Fortive (FTV) 10-K risk factor changes: FY2020 vs FY2019

Our business is also subject to general risks and uncertainties that affect many other companies, such as market conditions, economic conditions, geopolitical events, changes in laws, [removed: regulations] [added: regulations,] or accounting rules, fluctuations in interest rates, terrorism, wars or conflicts, major health concerns, natural [removed: disasters] [added: disasters,] or other disruptions of expected business conditions.

Additional risks and uncertainties not currently known to us or that we currently believe are immaterial also may impair our business, including our results of operations, [removed: liquidity] [added: liquidity,] and financial condition.*

[removed: Risks] [added: Risk] Related to Our [removed: Business][added: Business Operations]

Slower global economic growth, actual or anticipated default on sovereign debt, changes in global trade policies, volatility in the currency and credit markets, high levels of unemployment and underemployment, reduced levels of capital expenditures, changes in government fiscal and monetary policies, government deficit reduction and budget negotiation dynamics, sequestration, other austerity measures, political and social instability, natural disasters, terrorist attacks, and other challenges that affect the global economy adversely affect us and our distributors, [removed: customers] [added: customers,] and suppliers, including having the effect of:

[removed: | • |] [added: -] reducing demand for our products, [removed: software] [added: software,] and services, limiting the financing available to our customers and suppliers, increasing order [removed: cancellations] [added: cancellations,] and resulting in longer sales cycles and slower adoption of new technologies; [removed: |]

[removed: | • |] [added: -] increasing the difficulty in collecting accounts receivable and the risk of excess and obsolete inventories; [removed: |]

[removed: | • |] [added: -] increasing price competition in our served markets; [removed: |]

[removed: | • |] [added: -] supply interruptions, which could disrupt our ability to produce our products; [removed: |]

[removed: | • |] [added: -] increasing the risk of impairment of goodwill and other long-lived assets, and the risk that we may not be able to fully recover the value of other assets such as real estate and tax assets; and [removed: |]

[removed: | • |] [added: -] increasing the risk that counterparties to our contractual arrangements will become insolvent or otherwise unable to fulfill their contractual obligations which, in addition to increasing the risks identified above, could result in preference actions against us. [removed: |]

In addition, adverse general economic conditions may lead to instability in U.S. and global capital and credit markets, including market disruptions, limited [removed: liquidity] [added: liquidity,] and interest rate volatility.

Limitations on the ability of customers, [removed: suppliers] [added: suppliers,] or financial counterparties to access credit at interest rates and on terms that are acceptable to them could lead to insolvencies of key suppliers and customers, limit or prevent customers from obtaining credit to finance purchases of our products and [removed: services] [added: services,] and cause delays in the delivery of key products from suppliers.

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

Demand for our products and services is also sensitive to changes in customer order patterns, which may be affected by announced price changes, changes in incentive programs, new product [removed: introductions] [added: introductions,] and customer inventory levels.

In order to compete effectively, we must retain longstanding relationships with major customers and continue to grow our business by establishing relationships with new customers, continually developing new or enhanced products and services to maintain and expand our brand recognition and leadership position in various product and service [removed: categories] [added: categories,] and penetrating new markets, including high-growth markets.

We compete in markets in which we and our customers must comply with supranational, federal, state, [removed: local] [added: local,] and other jurisdictional regulations, such as regulations governing health and safety, the [removed: environment] [added: environment,] and electronic communications, and market [removed: standardizations, such as the Europay, MasterCard and Visa (“EMV”) global standard.][added: standardizations.]

We develop, [removed: configure] [added: configure,] and market our products and services to meet customer needs created by these regulations and standards.

These regulations and standards are complex, change frequently, have tended to become more stringent over [removed: time] [added: time,] and may be inconsistent across jurisdictions.

Any significant change or delay in implementation in any of these regulations or standards (or in the interpretation, [removed: application] [added: application,] or enforcement thereof) could reduce or delay demand for our products and services, increase our costs of producing or delay the introduction of new or modified products and services, or could restrict our existing activities, [removed: products] [added: products,] and services.

During [removed: 2019,] [added: 2020,] year-over-year sales from existing businesses grew slightly in China, and sales in China accounted for approximately [removed: 8%] [added: 12%] of our total sales for the year.

There continues to be significant uncertainty about the future relationship between the United States and China, including with respect to trade policies, treaties, government [removed: regulations] [added: regulations,] and tariffs.

In particular, there continues to be uncertainty about U.S. foreign trade policy with respect to [removed: China.][added: China, including any changes to the trade policies that may be adopted by the new administration.]

Our ability to grow revenues, [removed: earnings] [added: earnings,] and cash flow at or above our anticipated rates depends in part upon our ability to identify and successfully acquire and integrate businesses at appropriate prices and realize anticipated synergies.

Our growth depends in part on the timely development and [removed: commercialization,] [added: commercialization] and customer [removed: acceptance,] [added: acceptance] of new and enhanced products and services based on technological innovation.

[removed: | • |] [added: -] correctly identify customer needs and preferences and predict future needs and preferences; [removed: |]

[removed: | • |] [added: -] allocate our research and development funding to products and services with higher growth prospects; [removed: |]

[removed: | • |] [added: -] anticipate and respond to our competitors’ development of new products and services and technological innovations; [removed: |]

[removed: | • |] [added: -] differentiate our offerings from our competitors’ offerings and avoid commoditization; [removed: |]

[removed: | • |] [added: -] innovate and develop new technologies and applications, and acquire or obtain rights to third-party technologies that may have valuable applications in our served markets; [removed: |]

[removed: | • |] [added: -] obtain adequate intellectual property rights with respect to key technologies before our competitors do; [removed: |]

[removed: | • |] [added: -] successfully commercialize new technologies in a timely manner, price them [removed: competitively] [added: competitively,] and cost-effectively manufacture and deliver sufficient volumes of new products of appropriate quality on time; and [removed: |]

[removed: | • |] [added: -] stimulate customer demand for and convince customers to adopt new technologies. [removed: |]

Our reputation, ability to do [removed: business] [added: business,] and financial statements may be impaired by improper conduct by any of our employees, [removed: agents] [added: agents,] or business partners.

We cannot provide assurance that our internal controls and compliance systems will always protect us from acts committed by employees, [removed: agents] [added: agents,] or business partners of ours (or of businesses we acquire or partner with) that would violate U.S. and/or non-U.S. laws, including the laws governing payments to government officials, bribery, fraud, [removed: kickbacks] [added: kickbacks,] and false claims, sales and marketing practices, conflicts of interest, competition, export and import compliance, money [removed: laundering] [added: laundering,] and data privacy.

In particular, the U.S. Foreign Corrupt Practices Act, the U.K. Bribery [removed: Act] [added: Act,] and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to government officials for the purpose of obtaining or retaining business, and we operate in many parts of the world that have experienced governmental corruption to some degree.

[removed: In] addition, though we rely on our suppliers to adhere to our supplier standards of conduct, material violations of such standards of conduct could occur that could have a material effect on our financial statements.

Our acquisition of businesses, joint [removed: ventures] [added: ventures,] and strategic relationships could negatively impact our financial statements.

These acquisitions and strategic relationships involve a number of financial, accounting, managerial, operational, legal, [removed: compliance] [added: compliance,] and other risks and challenges, including the following, any of which could adversely affect our financial statements:

[removed: | • |] [added: -] any acquired business, technology, [removed: service] [added: service,] or product could under-perform relative to our expectations and the price that we paid for it, or not perform in accordance with our anticipated timetable; [removed: |]

[removed: | • |] [added: -] we may incur or assume significant debt in connection with our acquisitions or strategic relationships; [removed: |]

The effect of the COVID-19 pandemic on our global operations and the operations of our customers, suppliers, and vendors is continuing to have a material, adverse impact on our business and results of operations.

Our global operations expose us broadly to the COVID-19 pandemic.

In particular, continued efforts to mitigate the spread of the virus have caused us, our suppliers, and customers to reduce commercial activities and utilization of facilities and manufacturing sites, adversely impacting demand for our products and services, our ability to source required materials and components, and our ability to manufacture, sell, and service our products.

In addition, implementation of measures to help control the spread of the virus, including internal work-from-home policies to protect the health of our employees and community, travel restrictions, social distancing measures, and re-opening restrictions have negatively impacted our collaboration efforts with our global colleagues, customers, vendors, and service providers, and increased the risk and cost of protecting against cyber attacks.

While we continue to implement global and local response teams, incremental cost reduction efforts, and business continuity efforts internally and with our customers, suppliers, and vendors, the duration and extent of the operational and financial impact of the COVID-19 pandemic remains highly uncertain.

The degree to which COVID-19 impacts us going forward will depend on future developments that are highly uncertain and therefore cannot be predicted, including, but not limited to, the duration and spread of the pandemic, its severity, or the actions taken to contain the spread and impact of COVID-19, the general availability, effectiveness, and distribution of any vaccine, and how quickly and to what extent normal economic, market, and operating conditions resume.

Even after the COVID-19 pandemic has subsided as a public health matter, we may experience material adverse impacts to our business as a result of its adverse impact on the global economy, in-person collaboration efforts, and consumer confidence.

If we are unable to recruit and retain key employees, our business may be harmed.

Much of our future success and our ability to realize the benefit of our acquisitions and execute our portfolio strategy depends on our ability to attract and retain key employees, including our senior management.

In particular, the markets for highly skilled employees and leaders in the technology and healthcare industries are extremely competitive.

Our brand, our culture, our ability to provide competitive compensation, our locations of operations, and our reputation are important to our ability to recruit and retain key employees in these competitive markets.

If we are not competitive or successful in our recruiting efforts, if we cannot attract or retain key employees, or if we do not adequately ensure effective succession planning or transfer of knowledge for our key employees, our ability to deliver and execute on our operational, development, or portfolio strategies would be adversely affected.

Risk Related to our International Operations

located outside the United States.

- the impact of the U.K.’s exit from the E.U. (Brexit) on the Company’s business operations in the U.K. and Europe, including the effects of the Trade and Cooperation Agreement between the European Union, the European Atomic Energy Community, and the United Kingdom signed on December 30, 2020;

Risk Related to Our Acquisitions, Investments, and Dispositions

unexpected liabilities that adversely affect our financial statements.

For example, in 2018, we split-off most of our automation and specialty platform in a Reverse Morris Trust transaction with Altra Industrial Motion Corp..

and, in 2020, we spun-off our former Industrial Technologies segment.

Potential indemnification liabilities to Vontier pursuant to the separation agreement could materially and adversely affect our businesses, financial condition, results of operations, and cash flows.

We entered into a separation and distribution agreement and related agreements with Vontier to govern the separation and distribution of Vontier and the relationship between the two companies going forward.

These agreements provide for specific indemnity and liability obligations of each party and could lead to disputes between us.

If we are required to indemnify Vontier under the circumstances set forth in these agreements, we may be subject to substantial liabilities.

In addition, with respect to the liabilities for which Vontier has agreed to indemnify us under these agreements, there can be no assurance that the indemnity rights we have against Vontier will be sufficient to protect us against the full amount of the liabilities, or that Vontier will be able to fully satisfy its indemnification obligations.

