable segment comprised of two operating segments: (i) Mobility Technologies and (ii) Diagnostics and Repair Technologies. Subsequent to the realignment, the Company now operates through three reportable segments which align to the Company’s three operating segments: (i) Mobility Technologies, (ii) Repair Solutions and (iii) Environmental & Fueling Solutions.

The Company’s Coats (Hennessy) business, which is currently held for sale, is presented in Other. The Company’s Global Traffic Technologies business, which was divested during April 2023, is presented in Other for periods prior to the divestiture. Refer to Note 13. Divestitures and Assets and Liabilities Held for Sale for further discussion of the Company’s Coats (Hennessy) and Global Traffic Technologies businesses.

Segment operating profit is used as a performance metric by the chief operating decision maker (“CODM”) in determining how to allocate resources and assess performance. Segment operating profit represents total segment sales less operating costs attributable to the segment, which does not include unallocated corporate costs and other operating costs not allocated to the reportable segments as part of the CODM’s assessment of reportable segment operating performance, including stock-based compensation expense, amortization of intangible assets, restructuring costs, transaction- and deal-related costs, and other costs not indicative of the segment’s core operating performance. As part of the CODM’s assessment of the Repair Solutions segment, a capital charge based on the segment’s financing receivables portfolio is assessed by Corporate (the “Repair Solutions Capital Charge”). The unallocated corporate and other operating costs are presented in Corporate & other unallocated costs in the reconciliation to earnings before income taxes below. Intersegment amounts are not significant and have been eliminated.

The Company’s CODM does not review any information regarding total assets on a segment basis.

~~Operating lease cost was $5.2~~Prior period segment results have been presented in conformity with the Company’s new reportable segments. Segment results for the periods indicated were as follows:


	Three Months Ended				Nine Months Ended
($ in millions)	September 29, 2023		September 30, 2022		September 29, 2023		September 30, 2022
Sales:
Mobility Technologies	$	247.7	$	228.5	$	732.4	$	646.7
Repair Solutions(a)	160.2		152.7		500.0		466.8
Environmental & Fueling Solutions	331.6		368.5		984.7		1,072.0
Other	25.9		38.3		89.1		127.0
Total	$	765.4	$	788.0	$	2,306.2	$	2,312.5

Segment operating profit:
Mobility Technologies	$	51.4	$	54.8	$	144.0	$	138.5
Repair Solutions(b)	43.3		48.6		132.2		137.2
Environmental & Fueling Solutions	95.7		104.3		271.6		284.8
Other	2.2		1.5		8.2		9.8
Segment operating profit	192.6		209.2		556.0		570.3
Corporate & other unallocated costs(b)	(50.0)		(59.0)		(159.0)		(148.8)
Operating profit	142.6		150.2		397.0		421.5
Interest expense, net	(22.8)		(17.9)		(70.7)		(46.1)
Gain on sale of business	0.3		—		34.4		—
Gain on previously held equity interests from combination of business	—		—		—		32.7
Unrealized (loss) gain on equity securities measured at fair value	—		(65.8)		—		17.2
Other non-operating (expense) income, net	(0.2)		1.4		(1.6)		1.3
Earnings before income taxes	$	119.9	$	67.9	$	359.1	$	426.6

Depreciation expense:
Mobility Technologies	$	8.3	$	5.8	$	21.2	$	16.5
Repair Solutions	0.5		0.4		1.4		1.2
Environmental & Fueling Solutions	1.9		3.2		9.3		10.4
Other	—		—		—		0.9
Corporate	0.3		0.4		0.8		0.8
Total	$	11.0	$	9.8	$	32.7	$	29.8

(a) Includes interest income related to financing receivables of $19.7 million, $17.9 million, $58.5 million and ~~$5.3~~$54.5 million for the three ~~months ended September 30, 2022~~ and ~~October 1, 2021, respectively. For the~~ nine months ended September 29, 2023 and September 30, 2022, ~~and October 1, 2021, operating lease cost was $16.4~~respectively.

(b) Includes the Repair Solutions Capital Charge of $10.5 million, $10.0 million, $31.0 million and ~~$15.8~~$29.8 million ~~respectively. During~~for the three and nine months ended September ~~30, 2022~~29, 2023 and October 1, 2021, cash paid for operating leases included in operating cash flows was $14.7 million and $14.1 million, respectively. Right-of-use assets obtained in exchange for operating lease obligations were $7.7 million and $15.7 million for the nine months ended September 30, 2022, ~~and October 1, 2021,~~ respectively.

NOTE 10. LITIGATION AND CONTINGENCIES

Warranty

WeEstimated warranty costs are generally ~~accrue estimated warranty costs~~accrued at the time of sale. In general, manufactured products are warrantied against defects in material and workmanship when properly used for their intended purpose, installed correctly, and appropriately maintained. Warranty period terms depend on the nature of the product and range from ~~ninety~~90 days up to the life of the product. 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. The accrued warranty liability is reviewed on a quarterly basis and may be adjusted as additional information regarding expected warranty costs becomes known.

The following is a rollforward of the Company’s accrued warranty liability:


($ in millions)
Balance, December 31, ~~2021~~2022	$	~~49.4~~43.0
Accruals for warranties issued during the period	~~22.7~~27.8
Settlements made	~~(24.9)~~
~~Additions due to acquisition~~	~~0.5~~ (25.1)
Effect of foreign currency translation	~~(0.9)~~
~~Reclassification to held for sale~~	~~(1.3)~~(0.2)
Balance, September ~~30, 2022~~29, 2023	$	45.5

Litigation and Other Contingencies

The Company is involved in legal proceedings from time to time in the ordinary course of its business. Although the outcome of such matters is uncertain, management believes that these legal proceedings will not have a material adverse effect on the financial condition or results of future operations of the Company.

In accordance with accounting guidance, the Company records a liability in the Consolidated Condensed Financial Statements for loss contingencies when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss does not meet the known or probable level but is reasonably possible and a loss or range of loss can be reasonably estimated, the estimated loss or range of loss is disclosed.

Our reserves consist of specific reserves for individual claims and additional amounts for anticipated developments of these claims as well as for incurred but not yet reported claims. The specific reserves for individual known claims are quantified with the assistance of legal counsel and outside risk insurance professionals where appropriate. In addition, outside risk insurance professionals may assist in the determination of reserves for incurred but not yet reported claims through evaluation of our specific loss history, actual claims reported, and industry trends among statistical and other factors. Reserve estimates are adjusted as additional information regarding a claim becomes known. While we actively pursue financial recoveries from insurance providers, the Company does not recognize any recoveries until realized or until such time as a sustained pattern of collections is established related to historical matters of a similar nature and magnitude. If the risk insurance reserves the Company has established are inadequate, we would be required to incur an expense equal to the amount of the loss incurred in excess of the reserves, which would adversely affect our net earnings.

In connection with the recognition of liabilities for asbestos related matters, the Company records insurance recoveries that are deemed probable and estimable. In assessing the probability of insurance recovery, we make judgments concerning insurance coverage that we believe are reasonable and consistent with our historical dealings, our knowledge of any pertinent solvency issues surrounding insurers, and litigation and court rulings potentially impacting coverage. While the substantial majority of our insurance carriers are solvent, some of our individual carriers are insolvent, which has been considered in the analysis of probable recoveries. Projecting future events is subject to various uncertainties, including litigation and court rulings potentially impacting coverage, that could cause insurance recoveries on asbestos related liabilities to be higher or lower than those projected and recorded. Given the inherent uncertainty in making future projections, the Company reevaluates projections concerning the Company’s probable insurance recoveries considering any changes to the projected liabilities, the Company’s recovery experience or other relevant factors that may impact future insurance recoveries.

~~We recorded gross~~Gross liabilities associated with known and future expected asbestos claims ~~of $73.8 million~~ and ~~$79.0 million~~projected insurance recoveries were as of September 30, 2022 and December 31, 2021, respectively. Known and future expected asbestos claims of $14.2 million and $21.5 million are included in Accrued expenses and other current liabilities on the Consolidated Condensed Balance Sheetsfollows as

of:

of September 30, 2022 and December 31, 2021, respectively. Known and future expected asbestos claims of $59.6 million and $57.5 million are included in Other long-term liabilities on the Consolidated Condensed Balance Sheets as of both September 30, 2022 and December 31, 2021.

We recorded the related projected insurance recoveries of $37.8 million and $45.0 million as of September 30, 2022 and December 31, 2021, respectively. Projected insurance recoveries in the accompanying Consolidated Condensed Balance Sheets as of September 30, 2022 include $7.5 million in Prepaid expenses and other current assets and $30.3 million in Other assets. Projected insurance recoveries in the accompanying Consolidated Condensed Balance Sheets as of December 31, 2021 include $14.8 million in Prepaid expenses and other current assets and $30.2 million in Other assets.


($ in millions)	Classification	September 29, 2023		December 31, 2022
Gross liabilities
Current	Accrued expenses and other current liabilities	$	26.2	$	27.1
Long-term	Other long-term liabilities	76.7		78.1
Total		102.9		105.2

Projected insurance recoveries
Current	Prepaid expenses and other current assets	17.4		21.2
Long-term	Other assets	47.4		47.4
Total		$	64.8	$	68.6

Guarantees

As of September ~~30, 2022~~29, 2023 and December 31, ~~2021, we~~2022, the Company had guarantees consisting primarily of outstanding standby letters of credit, bank guarantees, and performance and bid bonds of approximately ~~$86.7~~$81.0 million and ~~$92.6~~$84.0 million, respectively. These guarantees have been provided in connection with certain arrangements with vendors, customers, financing counterparties, and governmental entities to secure ~~our~~the Company’s obligations and/or performance requirements related to specific transactions. ~~In general, we~~The Company believes that if the obligations under these instruments were triggered, they would ~~only be liable for~~not have a material effect on the ~~amount of these guarantees in the event of default in the performance of our obligations.~~

~~Refer to Note 5. Financing for information regarding guarantees of the Notes by certain of our wholly-owned subsidiaries.~~financial statements.

NOTE 11. FAIR VALUE MEASUREMENTS

Accounting standards define fair value based on an exit price model, establish a framework for measuring fair value where ~~our~~ assets and liabilities are required to be carried at fair value and provide for certain disclosures related to the valuation methods used within a 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 our assumptions.

A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Below is a summary of financial assets and liabilities that are measured at fair value on a recurring basis as of:


($ in millions)	($ in millions)	Quoted Prices in Active Market (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		($ in millions)	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
September 30, 2022
September 29, 2023										September 29, 2023
Contingent consideration liabilities										Contingent consideration liabilities	$	—	$	—	$	9.3	$	9.3
Deferred compensation liabilities										Deferred compensation liabilities	4.5		—		—		4.5
December 31, 2022										December 31, 2022
Equity securities measured at fair value	Equity securities measured at fair value	$	67.1	$	—	$	—	$	67.1	Equity securities measured at fair value	$	21.3	$	—	$	—	$	21.3
Earn-out liabilities		—		—		14.0		14.0
Contingent consideration liabilities										Contingent consideration liabilities	—		—		11.6		11.6
Deferred compensation liabilities	Deferred compensation liabilities	—		4.9		—		4.9		Deferred compensation liabilities	—		5.1		—		5.1
December 31, 2021
Deferred compensation liabilities		$	—	$	4.8	$	—	$	4.8

Certain management employees participate in our nonqualified deferred compensation programs that permit such employees to defer a portion of their compensation, on a pretax basis, until after their termination of employment. All amounts deferred under such plans are unfunded, unsecured obligations and are presented as a component of our compensation and benefits accrual included in Other long-term liabilities in the accompanying Consolidated Condensed Balance Sheets. Participants may choose among alternative earning rates for the amounts they defer, which are primarily based on investment options within our defined contribution plans for the benefit of U.S. employees (“401(k) Programs”) (except that the earnings rates for amounts contributed unilaterally by the Company are entirely based on changes in the value of our common stock). Changes in the

~~deferred compensation liability under these programs are recognized based on changes in the fair value of the participants’ accounts, which are based on the applicable earnings rates.~~

~~Refer to Note 2. Acquisitions for information regarding earn-out liabilities.~~

~~Other Investments~~Equity Securities

The Company ~~holds~~held a minority interest in Tritium Holdings Pty, Ltd (“Tritium”) which historically was recorded at cost in Other assets on the Consolidated Condensed Balance Sheets. On January 13, 2022, Tritium announced that it completed a business combination with Decarbonization Plus Acquisition Corporation II to make Tritium a publicly listed company on NASDAQ under the symbol “DCFC”. AsOnce Tritium ~~is now~~became publicly traded, the Company ~~records~~recorded its investment at fair value in Equity securities measured at fair value on the Consolidated Condensed Balance Sheets with changes in the value recorded in Unrealized (loss)/gain on equity securities measured at fair value on the Consolidated Condensed Statements of Earnings and Comprehensive Income and Unrealized gain on equity securities measured at fair value on the Consolidated Condensed Statements of Cash Flows.