Each of these risks could negatively affect our businesses, financial condition, results of operations, and cash flows.

Risk Related to Regulatory and Compliance Matters

In

In certain circumstances, export control and economic sanctions regulations may prohibit the export of certain products, services, and technologies.

In other circumstances, we may be required to obtain an export license before exporting the controlled item.

Compliance with the various import laws that apply to our businesses can restrict our access to, and increase the cost of obtaining, certain products and at times can interrupt our supply of imported inventory;

- we also have agreements to sell products and services to government entities and are subject to various statutes and regulations that apply to companies doing business with government entities.

The laws governing government contracts differ from the laws governing private contracts.

For example, many government contracts contain pricing and other terms and conditions that are not applicable to private contracts.

Our agreements with government entities may be subject to termination, reduction, or modification at the convenience of the government or in the event of changes in government requirements, reductions in federal spending and other factors, and we may underestimate our costs of performing under the contract.

Government contracts that have been awarded to us following a bid process could become the subject of a bid protest by a losing bidder, which could result in loss of the contract.

We are also subject to investigation and audit for compliance with the requirements governing government contracts;

- we are also required to comply with increasingly complex and changing data privacy regulations in multiple jurisdictions that regulate the collection, use, protection, and transfer of personal data, including the transfer of personal data between or among countries.

In particular, the General Data Protection Regulation became effective in the European Union in May 2018 and the California Consumer Privacy Act became effective in January 2020.

We may also face audits or investigations by one or more domestic or foreign government agencies relating to our compliance with these regulations.

An adverse outcome under any such investigation or audit could subject us to fines

| | |

| --- | --- |

Our plans to separate into two independent, publicly traded companies may not be completed on the currently contemplated timeline or at all and may not achieve the intended benefits.

On September 4, 2019, we announced our intention to separate into two independent, publicly traded companies.

The separation, if effectuated, will create, (i) an industrial technology company, retaining the Fortive name, with a differentiated portfolio of growth-oriented businesses focused on connected workflow solutions that incorporate advanced sensors, instrumentation, software, data and analytics and (ii) a global industrial company (“Vontier”) consisting of our Transportation Technologies and Franchise Distribution platforms with a focus on growth opportunities in the rapidly evolving transportation and mobility markets.

Our ability to effectuate the separation, the structure of the separation and the anticipated benefits of the separation may be adversely and materially impacted by adverse market conditions, possible delays in obtaining various tax rulings, regulatory approvals or clearances, uncertainty of the financial markets, our business performance and unanticipated delays in establishing infrastructure or processes for Vontier.

In addition, the cost and resources required to effectuate the separation may be significantly higher than what we currently anticipate.

There is a risk of escalation and retaliatory actions between the two countries.

In addition, the current administration, certain members of Congress and federal officials have stated that United States may seek to implement more protective trade measures, not just with respect to China but with respect to other countries in the Asia Pacific region as well.

increase our expenses, adversely affect our financial position or cause us to fail to meet our public financial reporting obligations;

statements or that we will not be subject to additional claims for personal injury or remediation in the future based on our past, present or future business activities.

| • | we also have agreements to sell products and services to government entities and are subject to various statutes and regulations that apply to companies doing business with government entities. The laws governing government contracts differ from the laws governing private contracts. For example, many government contracts contain pricing and other terms and conditions that are not applicable to private contracts. Our agreements with government entities may be subject to termination, reduction or modification at the convenience of the government or in the event of changes in government requirements, reductions in federal spending and other factors, and we may underestimate our costs of performing under the contract. Government contracts that have been awarded to us following a bid process could become the subject of a bid protest by a losing bidder, which could result in loss of the contract. We are also subject to investigation and audit for compliance with the requirements governing government contracts; |

| • | we are also required to comply with increasingly complex and changing data privacy regulations in multiple jurisdictions that regulate the collection, use, protection and transfer of personal data, including the transfer of personal data between or among countries. In particular, the General Data Protection Regulation became effective in the European Union in May 2018 and the California Consumer Privacy Act became effective in January 2020. We may also face audits or investigations by one or more domestic or foreign government agencies relating to our compliance with these regulations. An adverse outcome under any such investigation or audit could subject us to fines or other penalties. That or other circumstances related to our collection, use and transfer of personal data could cause a loss of reputation in the market and/or adversely affect our business and financial position; |

| • | we are also required to comply with ever changing labor and employment laws and regulations in multiple jurisdictions. These changes, including the California legislature’s recent passage of Assembly Bill 5 codifying a new independent contractor test, could negatively impact our business or financial position. |

| • | the impact of the U.K.’s exit from the E.U. (Brexit) on the Company’s business operations in the U.K. and Europe, which will vary depending on the final terms of the transition; |

Increased strength of the U.S. dollar increases the effective price of

We believe that a change in the statutory tax rate of any individual foreign country would not have a material effect on our financial statements given the geographic dispersion of our taxable income.

In addition, the OECD has announced additional guidance that will be forthcoming in 2020 that could materially impact the law for transfer pricing and permanent establishment taxation.

Specifically, the credit agreement requires us to maintain as of the end of any fiscal quarter a consolidated net leverage ratio of debt to consolidated EBITDA (as defined in the credit agreement) of less than 3.50 to 1.00 or, for four consecutive quarters immediately following the consummation of any qualified acquisition, less than 4.00 to 1.00.

In addition, the credit agreement requires us to maintain a consolidated interest coverage ratio of consolidated EBITDA to interest expense of greater than 3.50 to 1.00 as of the end of any fiscal quarter.

on which the person became an interested stockholder, unless (i) prior to such time, the board of directors of such corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; (ii) upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of such corporation at the time the transaction commenced (excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) the voting stock owned by directors who are also officers or held in employee benefit plans in which the employees do not have a confidential right to tender or vote stock held by the plan); or (iii) on or subsequent to such time the business combination is approved by the board of directors of such corporation and authorized at a meeting of shareholders by the affirmative vote of at least two-thirds of the outstanding voting stock of such corporation not owned by the interested stockholder.

We prepare our consolidated financial statements in conformity with U.S. GAAP.

The FASB issued new accounting standards for revenue recognition and accounting for leases.

Our well-known brands hold leading positions in [removed: field] [added: intelligent operating] solutions, [removed: product realization, sensing technologies, health, transportation] [added: precision] technologies, and [removed: franchise distribution.][added: advanced healthcare solutions.]

Our businesses design, develop, service, [removed: manufacture] [added: manufacture,] and market professional and engineered products, [removed: software] [added: software,] and services for a variety of end markets, building upon leading brand names, innovative [removed: technology] [added: technologies,] and significant market positions.

Our research and development, manufacturing, sales, distribution, [removed: service] [added: service,] and administrative facilities are located in more than 50 countries across North America, Asia Pacific, [removed: Europe] [added: Europe,] and Latin America.

[removed: | • |] [added: -] Basis of Presentation [removed: |]

[removed: | • |] [added: -] Overview [removed: |]

[removed: | • |] [added: -] Results of Operations [removed: |]

[removed: | • |] [added: -] Financial Instruments and Risk Management [removed: |]

[removed: | • |] [added: -] Liquidity and Capital Resources [removed: |]

[removed: | • |] [added: -] Critical Accounting Estimates [removed: |]

[removed: | • |] [added: -] New Accounting Standards [removed: |]

Unless otherwise noted, amounts, [removed: percentages] [added: percentages,] and discussion for all periods included in Management’s Discussion and Analysis reflect the results of operations and financial condition from our continuing operations.

As a [removed: diversified industrial technology growth] company with global operations, our businesses are affected by worldwide, [removed: regional] [added: regional,] and industry-specific economic and political factors.

Our geographic and industry diversity, as well as the range of [removed: our] products, software, and [removed: services,] [added: services we offer,] typically help limit the impact of any one industry or the economy of any single country (except for the United States) on our operating results.

We operate in a highly competitive business environment in most markets, and our long-term growth and profitability will [removed: depend] [added: depend,] in [removed: particular] [added: particular,] on our ability to expand our business across geographies and market segments, identify, consummate, and integrate appropriate acquisitions, develop innovative and differentiated new products, services, and software, expand and improve the effectiveness of our sales force, continue to reduce costs and improve operating efficiency and quality, [added: attract relevant talent] and [added: retain, grow, and empower our talented workforce, and] effectively address the demands of an increasingly regulated environment.

We are making significant investments, organically and through acquisitions, to address technological change in the markets we serve and to improve our manufacturing, research and [removed: development] [added: development,] and customer-facing resources in order to be responsive to our customers throughout the world.

In this report, references to sales from existing businesses refers to sales from operations calculated according to generally accepted accounting principles in the United States (“GAAP”) but excluding (1) the impact from acquired businesses and [added: purchase accounting adjustments] (2) the impact of currency translation.

[removed: 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 impact from acquired businesses) [removed: and (b) the period-to-period change in sales (excluding sales impact from acquired businesses)] after applying the current period foreign exchange rates to the prior year period.

[removed: Year-over-year] [added: Geographically, year-over-year] sales from existing businesses [removed: grew] [added: during the year ended December 31, 2020 declined] at a [removed: high-single] [added: mid-single] digit rate in [removed: Latin America] [added: both developed markets] and [removed: grew at mid-single] [added: high-growth markets, respectively, which was driven by a high-single] digit rate [added: decline] in North [added: America and Latin] America, [removed: while sales from existing businesses declined at] a [removed: low-double] [added: mid-single] digit rate [added: decline] in [removed: India] [added: Asia,] and [removed: at] a low-single digit rate [added: decline] in Western Europe.

[removed: Sales] [added: Year-over-year sales] from existing businesses [added: grew slightly] in China [removed: increased slightly year-over-year.][added: during the year ended December 31, 2020.]

Completed [removed: Acquisitions] [added: Divestitures, Acquisitions,] and Business Combinations

*Advanced Sterilization [removed: Products*][added: Products Acquisition*]

ASP engages in the research, development, manufacture, marketing, [removed: distribution] [added: distribution,] and sale of low-temperature terminal sterilization and high-level disinfection products.

As of December 31, [removed: 2019,] [added: 2020] we have closed 20 Principal Countries and [removed: four] [added: 34] Non-Principal Countries that, in aggregate, accounted for [removed: approximately 98%] [added: more than 99%] of the preliminary valuation of ASP.

The remaining [added: five] Non-Principal Countries represent [removed: approximately 2%] [added: less than 1%] of the preliminary valuation of ASP, or [removed: $50] [added: $10.1] million, which is included as a prepaid asset in Other assets in the Consolidated Balance Sheet.

As each Non-Principal Country closes, we [removed: will] reduce the prepaid asset and record the fair value of the assets acquired and liabilities assumed.

In addition, the Company entered into a transition services agreement with Johnson & Johnson for certain administrative and operational [removed: services,] [added: services (“TSA”) with Principal Countries] and distribution agreements in the Non-Principal [removed: Countries that have not been closed.][added: Countries.]

Under the distribution agreements, ASP [removed: will sell] [added: sells] finished goods to Ethicon at prices agreed by the parties.

ASP [removed: will recognize] [added: recognizes] these sales as revenue when the conditions for revenue recognition are met.

In addition to the acquisition of ASP, during 2019, we acquired four businesses including Intelex [removed: Technologies,] [added: Technologies and] Pruftechnik, [added: both of which complement existing businesses in our Intelligent Operation Solutions segment,] and Censis Technologies [added: within our Advanced Healthcare Solutions segment,] for total consideration of $1.2 billion in cash, net of cash acquired.

We [removed: preliminarily] recorded an aggregate of [removed: $773] [added: $781] million of goodwill related to these acquisitions.

Additionally, the loss from our equity investment in the Combined Business is included in Other non-operating expenses, net in [removed: the accompanying Consolidated Statement of Earnings.]

[removed: *Gordian*][added: *Gordian Acquisition*]

On July 27, 2018, we acquired TGG Ultimate Holdings, Inc. and its subsidiaries, including The Gordian Group, Inc. (“Gordian”), a privately-held, leading provider of construction cost data, [removed: software] [added: software,] and service, for a total purchase price of $778 million net of cash acquired (the “Gordian Acquisition”).

[removed: *Accruent*][added: *Accruent Acquisition*]

Accruent is a recognized leader in the facilities asset management industry, combining deep domain and industry capabilities with an integrated, cloud-based framework that provides insights spanning the full lifecycle of real estate, [removed: facilities] [added: facilities,] and asset management.

Accruent serves over 10,000 global customers, and helps assure clients fulfill the mission of their organization by extending the lifecycle of assets, monitoring full [removed: compliance] [added: compliance,] and reducing safety risks.

[removed: *Other Acquisitions*][added: | Other: | | | | | | | | | | | | | | | | | |]

[removed: Divestiture] [added: *Divestiture] of A&S [removed: Business][added: Business*]

| | [added: | | 2020 vs. 2019 | | | | | |] 2019 vs. 2018 | | [added: |]

| Total revenue growth (GAAP) | [removed: 13.4] | [added: | 1.5 | |] % | [added: | | | 20.1 | | % |]

Fortive Corporation (the “Company,” “we,” “our,” and “us”) is a provider of essential technologies for connected workflow solutions across a range of attractive end-markets.

On October 9, 2020, we completed the separation of our former Industrial Technologies segment (the “Separation”) by distributing 80.1% of the outstanding shares of Vontier Corporation (“Vontier”), the entity we created to hold the corresponding businesses, to Fortive stockholders on a pro rata basis.

To effect the Separation, the Company distributed to its stockholders two shares of Vontier common stock for every five shares of the Company’s common stock outstanding held on September 25, 2020, the record date for the distribution, with the Company retaining 19.9% of the shares of Vontier common stock immediately following the Separation (the “Retained Vontier Shares”).

On January 19, 2021, we completed an exchange of all of the Retained Vontier Shares as part of a non-cash debt-for-equity exchange that reduced outstanding indebtedness of Fortive by $1.1 billion.

The accounting requirements for reporting the Separation of Vontier as a discontinued operation were met when the Separation was completed.

Accordingly, the accompanying consolidated financial statements for all periods presented reflect the results of the Vontier business as a discontinued operation.

Fortive did not retain a controlling interest in Vontier and therefore the fair value of the Retained Vontier Shares and subsequent fair value changes are included in our assets of and results from continuing operations, respectively.

The subsequent change in the fair value of the Retained Vontier Shares and the resulting gain will be recorded in the first quarter of 2021.

In light of the Vontier Separation, we changed our internal reporting structure on the first day of the fourth quarter, September 26, 2020, to reflect organizational and leadership changes that allow us to better assess the operational performance of and allocate resources to our businesses.

Our chief operating decision maker assesses performance and allocates resources based on our new operating segments, which are also our new reportable segments.

Our new reportable segments are comprised of Intelligent Operating Solutions, Precision Technologies, and Advanced Healthcare Solutions.

The discussion of historical information in Management’s Discussion and Analysis has been recast to reflect the new reportable segments of our continuing operations.

Fortive is a multinational business with global operations with approximately 47% of our sales derived from customers outside the United States in 2020.

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 impact from acquired businesses) and (b) the

*Business Performance*

A novel strain of coronavirus was first identified in December 2019, and subsequently declared a pandemic by the World Health Organization in March 2020 (“COVID-19”).

This outbreak has surfaced in nearly all regions around the world, resulting in governments implementing strict measures to help contain or mitigate the spread of the virus, including quarantines, “shelter in place,” and “stay at home” orders, travel restrictions, school and commercial facility closures, re-opening restrictions, among others (collectively “virus control measures”).

These virus control measures have led to slowdowns or shutdowns for businesses deemed both “essential” and “non-essential” in affected areas, causing significant disruption in the financial markets both globally and in the United States, most notably during the first half of 2020.

The majority of our essential production facilities around the world were open during 2020, and as of the date of this Report, all of our locations are open and operating.

Given our businesses operate globally, have diverse customers, and serve multiple end-markets, COVID-19 impacted our businesses and operating results during 2020 directly with reduced year-over-year demand from customers operating in non-essential end-markets and indirectly with reduced demand created by macroeconomic disruption or disruption in adjacent end-markets.

These disruptions impacted our operating results most severely during the second quarter of 2020 and we have realized sequential improvement in demand across all of our businesses and geographies since.

For the year-ended December 31, 2020, aggregate year-over-year sales increased 1.5% as our continued application and deployment of the Fortive Business System and incremental sales from our recently acquired companies more than off-set declines in demand from our existing businesses.

Sales from existing businesses decreased 5.9% during the year ended December 31, 2020 as compared to the comparable period of 2019 reflecting the broad impacts of the COVID-19 pandemic, as virus control measures were deployed in most regions and particularly impacted our results in the second quarter of 2020, with sequential improvement each quarter thereafter, including a slight year-over-year increase in demand from existing businesses during the fourth quarter.

Sales that management considers recurring revenue represented approximately 40% of our total sales during the year-ended December 31, 2020 and increased approximately 11% year-over-year, including sales from our existing software as a service (“SAAS”) businesses that increased at a rate in the mid-teens year-over-year.

*2021 Outlook*

As a result of the COVID-19 pandemic, overall global conditions have been volatile and uncertain.

While our results in the fourth quarter of 2020 indicate positive, broad-based momentum across our portfolio, economic uncertainties continue to exist.

The impact of the COVID-19 pandemic on our future results will depend on the length, severity, and recurrence of virus control measures and the availability of antiviral medications and distribution and administration of vaccinations, both of which are uncertain.

We plan to continue deploying the Fortive Business System to help drive near-term performance and maximize cash flow generation amidst this uncertainty.

Given the diverse nature of our businesses and the end-markets they serve, we believe certain of our businesses will continue being resilient against the broad COVID-19 impacts in the first quarter of 2021, while we believe others will continue being

relatively more sensitive, with varied rates of continued recovery as virus control measures remain in place.

The businesses we believe will continue being relatively more resilient include our businesses with a greater proportion of recurring revenue, including our SAAS businesses that provide critical workflow solutions to their customers, certain healthcare businesses, and those with longer business cycles with strong backlogs.

We believe our businesses that are more dependent on short-cycle industrial demand and production dynamics will continue to sequentially improve but continue experiencing a somewhat challenging environment.

As such, we expect year-over-year global demand for our products and services in both the first quarter of 2021 and year ended December 31, 2021 to grow at a mid-single digit rate.

Despite the virus control measures in place in geographies critical to our supply chain, we have successfully implemented solutions to support our operations and have not experienced significant production material shortages, supply chain constraints, or distribution limitations impacting our operations as of the date of this Report; however, in light of the uncertainty of the COVID-19 pandemic severity and duration, we are continuing to evaluate and monitor the condition of our supply chain, including the financial health of our suppliers and their ability to access raw materials and other key inputs and may experience shortages, constraints, or disruptions during the first quarter of 2021 or in future periods.

We are closely monitoring the health of our employees, and continue to implement safety protocols at our facilities to help ensure their health and safety.

In addition, we continue to monitor our suppliers and customers and their ability to maintain production capacity to meet our operational requirements.

Individuals contracting or being exposed to COVID-19, or who are unable to report to work due to virus control measures, may significantly disrupt production throughout our supply chain and negatively impact our sales channels.

Further, our customers may be directly impacted by business curtailments or weak market conditions, and may not be willing or able to accept shipments of products, may cancel orders, and may not be able to pay us on a timely basis.

To mitigate the impact of the economic conditions from the COVID-19 pandemic as well as any escalation of geopolitical uncertainties related to governmental policies toward international trade, monetary and fiscal policies, and relations between the U.S. and China, we will continue applying and deploying the Fortive Business System to actively manage our supply chain, drive operating efficiencies, and continue to collaborate with our customers and suppliers to minimize disruption to their businesses.

The following discussion and analysis of Fortive’s (the “Company,” “we,” “our,” and “us”) financial condition and results of operations for the fiscal years ended December 31, 2019 and December 31, 2018 should be read in conjunction with Selected Consolidated Financial Data and our audited consolidated financial statements and the notes to those statements.

Discussion and analysis of our financial condition and results of operations for the year ended December 31, 2018 compared to December 31, 2017 is included under the heading “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed for the fiscal year ended December 31, 2018 with the Securities and Exchange Commission on February 28, 2019.

Fortive is a diversified industrial technology growth company comprised of Professional Instrumentation and Industrial Technologies segments and encompassing businesses that are recognized leaders in attractive markets.

| | |

| --- | --- |

On September 4, 2019, we announced our intention to separate into two independent, publicly traded companies subject to the satisfaction of certain conditions, including obtaining final approval from our Board of Directors.

The separation will create (i) an industrial technology company, retaining the Fortive name, with a differentiated portfolio of growth-oriented businesses focused on connected workflow solutions that incorporate advanced sensors, instrumentation, software, data, and analytics and (ii) a global industrial company (“Vontier”) consisting of our Transportation Technologies and Franchise Distribution platforms with a focus on growth opportunities in the rapidly evolving transportation and mobility markets.

The separation is expected to be structured in a tax-efficient manner and completed in the second half of 2020.

All assets, liabilities, revenues and expenses of the businesses comprising Vontier are included in continuing operations in the accompanying consolidated financial statements.

Fortive is a multinational business with global operations.

Please see “Item 1.

Business – General” included in this Annual Report for a discussion of the Company’s strategies for delivering long-term shareholder value.

During 2019, approximately 43% of our sales were derived from customers outside the United States.

While differences exist among our businesses, on an overall basis, demand for our hardware and software products, and services increased during 2019 as compared to 2018 resulting in aggregate year-over-year sales growth of 13.4% and sales growth from existing businesses of 2.0%.

Our continued application and deployment of the Fortive Business System including investments in sales growth initiatives and new product introductions, as well as increased demand in developed markets and other business-specific factors discussed below contributed to overall sales growth from existing businesses.