During the ~~nine months ended September 30, 2022,~~first quarter of 2023, the Company sold ~~shares of~~its remaining interest in Tritium ~~stock~~ and recognized a ~~gain~~loss of ~~$2.7~~$0.9 million, which is ~~recorded~~presented in Other non-operating (expense) income, ~~(expense),~~ net on the Consolidated Condensed Statements of Earnings and Comprehensive Income and ~~Gain~~Loss (gain) on equity investments inon the Consolidated Condensed Statements of Cash ~~Flows.~~Flows for the nine months ended September 29, 2023.

Contingent Consideration

The fair value of the contingent consideration liabilities relates to payments to previous owners of acquired companies contingent on the achievement of certain revenue targets. The Company records a liability for contingent consideration in the purchase price for acquisitions at fair value on the acquisition date, and remeasures the liability at each reporting date, based on the Company’s estimate of the expected probability of achievement of the contingency targets. This estimate is based on significant unobservable inputs and represents a Level 3 measurement within the fair value hierarchy.

Deferred Compensation

Certain management employees participate in the Company’s nonqualified deferred compensation programs that permit such employees to defer a portion of their compensation, on a pretax basis, until after their termination of employment. All amounts deferred under such plans are unfunded, unsecured obligations and are presented as a component of our compensation and benefits accrual included in Other long-term liabilities in the Consolidated Condensed Balance Sheets. Participants may choose among alternative earning rates for the amounts they defer, which are primarily based on investment options within our defined contribution plans for the benefit of U.S. employees (except that the earnings rates for amounts contributed unilaterally by the Company are entirely based on changes in the value of the Company’s common stock). Changes in the deferred compensation liability under these programs are recognized based on changes in the fair value of the participants’ accounts, which are based on the applicable earnings rates.

Nonrecurring Fair Value Measurements

Certain assets and liabilities are carried on the accompanying Consolidated Condensed Balance Sheets at cost and are not remeasured to fair value on a recurring basis. These assets include finite-lived intangible assets, which are tested for impairment when a triggering event occurs, and goodwill and identifiable indefinite-lived intangible assets, which are tested for impairment at least annually as of the first day of the fourth quarter or more frequently if events and circumstances indicate that the asset may not be recoverable.

As of September ~~30, 2022,~~29, 2023, assets carried on the balance sheet and not remeasured to fair value on a recurring basis ~~were~~included $1.7 billion of goodwill and ~~$670.8~~$584.8 million of identifiable intangible assets, net.

~~Refer to Note 5. Financing for information related to the fair value of the Company’s borrowings.~~

~~NOTE 12. RELATED-PARTY TRANSACTIONS~~

In connection with the Separation, we entered into the Agreements with Fortive which govern the Separation and provide a framework for the relationship between the parties going forward, including an employee matters agreement, a tax matters agreement, an intellectual property matters agreement, an FBS license agreement and a transition services agreement.

~~Employee Matters Agreement~~

The employee matters agreement sets forth, among other things, the allocation of assets, liabilities and responsibilities relating to employee compensation and benefit plans and programs and other related matters in connection with the Separation, including the treatment of outstanding equity and other incentive awards and certain retirement and welfare benefit obligations.

~~Tax Matters Agreement~~

The tax matters agreement governs the respective rights, responsibilities and obligations of both Fortive and Vontier after the Separation with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and other matters regarding taxes.

~~Intellectual Property Matters Agreement~~

The intellectual property matters agreement sets forth the terms and conditions pursuant to which Fortive and Vontier have mutually granted certain personal, generally irrevocable, non-exclusive, worldwide, and royalty-free rights to use certain intellectual property. Both parties are able to sublicense their rights in connection with activities relating to their businesses, but not for independent use by third parties.

~~FBS License Agreement~~

The FBS license agreement sets forth the terms and conditions pursuant to which Fortive has granted a non-exclusive, worldwide, non-transferable, perpetual license to us to use FBS solely in support of our businesses. We are able to sublicense such license solely to direct and indirect wholly-owned subsidiaries.

~~Transition Services Agreement (“TSA”)~~

The TSA sets forth the terms and conditions pursuant to which Vontier and our subsidiaries and Fortive and its subsidiaries will provide to each other various services after the Separation. The services to be provided include information technology, facilities, certain accounting and other financial functions, and administrative services. The charges for the transition services generally are expected to allow the providing company to fully recover all out-of-pocket costs and expenses it actually incurs in connection with providing the service, plus, in some cases, the allocated indirect costs of providing the services, generally without profit.

~~TSA Payments~~

In accordance with the TSA, receipts from Fortive were immaterial during the three and nine months ended October 1, 2021. During the nine months ended October 1, 2021, we made net payments to Fortive of $48.5 million. Net payments during the nine months ended October 1, 2021 included approximately $30 million of our share of the transaction taxes related to the Separation. Net payments made during the three months ended October 1, 2021 were not significant.

~~Net payments made during the three and nine months ended September 30, 2022 were not significant.~~

NOTE ~~13. CAPITALIZATION~~12. CAPITAL STOCK AND EARNINGS PER SHARE

~~Capital Stock~~

The Company’s authorized capital stock consists of 1,985,000,000 shares of common stock, par value $0.0001 per share, and 15,000,000 shares of preferred stock with no par value, all of which shares of preferred stock are undesignated.

Earnings Per Share

Basic earnings per share is calculated by dividing net earnings by the weighted average number of shares of common stock outstanding. Diluted earnings per share is ~~similarly~~ calculated ~~except that the calculation includes~~by adjusting weighted average common shares outstanding for the dilutive effect of the assumed issuance of shares under stock-based compensation plans, determined using the treasury-stock method, except where the inclusion of such shares would have an anti-dilutive impact.

Information related to the calculation of net earnings per share of common stock is summarized as follows:


		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
($ and shares in millions, except per share amounts)		September 30, 2022		October 1, 2021		September 30, 2022		October 1, 2021
(in millions, except per share amounts)										(in millions, except per share amounts)	September 29, 2023		September 30, 2022		September 29, 2023		September 30, 2022
Numerator:	Numerator:									Numerator:
Net earnings	Net earnings	$	50.1	$	127.3	$	333.6	$	300.6	Net earnings	$	90.6	$	50.1	$	270.7	$	333.6

Denominator:	Denominator:									Denominator:
Basic weighted average common shares outstanding	Basic weighted average common shares outstanding	158.2		169.1		161.5		168.9		Basic weighted average common shares outstanding	154.8		158.2		155.3		161.5
Effect of dilutive stock options and RSUs	Effect of dilutive stock options and RSUs	0.5		1.2		0.7		1.1		Effect of dilutive stock options and RSUs	1.0		0.5		0.8		0.7
Diluted weighted average common shares outstanding	Diluted weighted average common shares outstanding	158.7		170.3		162.2		170.0		Diluted weighted average common shares outstanding	155.8		158.7		156.1		162.2

Earnings per share:	Earnings per share:									Earnings per share:
Basic	Basic	$	0.32	$	0.75	$	2.07	$	1.78	Basic	$	0.59	$	0.32	$	1.74	$	2.07
Diluted	Diluted	$	0.32	$	0.75	$	2.06	$	1.77	Diluted	$	0.58	$	0.32	$	1.73	$	2.06

Anti-dilutive shares	Anti-dilutive shares	3.4		1.6		3.3		2.5		Anti-dilutive shares	1.7		3.4		2.3		3.3

Share Repurchase Program

On May 24, 2022, the Company’s Board of Directors approved a replenishment of the Company’s previously approved share repurchase program announced in May 2021, bringing the total amount authorized for future share repurchases ~~back up~~ to ~~$500~~$500.0 million. Under the share repurchase program, the Company ~~will~~may purchase shares of common stock from time to time ~~on the~~in open market ~~or in~~transactions, privately negotiated ~~transactions.~~transactions, accelerated share repurchase programs, or by combinations of such methods, any of which may use prearranged trading plans that are designed to meet the requirements of Rule 10b5-1(c) of the Securities Exchange Act of 1934. The timing of any repurchases and ~~amount~~the actual number of shares repurchased will ~~be determined by~~depend on a variety of factors, including the Company’s ~~management based on market conditions, share~~stock price, ~~applicable legal~~corporate and regulatory requirements, restrictions under the Company’s debt obligations and other ~~factors. The Company may enter into Rule 10b5-1 plans to facilitate purchases under the share repurchase program.~~market and economic conditions. The share repurchase program may be suspended or discontinued at any time and has no expiration date.

In February 2022, the Company entered into an accelerated share repurchase agreement (“ASR”) with a third-party financial institution whereupon we provided them with a prepayment of $250.0 million and received an initial delivery of 8.2 million shares of our common stock. We received an additional 1.8 million shares of our common stock as final settlement of the ASR during Q2. In total, theThe Company repurchased ~~10.0 million shares under the ASR at an average price of $25.11 per share.~~

~~During the nine months ended September 30, 2022, the Company repurchased an additional 1.6~~0.4 million of the Company’s shares for ~~$38.0~~$11.6 million through open market transactions at an average price per share of ~~$23.02.~~

$30.00 during the three months ended September 29, 2023 and 2.4 million of the Company’s shares for $61.6 million through open market transactions at an average price per share of $26.00 during the nine months ended September 29, 2023. As of September ~~30, 2022,~~29, 2023, the Company has remaining authorization to repurchase ~~$469~~$367.3 million of its common stock under the share repurchase program.

NOTE ~~14.~~13. DIVESTITURES AND ASSETS AND LIABILITIES HELD FOR SALE

Global Traffic Technologies

On April 14, 2023, the Company completed the sale of Global Traffic Technologies for $108.4 million. The Company finalized customary working capital adjustments during the three months ended September 29, 2023. As a result of the transaction, the Company recognized a gain of $0.3 million and $34.4 million during the three and nine months ended September 29, 2023, respectively, which are presented in Gain on sale of business in the Consolidated Condensed Statements of Earnings and Comprehensive Income. There is a transition services agreement (the “TSA”) in place between the Company and Global Traffic Technologies which sets forth the terms and conditions pursuant to which the Company will provide certain services to Global Traffic Technologies. Receipts related to the TSA were insignificant for the three and nine months ended September 29, 2023. The operations of Global Traffic Technologies did not meet the criteria to be presented as discontinued operations.

~~Hennessy~~Coats (Hennessy)

During the three months ended July 1, 2022, the Company reached the strategic decision to exit ~~our Hennessy~~its Coats (Hennessy) business. The Company determined that the associated assets and liabilities met the held for sale accounting criteria and ~~they were~~Coats (Hennessy) was classified as Current assets held for sale and Current liabilities held for sale in the Consolidated Condensed Balance ~~Sheet~~Sheets as of September ~~30, 2022.~~29, 2023. The operations of Coats (Hennessy) did not meet the criteria to be presented as discontinued operations.

~~Global Traffic Technologies~~

During the three months ended July 1, 2022, the Company reached the strategic decision to exit our Global Traffic Technologies business (collectively with Hennessy, the “Disposal Groups”). The Company determined that the associated assets and liabilities met the held for sale accounting criteria and they were classified as Current assets held for sale and Current liabilities held for sale in the Consolidated Condensed Balance Sheet as of September 30, 2022.

The assets and liabilities were measured at the lower of fair value less costs to sell or the carrying value.