On a year-over-year basis, our Industrial Technologies segment reported sales growth from existing businesses of 5.2%, while sales from existing businesses in our Professional Instrumentation segment declined slightly.

In our Industrial Technologies segment, the liability shift related to enhanced credit card security requirements for outdoor payment systems that is expected to occur in October 2020 in the United States based on the Europay, Mastercard, and Visa (“EMV”) global standards is continuing to drive demand within our transportation technologies platform.

The decline in our Professional Instrumentation segment reflects slowing macroeconomic conditions across most major markets in 2019.

Geographically, sales from existing businesses grew at a low-single digit rate in developed markets and were relatively flat in high growth markets during 2019 as compared to 2018.

We expect overall sales from existing businesses to continue to grow on a year-over-year basis during 2020; however, we continue to monitor developments from macro-economic and geopolitical uncertainties, including global uncertainties related to governmental policies toward international trade, monetary and fiscal policies, including the current uncertainty about the future trade relationship between the United States and China, and the impacts of the coronavirus, as well as other factors identified in “Item 1A.

Risk Factors.”

Additionally, we made an additional equity investment of $4 million.

The businesses acquired complement existing units of our Professional Instrumentation segment.

In addition to the acquisitions of Accruent and Gordian, during 2018, we acquired two businesses for total consideration of $44 million in cash, net of cash acquired.

The businesses acquired complement existing units of both our segments.

We recorded $31 million of goodwill related to these acquisitions.

| | | |

| --- | --- | --- |

| • | The incremental year-over-year net dilutive effect of acquisition-related transaction costs and transaction costs related to the planned separation of Fortive into two independent, publicly traded companies — unfavorable 120 basis points |

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| Professional Instrumentation | $ | 4,427.8 | | | $ | 3,655.1 | |

| Industrial Technologies | 2,892.2 | | | | 2,797.6 | | |

| Total | $ | 7,320.0 | | | $ | 6,452.7 | |

| United States | $ | 4,206.5 | | | $ | 3,539.6 | |

| China | 592.0 | | | | 569.0 | | |

PROFESSIONAL INSTRUMENTATION

Our Professional Instrumentation segment consists of our Advanced Instrumentation & Solutions, Sensing Technologies, and Advanced Sterilization Products and Censis businesses.

Our Advanced Instrumentation & Solutions businesses provide product realization and field solutions services and products.

Our well-known brands hold leading positions in [removed: field] [added: intelligent operating] solutions, [removed: product realization, sensing technologies, health, transportation] [added: precision] technologies, and [removed: franchise distribution.][added: advanced healthcare solutions.]

Our businesses design, develop, service, [removed: manufacture] [added: manufacture,] and market professional and engineered products, [removed: software] [added: software,] and services for a variety of end markets, building upon leading brand names, innovative [removed: technology] [added: technologies,] and significant market positions.

Our research and development, manufacturing, sales, distribution, [removed: service] [added: service,] and administrative facilities are located in more than 50 countries across North America, Asia Pacific, [removed: Europe] [added: Europe,] and Latin America.

Through rigorous application of [removed: our] [added: the] proprietary [removed: FBS] set of growth, lean, and leadership tools and [removed: processes,] [added: processes that comprise FBS,] we continuously improve business performance in the critical areas of innovation, product development and commercialization, global supply chain, sales and [removed: marketing] [added: marketing,] and leadership development.

Our commitment to FBS has enabled us to drive customer satisfaction and profitability, [added: and] generate significant improvements in innovation, growth, and core operating margins.

Fortive Corporation is a Delaware corporation and was incorporated in 2015 in connection with the separation of Fortive from Danaher Corporation (“Danaher” or “Former Parent”) on July 2, 2016 as an independent, publicly-traded company, listed on the New York Stock [removed: Exchange (the “Danaher Separation”).][added: Exchange.]

Advanced [removed: Instrumentation &] [added: Healthcare] Solutions

Typical users of these [removed: products and software] [added: offerings] include electrical engineers, electricians, electronic technicians, [removed: safety] [added: EHSQ] professionals, [removed: medical technicians,] network technicians, [added: facility managers,] first-responders, and [removed: industrial service, installation and] maintenance professionals.

Products [added: and services within our Intelligent Operating Solutions segment] are marketed under a variety of [added: leading] brands, including ACCRUENT, FLUKE, FLUKE [removed: BIOMEDICAL, FLUKE] NETWORKS, GORDIAN, INDUSTRIAL SCIENTIFIC, INTELEX, [removed: LANDAUER, PRUFTECHNIK] and [removed: QUALITROL.][added: PRUFTECHNIK.]

[removed: Product Realization Our product realization services] [added: Furthermore, through our solutions] and [removed: products help] [added: services, we enable] developers and engineers [added: in healthcare and other critical industries] across the end-to-end product creation cycle from concepts to finished products.

Products and services [added: in our Precision Technologies segment] are marketed under a variety of brands, including [removed: INVETECH, KEITHLEY,] [added: ANDERSON-NEGELE, GEMS, SETRA, HENGSTLER-DYNAPAR, QUALITROL,] PACIFIC SCIENTIFIC, [removed: SONIX] [added: KEITHLEY] and TEKTRONIX.

[removed: Our Sensing Technologies business offers devices] [added: In our sensing business, we provide solutions] that sense, [removed: monitor] [added: monitor,] and control operational or manufacturing variables, such as temperature, pressure, level, [removed: flow, turbidity,] and [removed: conductivity.][added: flow.]

[removed: Users of these] [added: Our sensing] products [removed: span] [added: serve] a wide variety of [removed: industrial and manufacturing] [added: vertical] markets, including [added: power and energy,] medical equipment, food and beverage, [removed: marine, industrial,] [added: aerospace and defense,] off-highway vehicles, [removed: building automation,] [added: electronics, semiconductors,] and [removed: semiconductors.][added: other general industrial markets.]

Our [removed: Advanced Sterilization Products (“ASP”) business provides] [added: offerings provide] critical sterilization and disinfection solutions, including low-temperature hydrogen peroxide sterilization solutions [removed: for temperature-sensitive equipment, to advance] [added: and advanced] infection prevention and patient safety in healthcare facilities.

[removed: Our Censis business provides] [added: In addition, we provide] subscription-based surgical inventory management systems to healthcare facilities to facilitate inventory management and regulatory [removed: compliance.][added: compliance as well as subscription-based technical, analytical, and compliance services to determine radiation exposure.]

The following discussion includes information common to [removed: both] [added: all] of our segments.

Our manufacturing operations employ a wide variety of raw materials, including electronic components, steel, plastics and other petroleum-based products, cast iron, [removed: aluminum] [added: aluminum,] and copper.

We utilize a number of techniques to address potential disruption in and other risks relating to our supply chain, including in certain cases the use of safety stock, alternative [removed: materials] [added: materials,] and qualification of multiple supply sources.

During [removed: 2019] [added: 2020] we had no raw material shortages that had a material effect on our business.

We own numerous patents, trademarks, [removed: copyrights] [added: copyrights,] and trade secrets and [added: hold] licenses to [added: use] intellectual property owned by others.

Although in aggregate our intellectual property is important to our operations, we do not consider any single patent, trademark, copyright, trade [removed: secret] [added: secret,] or license to be of material importance to any segment or to the business as a whole.

Because of the range of the products and services we sell and the variety of markets we serve, we encounter a wide variety of competitors, including [removed: well-established regional competitors, competitors who are more specialized than we are in particular markets, as well as] larger companies or divisions of larger companies with substantial sales, marketing, research, and financial [removed: capabilities.][added: capabilities, as well as well-established regional competitors who are more specialized than we are in particular markets.]

Key competitive factors vary among our businesses and product and service lines, but include the specific factors noted above with respect to each particular business and typically also include price, quality, performance, delivery speed, applications expertise, distribution channel [removed: access, service and support, technology and innovation, breadth of product, service and software offerings and brand name recognition.]

As of December 31, [removed: 2019,] [added: 2020,] we employed approximately [removed: 25,000] [added: 17,000] persons, of whom approximately [removed: 13,000] [added: 9,500] were employed in the United States and approximately [removed: 12,000] [added: 7,500] were employed outside of the United States.

Although the substantial majority of our revenue in [removed: 2019] [added: 2020] was from customers other than governmental entities, each of our segments has agreements relating to the sale of products to government entities.

We face extensive government regulation both within and outside the United States relating to the development, manufacture, marketing, [removed: sale] [added: sale,] and distribution of our products, [removed: software] [added: software,] and services.

For a discussion of the environmental laws and regulations that our operations, [removed: products] [added: products,] and services are subject to and other environmental contingencies, please refer to Note 16 to the consolidated financial statements included in this Annual Report.

[removed: | • |] [added: -] the International Traffic in Arms Regulations administered by the U.S. Department of State, Directorate of Defense Trade Controls, which, among other things, impose license requirements on the export from the United States of defense articles and defense services listed on the United States Munitions List; [removed: |]

[removed: | • |] [added: -] the Export Administration Regulations administered by the U.S. Department of Commerce, Bureau of Industry and Security, which, among other things, impose licensing requirements on the export, in-country [removed: transfer] [added: transfer,] and re-export of certain dual-use goods, [removed: technology] [added: technology,] and software (which are items that have both commercial and military or proliferation applications); [removed: |]

[removed: | • |] [added: -] the regulations administered by the U.S. Department of Treasury, Office of Foreign Assets Control, which implement economic sanctions imposed against designated countries, [removed: governments] [added: governments,] and persons based on United States foreign policy and national security considerations; and [removed: |]

[removed: | • |] [added: -] the import regulations administered by U.S. Customs and Border Protection. [removed: |]

We also have operations around the world, and this geographic diversity allows us to draw on the skills of a worldwide workforce, provides greater stability to our operations, allows us to drive economies of scale, provides revenue streams that may help offset economic trends that are specific to individual [removed: economies] [added: economies,] and offers us an opportunity to access new markets for products.

We maintain an internet website at www.fortive.com where we make available free of charge our annual reports on Form 10-K, quarterly reports on Form [removed: 10-Q] [added: 10-Q,] and current reports on Form 8-K and amendments to those reports, filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after filing such material with, or furnishing such material to, the SEC.

Fortive Corporation is a provider of essential technologies for connected workflow solutions across a range of attractive end-markets.

On October 9, 2020, we completed the separation of our former Industrial Technologies segment (the “Separation”) by distributing 80.1% of the outstanding shares of Vontier Corporation (“Vontier”), the entity we created to hold the corresponding businesses, to Fortive stockholders on a pro rata basis.

To effect the Separation, the Company distributed to its stockholders two shares of Vontier common stock for every five shares of the Company’s common stock outstanding held on September 25, 2020, the record date for the distribution, with the Company retaining 19.9% of the shares of Vontier common stock immediately following the Separation (the “Retained Vontier Shares”).

On January 19, 2021, we completed an exchange of all

of the Retained Vontier Shares as part of a non-cash debt-for-equity exchange that reduced outstanding indebtedness of Fortive by $1.1 billion.

Before the Separation, we reported our results in two reportable segments consisting of Professional Instrumentation and Industrial Technologies.

In connection with the Separation, and in light of organizational and leadership changes we made to enhance and better evaluate the operational performance of and allocate resources to our businesses, we now operate and report our results in three segments, Intelligent Operating Solutions, Precision Technologies, and Advanced Healthcare Solutions, each of which is further described below.

Intelligent Operating Solutions

Our Intelligent Operating Solutions segment provides leading solutions to accelerate industrial and facility reliability and performance, as well as compliance and safety across a range of vertical end markets, including manufacturing, process industries, healthcare, utilities and power, communications and electronics, among others.

The businesses in our Intelligent Operating Solutions segment provide a broad and differentiated offering of instrumentation, sensors, software, and services to address these critical workflows for our customers.

These offerings include connected reliability tools, environment, health, safety, and quality (EHSQ) enterprise software products, facility and asset lifecycle software, and pre-construction planning and construction procurement solutions.

We also offer a series of leading hardware offerings including ruggedized professional test tools, electric, pressure, and temperature calibration tools for high-end government and industrial labs, as well as portable gas detection tools which keep workers safe in industries where air quality and safety cannot be taken for granted.

Precision Technologies

Our Precision Technologies segment supplies technologies to a broad set of vertical end markets, enabling our customers to accelerate the development of innovative products and solutions.

We provide our customers with electrical test and measurement instruments and services, energetic material devices, and a broad portfolio of sensor and control system solutions.

In our energetic materials business, we design, manufacture, and market highly-engineered energetic material solutions for commercial, defense, and space markets.

At Tektronix, we provide our customers with a broad portfolio of test and measurement instruments serving a variety of end markets including communication, consumer electronics, semiconductor, defense, automotive, and industrial.

Customers for these products and services include design engineers for advanced electronic devices and equipment, process and quality engineers focused on improved process capability and

productivity, facility maintenance managers driving increased uptime, and other customers for whom precise measurement, reliability, and compliance are critical in their applications.

Our Advanced Healthcare Solutions segment serves healthcare customers with enabling products and services for critical activities that help ensure safe, efficient, and timely healthcare.

Through the Advanced Healthcare Solutions segment, we provide broad hardware and software portfolio offerings optimized around our end-users’ most critical workflows, including instrument and device reprocessing, instrument tracking, cell therapy equipment design and manufacturing, biomedical test tools, radiation safety monitoring, and asset management.

Products and services in our Advanced Healthcare Solutions segment are marketed under a variety of brands, including ASP, CENSIS, CENSITRAC, EVOTECH, FLUKE BIOMEDICAL, INVETECH, LANDAUER, RAYSAFE, and STERRAD.

access, service and support, technology and innovation, breadth of product, service and software offerings, and brand name recognition.

Human Capital Resources

Empowering our talented global team to contribute in meaningful ways is a critical component of our strategy and our success.

To support the advancement of our employees and the success of our Company, we invest in and develop our employees at every level.

We are committed to creating a challenging and collaborative culture and environment where our employees can grow, develop, and do their best work.

*COVID-19 Response*

In the uncertainty that immediately followed the COVID-19 pandemic, we were guided by five key pillars in our response to our employees: Safety, Transparency, Empathy, Science and Employee Trust.

The policies we implemented were guided with the safety of our employees, their families, our customers, and our communities as the number one priority, with our actions informed by data and expert public health guidance.

The manner in which we considered and communicated our policies and actions were driven by the recognition of, and empathy for, the uncertainty, fear, and real-life impact caused by the pandemic for our colleagues.

With that in mind, we focused on being agile and transparent with what we were doing and why we were doing it, while listening to ongoing feedback from our global teams and quickly making changes where needed.

We did our best to accommodate the needs of our people as they managed through an incredibly difficult year personally and professionally.

Driven by our values, we:

- Formed global and local response teams at every level to create hundreds of standard processes to share best practices and streamline communication to keep our employees safe and informed;

- Acted quickly to limit and then stop business travel;

- Ensured pay continuity for quarantine periods for our employees;

- Quickly made the decision to enable and then mandate remote work for those who were able to do so while ensuring that our essential manufacturing team members had the education, resources, and support needed to stay safe on the job;

- Created flexible shifts and schedules to accommodate childcare and other family or personal needs;

- Provided subsidized childcare and other caregiver services as well as parental counseling;

Fortive Corporation is a diversified industrial technology growth company encompassing businesses that are recognized leaders in attractive markets.

On September 4, 2019, we announced our intention to separate into two independent, publicly traded companies subject to the satisfaction of certain conditions, including obtaining final approval from our Board of Directors.

The separation would create (i) an industrial technology company, retaining the Fortive name, with a differentiated portfolio of growth-oriented businesses focused on connected workflow solutions that incorporate advanced sensors, instrumentation, software, data and analytics, and (ii) a global industrial company (“Vontier”) consisting of our Transportation Technologies and Franchise Distribution platforms

with a focus on growth opportunities in the rapidly evolving transportation and mobility markets.

The separation is expected to be structured in a tax-efficient manner and completed in the second half of 2020.

Fortive is comprised of two reportable segments, Professional Instrumentation and Industrial Technologies, each of which is further described below.

Professional Instrumentation

Our Professional Instrumentation segment offers essential products, software and services used to create actionable intelligence by measuring and monitoring a wide range of physical parameters in industrial applications, including electrical current, radio frequency signals, distance, pressure, temperature, turbidity, radiation, and hazardous gases.

Furthermore, we offer products, software and services used to provide critical sterilization and disinfection solutions to advance health, safety and compliance.

We also offer products that are used in the design, development, manufacturing, testing and advanced calibration of products for electronics and industrial markets.

Product offerings include advanced sensors and instrumentation, cloud-based IoT solutions, temperature-sensitive sterilization and disinfection systems, vertical application workflow software, data and analytics to efficiently manage the full lifecycle of assets used in industrial, medical, educational, governmental, and commercial facilities.

Customers for these products and services include industrial service, installation and maintenance professionals, designers and manufacturers of electronic devices and instruments, medical technicians and health professionals, safety professionals, commercial property owners, contractors, facility managers and other customers for whom precision, reliability, safety, compliance, integrated workflows and data analytics are critical in their specific applications.

Our Professional Instrumentation segment consists of our Advanced Instrumentation & Solutions, Sensing Technologies, and Advanced Sterilization Products and Censis businesses.

Our Advanced Instrumentation & Solutions business was primarily established through the acquisitions of Qualitrol in the 1980s, Fluke Corporation and Pacific Scientific Company in 1998, Tektronix and Invetech in 2007, Keithley Instruments in 2010, eMaint in 2016, Industrial Scientific and Landauer in 2017, Gordian and Accruent in 2018, Intelex and Pruftechnik in 2019 and numerous bolt-on acquisitions.

In addition, both Advanced Sterilization Products and Censis were acquired in 2019.

Our Advanced Instrumentation & Solutions business consists of:

Field Solutions Our field solutions products include a variety of compact professional test tools, thermal imaging and calibration equipment for electrical, industrial, electronic and calibration applications, online condition-based monitoring equipment; portable gas detection equipment, consumables, and software as a service (SaaS) offerings including safety/user behavior, asset management, environmental, health and safety (EHS) quality management and compliance monitoring; subscription-based technical, analytical, and compliance services to determine occupational and environmental radiation exposure; and software, data analytics and services for critical infrastructure in utility, industrial, energy, construction, facilities management, public safety, mining, EHS, and healthcare applications.

The instrumentation and sensing products and associated software solutions measure voltage, current, resistance, power quality, frequency, pressure, temperature, radiation, hazardous gas and air quality, among other parameters.

The business also makes and sells instruments, controls and monitoring and maintenance systems used by maintenance departments in utilities and industrial facilities to monitor assets,

including transformers, generators, motors and switchgear.

The business also provides physical resource management software with an integrated cloud-based framework for management of commercial property and facilities to extend the lifecycle of assets, facilitate regulatory compliance and reduce safety risks.

In addition, the business provides subscription-based construction cost data, software and services for real estate construction and maintenance applications.

Our test, measurement and monitoring products are used in the design, manufacturing and development of electronics, industrial, and other advanced technologies.

Typical users of these products and services include research and development engineers who design, de-bug, monitor and validate the function and performance of electronic components, subassemblies and end-products.

The business also provides a full range of design, engineering and manufacturing services and highly-engineered, modular components to enable conceptualization, development and launch of products in the medical diagnostics, cell therapy and consumer markets.

Finally, the business designs, develops, manufactures and markets critical, highly-engineered energetic materials components in specialized vertical applications.

Competition in the Advanced Instrumentation & Solutions business is based on a number of factors, including the reliability, performance, ruggedness, ease of use, ergonomics and aesthetics of the product, the service provider’s relevant expertise with particular technologies and applications, as well as the other factors described under “-Competition.” Sales in the business are generally made through independent distributors and direct sales personnel.

Sensing Technologies

Our competitive advantage in these markets is based on our ability to apply advanced sensing technologies to a variety of customer needs, many of which are in demanding operating environments.

Our modular products and agile supply chain enable rapid customization of solutions for unique operational requirements and which meet the lead-time needs of our customers.

Competition in the business is based on a number of factors, including technology, application design expertise, lead time, channels of distribution, brand awareness, as well as the other factors described under “-Competition.” Products in this business are marketed under a variety of brands, including ANDERSON-NEGELE, GEMS and SETRA.

Sales in the business are generally made through direct sales personnel and independent distributors.

Advanced Sterilization Products and Censis

Competition in these businesses is based on a number of factors, including technology, scope of integrated functionality and solutions to address a broader range of hospital workflows, reliability, installed base of customers, and brand awareness, as well as the other factors described under “-Competition.” Products in this business are marketed under a variety of brands, including ASP, CENSIS, CENSITRAC, EVOTECH, STERRAD, and ENDOCLENS.

Sales in these businesses are generally made through direct sales personnel and independent distributors.

Manufacturing facilities of our Professional Instrumentation segment are located in North America, Europe and Asia.

Industrial Technologies

Our Industrial Technologies segment offers critical technical equipment, components, software and services for manufacturing, repair and transportation markets worldwide.

We offer a wide range of products spanning advanced environmental sensors, fueling equipment, field payment, hardware, remote management and workflow software, vehicle tracking and fleet management software, signaling solutions for traffic light control and a range of tools for professional auto technicians and tire and wheel repair workshops.

Products and services offered serve retail fueling operators, commercial auto-repair businesses, municipal governments and public safety entities and fleet owners/operators, globally.

Based upon our experience, current [removed: information] [added: information,] and applicable law, we do not believe that these proceedings and claims will have a material effect on our financial position, results of operations or cash flows.