The following table summarizes the carrying amounts of major classes of assets and liabilities of ~~the Disposal Groups~~Coats (Hennessy) as ~~of:~~of September 29, 2023 (in millions):

~~($ in millions)~~

ASSETS

Accounts receivable, ~~net~~less allowance for credit losses

~~21.3~~18.1

Inventories

~~16.4~~12.8

~~Other~~Prepaid expenses and other current assets

~~1.7~~0.7

Property, plant and equipment, net

~~9.1~~4.5

Operating lease right-of-use assets

~~0.4~~0.2

~~Other intangible assets, net~~

~~28.7~~

Goodwill

~~56.0~~15.7

~~Other assets~~

~~5.1~~

Total assets held for sale

~~138.7~~52.0

LIABILITIES

Trade accounts payable

~~14.4~~14.3

Current operating lease liabilities

~~0.4~~0.2

Accrued expenses and other current liabilities

~~14.6~~8.2

Other long-term liabilities

~~10.0~~6.6

Total liabilities held for sale

~~39.4~~29.3

~~The operations of Hennessy and Global Traffic Technologies did not meet the criteria individually or in the aggregate to be presented as discontinued operations.~~

~~NOTE 15. SUBSEQUENT EVENT~~

On October 28, 2022, the Company entered into an agreement to refinance the Two-Year Term Loans Due 2023 into a new $600 million three-year delayed draw term loan. The Company plans to draw on this loan in full on or before December 30, 2022 and use the proceeds to pay off the existing Two-Year Term Loans Due 2023. Accordingly, the Two-Year Term Loans Due 2023 remain classified as long-term as of September 30, 2022.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide a reader of our financial statements with a narrative from the perspective of management and is intended to help the reader understand the results ~~and~~of operations and financial condition of the Company. Our MD&A should be read in conjunction with ~~the~~our MD&A and Consolidated and Combined Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021~~2022 (the ~~“2021~~“2022 Annual Report on Form 10-K”). and our Consolidated Condensed Financial Statements as of and for the three and nine months ended September 29, 2023 included in this Form 10-Q.

INFORMATION RELATING TO FORWARD-LOOKING STATEMENTS

Certain statements included or incorporated by reference in this quarterly report, in other documents we file with or furnish to the Securities and Exchange Commission (“SEC”), in our press releases, webcasts, conference calls, materials delivered to shareholders and other communications, are “forward-looking statements” within the meaning of the United States federal securities laws.

Forward-looking statements are not guarantees of future performance and actual results may differ materially from the results, developments and business decisions contemplated by our forward-looking statements. Accordingly, you should not place undue reliance on any such forward-looking statements. Forward-looking statements speak only as of the date of the ~~Report,~~report, document, press release, webcast, call, materials or other communication in which they are made. Important factors that could cause actual results to differ materially from those envisaged in the forward-looking statements include the following:

•The ongoing effects of the COVID-19 pandemic on our global operations and the operations of our customers, suppliers, and vendors is having, and is expected to continue to have, a significant impact on our business and results of operations.

•~~Changes in,~~If we cannot adjust our manufacturing capacity, supply chain management or ~~status of implementation of, industry standards and governmental regulations, including interpretation or enforcement thereof, may reduce demand~~the purchases required for our ~~products~~manufacturing activities to reflect changes in market conditions, customer demand and supply chain or transportation disruptions, our profitability may suffer. In addition, our reliance upon sole or limited sources of supply for certain materials, components and services ~~increase our expenses or otherwise adversely impact our business model.~~could cause production interruptions, delays and inefficiencies.

•Our growth depends in part on the timely development and commercialization, and customer acceptance, of new and enhanced products and services based on technological innovation.

•The indemnification provisions of acquisition agreements by which we have acquired companies may not fully protect us and as a result we may face unexpected liabilities.

•Our ~~businesses are subject to extensive regulation; failure to comply with those regulations could adversely affect our financial statements and our business, including our reputation.~~

•~~International economic, political, war or hostility, legal, compliance, supply chain, epidemic and business factors could negatively affect our financial statements.~~

•~~We may be required to recognize impairment charges for our goodwill and other intangible assets.~~

•~~We are party to asbestos-related product litigation that could adversely affect our financial condition, results of operations and cash flows.~~

•~~Our~~ restructuring actions could have long-term adverse effects on our business.

•As of ~~the date of this quarterly report,~~September 29, 2023, we have outstanding indebtedness of approximately ~~$2.6~~$2.4 billion and the ability to incur an additional ~~$736.0~~$750.0 million of indebtedness under the Revolving Credit Facility ~~as defined above,~~ and in the future we may incur additional indebtedness. This indebtedness could adversely affect our businesses and our ability to meet our obligations and pay dividends.

•We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

•Any inability to consummate acquisitions at our historical rates and at appropriate prices, and to make appropriate investments that support our long-term strategy, could negatively impact our growth rate and stock price.

•Our acquisition of businesses, investments, joint ventures and other strategic relationships could negatively impact our financial statements.

•~~Changes in~~Divestitures or other dispositions could negatively impact our ~~tax rates~~business, and contingent liabilities from businesses that we or ~~exposure to additional income tax liabilities or assessments~~our predecessors have sold could adversely affect our ~~profitability. In addition, audits by tax authorities could result in additional tax payments for prior periods.~~

financial statements.

•

Conditions in the global economy, the particular markets we serve and the financial markets may adversely affect our business and financial statements.

•Adverse changes in our relationships with, or the financial condition, performance, purchasing patterns or inventory levels of, key distributors and other channel partners could adversely affect our financial statements.

•Our financial results are subject to fluctuations in the cost and availability of commodities that we use in our operations.

•~~If we cannot adjust~~Defects, tampering, unanticipated use or inadequate disclosure with respect to our ~~manufacturing capacity~~products or ~~the purchases required for~~services (including software), or allegations thereof, could adversely affect our ~~manufacturing activities to reflect changes in market conditions~~business, reputation and customer demand, our profitability may suffer. In addition, our reliance upon sole or limited sources of supply for certain materials, components and services could cause production interruptions, delays and inefficiencies.financial statements.

•~~Potential indemnification liabilities~~We have a limited history of operating as a separate, publicly traded company, and our historical financial information is not necessarily representative of the results that we would have achieved as a separate, publicly traded company and may not be a reliable indicator of our future results.

•Our growth could suffer if the markets into which we sell our products and services decline, do not grow as anticipated or experience cyclicality.

•Our reputation, ability to ~~Fortive pursuant~~do business and financial statements may be impaired by improper conduct by any of our employees, agents or business partners.

•If we do not or cannot adequately protect our intellectual property, or if third parties infringe our intellectual property rights, we may suffer competitive injury or expend significant resources enforcing our rights.

•Third parties may claim that we are infringing or misappropriating their intellectual property rights and we could suffer significant litigation expenses, losses or licensing expenses or be prevented from selling products or services.

•If we suffer a loss to ~~the separation agreement~~our facilities, supply chains, distribution systems or information technology systems due to catastrophe or other events, our operations could ~~materially~~be seriously harmed.

•Our ability to attract, develop and retain talented executives and other key employees is critical to our success.

•Work stoppages, union and works council campaigns and other labor disputes could adversely impact our productivity and results of operations.

•International economic, political, legal, compliance, supply chain, epidemic, pandemic and business factors could negatively affect our financial statements.

•Foreign currency exchange rates may adversely affect our financial statements.

•Changes in, or status of implementation of, industry standards and governmental regulations, including interpretation or enforcement thereof, may reduce demand for our products or services, increase our expenses or otherwise adversely impact our business model.

•Our businesses are subject to extensive regulation; failure to comply with those regulations could adversely affect our financial statements and our business, including our reputation.

•We are party to asbestos-related product litigation that could adversely affect our financial condition, results of operations and cash flows. ~~In addition, there can be no assurance~~

•A significant disruption in, or breach in security of, our information technology systems or data or violation of data privacy laws could adversely affect our business, reputation and financial statements.

•Our operations, products and services expose us to the risk of environmental, health and safety liabilities, costs and violations that ~~Fortive’s performance~~could adversely affect our business, reputation and financial statements.

•We are subject to a variety of ~~its indemnity obligations to us under~~litigation and other legal and regulatory proceedings in the ~~separation agreement regarding certain liabilities will be sufficient.~~course of our business that could adversely affect our business and financial statements.

•If ~~there is a determination that~~we are unable to implement and maintain effective internal control over financial reporting in the ~~distribution, together with certain related transactions, is taxable for U.S. federal income tax purposes because~~future, investors may lose confidence in the ~~facts, assumptions, representations or undertakings underlying Fortive’s private letter ruling from~~accuracy and completeness of our financial reports and the IRS or tax opinion are incorrect or for any other reason, then Fortive and its stockholders could incur significant U.S. federal income tax liabilities, and we could also incur significant liabilities.market price of our common stock may be negatively affected.

•We may be ~~affected by significant restrictions, including on~~required to recognize impairment charges for our ~~ability to engage in certain corporate transactions for a two-year period after the distribution in order to avoid triggering significant tax-related liabilities.~~goodwill and other intangible assets.

•~~Fortive may compete with us.~~

•~~We may not achieve some~~Changes in our effective tax rates or ~~all of the expected benefits of the separation, and the separation may adversely~~exposure to additional income tax liabilities or assessments could affect our ~~businesses.~~profitability. In addition, audits by tax authorities could result in additional payments for prior periods.

See “Item ~~1.A.~~1A. Risk Factors” in our ~~2021~~2022 Annual Report on Form 10-K and ~~Part~~“Part II - Item 1A. Risk Factors” in this Form 10-Q for a further discussion regarding reasons that actual results may differ materially from the results, developments and business decisions contemplated by our forward-looking statements. Forward-looking statements speak only as of the date of the report, document, press release, webcast, call, materials or other communication in which they are made. We do not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise.

OVERVIEW

General

Vontier Corporation (“Vontier,” the “Company,” “we,” “us,” or “our”) is a global industrial technology company ~~that focuses on critical technical~~uniting productivity, automation and multi-energy technologies to meet the needs of a rapidly evolving, more connected mobility ecosystem. Leveraging leading market positions, decades of domain expertise and unparalleled portfolio breadth, Vontier enables the way the world moves, delivering smart, safe and sustainable solutions to our customers and the planet. Vontier has a culture of continuous improvement and innovation built upon the foundation of the Vontier Business System and embraced by colleagues worldwide.

Segments

In the first quarter of 2023, we realigned our internal organization to align with our strategy, resulting in changes to our operating segments. Historically, we operated through one reportable segment comprised of two operating segments: (i) Mobility Technologies and (ii) Diagnostics and Repair Technologies. Subsequent to the realignment, we now operate through three reportable segments which align to our three operating segments: (i) Mobility Technologies, which provides digitally enabled equipment ~~components,~~and solutions to support efficient operations across the mobility ecosystem, including point-of-sale and payment systems, workflow automation solutions, telematics, data analytics, software platform for electric vehicle charging networks, and integrated solutions for alternative fuel dispensing; (ii) Repair Solutions, which manufactures and distributes aftermarket vehicle repair tools, toolboxes, automotive diagnostic equipment and software through a network of mobile franchisees; and (iii) Environmental & Fueling Solutions, which provides environmental and fueling hardware and software, and services for manufacturing, repair and servicing in the mobility infrastructure industry worldwide. We supply a wide range of solutions spanning advanced environmental sensors; fueling equipment; field payment hardware; point-of-sale; workflow and monitoring software; vehicle tracking and fleet management; softwareaftermarket solutions for ~~traffic light control; and vehicle mechanics’ and technicians’ equipment. We market our products and services to retail and commercial~~global fueling operators, convenience store and in-bay car wash operators, tunnel car wash businesses, commercial vehicle repair businesses, municipal governments and public safety entities and fleet owners/operators on a global basis.

Our research and development, manufacturing, sales, distribution, service and administrative operations are located in more than 30 countries across North America, Asia Pacific, Europe and Latin America. In addition, we sell our products in these countries and multiple other markets in these regions. We define high-growth markets as developing markets of the world experiencing extended periods of accelerated growth in gross domestic product and infrastructure, which include Eastern Europe, the Middle East, Africa, Latin America, and Asia, with the exception of Japan and Australia.infrastructure.

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~~BUSINESS PERFORMANCE AND OUTLOOK~~

~~Business Performance~~

~~On an overall basis, sales of our hardware and software products and services increased~~Our Coats (Hennessy) business, which is currently held for sale, is presented in Other. The Company’s Global Traffic Technologies business, which was divested during ~~the three and nine months ended September 30, 2022. As compared~~April 2023, is presented in Other for periods prior to the ~~comparable periods of 2021, aggregate year-over-year total sales increased 2.5%~~divestiture. Refer to Note 13. Divestitures and ~~5.1%~~Assets and Liabilities Held for the three and nine months ended September 30, 2022, respectively. Sales from existing businesses decreased 1.9% and 0.2% during the three and nine months ended September 30, 2022, respectively, as comparedSale to the ~~comparable periods~~Consolidated Condensed Financial Statements for further discussion of the Company’s Coats (Hennessy) and Global Traffic Technologies businesses.