[removed: FORM 10-K][added: FORM 10-K]

| (Mark One) | | [added: | | | |]

| ☒ | [added: | |] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

For the fiscal year [removed: ended December] [added: ended December] 31, [removed: 2019][added: 2020]

| ☐ | [added: | |] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

| For the transition period from to | | [added: | | | |]

Commission File [removed: Number 1-37654][added: Number 1-37654]

| Delaware | | [added: | | | |] 47-5654583 | [added: | |]

| (State or other jurisdiction of incorporation or organization) | | [added: | | | |] (I.R.S. employer identification number) | [added: | |]

| 6920 Seaway Blvd | | | | [added: | | | | | | | |]

| Everett, | [added: | |] WA | | [added: | | | |] 98203 | [added: | |]

| (Address of principal executive offices) | | | [added: | | | | | |] (Zip code) | [added: | |]

Registrant’s telephone number, including area code: [removed: (425) 446] [added: (425) 446] - 5000

| Title of each class | [added: | |] Trading symbols | [added: | |] Name of each exchange on which registered | [added: | |]

| Common stock, par value $0.01 per share | [added: | |] FTV | [added: | |] New York Stock Exchange | [added: | |]

| 5% Mandatory convertible preferred stock, Series A, par value $0.01 per share | [added: | |] FTV. PRA | [added: | |] New York Stock Exchange | [added: | |]

| Large accelerated filer | [added: | |] x | | | | [added: | | | | | | | |] Accelerated filer | [added: | |] ¨ | [added: | |]

| Non-accelerated filer | [added: | |] ¨ | | [added: | | | |] (Do not check if a smaller reporting company) | | [added: | | | |] Smaller reporting company | [added: | |] ☐ | [added: | |]

| | | | | | [added: | | | | | | | | | |] Emerging growth company | [added: | |] ☐ | [added: | |]

As of February [removed: 21, 2020] [added: 19, 2021] there were [removed: 336,415,264] [added: 338,072,765] shares of Registrant’s common stock outstanding.

The aggregate market value of common stock held by non-affiliates of the Registrant as of June [removed: 28, 2019] [added: 26, 2020] was [removed: $24.1] [added: $17.1] billion, based upon the closing price of the Registrant’s common stock on the New York Stock Exchange.

Part III incorporates certain information by reference from the Registrant’s proxy statement for its [removed: 2020] [added: 2021] annual meeting of stockholders to be filed pursuant to Regulation 14A within 120 days after Registrant’s fiscal year-end.

With the exception of the sections of the [removed: 2020] [added: 2021] Proxy Statement specifically incorporated herein by reference, the [removed: 2020] [added: 2021] Proxy Statement is not deemed to be filed as part of this Form 10-K.

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| [Information Relating to Forward-looking [removed: Statements](#s3B4B470231A65A139E875E0A433CEC7A)] [added: Statements](#i365c529b01a247e3884b2b16298fb029_10)] | | | [removed: [2](#s3B4B470231A65A139E875E0A433CEC7A)] | [added: | | | | | [2](#i365c529b01a247e3884b2b16298fb029_10) | | |]

| Part 1. | | | | [added: | | | | | | | |]

| | [added: | |] Item 1. | [removed: [Business](#s4A5A9D806DCC5491A51CF2BFF2CCFB49)] | [removed: [2](#s4A5A9D806DCC5491A51CF2BFF2CCFB49)] | [added: [Business](#i365c529b01a247e3884b2b16298fb029_16) | | | [2](#i365c529b01a247e3884b2b16298fb029_16) | | |]

| | [added: | |] Item 1A. | [added: | |] [Risk [removed: Factors](#sC4DF0B17ECA7533790824A62FFAEBF6B)] [added: Factors](#i365c529b01a247e3884b2b16298fb029_19)] | [removed: [8](#sC4DF0B17ECA7533790824A62FFAEBF6B)] | [added: | [10](#i365c529b01a247e3884b2b16298fb029_19) | | |]

| | [added: | |] Item 1B. | [added: | |] [Unresolved Staff [removed: Comments](#s665E95AF69C3576DA293C6D7BC2A52EC)] [added: Comments](#i365c529b01a247e3884b2b16298fb029_22)] | [removed: [20](#s665E95AF69C3576DA293C6D7BC2A52EC)] | [added: | [23](#i365c529b01a247e3884b2b16298fb029_22) | | |]

| | [added: | |] Item 2. | [removed: [Properties](#s43547A86DBD75DAC9BD0F22E46C4722E)] | [removed: [20](#s43547A86DBD75DAC9BD0F22E46C4722E)] | [added: [Properties](#i365c529b01a247e3884b2b16298fb029_25) | | | [23](#i365c529b01a247e3884b2b16298fb029_25) | | |]

| | [added: | |] Item 3. | [added: | |] [Legal [removed: Proceedings](#sE22B0990CF3253C4B6E551DC9D626CD2)] [added: Proceedings](#i365c529b01a247e3884b2b16298fb029_28)] | [removed: [21](#sE22B0990CF3253C4B6E551DC9D626CD2)] | [added: | [23](#i365c529b01a247e3884b2b16298fb029_28) | | |]

| | [added: | |] Item 4. | [added: | |] [Mine Safety [removed: Disclosures](#s57A6FC29D20455F78EC2A15DA25AC448)] [added: Disclosures](#i365c529b01a247e3884b2b16298fb029_31)] | [removed: [21](#s57A6FC29D20455F78EC2A15DA25AC448)] | [added: | [23](#i365c529b01a247e3884b2b16298fb029_31) | | |]

| | | [added: | | | |] [Information about our Executive [removed: Officers](#s810857778B3B518C944A70A43AD660E8)] [added: Officers](#i365c529b01a247e3884b2b16298fb029_34)] | [removed: [22](#s810857778B3B518C944A70A43AD660E8)] | [added: | [24](#i365c529b01a247e3884b2b16298fb029_34) | | |]

| Part 2. | | | | [added: | | | | | | | |]

| | [added: | |] Item 5. | [added: | |] [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s2FC372352641528AAE5445BCA1932A36)] [added: Securities](#i365c529b01a247e3884b2b16298fb029_40)] | [removed: [23](#s2FC372352641528AAE5445BCA1932A36)] | [added: | [25](#i365c529b01a247e3884b2b16298fb029_40) | | |]

| | [added: | |] Item 6. | [added: | |] [Selected [added: Financial](#i365c529b01a247e3884b2b16298fb029_43) [Selected] Financial [removed: Data](#s0C137A11379657799438D50FE68F9C4D)] [added: Data](#i365c529b01a247e3884b2b16298fb029_2838)] | [removed: [23](#s0C137A11379657799438D50FE68F9C4D)] | [added: | [25](#i365c529b01a247e3884b2b16298fb029_2838) | | |]

| | [added: | |] Item 7. | [added: | |] [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sCFA3407F1236571AA6A343C9A2EC0889)] [added: Operations](#i365c529b01a247e3884b2b16298fb029_46)] | [removed: [23](#sCFA3407F1236571AA6A343C9A2EC0889)] | [added: | [25](#i365c529b01a247e3884b2b16298fb029_46) | | |]

| | [added: | |] Item 7A. | [added: | |] [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s8625FF95CA305264A0A62BAAFC852DAD)] [added: Risk](#i365c529b01a247e3884b2b16298fb029_124)] | [removed: [44](#s8625FF95CA305264A0A62BAAFC852DAD)] | [added: | [51](#i365c529b01a247e3884b2b16298fb029_124) | | |]

| | [added: | |] Item 8. | [added: | |] [Financial Statements and Supplementary [removed: Data](#s5539AAC8650E54018ECCC5AB74902307)] [added: Data](#i365c529b01a247e3884b2b16298fb029_127)] | [removed: [45](#s5539AAC8650E54018ECCC5AB74902307)] | [added: | [52](#i365c529b01a247e3884b2b16298fb029_127) | | |]

| | [added: | |] Item 9. | [added: | |] [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#sFC025DBEBD275AC6994E186BA91485D2)] [added: Disclosure](#i365c529b01a247e3884b2b16298fb029_250)] | [removed: [101](#sFC025DBEBD275AC6994E186BA91485D2)] | [added: | [109](#i365c529b01a247e3884b2b16298fb029_250) | | |]

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

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As of December 31, [removed: 2019,] [added: 2020,] our facilities included approximately [removed: 80] [added: 60] significant facilities, which are used for manufacturing, distribution, warehousing, research and development, general [removed: administrative] [added: administrative,] and/or sales functions.

Approximately [removed: 40] [added: 30] of these facilities are located in the United States in over [removed: 20] [added: 10] states and approximately [removed: 40] [added: 30] are located outside the United States in over [removed: 20] [added: 10] countries, including Canada and countries in Asia Pacific, Europe, and Latin America.

These facilities cover approximately [removed: 8] [added: 5] million square feet, of which approximately [removed: 5] [added: 3] million square feet are owned and approximately [removed: 3] [added: 2] million square feet are leased.

The approximate number of significant facilities by business segment is: [removed: Professional Instrumentation, 45;] [added: Intelligent Operating Solutions 25, Precision Technologies 25,] and [removed: Industrial Technologies, 35.][added: Advanced Healthcare Solutions 10.]

Set forth below are the names, ages, [removed: positions] [added: positions,] and experience of our executive officers as of February [removed: 27, 2020.][added: 26, 2021.]

| Name | | [added: | | | |] Age | | [added: | | | |] Position | | [added: | | | |] Officer Since | [added: | |]

| James A. Lico | | [removed: 54] | | [added: | | 55 | | | | | |] President and Chief Executive Officer | | [added: | | | |] 2016 | [added: | |]

| [removed: Martin Gafinowitz] [added: Barbara B. Hulit] | | [removed: 61] | | [added: | | 54 | | | | | |] Senior Vice President | | [added: | | | |] 2016 | [added: | |]

| [removed: Barbara B. Hulit] [added: Patrick K. Murphy] | | [removed: 53] | | [added: | | 59 | | | | | |] Senior Vice President | | [added: | | | |] 2016 | [added: | |]

| Charles E. McLaughlin | | [removed: 58] | | [added: | | 59 | | | | | |] Senior Vice President – Chief Financial Officer | | [added: | | | |] 2016 | [added: | |]

| [removed: Patrick K. Murphy] [added: William W. Pringle] | | [removed: 58] | | [added: | | 53 | | | | | |] Senior Vice President | | [added: | | | |] 2016 | [added: | |]

| [removed: William W. Pringle] [added: Jonathan L. Schwarz] | | [removed: 52] | | [added: | | 49 | | | | | |] Senior Vice President [added: – Corporate Development] | | [added: | | | |] 2016 | [added: | |]

[removed: | Jonathan L.] Schwarz [removed: | | 48 | |] [added: has served as Senior] Vice [removed: President –] [added: President, Corporate Development since February 2021 and as Vice President,] Strategy and Corporate Development [removed: | |] [added: from April 2019 to February 2021 and as Vice President, Corporate Development from July] 2016 [removed: |][added: to April 2019.]

| Peter C. Underwood | | [removed: 50] | | [added: | | 51 | | | | | |] Senior Vice President – General Counsel [removed: and Secretary] | | [added: | | | |] 2016 | [added: | |]

| Stacey A. Walker | | [removed: 49] | | [added: | | 50 | | | | | |] Senior Vice President – Human Resources | | [added: | | | |] 2016 | [added: | |]

[removed: Martin Gafinowitz] [added: Underwood] has served as [removed: a] Senior Vice [removed: President] [added: President, General Counsel] of Fortive since [removed: July] [added: May] 2016.