Prior period segment results have been presented in ~~2021.~~

~~The increase in total sales during~~conformity with the three months ended September 30, 2022 was primarily driven by our acquisition of DRB Systems, LLC (“DRB”), which is part of our mobility technologies platform, as well as our diagnostics and repair portfolio, which experienced strong demand across most product categories. The Company saw strong demand for our compressed natural gas technology within our alternative energy solutions and aftermarket within our mobility technologies platform, but was impacted by the lower rate of demand related to the enhanced credit card security requirements for outdoor payment systems based on the Europay, Mastercard and Visa (“EMV”) global standards. Changes in foreign currency exchange rates negatively impacted our sales growth by 3.3% during the three months ended September 30, 2022 compared to the comparable period in 2021.

The increase in total sales during the nine months ended September 30, 2022 was primarily driven by our acquisition of DRB. Our mobility technologies platform had strong demand for alternative energy but was impacted by the lower rate of demand related to the enhanced credit card security requirements for outdoor payment systems based on the Europay, Mastercard and Visa (“EMV”) global standards as well as the end of Mexico fiscal regulation upgrades. Additionally, total sales increased due to our diagnostics and repair technologies platform, which experienced strong demand across most product categories, most notably specialty tools and diagnostics as well as the impact of price increases by the Company across its portfolio. Changes in foreign currency exchange rates negatively impacted our sales growth by 2.5% during the nine months ended September 30, 2022 compared to the comparable period in 2021.

In developed markets, year-over-year total sales increased at a rate in the mid single digits and sales from existing businesses declined at rate in the low single digits for the three months ended September 30, 2022. The increase in total sales was primarily due to an increase in North America related to the impact of our acquisition of DRB and strong demand for our compressed natural gas technology within our alternative energy solutions which was partially offset by declines in Western Europe. In high growth markets, total sales and sales from existing businesses for the three months ended September 30, 2022 declined at a rate in the low double digits and low single digits, respectively. The decline in total sales was primarily due to timing for dispenser and environmental deliveries in India and the negative impact of foreign exchange rates.

In developed markets, year-over-year total sales increased at a rate in the high single digits for the nine months ended September 30, 2022. Sales from existing businesses for the nine months ended September 30, 2022 were up slightly. The increase in total sales was primarily due to an increase in North America related to the impact of our acquisition of DRB and strong demand for our compressed natural gas technology within our alternative energy solutions which was partially offset by declines in Western Europe. In high growth markets total sales and sales from existing businesses decreased at a rate in the low double digits and mid single digits, respectively, driven by declines in Latin America due to the end of Mexico fiscal regulation upgrades and the Middle East and Africa.Company’s new reportable segments.

Outlook

We expect overall sales and core sales ~~from existing businesses~~ to ~~grow~~decline on a year-over-year basis in ~~2022. Additionally,~~2023 due to the end of the U.S. upgrade cycle for enhanced credit card security requirements for outdoor payments systems based on the Europay, MasterCard and Visa (“EMV”) global standards. Excluding this impact, we expect core sales to increase high-single digits. Our outlook is subject to various assumptions and risks, including but not limited to the resilience and durability of the economies of the United States and other critical regions, ongoing challenges with global logistics and supply chain including the availability of electronic components, the impact of ~~the COVID-19 pandemic, the impact of the Russia Ukraine Conflict,~~international conflicts, including Russia-Ukraine and Israel-Hamas, market conditions in key end product segments, and the impact of energy disruption in Europe.

~~Our outlook is subject to the below factors as well as additional~~ Additional uncertainties asare identified in “Information Relating to Forward-Looking Statements” above.

We anticipate that supply chain and inflationary pressures will persist throughout 2022 and that although our backlog may decline compared to 2021, it may remain elevated compared to historical levels. At the end of August, one of our key electronic suppliers for multiple boards that are part of every dispenser shipped in the United States, suffered a cyberattack that brought down all their manufacturing capability for approximately three weeks, which impacted our Greensboro factory while we mitigated the issue. We will continue to deploy the Vontier Business System to actively manage production challenges,

~~collaborate with customers and suppliers to minimize disruptions and utilize price increases and other countermeasures to offset inflationary pressures.~~

We continue to monitor the macroeconomic and geopolitical conditions which may impact our business, including ~~the COVID-19 pandemic,~~ monetary and fiscal policies, changes in the banking system, international trade and relations between the U.S., China and other nations, and investment and taxation policy initiatives being considered in the United States and by the Organization for Economic Co-operation and ~~Development.~~Development (the “OECD”). We also continue to monitor the ~~Russia Ukraine Conflict~~Russia-Ukraine and Israel-Hamas conflicts and the impact on our business and operations. As of the filing date of this report, we do not believe they are material.

RESULTS OF OPERATIONS

Comparison of Results of Operations


		Three Months Ended						Nine Months Ended							Three Months Ended						Nine Months Ended
($ in millions)	($ in millions)	September 30, 2022			October 1, 2021			September 30, 2022			October 1, 2021			($ in millions)	September 29, 2023			September 30, 2022			September 29, 2023			September 30, 2022
Total sales		$	788.0		$	768.5		$	2,312.5		$	2,200.5
Total cost of sales		(428.1)			(422.1)			(1,269.2)			(1,223.8)
Sales														Sales	$	765.4		$	788.0		$	2,306.2		$	2,312.5
Cost of sales														Cost of sales	(406.4)			(428.1)			(1,246.1)			(1,269.2)
Gross profit	Gross profit	359.9			346.4			1,043.3			976.7			Gross profit	359.0			359.9			1,060.1			1,043.3
Operating costs:	Operating costs:													Operating costs:
Selling, general and administrative expenses ("SG&A")	Selling, general and administrative expenses ("SG&A")	(174.7)			(147.8)			(517.4)			(458.1)			Selling, general and administrative expenses ("SG&A")	(177.3)			(174.7)			(542.7)			(517.4)
Research and development expenses ("R&D")	Research and development expenses ("R&D")	(35.0)			(31.2)			(104.4)			(97.3)			Research and development expenses ("R&D")	(39.1)			(35.0)			(120.4)			(104.4)

Operating profit	Operating profit	$	150.2		$	167.4		$	421.5		$	421.3		Operating profit	$	142.6		$	150.2		$	397.0		$	421.5

Gross profit as a % of sales	Gross profit as a % of sales	45.7		%	45.1		%	45.1		%	44.4		%	Gross profit as a % of sales	46.9		%	45.7		%	46.0		%	45.1		%
SG&A as a % of sales	SG&A as a % of sales	22.2		%	19.2		%	22.4		%	20.8		%	SG&A as a % of sales	23.2		%	22.2		%	23.5		%	22.4		%
R&D as a % of sales	R&D as a % of sales	4.4		%	4.1		%	4.5		%	4.4		%	R&D as a % of sales	5.1		%	4.4		%	5.2		%	4.5		%
Operating profit as a % of sales	Operating profit as a % of sales	19.1		%	21.8		%	18.2		%	19.1		%	Operating profit as a % of sales	18.6		%	19.1		%	17.2		%	18.2		%

The components of our consolidated sales growth were as follows for the periods indicated:


	% Change Three Months Ended September 29, 2023 vs. Comparable 2022 Period		% Change Nine Months Ended September 29, 2023 vs. Comparable 2022 Period
Total sales growth (GAAP)	(2.9)	%	(0.3)	%
Core sales (Non-GAAP)	(2.6)	%	(0.2)	%
Acquisitions and divestitures (Non-GAAP)	(0.2)	%	0.8	%
Currency exchange rates (Non-GAAP)	(0.1)	%	(0.9)	%

Sales for each of our segments were as follows for the periods indicated:


	Three Months Ended				Nine Months Ended
($ in millions)	September 29, 2023		September 30, 2022		September 29, 2023		September 30, 2022
Mobility Technologies	$	247.7	$	228.5	$	732.4	$	646.7
Repair Solutions	160.2		152.7		500.0		466.8
Environmental & Fueling Solutions	331.6		368.5		984.7		1,072.0
Other	25.9		38.3		89.1		127.0
Total	$	765.4	$	788.0	$	2,306.2	$	2,312.5

Mobility Technologies

The components of sales growth for our Mobility Technologies segment were as follows for the periods indicated:


	% Change Three Months Ended September 29, 2023 vs. Comparable 2022 Period		% Change Nine Months Ended September 29, 2023 vs. Comparable 2022 Period
Total sales growth (GAAP)	8.4	%	13.3	%
Core sales (Non-GAAP)	4.1	%	6.8	%
Acquisitions (Non-GAAP)	4.8	%	7.9	%
Currency exchange rates (Non-GAAP)	(0.5)	%	(1.4)	%

Total sales within our Mobility Technologies segment increased 8.4% during the three months ended September 29, 2023, as compared to the comparable period in 2022, driven by a 4.1% increase in core sales and a 4.8% increase from our recent acquisitions, partially offset by a 0.5% decrease due to the impact of currency translation. The increase in core sales was primarily due to solid demand in our car wash technologies and alternative energy solutions.

Total sales within our Mobility Technologies segment increased 13.3% during the nine months ended September 29, 2023, as compared to the comparable period in 2022, driven by a 6.8% increase in core sales and a 7.9% increase from our recent acquisitions, partially offset by a 1.4% decrease due to the impact of currency translation. The increase in core sales was primarily due to solid demand in our car wash technologies and alternative energy solutions.

The components of sales growth for our Repair Solutions segment were as follows for the periods indicated:


	% Change Three Months Ended September 29, 2023 vs. Comparable 2022 Period		% Change Nine Months Ended September 29, 2023 vs. Comparable 2022 Period
Total sales growth (GAAP)	4.9	%	7.1	%
Core sales (Non-GAAP)	5.0	%	7.2	%
Acquisitions (Non-GAAP)	—	%	—	%
Currency exchange rates (Non-GAAP)	(0.1)	%	(0.1)	%

Total sales and core sales within our Repair Solutions segment increased 4.9% and 5.0%, respectively, during the three months ended September 29, 2023, as compared to the comparable period in 2022, primarily due to strong demand in the tool storage and powered tools product categories.

Total sales and core sales within our Repair Solutions segment increased 7.1% and 7.2%, respectively, during the nine months ended September 29, 2023, as compared to the comparable period in 2022, primarily due to strong demand in the tool storage, hardline and powered tools product categories.

Environmental & Fueling Solutions

The components of ~~Sales Growth~~
% Change Three Months Ended September 30, 2022 vs. Comparable 2021 Period % Change Nine Months Ended September 30, 2022 vs. Comparable 2021 Period
Total revenue growth (GAAP) 2.5 % 5.1 %
Existing businesses (Non-GAAP) (1.9) % (0.2) %
Acquisitions (Non-GAAP) 7.7 % 7.8 %
Currency exchange rates (Non-GAAP) (3.3) % (2.5) %
sales growth for our Environmental & Fueling Solutions segment were as follows for the periods indicated:


	% Change Three Months Ended September 29, 2023 vs. Comparable 2022 Period		% Change Nine Months Ended September 29, 2023 vs. Comparable 2022 Period
Total sales growth (GAAP)	(10.0)	%	(8.1)	%
Core sales (Non-GAAP)	(10.3)	%	(7.2)	%
Acquisitions (Non-GAAP)	—	%	—	%
Currency exchange rates (Non-GAAP)	0.3	%	(0.9)	%

Total sales within our ~~mobility technologies platform increased low single digits~~Environmental & Fueling Solutions segment decreased 10.0% during the three months ended September ~~30, 2022~~29, 2023, as compared to the comparable period in 2022, driven primarily by a 10.3% decrease in core sales, partially offset by a 0.3% increase due to the impact of ~~2021 which~~currency translation. The decrease in core sales was ~~primarily attributable to our acquisition of DRB. Our sales from existing businesses in our mobility technologies platform decreased low single digits~~ primarily due to the ~~lower rate~~end of ~~demand related to~~ the U.S. upgrade cycle for enhanced credit card security requirements for outdoor ~~payment~~payments systems based on the EMV global standards, ~~which were~~ partially offset by strong demand for ~~our compressed natural gas technology within our alternative energy solutions.~~U.S. fuel dispenser systems and environmental products, globally.

Total sales within our ~~mobility technologies platform increased mid single digits~~Environmental & Fueling Solutions segment decreased 8.1% during the nine months ended September ~~30, 2022~~29, 2023, as compared to the comparable period in 2022, driven primarily by a 7.2% decrease in core sales and a 0.9% decrease due to the impact of ~~2021 which~~currency translation. The decrease in core sales was ~~primarily attributable to our acquisition of DRB. Our sales from existing businesses in our mobility technologies platform were down slightly~~ primarily due to the ~~lower rate~~end of ~~demand related to~~ the U.S. upgrade cycle for enhanced credit card security requirements for outdoor ~~payment~~payments systems based on the EMV global standards, ~~as well as~~

~~the end of Mexico fiscal regulation upgrades which were~~ partially offset by strong demand for ~~our compressed natural gas technology within our alternative energy solutions.~~

~~Total sales~~U.S. fuel dispenser systems, aftermarket parts and sales from existing businesses within our diagnostics and repair technologies platform increased low single digits during the three months ended September 30, 2022 as compared to the comparable period in 2021 driven primarily by continued strong demand across most product categories, most notably hardline and powered tools.

Total sales and sales from existing businesses within our diagnostics and repair technologies platform increased low single digits during the nine months ended September 30, 2022 as compared to the comparable period in 2021. The results of our diagnostics and repair technologies platform were driven primarily by continued strong demand across most product categories, most notably specialty and hardline tools.

The impact on the Company of price increases are reflected as a component of the change in sales from existing businesses, and year-over-year price increases contributed 5.9% and 5.3% to sales growth during the three and nine months ended September 30, 2022 versus the comparable periods in 2021.

The impact of currency translation decreased reported sales 3.3% and 2.5% on a year-over-year basis during the three and nine month periods ended September 30, 2022, respectively, primarily due to the unfavorable impact of the strengthening of the U.S. dollar against most other major currencies in 2022 compared to the comparable periods of 2021.

environmental products, globally.

Cost of sales ~~increased $6.0~~decreased $21.7 million, or 5.1%, for the three months ended September ~~30, 2022,~~29, 2023, as compared to the comparable period in ~~2021, which was~~2022, primarily due ~~primarily~~ to the ~~impact of acquisitions~~decrease in sales in our Environmental & Fueling Solutions segment, as ~~well as~~discussed above, and cost optimization, partially offset by increased costs due to inflationary pressures.

~~The year-over-year increase~~Cost of ~~$45.4~~sales decreased $23.1 million, ~~in cost of sales~~or 1.8%, for the nine months ended September ~~30, 2022~~29, 2023, as compared to the comparable period in ~~2021 was~~2022, primarily due to the decrease in sales in our Environmental & Fueling Solutions segment, as discussed above, and cost optimization, partially offset by the impact of ~~DRB~~recent acquisitions as well as increased costs due to inflationary pressures.

Gross profit ~~increased~~decreased $0.9 million, or 0.3%, during the three months ended September ~~30, 2022,~~29, 2023, as compared to the comparable period in ~~2021, which was~~2022, primarily due to increased costs due to inflationary pressures, partially offset by cost optimization and the net impact of the Company’s price increases. Gross profit margin increased 120 basis points during the three months ended September 29, 2023, as compared to the comparable period in 2022.

Gross profit increased $16.8 million, or 1.6%, during the nine months ended September 29, 2023, as compared to the comparable period in 2022, primarily due to cost optimization, the net impact of the Company’s price increases and ~~the impact of the acquisition of DRB and was partially offset by the increased costs due to inflationary pressures.~~

The year-over-year increase in gross profit for the nine months ended September 30, 2022 as compared to the comparable period in 2021 is primarily due to the impact of the Company’s price increases and the impact of the acquisition of DRB and was partially offset by the increased costs due to inflationary pressures.

The 60 and 70 basis point increases in gross profit margin during the three and nine months ended September 30, 2022, respectively, as compared to the comparable periods in 2021 is primarily due to price increases and the impact of the DRB acquisition which wereour recent acquisitions, partially offset by increased costs due to inflationary pressures. Gross profit margin increased 90 basis points during the nine months ended September 29, 2023, as compared to the comparable period in 2022.

Operating Costs and Other Expenses

SG&A expenses increased ~~by $26.9~~$2.6 million, or ~~300 basis points as a percentage of sales,~~1.5%, during the three months ended September ~~30, 2022,~~29, 2023, as compared to the comparable period in ~~2021,~~2022, and as a percentage of sales, increased 100 basis points during the same period, primarily due to an increase in variable and stock-based compensation expense and the impact of reserve-related adjustments to the ~~acquisition of DRB.~~Repair Solutions receivables portfolio, partially offset by a decrease in transaction and deal-related costs.

SG&A expenses increased ~~by $59.3~~$25.3 million, or ~~160 basis points as a percentage of sales,~~4.9%, during the nine months ended September ~~30, 2022,~~29, 2023, as compared to the comparable period in ~~2021,~~2022, and as a percentage of sales, increased 110 basis points during the same period, primarily due to an increase in costs associated with restructuring activities, variable and stock-based compensation expense and SG&A expenses, including intangible asset amortization, from our recent acquisitions, and the impact of reserve-related adjustments to the ~~acquisition of DRB.~~Repair Solutions receivables portfolio, partially offset by a decrease in transaction and deal-related costs.

R&D expenses, ~~(consisting~~consisting principally of internal and contract engineering personnel ~~costs)~~costs, increased ~~$3.8~~$4.1 million, ~~and $7.1 million~~or 11.7%, during the three ~~and nine~~ months ended September ~~30, 2022, respectively,~~29, 2023, as compared to the comparable ~~periods~~period in ~~2021,~~2022, primarily due to ~~the impact of~~continued growth investments in our ~~acquisitions of DRB and Driivz.~~Mobility Technologies segment. R&D ~~expense~~expenses as a percentage of sales ~~was relatively flat during the three and nine months ended September 30, 2022.~~

~~Operating profit margin decreased 270~~increased 70 basis points during the three months ended September ~~30, 2022~~29, 2023, as compared to the comparable period in ~~2021.~~2022.

~~Year-over-year operating profit margin comparisons were favorably impacted by:~~

•~~The year-over-year impacts~~R&D expenses increased $16.0 million, or 15.3%, during the nine months ended September 29, 2023, as compared to the comparable period in 2022, primarily due to the impact of our recent acquisitions and continued growth investments in our Mobility Technologies segment. R&D expenses as a percentage of sales ~~volumes, price, sales mix, other operating impacts and changes in foreign currency exchange rates — favorable 20 basis points~~

•~~The year-over-year operating effect of our acquisitions, excluding amortization — favorable 50 basis points~~

~~Year-over-year operating profit margin comparisons were primarily impacted by the following unfavorable factors:~~

•~~Increased costs due to inflationary pressures — unfavorable 340 basis points~~

~~Operating profit margin decreased 90~~increased 70 basis points during the nine months ended September ~~30, 2022~~29, 2023, as compared to the comparable period in ~~2021.~~2022.

~~Year-over-year~~Operating Profit

Operating profit decreased $7.6 million, or 5.1%, during the three months ended September 29, 2023, as compared to the comparable period in 2022, and operating profit margins decreased 50 basis points during the same period.

Operating profit decreased $24.5 million, or 5.8%, during the nine months ended September 29, 2023, as compared to the comparable period in 2022, and operating profit margins decreased 100 basis points during the same period.

Segment operating profit is used as a performance metric by the CODM in determining how to allocate resources and assess performance. Segment operating profit represents total segment sales less operating costs attributable to the segment, which does not include unallocated corporate costs and other operating costs not allocated to the reportable segments as part of the CODM’s assessment of reportable segment operating performance, including stock-based compensation expense, amortization of intangible assets, restructuring costs, transaction- and deal-related costs, and other costs not indicative of the segment’s core operating performance. As part of the CODM’s assessment of the Repair Solutions segment, a capital charge based on the segment’s financing receivables portfolio is assessed by Corporate. Refer to Note 9. Segment Information to the Consolidated Condensed Financial Statements for additional information.

Segment operating profit, operating profit and related margins were as follows for the periods indicated:


	Three Months Ended								Nine Months Ended
($ in millions)	September 29, 2023		Margin		September 30, 2022		Margin		September 29, 2023		Margin		September 30, 2022		Margin
Mobility Technologies	$	51.4	20.8	%	$	54.8	24.0	%	$	144.0	19.7	%	$	138.5	21.4	%
Repair Solutions	43.3		27.0		48.6		31.8		132.2		26.4		137.2		29.4
Environmental & Fueling Solutions	95.7		28.9		104.3		28.3		271.6		27.6		284.8		26.6
Other	2.2		8.5		1.5		3.9		8.2		9.2		9.8		7.7
Segment operating profit	192.6		25.2		209.2		26.5		556.0		24.1		570.3		24.7
Corporate & other unallocated costs(a)	(50.0)		(6.6)		(59.0)		(7.4)		(159.0)		(6.9)		(148.8)		(6.5)
Total operating profit	$	142.6	18.6	%	$	150.2	19.1	%	$	397.0	17.2	%	$	421.5	18.2	%

(a) Margin for corporate & other unallocated costs is presented as a percentage of total sales.

Mobility Technologies

Segment operating profit for our Mobility Technologies segment decreased $3.4 million, or 6.2%, during the three months ended September 29, 2023, as compared to the comparable period in 2022, and segment operating profit margin ~~comparisons were favorably impacted by:~~

•~~The year-over-year impacts of sales volumes, price, sales mix, other operating impacts and changes in foreign currency exchange rates — favorable 190~~decreased 320 basis points

• during the same period. The ~~year-over-year operating effect of our acquisitions, excluding amortization — favorable 60 basis points~~

~~Year-over-year~~decrease in segment operating profit margin ~~comparisons were~~was primarily ~~impacted by~~due to continued growth investment.

Segment operating profit for our Mobility Technologies segment increased $5.5 million, or 4.0%, during the ~~following unfavorable factors:~~nine months ended September 29, 2023, as compared to the comparable period in 2022, and segment operating profit margin decreased 170 basis points during the same period. The decrease in segment operating profit margin was primarily due to a change in the mix of products sold, due to recent acquisitions, and continued growth investment.

Segment operating profit for our Repair Solutions segment decreased $5.3 million, or 10.9%, during the three months ended September 29, 2023, as compared to the comparable period in 2022, and segment operating profit margin decreased 480 basis points during the same period. The decrease in segment operating profit margin was primarily due to the impact of reserve-related adjustments to the receivables portfolio and a tariff benefit during 2022.

•~~Increased costs~~Segment operating profit for our Repair Solutions segment decreased $5.0 million, or 3.6%, during the nine months ended September 29, 2023, as compared to the comparable period in 2022, and segment operating profit margin decreased 300 basis points during the same period. The decrease in segment operating profit margin was primarily due to ~~inflationary pressures — unfavorable 340~~the impact of reserve-related adjustments to the receivables portfolio.

Environmental & Fueling Solutions

Segment operating profit for our Environmental & Fueling Solutions segment decreased $8.6 million, or 8.2%, during the three months ended September 29, 2023, as compared to the comparable period in 2022, and segment operating profit margin increased 60 basis points during the same period. The increase in segment operating profit margin was primarily due to cost savings from restructuring activities and continued price-cost benefits.

Segment operating profit for our Environmental & Fueling Solutions segment decreased $13.2 million, or 4.6%, during the nine months ended September 29, 2023, as compared to the comparable period in 2022, and segment operating profit margin increased 100 basis points during the same period. The increase in segment operating profit margin was primarily due to cost savings from restructuring activities and continued price-cost benefits.

Corporate & Other Unallocated Costs

Corporate & other unallocated costs decreased $9.0 million, or 15.3%, during the three months ended September 29, 2023, as compared to the comparable period in 2022, primarily due to a decrease in transaction and deal-related costs, partially offset by an increase in variable and stock-based compensation expense. Corporate & other unallocated costs as a percentage of total sales decreased 80 basis points during the three months ended September 29, 2023, as compared to the comparable period in 2022.

Corporate & other unallocated costs increased $10.2 million, or 6.9%, during the nine months ended September 29, 2023, as compared to the comparable period in 2022, primarily due to an increase in costs associated with restructuring activities, intangible asset amortization and variable and stock-based compensation expense, partially offset by a decrease in transaction and deal-related costs. Corporate & other unallocated costs as a percentage of total sales increased 40 basis points during the nine months ended September 29, 2023, as compared to the comparable period in 2022.