Prior to July 2016, [removed: Mr. Gafinowitz] [added: Ms. Walker] served as [removed: Senior] Vice [removed: President-Group Executive] [added: President-Talent Management] of Danaher from [removed: March] [added: January] 2014 to July 2016 after serving as Vice [removed: President-Group Executive of Danaher from 2005 to March 2014.]

Prior to joining Danaher, he served as CEO of Nidec Motor Corporation and President of the ACIM (Appliance, [removed: Commercial] [added: Commercial,] and Industrial Motor) Business Unit of Nidec Corporation, a manufacturer of commercial, industrial, and appliance motors and controls, from 2010 until October 2013.

Pringle [added: who] has served as a Senior Vice President of Fortive since July [removed: 2016.][added: 2016 will resign effective March 12, 2021.]

[removed: Prior to July 2016, Ms. Walker served as Vice] President-Talent [removed: Management of Danaher from January 2014 to July 2016 after serving as Vice President-Talent] Planning from December 2012 to December 2013 and as Vice President-Human Resources for Danaher’s Chemtreat business from 2008 to November 2012.

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| Edward R. Simmons | | | | | | 47 | | | | | | Senior Vice President – Strategy | | | | | | 2021 | | |

Edward R.

Simmons has served as Senior Vice President, Strategy of Fortive since February 2021.

From June 2018 to December 2020, Mr. Simmons was the President of Vista Consulting Group for Vista Equity Partners, a leading private investment firm focused on software, data, and technology-enabled businesses.

In addition, from September 1999 through May 2018, Mr. Simmons served as a Partner of Bain & Company where he served as a Director in its Private Equity Practice and led its Technology, Media, and Telecommunications practice.

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Schwarz has served as Vice President, Strategy and Corporate Development of Fortive since April 2019 and as Vice-President, Corporate Development from July 2016 to April 2019.

Underwood has served as Senior Vice President, General Counsel and Secretary of Fortive since May 2016.

As of February [removed: 21, 2020,] [added: 19, 2021,] there were approximately [removed: 2,300] [added: 2,100] holders of record of our common stock.

Not applicable.

($ in millions, except per share information)

The following table sets forth the selected consolidated financial data for the five-years ended December 31, 2019.

Unless otherwise indicated, the following disclosures reflect our continuing operations.

Refer to Note 4 to the consolidated financial statements included in this report for additional information regarding discontinued operations.

This selected financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and accompanying notes included in this report.

Historical results presented herein may not be indicative of future results.

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| | As of and for the Year Ended December 31 | | | | | | | | | | | | | | | | | | |

| | 2019 | | | | 2018 | | | | 2017 | | | | 2016 | | | | 2015 | | |

| Summary of Operations | | | | | | | | | | | | | | | | | | | |

| Sales | $ | 7,320.0 | | | $ | 6,452.7 | | | $ | 5,756.1 | | | $ | 5,378.2 | | | $ | 5,311.8 | |

| Operating profit | 1,004.1 | | | | 1,178.4 | | | | 1,143.0 | | | | 1,061.7 | | | | 1,081.5 | | |

| Net earnings from continuing operations | 725.4 | | | | 918.3 | | | | 884.3 | | | | 740.2 | | | | 737.6 | | |

| Net earnings per share from continuing operations: | | | | | | | | | | | | | | | | | | | |

| Basic | 1.95 | | | | 2.56 | | | | 2.54 | | | | 2.14 | | | | 2.14 | | |

| Diluted | 1.93 | | | | 2.52 | | | | 2.51 | | | | 2.13 | | | | 2.14 | | |

| Common stock dividends declared and paid per share | 0.28 | | | | 0.28 | | | | 0.28 | | | | 0.14 | | | | — | | |

| Preferred stock dividends declared and paid per share | 50.00 | | | | 25.28 | | | | — | | | | — | | | | — | | |

| Financial Position | | | | | | | | | | | | | | | | | | | |

| Assets of continuing operations | $ | 17,435.8 | | | $ | 12,875.6 | | | $ | 9,629.6 | | | $ | 7,353.1 | | | $ | 6,377.9 | |

| Assets of discontinued operations | 3.2 | | | | 30.0 | | | | 871.0 | | | | 836.7 | | | | 832.7 | | |

| Total assets | 17,439.0 | | | | 12,905.6 | | | | 10,500.6 | | | | 8,189.8 | | | | 7,210.6 | | |

| Current portion of long-term debt | 1,500.0 | | | | 455.6 | | | | — | | | | — | | | | — | | |

| Long-term debt, net of current maturities | 4,828.4 | | | | 2,974.7 | | | | 4,056.2 | | | | 3,358.0 | | | | — | | |

| Long-term debt | 6,328.4 | | | | 3,430.3 | | | | 4,056.2 | | | | 3,358.0 | | | | — | | |

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2019.][added: 2020.]

Based on this assessment, management concluded that, as of December 31, [removed: 2019,] [added: 2020,] the Company’s internal control over financial reporting is effective.

This report dated February [removed: 27, 2020] [added: 26, 2021] appears on page [removed: 46] [added: 53] of this Form 10-K.

We have audited Fortive Corporation and subsidiaries’ internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), (the COSO criteria).

In our opinion, Fortive Corporation and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Fortive Corporation and subsidiaries as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] the related consolidated statements of earnings, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, [removed: 2019,] [added: 2020,] and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) and our report dated February [removed: 27, 2020] [added: 26, 2021] expressed an unqualified opinion thereon.

We have audited the accompanying consolidated balance sheets of Fortive Corporation and subsidiaries (the Company) as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] the related consolidated statements of earnings, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, [removed: 2019,] [added: 2020,] and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2019,] [added: 2020,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February [removed: 27, 2020] [added: 26, 2021] expressed an unqualified opinion thereon.

| *Description of the Matter* | [added: | |] Accounting for unrecognized tax benefits The Company operates in a complex, multinational tax environment, and its effective tax rate is affected by implementation of global tax planning strategies, including those related to business acquisition [added: and divestiture] structuring. The Company’s uncertain tax positions are subject to audit by taxing authorities in various jurisdictions, and the resolution of such audits may span multiple years. The Company uses significant judgment to (1) determine whether, based on the technical merits, a tax position is more likely than not to be sustained and (2) measure the amount of tax benefit that qualifies for recognition. As more fully described in Note 14 - Income Taxes, as of December 31, [removed: 2019,] [added: 2020,] the Company’s gross unrecognized tax benefits were [removed: $214.9] [added: $200] million. Auditing the recognition and measurement of tax positions, including those related to business acquisitions and [added: divestiture] restructuring, was challenging because the measurement of the tax position is complex, highly judgmental and based on interpretations of tax laws and legal rulings. | [added: | |]

| *How We Addressed the Matter in Our Audit* | [added: | |] We tested controls over the Company’s process to assess the technical merits of tax positions, including management’s process to measure the benefits of those tax positions. In testing the measurement criteria, we involved our tax professionals to assess the technical merits of the Company’s tax positions. This included assessing the Company’s correspondence with relevant tax authorities as well as evaluating their third-party income tax opinions or memorandums and application of case law, rulings or other relevant tax authority obtained or considered by the Company. To support our evaluation, among other things, we separately interviewed certain key external tax advisers of the Company. We analyzed the Company’s assumptions and data used to determine the amount of tax benefit to recognize and tested the accuracy of the calculations. We also evaluated the Company’s income tax disclosures included in Note 14 to the consolidated financial statements in relation to these matters. | [added: | |]

| | [removed: As] [added: | | As] of December [removed: 31] [added: 31] | | | | | | | [added: | |]

| | [added: | | 2020 | | | | | |] 2019 | | | | [added: | |] 2018 | | |

| [removed: ASSETS] [added: ASSETS] | | | | | | | | [added: | | | |]

| Current assets: | | | | | | | | [added: | | | |]

| Cash and equivalents | [added: | |] $ | [removed: 1,205.2] [added: 1,824.8] | | | [added: | |] $ | [removed: 1,178.4] [added: 1,205.2] | |

| Accounts receivable less allowance for doubtful accounts of [removed: $59.8] [added: $42.5] million and [removed: $54.9] [added: $26.4] million at December 31, [removed: 2019] [added: 2020] and December 31, [removed: 2018,] [added: 2019,] respectively | [removed: 1,384.5] | | [added: 810.3] | | [removed: 1,195.1] | | | [added: | 890.7 | | |]

| Prepaid expenses and other current assets | [removed: 455.6] | | [added: 206.7] | | [removed: 193.2] | | | [added: | 338.6 | | |]

| Current assets, discontinued operations | [removed: 3.2] | | [added: 30.4] | | [removed: 30.0] | | | [added: | 838.1 | | |]

| Total current assets | [removed: 3,688.8] | | [added: 4,446.9] | | [removed: 3,171.2] | | | [added: | 3,688.8 | | |]

| [removed: Property,] [added: Property,] plant and equipment, [removed: net] [added: net] | [removed: 519.5] | | | | [removed: 576.1] | | | [added: | | | | | | | | | |]

| Operating lease right-of-use assets | [removed: 206.8] | | [added: 188.7] | | [removed: —] | | | [added: | 169.0 | | |]

| Other intangible assets, net | [removed: 3,845.0] | | [added: —] | | [removed: 2,476.3] | | | [added: | 274.3 | | |]

| Total assets | [added: | |] $ | [added: 16,051.5 | | | | | $ |] 17,439.0 | | | [added: | |] $ | 12,905.6 | |

| [removed: LIABILITIES] [added: LIABILITIES] AND [removed: EQUITY] [added: EQUITY] | | | | | | | | [added: | | | |]

| Current liabilities: | | | | | | | | [added: | | | |]

| Current portion of long-term debt | [added: | |] $ | [removed: 1,500.0] [added: 1,399.8] | | | [added: | |] $ | [removed: 455.6] [added: 1,500.0] | |

| Trade accounts payable | [removed: 765.5] | | [added: $] | [added: —] | [removed: 706.5] | | | [added: | $ | (316.5) | |]

| Current operating lease liabilities | [removed: 54.9] | | [added: 47.0] | | [removed: —] | | | [added: | 42.1 | | |]

| Accrued expenses and other current liabilities | [removed: 1,146.8] | | [added: 899.9] | | [removed: 999.3] | | | [added: | 797.8 | | |]

| Current liabilities, discontinued operations | [removed: —] | | [added: 33.3] | | [removed: 30.7] | | | [added: | 678.3 | | |]

| Total current liabilities | [removed: 3,467.2] | | [added: 2,860.8] | | [removed: 2,192.1] | | | [added: | 3,467.2 | | |]

| Operating lease liabilities | [removed: 159.0] | | [added: 154.3] | | [removed: —] | | | [added: | 133.8 | | |]

| Other long-term liabilities | [removed: 1,584.2] | | [added: —] | | [removed: 1,125.9] | | | [added: | (272.6) | | |]

| Long-term debt | [removed: 4,828.4] | | [added: 2,830.3] | | [removed: 2,974.7] | | | [added: | 4,826.2 | | |]

| Commitments and Contingencies | | | | | | | | [added: | | | |]

| Equity: | | | | | | | | [added: | | | |]

| Preferred stock: $0.01 par value, 15.0 million shares authorized; 5.0% Mandatory convertible preferred stock, series A, 1.4 million shares designated, issued and outstanding at December 31, [removed: 2019] [added: 2020] and December 31, [removed: 2018] [added: 2019] | [added: | |] — | | | | [added: | |] — | | |

| Common stock: $0.01 par value, 2.0 billion shares authorized; [removed: 336.9] [added: 339.0 million] and [removed: 335.1] [added: 336.9] million issued; [removed: 336.0] [added: 337.9 million] and [removed: 334.5] [added: 336.0] million outstanding at December 31, [removed: 2019] [added: 2020] and December 31, [removed: 2018,] [added: 2019,] respectively | [added: | |] 3.4 | | | | [added: | |] 3.4 | | |

| Additional paid-in capital | [removed: 3,311.1] | | [added: 3,554.5] | | [removed: 3,126.0] | | | [added: | 3,311.1 | | |]