NON-GAAP FINANCIAL MEASURES

Core Sales ~~from Existing Businesses~~

We define core sales ~~from existing businesses~~ as total sales excluding (i) sales from acquired and certain divested businesses; (ii) the impact of currency translation; and (iii) certain other items.

•References to sales attributable to acquisitions or acquired businesses refer to GAAP sales from acquired businesses recorded prior to the first anniversary of the acquisition less the amount of sales attributable to certain divested businesses or product lines not considered discontinued operations.

•The portion of sales attributable to the impact of currency translation is calculated as the difference between (a) the period-to-period change in sales (excluding sales from acquired businesses) and (b) the period-to-period change in sales, including foreign operations, (excluding sales from acquired businesses) after applying the current period foreign exchange rates to the prior year period.

•The portion of sales attributable to other items is calculated as the impact of those items which are not directly correlated to core sales ~~from existing businesses~~ which do not have an impact on the current or comparable period.

~~Sales from existing businesses~~Core sales should be considered in addition to, and not as a replacement for or superior to, total sales, and may not be comparable to similarly titled measures reported by other companies.

Management believes that reporting the non-GAAP financial measure of core sales ~~from existing businesses~~ provides useful information to investors by helping identify underlying growth trends in our business and facilitating easier comparisons of our sales performance with our performance in prior and future periods and to our peers. We exclude the effect of acquisitions and divestiture-related items because the nature, size and number of such transactions can vary dramatically from period to period and between us and our peers. We exclude the effect of currency translation and certain other items from core sales ~~from existing businesses~~ because these items are either not under management’s control or relate to items not directly correlated to ~~sales from existing businesses.~~core sales. Management believes the exclusion of these items from core sales ~~from existing businesses~~ may facilitate assessment of underlying business trends and may assist in comparisons of long-term performance. References to sales volume refer to the impact of both price and unit sales.

INTEREST COSTS

Interest expense, net was $22.8 million during the three months ended September 29, 2023, as compared to $17.9 million for the comparable period in 2022, an increase of $4.9 million, driven primarily by the impact of increases in interest rates on our variable-rate debt obligations, partially offset by a decrease in our outstanding debt obligations between periods.

Interest expense, net was $70.7 million during the nine months ended September 29, 2023, as compared to $46.1 million for the comparable period in 2022, an increase of $24.6 million, driven primarily by the impact of increases in interest rates on our variable-rate debt obligations, partially offset by a decrease in our outstanding debt obligations between periods.

For a discussion of our outstanding indebtedness, refer to Note 5. Financing to the Consolidated Condensed Financial Statements.

INCOME TAXES

~~General~~

Income tax expense and deferred tax assets and liabilities reflect management’s assessment of future taxes expected to be paid on items reflected in our financial statements. Our effective tax rate can be affected by, among other items, changes in the mix of earnings in countries with differing statutory tax rates (including as a result of business acquisitions and dispositions), changes in the valuation of deferred tax assets and liabilities, the implementation of tax planning strategies, tax rulings, court decisions, settlements with tax authorities and changes in tax laws.

~~Comparison of the Three and Nine Months Ended September 30, 2022 and October 1, 2021~~Effective Tax Rate

Our effective tax rate for the three and nine months ended September ~~30, 2022~~29, 2023 was ~~26.2%~~24.4% and ~~21.8%~~24.6%, respectively, as compared to ~~19.6%~~26.2% and ~~22.2%~~21.8% for the three and nine months ended ~~October 1, 2021.~~September 30, 2022. The ~~year-over-year increase~~decrease in the effective tax rate for the three months ended September ~~30, 2022~~29, 2023 as compared to the comparable period in the prior year was primarily due to a loss from the ~~recording~~sale of ~~our investment in Tritium~~equity securities measured at fair ~~value.~~value in the prior year. The ~~year-over-year decrease~~increase in the effective tax rate for the nine months ended September ~~30, 2022~~29, 2023 as compared to the comparable period in the prior year was primarily due to ~~an increase in~~ non-taxable income related to our previously held equity interest in Driivz ~~and a decrease~~ in ~~state taxes.~~the prior year.

~~Our~~Pillar Two

The OECD agreed among over 130 countries on the Pillar Two proposals which establish a global minimum effective tax rate of 15% for ~~both periods~~multinational groups with annual global revenue exceeding €750 million. Many countries continue to announce changes in ~~2022~~their tax laws and ~~2021 differs from~~regulations based on the ~~U.S. federal statutory~~Pillar Two proposals, including the European Union (“EU”) Member States which unanimously adopted the EU Pillar Two Directive, providing for a minimum effective tax rate of ~~21% due primarily~~15%. EU Member States are required to enact the EU Pillar Two Directive into their national laws by December 31, 2023, with effective dates of January 1, 2024 and January 1, 2025, respectively, for different aspects of the EU Pillar Two Directive. We are currently evaluating the potential impact of the Pillar Two global minimum tax proposals on our financial statements.

COMPREHENSIVE INCOME

Comprehensive income increased by $63.1 million during the three months ended September 29, 2023, as compared to the ~~effect~~comparable period in 2022. Comprehensive income for the three months ended September 30, 2022 includes an unrealized loss on equity securities measured at fair value of ~~state taxes~~$65.8 million.

Comprehensive income increased by $25.7 million during the nine months ended September 29, 2023, as compared to the comparable period in 2022. Comprehensive income for the nine months ended September 29, 2023 includes a gain on the sale of the Company’s Global Traffic Technologies business of $34.4 million and unfavorable foreign ~~taxable earnings at a rate different from the U.S. federal statutory rate, which~~currency translation adjustments of $34.2 million. Comprehensive income for the nine months ended September 30, 2022 ~~was offset by the increase in non-taxable income related to our~~includes a gain on previously held equity interests from combination of business of $32.7 million which relates to a gain recognized on our interest in ~~Driivz.~~

~~COMPREHENSIVE INCOME~~

~~Comprehensive income decreased by $115.1 million during~~Driivz prior to acquiring the ~~three months ended September 30, 2022 as compared to the comparable period in 2021 primarily due to unfavorable changes in foreign currency adjustments~~remaining outstanding shares, an unrealized gain on equity securities measured at fair value of ~~$37.7 million and net earnings that were lower by $77.2 million.~~

~~Comprehensive income decreased by $65.3 million during the nine months ended September 30, 2022 as compared to the comparable period in 2021 primarily due to net earnings that were higher by $33.0~~$17.2 million and unfavorable ~~changes in~~ foreign currency translation adjustments of ~~$98.2~~$122.9 million.

Refer to Note 2. Acquisitions to the Consolidated Condensed Financial Statements for additional information on our acquisition of Driivz, Note 11. Fair Value Measurements to the Consolidated Condensed Financial Statements for additional information on our investments and Note 13. Divestitures and Assets and Liabilities Held for Sale to the Consolidated Condensed Financial Statements for additional information on the divestiture of our Global Traffic Technologies business.

LIQUIDITY AND CAPITAL RESOURCES

We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. As of September 29, 2023, we held $263.6 million of cash and cash equivalents and had $750.0 million of borrowing capacity under our revolving credit facility. We generate substantial cash from operating activities and believe that our operating cash flow and other sources of liquidity will be sufficient to allow us to continue to support working capital needs, capital expenditures, pay interest and service debt, pay taxes and any related interest or penalties, fund our restructuring activities and pension plans as required, invest in existing businesses, consummate strategic acquisitions, ~~make interest payments on our outstanding indebtedness, and~~ manage our capital structure on a short and long-term ~~basis.~~

~~2022 Financing~~basis and ~~Capital Transactions~~

~~During~~support other business needs or objectives. We also have purchase obligations which consist of agreements to purchase goods or services that are enforceable and legally binding on us and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions and the ~~nine months ended~~approximate timing of the transaction. As of September ~~30, 2022,~~29, 2023, we ~~completed the following financing and capital transactions:~~

•~~Entered and settled a $250.0 million accelerated share repurchase program under which~~believe that we ~~received 10.0 million shares which are held as Treasury stock;~~

•~~Repurchased 1.6 million shares in the open market which are held as Treasury stock.~~have sufficient liquidity to satisfy our cash needs.

Our long-term debt requires, among others, that we maintain certain financial covenants, and we were in compliance with all of these covenants as of September ~~30, 2022.~~29, 2023.

2023 Financing and Capital Transactions

During the nine months ended September 29, 2023, we completed the following financing and capital transactions:

•Voluntarily repaid $240.0 million of the Three-Year Term Loans Due 2024;

•Repurchased 2.4 million shares for $61.6 million in the open market.

Refer ~~also~~ to Note 5. Financing to the Consolidated Condensed Financial Statements for ~~additional information.~~more information related to our long-term indebtedness and Note 12. Capital Stock and Earnings per Share to the Consolidated Condensed Financial Statements for more information related to our share repurchases.

Overview of Cash Flows and Liquidity

Following is an overview of our cash flows and liquidity:


		Nine Months Ended					Nine Months Ended
($ in millions)	($ in millions)	September 30, 2022		October 1, 2021		($ in millions)	September 29, 2023		September 30, 2022
Net cash provided by operating activities	Net cash provided by operating activities	$	139.8	$	341.9	Net cash provided by operating activities	$	290.1	$	139.8

Proceeds from sale of business, net of cash provided						Proceeds from sale of business, net of cash provided	$	107.5	$	—
Cash paid for acquisitions, net of cash received	Cash paid for acquisitions, net of cash received	$	(277.1)	$	(955.5)	Cash paid for acquisitions, net of cash received	—		(277.1)
Payments for additions to property, plant and equipment	Payments for additions to property, plant and equipment	(43.0)		(32.9)		Payments for additions to property, plant and equipment	(43.5)		(43.0)
Proceeds from sale of asset		0.2		—
Proceeds from sale of property						Proceeds from sale of property	4.3		0.2
Cash paid for equity investments	Cash paid for equity investments	(11.3)		(7.6)		Cash paid for equity investments	(2.7)		(11.3)
Proceeds from sale of equity securities	Proceeds from sale of equity securities	5.1		—		Proceeds from sale of equity securities	20.4		5.1
Cash received for settlement of investment		—		7.0
Net cash used in investing activities		$	(326.1)	$	(989.0)
Net cash provided by (used in) investing activities						Net cash provided by (used in) investing activities	$	86.0	$	(326.1)

Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt	$	235.0	$	2,186.5	Proceeds from issuance of long-term debt	$	—	$	235.0
Repayment of long-term debt	Repayment of long-term debt	(185.0)		(1,400.0)		Repayment of long-term debt	(240.0)		(185.0)
Payment for debt issuance costs		—		(5.1)
Payment of common stock cash dividend		(12.0)		(8.4)
Purchase of treasury stock		(288.0)		—

Net borrowings (repayments) of short-term debt		3.6		(6.2)
Net transfers to Former Parent		—		(35.6)
Net proceeds from short-term borrowings						Net proceeds from short-term borrowings	1.4		3.6
Payments of common stock cash dividend						Payments of common stock cash dividend	(11.7)		(12.0)
Purchases of treasury stock						Purchases of treasury stock	(61.6)		(288.0)
Proceeds from stock option exercises	Proceeds from stock option exercises	1.3		6.8		Proceeds from stock option exercises	6.0		1.3
Acquisition of noncontrolling interest		—		(1.9)
Other financing activities	Other financing activities	(3.8)		(4.8)		Other financing activities	(7.4)		(3.8)
Net cash (used in) provided by financing activities		$	(248.9)	$	731.3
Net cash used in financing activities						Net cash used in financing activities	$	(313.3)	$	(248.9)

Operating Activities

Cash flows from operating activities can fluctuate significantly from ~~period-to-period~~period to period as working capital needs and the timing of payments for income taxes, ~~various employee liabilities,~~ restructuring activities, and other items impact reported cash flows.

Cash flows from operating activities were ~~$139.8~~$290.1 million during the nine months ended September ~~30, 2022, a decrease~~29, 2023, an increase of ~~$202.1~~$150.3 million, as compared to the comparable period in ~~2021.~~2022. The year-over-year change in operating cash flows was primarily attributable to the following factors:

•The aggregate of accounts receivable and long-term financing receivables used ~~$76.1~~$33.6 million of operating cash flows during the nine months ended September ~~30, 2022~~29, 2023 compared to using ~~$25.0~~$76.1 million in the comparable period of ~~2021.~~2022. The amount of cash flow generated from or used by accounts receivable depends upon how effectively we manage the cash conversion cycle and can be significantly impacted by the timing of collections in a period. Additionally, when we originate certain financing receivables, we assume the financing receivable by decreasing the franchisee’s trade accounts receivable. As a result, originations of certain financing receivables are non-cash transactions.

•The aggregate of other operating assets and liabilities used $16.8 million during the nine months ended September 29, 2023 compared to using $158.4 million in the comparable period of 2022. This change is due primarily to working capital needs and the timing of accruals and payments and tax-related amounts.

Investing Activities

Net cash provided by investing activities was $86.0 million during the nine months ended September 29, 2023, driven primarily by proceeds from the sale of our Global Traffic Technologies business and equity securities, partially offset by payments for additions to property, plant and equipment. Net cash used in investing activities was $326.1 million during the nine months ended September 30, 2022, ~~compared to providing $11.0 million in~~driven primarily by the ~~comparable~~cash paid for the acquisitions that closed during the period ~~of 2021. This change is due primarily to the timing of accruals~~ and payments ~~as well as inventory~~for additions to property, plant and ~~other working~~equipment.

We made capital ~~needs.~~

~~Investing Activities~~

~~Net cash used in investing activities decreased by $662.9~~expenditures of approximately $43.5 million and $43.0 million during the nine months ended September 29, 2023 and September 30, 2022, ~~as compared to the comparable period~~respectively.

Financing Activities

Net cash used in ~~2021 primarily due to the cash paid for the acquisition of DRB in~~financing activities was $313.3 million during the nine months ended ~~October 1, 2022.~~

~~Financing Activities~~September 29, 2023, driven primarily by the voluntary repayment of $240.0 million of the Three-Year Term Loans due 2024 and ~~Indebtedness~~

~~Cash flows from~~repurchases of the Company’s common stock of $61.6 million. Net cash used in financing activities ~~used~~was $248.9 million during the nine months ended September 30, 2022, ~~compared to $731.3~~driven primarily by repurchases of ~~cash provided in~~ the ~~comparable period in 2021. The decrease in cash provided was primarily due to lower~~Company’s common stock of $288.0 million, partially offset by net proceeds from long-term debt of ~~$2.0 billion, an increase in purchase of treasury stock of $288.0 million, and a decrease in repayments of long-term debt of $1.2 billion.~~$50.0 million.

~~Contractual Obligations~~Share Repurchase Program

~~There have been no material changes~~Refer to Note 12. Capital Stock and Earnings per Share to the ~~contractual obligations as disclosed in~~Consolidated Condensed Financial Statements for a description of the Company’s share repurchase program.

Dividends

We paid regular quarterly cash dividends of $0.025 per share during the nine months ended September 29, 2023. The declaration of future cash dividends is at the discretion of our ~~2021 Annual Report on Form 10-K.~~Board of Directors and will depend upon, among other things, our future earnings, cash flows, capital requirements, financial condition and general business conditions.

Supplemental Guarantor Financial Information

As of September ~~30, 2022,~~29, 2023, we had $1.6 billion in aggregate principal amount of the Registered Notes and ~~$1.0 billion~~$760.0 million in aggregate principal amount outstanding of the Term Loans. Our obligations to pay principal and interest on the Registered Notes and Term Loans are fully and unconditionally guaranteed on a joint and several basis on an unsecured, unsubordinated basis by ~~the Guarantors.~~Gilbarco Inc. and Matco Tools Corporation, two of Vontier’s wholly-owned subsidiaries (the “Guarantor Subsidiaries”). Our other subsidiaries do not guarantee any such indebtedness (collectively, the “Non-Guarantor Subsidiaries”). Refer to Note 5. Financing to the Consolidated Condensed Financial Statements for additional information regarding the terms of our Registered Notes and the Term Loans.

The Registered Notes and the guarantees thereof are the Company’s and the ~~guarantors’~~Guarantor Subsidiaries’ senior unsecured obligations and:

•rank without preference or priority among themselves and equally in right of payment with our existing and any future unsecured and unsubordinated indebtedness, including, without limitation, indebtedness under our credit agreement;

•are senior in right of payment to any of our existing and future indebtedness that is subordinated to the notes;

•are effectively subordinated to any of our existing and future secured indebtedness to the extent of the assets securing such indebtedness; and

•are structurally subordinated to all existing and any future indebtedness and any other liabilities of our ~~non-Guarantor~~Non-Guarantor Subsidiaries.

The following tables present summarized financial information for Vontier Corporation and the Guarantor Subsidiaries on a combined basis and after the elimination of (a) intercompany transactions and balances between Vontier Corporation and the Guarantor Subsidiaries and (b) equity in earnings from and investments in the Non-Guarantor Subsidiaries.


Summarized Results of Operations Data ($ in millions)	Nine Months Ended September ~~30, 2022~~29, 2023
Net sales (a)	$	~~1,122.6~~1,141.5
Gross profit (b)	~~554.8~~560.5
Net income (c)	$	~~379.6~~259.0

(a) Includes intercompany sales of ~~$5.1~~$23.6 million for the nine months ended September ~~30, 2022.~~29, 2023.
(b) Includes intercompany gross profit of ~~$10.5~~$4.6 million for the nine months ended September ~~30, 2022.~~29, 2023.
(c) Includes ~~pretax~~ intercompany ~~net~~pretax income of ~~$30.0~~$25.5 million for the nine months ended September ~~30, 2022.~~29, 2023.

September 30, 2022 December 31, 2021
Summarized Balance Sheet Data ($ in millions)
Assets
Current assets $ 473.7 $ 364.2
Intercompany receivables 952.7 581.1
Noncurrent assets 612.7 603.7
Total assets $ 2,039.1 $ 1,549.0
Liabilities
Current liabilities $ 377.8 $ 399.2
Intercompany payables 348.7 400.3
Noncurrent liabilities 2,664.8 2,635.4
Total liabilities $ 3,391.3 $ 3,434.9


Summarized Balance Sheet Data ($ in millions)	September 29, 2023
Assets
Current assets	$	398.8
Intercompany receivables	1,639.1
Noncurrent assets	636.2
Total assets	$	2,674.1
Liabilities
Current liabilities	$	339.1
Intercompany payables	379.8
Noncurrent liabilities	2,402.1
Total liabilities	$	3,121.0

CRITICAL ACCOUNTING ESTIMATES

~~There~~Except as described below, there were no material changes to the Company’s critical accounting estimates described in the Company’s ~~2021~~2022 Annual Report on Form 10-K.

Goodwill

Goodwill arises from the purchase price for acquired businesses exceeding the fair value of tangible and intangible assets acquired less assumed liabilities. We assess the goodwill of each of our reporting units for impairment at least annually as of the first day of the fourth quarter or more frequently if events and circumstances indicate that goodwill may not be recoverable.

When evaluating for impairment, we may first perform a qualitative assessment to determine whether it is more likely than not that a reporting unit or indefinite-lived intangible asset is impaired. If we do not perform a qualitative assessment, or if we determine that it is not more likely than not that the fair value of the reporting unit or indefinite-lived intangible asset exceeds its carrying amount, we will calculate the estimated fair value of the reporting unit or indefinite-lived intangible asset. Our decision to perform a qualitative impairment assessment for an individual reporting unit in a given year is influenced by a number of factors, inclusive of the size of the reporting unit's goodwill, the significance of the excess of the reporting unit's estimated fair value over carrying value at the last quantitative assessment date, the amount of time in between quantitative fair value assessments and the date of acquisition.

In the first quarter of 2023, we realigned our internal organization, as further discussed in Note 9. Segment Information to the Consolidated Condensed Financial Statements, which resulted in a decrease in the number of reporting units for goodwill impairment testing from seven reporting units to five reporting units. For historical reporting units that were divided among our new reporting units after the realignment, we used the relative fair value method to reallocate goodwill to the new reporting units. We performed a qualitative goodwill impairment test immediately prior to and following the change in reporting units. Factors we considered in the qualitative assessment included general macroeconomic conditions, industry and market conditions, cost factors, overall financial performance of our reporting units, events or changes affecting the composition or carrying value of the net assets of our reporting units, information related to market multiples of peer companies and other relevant entity specific events. Based on our assessment, we determined on the basis of the qualitative and quantitative factors that the fair values of the reporting units were more likely than not greater than their respective carrying values both immediately prior to and following the change in reporting units, and therefore, a quantitative test was not required.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and qualitative disclosures about market risk appear in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Instruments and Risk Management,” in the Company’s ~~2021~~2022 Annual Report on Form 10-K. There were no material changes to this information during the ~~quarter~~nine months ended September ~~30, 2022.~~29, 2023.

ITEM 4. CONTROLS AND PROCEDURES

Our management, with the participation of the President and Chief Executive Officer, and the Senior Vice President and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the President and Chief Executive Officer, and the Senior Vice President and Chief Financial Officer, have concluded that, as of the end of such period, these disclosure controls and procedures were effective.

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the most recent completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

4136

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Vontier is party in the ordinary course of business, and may in the future be involved in, legal proceedings, litigation, claims, and government investigations. Although the results of the legal proceedings, claims, and government investigations in which we are involved cannot be predicted with certainty, we do not believe that the final outcome of these matters is reasonably likely to have a material adverse effect on our business, financial condition, or operating results.

Refer to ~~“Note~~Note 10. Litigation ~~And~~and Contingencies ~~– Litigation and Other Contingencies” of~~to the Consolidated Condensed Financial Statements in this Form 10-Q for more information on certain legal proceedings.

ITEM 1A. RISK FACTORS

Information regarding risk factors appears in “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Information ~~Related~~Relating to Forward-Looking Statements,” in Part I - Item 2 of this Form 10-Q and in “Risk Factors” in Part I - Item 1A of our ~~2021~~2022 Annual Report on Form 10-K. There were no material changes during the three months ended September ~~30, 2022~~29, 2023 to the risk factors reported in our ~~2021~~2022 Annual Report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) Not applicable.

(b) Not applicable.

~~Stock~~On May 24, 2022, the Company’s Board of Directors approved a replenishment of the Company’s previously approved share repurchase program announced in May 2021, bringing the total amount authorized for future share repurchases to $500.0 million. Under the share repurchase program, the Company may ~~be made~~purchase shares of common stock from time to time in open market transactions, privately negotiated transactions, accelerated share repurchase programs, or by combinations of such methods, any of which may use ~~pre-arranged~~prearranged trading plans that are designed to meet the requirements of Rule 10b5-1(c) of the Securities Exchange Act of 1934. The timing of any repurchases and the actual number of shares repurchased will depend on a variety of factors, including the Company’s stock price, corporate and regulatory requirements, restrictions under the Company’s debt obligations and other market and economic conditions.

~~In February 2022, the Company entered into an accelerated~~ The share repurchase ~~agreement (“ASR”) with a third-party financial institution whereupon we provided them with a prepayment of $250.0 million~~program may be suspended or discontinued at any time and received an initial delivery of 8.2 million shares of our common stock. We received an additional 1.8 million shares of our common stock as final settlement of the ASR during Q2. In total, the Company repurchased 10.0 million shares under the ASR at an average price per share of $25.11.has no expiration date.

The following table sets forth our share repurchase activity for the three months ended September ~~30, 2022.~~29, 2023:

Period
Total Number of Shares Purchased(1)
Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
($ in millions)
July 2, 2022 to July 29, 2022 0.8 $ 22.33 0.8 $ 469
July 30, 2022 to August 26, 2022 — — — —
August 27, 2022 to September 30, 2022 — — — —
Total 0.8 0.8


Period	Total Number of Shares Purchased (in millions)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (in millions)	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs ($ in millions)
July 1, 2023 to July 28, 2023	—	$	—	—	$	378.9
July 29, 2023 to August 25, 2023	0.3	29.86		0.3	369.5
August 26, 2023 to September 29, 2023	0.1	30.60		0.1	367.3
Total	0.4			0.4

~~(1)~~ All shares are covered by our $500 million share repurchase program. The program was approved on May 19, 2021 and has no expiration date. On May 24, 2022, the Company’s Board of Directors approved a replenishment of the Company’s share repurchase program, bringing the total amount authorized for future share repurchases back up to $500 million.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

4237

ITEM 5. OTHER INFORMATION

Rule 10b5-1 Trading Plans

During the three months ended September 29, 2023, none of the Company’s directors or executive officers adopted, modified or terminated any contract, instruction or written plan for the purchase or sale of the Company’s securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

ITEM 6. EXHIBITS

~~Incorporated by Reference (Unless Otherwise Indicated)~~

~~Exhibit Number~~

~~Exhibit Index~~

~~Form~~

~~File No.~~

~~Exhibit~~

~~Filing Date~~

10.1*

~~Letter Agreement between Anshooman Aga and Vontier Corporation dated August 9, 2022~~

~~8-K~~

~~001-39483~~

~~10.1~~

~~August 12, 2022~~

10.2*

~~Transition Agreement between David Naemura and Vontier Corporation dated August 11, 2022~~

~~8-K~~

~~001-39483~~

~~10.2~~

~~August 12, 2022~~

~~31.1~~

~~Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~

—

~~Filed herewith~~

~~31.2~~

~~Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~

—

~~Filed herewith~~

~~32.1~~

~~Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~

—

~~Filed herewith~~

~~32.2~~

~~Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~

—

~~Filed herewith~~

~~101.INS~~

~~Inline XBRL Instance Document - the Instance Document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document~~

—

~~Filed herewith~~

~~101.SCH~~

~~Inline XBRL Taxonomy Schema Document~~

—

~~Filed herewith~~

~~101.CAL~~

~~Inline XBRL Taxonomy Extension Calculation Linkbase Document~~

—

~~Filed herewith~~

~~101.DEF~~

~~Inline XBRL Taxonomy Extension Definition Linkbase Document~~

—

~~Filed herewith~~

~~101.LAB~~

~~Inline XBRL Taxonomy Extension Label Linkbase Document~~

—

~~Filed herewith~~

~~101.PRE~~

~~Inline Taxonomy Extension Presentation Linkbase Document~~

—

~~Filed herewith~~

~~104~~

~~Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)~~

—

~~Filed herewith~~


		Incorporated by Reference (Unless Otherwise Indicated)

Exhibit Number	Exhibit Index	Form	File No.	Exhibit	Filing Date
22.1	List of Guarantor Subsidiaries	10-K	001-39483	22.1	February 17, 2023
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—	—		Filed herewith
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—	—		Filed herewith
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	—	—		Filed herewith
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	—	—		Filed herewith
101.INS	Inline XBRL Instance Document - the Instance Document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document	—	—		Filed herewith
101.SCH	Inline XBRL Taxonomy Schema Document	—	—		Filed herewith
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	—	—		Filed herewith
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	—	—		Filed herewith
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	—	—		Filed herewith
101.PRE	Inline Taxonomy Extension Presentation Linkbase Document	—	—		Filed herewith
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)	—	—		Filed herewith

* Indicates management contract or compensatory plan, contract or arrangement

4338

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	VONTIER CORPORATION:

Date: November ~~4, 2022~~2, 2023	By:	/s/ Anshooman Aga
		Anshooman Aga
		Senior Vice President and Chief Financial Officer

Date: November ~~4, 2022~~2, 2023	By:	/s/ Paul V. Shimp
		Paul V. Shimp
		Chief Accounting Officer

4439


Oror
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to


Delaware						84-2783455
(State or other jurisdiction of incorporation or organization)						(I.R.S. employer identification number)


		Page
PART I	FINANCIAL INFORMATION	4
Item 1.	Financial Statements (unaudited)	53
	Consolidated Condensed Balance Sheets as of ~~September~~3 0September 29 , ~~2022~~2023 and December 31, ~~2021~~2022	53
	Consolidated Condensed Statements of Earnings and Comprehensive Income for the Three and Nine Months Ended September 29 , 2023 and September 30 , 2022 ~~and~~ ~~October 1, 2021~~	64
	Consolidated Condensed Statements of Changes in ~~Stockholders'~~ Equity for the Three and Nine Months Ended September 29 , 2023 and September 30 , 2022 ~~and~~ ~~October 1, 2021~~	75
	Consolidated Condensed Statements of Cash Flows for the Nine Months Ended September 29 , 2023 and September 30 , 2022 ~~and~~ Oc ~~tober 1, 2021~~	107
	Notes to the Consolidated Condensed Financial Statements	118
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3225
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4136
Item 4.	Controls and Procedures	4136

PART II	OTHER INFORMATION	42
Item 1.	Legal Proceedings	4237
Item 1A.	Risk Factors	4237
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4237
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	38
Item 6.	Exhibits	4338
	Signatures		4439


	Common Stock			Additional Paid-In Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income/(loss)		Noncontrolling Interests		Total
	Shares	Amount
Balance, December 31, 2020	168.5	$	—	$	7.6	$	(13.6)	$	193.8	$	3.9	$	191.7
Net earnings	—	—		—		91.0		—		—		91.0
Other comprehensive loss, net of income taxes	—	—		—		—		(15.6)		—		(15.6)
Stock-based compensation expense	—	—		6.6		—		—		—		6.6
Exercise of common stock options and stock award distributions, net of shares for tax withholding	0.3	—		(1.4)		—		—		—		(1.4)
Acquisition of noncontrolling interest	—	—		(2.0)		—		—		0.1		(1.9)
Non-cash separation-related adjustments and other	—	—		(2.1)		—		—		—		(2.1)
Change in noncontrolling interests	—	—		—		—		—		(0.3)		(0.3)
Balance, April 2, 2021	168.8	$	—	$	8.7	$	77.4	$	178.2	$	3.7	$	268.0
Net earnings	—	—		—		82.3		—		—		82.3
Dividends on common stock ($0.025 per share)	—	—		—		(4.2)		—		—		(4.2)
Other comprehensive loss, net of income taxes	—	—		—		—		(2.0)		—		(2.0)
Stock-based compensation expense	—	—		6.4		—		—		—		6.4
Exercise of common stock options and stock award distributions, net of shares for tax withholding	0.1	—		2.5		—		—		—		2.5

Non-cash separation-related adjustments and other	—	—		(3.8)		—		—		—		(3.8)
Change in noncontrolling interests	—	—		—		—		—		0.1		0.1
Balance, July 2, 2021	168.9	$	—	$	13.8	$	155.5	$	176.2	$	3.8	$	349.3
Net earnings	—	—		—		127.3		—		—		127.3
Dividends on common stock ($0.025 per share)	—	—		—		(4.2)		—		—		(4.2)

Other comprehensive loss, net of income taxes	—	—		—		—		(6.8)		—		(6.8)
Stock-based compensation expense	—	—		6.3		—		—		—		6.3
Exercise of common stock options and stock award distributions, net of shares for tax withholding	0.1	—		2.5		—		—		—		2.5
Change in noncontrolling interests	—	—		—		—		—		0.2		0.2
Balance, October 1, 2021	169.0	$	—	$	22.6	$	278.6	$	169.4	$	4.0	$	474.6


($ in millions)	Preliminary Purchase Price Allocation		Measurement Period Adjustments		Final Purchase Price Allocation		Weighted Average Amortization Period
Accounts receivable	$	17.3	$	(3.3)	$	14.0
Inventories	21.0		(0.1)		20.9
Prepaid and other current assets	3.8		(0.1)		3.7
Technology	142.1		0.5		142.6		9.0
Customer relationships	227.0		—		227.0		11.0
Trade names	36.0		—		36.0		14.0
Goodwill	587.4		(15.6)		571.8
Other assets	14.9		0.1		15.0
Trade accounts payable	(5.8)		—		(5.8)
Accrued expenses and other current liabilities	(44.6)		2.5		(42.1)
Other long-term liabilities	(43.6)		16.3		(27.3)
Purchase price, net of cash acquired	$	955.5	$	0.3	$	955.8


($ in millions)	($ in millions)	2022		2021		2020		2019		2018		Prior		Total		($ in millions)	2023		2022		2021		2020		2019		Prior		Total
PSAs	PSAs															PSAs
Credit Score:	Credit Score:															Credit Score:
Less than 400	Less than 400	$	12.7	$	9.8	$	4.9	$	2.7	$	0.8	$	0.2	$	31.1	Less than 400	$	13.6	$	8.5	$	4.5	$	2.1	$	0.8	$	—	$	29.5
400-599	400-599	20.0		14.6		8.4		4.1		1.5		0.6		49.2		400-599	22.0		15.0		7.6		3.9		1.4		0.2		50.1
600-799	600-799	41.1		30.4		16.0		7.7		2.7		0.9		98.8		600-799	47.0		30.1		16.6		7.9		2.5		0.6		104.7
800+	800+	65.6		40.5		20.8		9.4		3.0		0.7		140.0		800+	75.5		45.1		20.8		9.7		2.7		0.4		154.2
Total PSAs	Total PSAs	$	139.4	$	95.3	$	50.1	$	23.9	$	8.0	$	2.4	$	319.1	Total PSAs	$	158.1	$	98.7	$	49.5	$	23.6	$	7.4	$	1.2	$	338.5

Franchisee Notes	Franchisee Notes															Franchisee Notes
Active distributors	Active distributors	$	18.7	$	23.8	$	9.1	$	8.4	$	4.5	$	4.5	$	69.0	Active distributors	$	17.6	$	19.4	$	15.2	$	7.9	$	5.6	$	6.7	$	72.4
Separated distributors	Separated distributors	0.1		0.6		1.6		2.6		1.3		4.1		10.3		Separated distributors	0.1		0.9		3.1		2.5		2.2		4.8		13.6
Total Franchisee Notes	Total Franchisee Notes	$	18.8	$	24.4	$	10.7	$	11.0	$	5.8	$	8.6	$	79.3	Total Franchisee Notes	$	17.7	$	20.3	$	18.3	$	10.4	$	7.8	$	11.5	$	86.0

Current Period Gross Write-offs																Current Period Gross Write-offs
PSAs																PSAs	$	0.9	$	11.2	$	8.3	$	4.6	$	2.0	$	1.1	$	28.1
Franchisee Notes																Franchisee Notes	—		0.7		0.8		0.3		0.4		0.2		2.4
Total current period gross write-offs																Total current period gross write-offs	$	0.9	$	11.9	$	9.1	$	4.9	$	2.4	$	1.3	$	30.5


($ in millions)	Foreign Currency Translation Adjustments		Other Adjustments (a)			Total
For the Three Months Ended September 30, 2022:
Balance, July 1, 2022	$	106.7	$	(3.0)		$	103.7
Other comprehensive income (loss) before reclassifications, net of income taxes	(44.7)		—			(44.7)
Amounts reclassified from accumulated other comprehensive income (loss):
Increase	—		0.1			0.1
Income tax impact	—		(0.1)			(0.1)
Amounts reclassified from accumulated other comprehensive income, net of income taxes	—		—		(b)	—
Net current period other comprehensive income (loss), net of income taxes	(44.7)		—			(44.7)
Balance, September 30, 2022	$	62.0	$	(3.0)		$	59.0

For the Three Months Ended October 1, 2021:
Balance, July 2, 2021	$	180.6	$	(4.4)		$	176.2
Other comprehensive income (loss) before reclassifications, net of income taxes	(7.0)		—			(7.0)
Amounts reclassified from accumulated other comprehensive income (loss):
Increase	—		0.2			0.2

Amounts reclassified from accumulated other comprehensive income, net of income taxes	—		0.2		(b)	0.2
Net current period other comprehensive income (loss), net of income taxes	(7.0)		0.2			(6.8)
Balance, October 1, 2021	$	173.6	$	(4.2)		$	169.4

(a) Includes balances relating to defined benefit plans and supplemental executive retirement plans.
(b) This accumulated other comprehensive income component is included in the computation of net periodic pension cost.


	% Change Three Months Ended September 30, 2022 vs. Comparable 2021 Period		% Change Nine Months Ended September 30, 2022 vs. Comparable 2021 Period
Total revenue growth (GAAP)	2.5	%	5.1	%
Existing businesses (Non-GAAP)	(1.9)	%	(0.2)	%
Acquisitions (Non-GAAP)	7.7	%	7.8	%
Currency exchange rates (Non-GAAP)	(3.3)	%	(2.5)	%


Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs ($ in millions)
July 2, 2022 to July 29, 2022	0.8	$	22.33	0.8	$	469
July 30, 2022 to August 26, 2022	—	—		—	—
August 27, 2022 to September 30, 2022	—	—		—	—
Total	0.8			0.8