February 26, 2021

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| *Description of the Matter* | | | Valuation of Goodwill The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value. To estimate the fair value, management uses a market approach based on multiples of earnings before interest, taxes, depreciation and amortization (EBITDA). In certain circumstances, management also evaluates other factors including the fair value computed through a discounted cash flow analysis to assess whether the reporting unit is impaired, and if so, the amount of impairment. The evaluation is performed on an annual basis, or more frequently if a triggering event is identified. As described in Note 7, the Company’s goodwill balance is $7.4 billion as of December 31, 2020. Due in large part to the COVID-19 pandemic and an updated forecast for Telematics (a component of discontinued operations), the Company determined that an interim quantitative impairment assessment of the Telematics reporting unit was necessary to be performed as of March 27, 2020. As described in Note 4, the Company estimated the fair value of the Telematics reporting unit using the discounted cash flow method and it resulted in the recording of a non-cash goodwill impairment charge of $85.3 million, which is presented in discontinued operations. The determination of the fair value using the discounted cash flow method requires management to make significant estimates and assumptions related to future revenue, future profitability, and appropriate discount and terminal growth rates. Auditing the Company’s annual goodwill impairment assessment is complex and highly judgmental due to the significant estimation required in determining the fair value of the reporting units. In particular, the estimated fair value is sensitive to significant assumptions including the selection of market multiples, projected financial information and, when applicable, discount rates and terminal growth rates. A high degree of audit judgment and an increased extent of effort including the need to involve our fair value specialists was required. | | |

| *How We Addressed the Matter in Our Audit* | | | We tested controls over management’s goodwill impairment assessment, including those related to the determination of the estimated interim fair value of the Telematics reporting unit. This included controls related to management’s forecasting, selection of market multiples and review of key assumptions including revenue growth, discount rate and terminal growth rate. To test the annual evaluation of goodwill and the measurement of the recorded Telematics goodwill impairment, among other procedures, we evaluated the reasonableness of management’s forecasts, tested the completeness and accuracy of the underlying data used to develop the forecast and tested the carrying value of the reporting unit. With the support of our fair value specialists, we evaluated the significant assumptions in the Telematics model, including the discount rate and terminal growth rate. Our fair value specialists also assisted us with our testing of management’s selected EBITDA multiples for the annual goodwill evaluation. We also evaluated the Company’s disclosures included in Notes 4 and 7 to the consolidated financial statements in relation to these matters. | | |

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| --- | --- | --- | --- | --- | --- |

February 26, 2021

| Inventories | | | 455.5 | | | | | | 416.2 | | |

| Investment in Vontier Corporation | | | 1,119.2 | | | | | | — | | |

| Other assets | | | 344.1 | | | | | | 344.7 | | |

| Goodwill | | | 7,359.2 | | | | | | 7,241.5 | | |

| Other intangible assets, net | | | 3,290.6 | | | | | | 3,570.7 | | |

| Other assets, discontinued operations | | | — | | | | | | 2,008.3 | | |

| Other long-term liabilities | | | 1,233.4 | | | | | | 1,339.0 | | |

| Long-term liabilities, discontinued operations | | | — | | | | | | 272.6 | | |

| Sales of products | | | $ | 3,956.7 | | | | | $ | 3,922.5 | | | | | $ | 3,360.5 | |

| Total sales | | | 4,634.4 | | | | | | 4,563.9 | | | | | | 3,800.4 | | |

| Cost of product sales | | | (1,643.4) | | | | | | (1,733.3) | | | | | | (1,343.8) | | |

| Cost of service sales | | | (382.5) | | | | | | (347.4) | | | | | | (270.4) | | |

| Total cost of sales | | | (2,025.9) | | | | | | (2,080.7) | | | | | | (1,614.2) | | |

| Gross profit | | | 2,608.5 | | | | | | 2,483.2 | | | | | | 2,186.2 | | |

| Interest expense, net | | | (148.5) | | | | | | (142.6) | | | | | | (77.2) | | |

| Unrealized gain on investment in Vontier Corporation | | | 1,119.2 | | | | | | — | | | | | | — | | |

| Income taxes | | | (55.5) | | | | | | (68.6) | | | | | | (75.6) | | |

| Basic | | | $ | 4.10 | | | | | $ | 0.59 | | | | | $ | 1.32 | |

| Diluted | | | $ | 4.05 | | | | | $ | 0.59 | | | | | $ | 1.30 | |

| Basic | | | $ | 0.48 | | | | | $ | 1.40 | | | | | $ | 7.01 | |

| Diluted | | | $ | 0.45 | | | | | $ | 1.38 | | | | | $ | 6.91 | |

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance, January 1, 2020 | | | 336.0 | | | | | | 3.4 | | | | | | 1.4 | | | | | | — | | | | | | 3,311.1 | | | | | | 4,097.5 | | | | | | | | | | | | (56.3) | | | | | | 13.2 | | |

| Mandatory convertible preferred dividends | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (69.0) | | | | | | | | | | | | — | | | | | | — | | |

| Vontier Separation and other | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 130.5 | | | | | | — | | | | | | | | | | | | (135.6) | | | | | | — | | |

| Balance, December 31, 2020 | | | 339.0 | | | | | | 3.4 | | | | | | 1.4 | | | | | | — | | | | | | 3,554.5 | | | | | | 5,547.4 | | | | | | | | | | | | (141.1) | | | | | | $ | 8.5 | |

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

The Company completed the acquisitions of the Advanced Sterilization Products business (“ASP”) on April 1, 2019, Intelex Technologies on June 27, 2019, Pruftechnik on July 5, 2019, and Censis Technologies on October 31, 2019, collectively the “Acquired Businesses.” The Company has not yet fully incorporated the internal controls and procedures of the Acquired Businesses into the Company’s internal control over financial reporting, and as such, management excluded the Acquired Businesses from its assessment of the effectiveness of the Company’s internal control over financial reporting as of and for the year ended December 31, 2019.

The Acquired Businesses constituted less than 25% of the Company’s total assets as of December 31, 2019 and less than 10% of the Company’s total revenues for the year ended December 31, 2019.

As indicated in the accompanying Report of Management on Fortive Corporation’s Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of the Advanced Sterilization Products business (“ASP”), Intelex Technologies (“Intelex”), Pruftechnik, and Censis Technologies (“Censis”) which are included in the 2019 consolidated financial statements of the Company.

Collectively, ASP, Intelex, Pruftechnik and Censis constituted less than 25% of the Company’s total assets as of December 31, 2019 and less than 10% of the Company’s total revenues for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of ASP, Intelex, Pruftechnik and Censis.

February 27, 2020

| | |

| --- | --- |

| *Description of the Matter* | Valuation of acquired intangible assets As more fully described in Note 3 to the consolidated financial statements, the Company completed several acquisitions during 2019 for net consideration of $3.9 billion. Auditing the accounting for the Company's 2019 acquisitions was complex and highly judgmental due to the significant estimation required in determining the fair value of customer relationships, trade names and technology acquired (collectively, “intangible assets”), which totaled $1.7 billion in aggregate. In particular, the estimated fair values were sensitive to significant assumptions such as the projected financial information and discount rate used in the valuation models, which are affected by expectations about future market and economic conditions. |

| *How We Addressed the Matter in Our Audit* | We tested controls over the measurement of the intangible assets acquired, including management’s review of the significant assumptions mentioned above and the completeness and accuracy of the data used in the measurements. To test the measurement of the intangible assets, we read the related purchase agreements, evaluated, among other things, whether (1) the valuation methodologies used were appropriate, (2) the significant assumptions, including discount rates, revenue growth rates, and projected free cash flow, used in valuing these intangibles were reasonable, and (3) the underlying data used by the Company in its analyses was appropriate. Specifically, when evaluating the assumptions related to the projected free cash flow, we compared the assumptions to the past performance of the acquired entities, the Company's history related to similar acquisitions, and the Company’s future plans for the acquired entities. We involved an internal specialist to assist in our completion of our audit procedures. |

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| Inventories | 640.3 | | | | 574.5 | | |

| Other assets | 779.6 | | | | 548.9 | | |

| Goodwill | 8,399.3 | | | | 6,133.1 | | |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Sales of products | $ | 6,396.9 | | | $ | 5,755.0 | | | $ | 5,173.3 | |

| Sales of services | 923.1 | | | | 697.7 | | | | 582.8 | | |

| Total sales | 7,320.0 | | | | 6,452.7 | | | | 5,756.1 | | |

| Cost of product sales | (3,050.8 | | ) | | (2,657.2 | | ) | | (2,440.3 | | ) |

| Cost of service sales | (588.9 | | ) | | (474.2 | | ) | | (394.4 | | ) |

| Total cost of sales | (3,639.7 | | ) | | (3,131.4 | | ) | | (2,834.7 | | ) |

| Gross profit | 3,680.3 | | | | 3,321.3 | | | | 2,921.4 | | |

| Interest expense, net | (164.2 | | ) | | (97.0 | | ) | | (88.7 | | ) |

| Income taxes | (149.1 | | ) | | (160.1 | | ) | | (189.3 | | ) |

| Basic | $ | 1.95 | | | $ | 2.56 | | | $ | 2.54 | |

| Diluted | $ | 1.93 | | | $ | 2.52 | | | $ | 2.51 | |

| Basic | $ | 0.04 | | | $ | 5.78 | | | $ | 0.46 | |

| Diluted | $ | 0.04 | | | $ | 5.69 | | | $ | 0.45 | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balance, January 1, 2017 | 345.9 | | | $ | 3.5 | | | — | | | $ | — | | | $ | 2,427.2 | | | $ | 403.0 | | | $ | (145.8 | ) | | $ | 3.1 | |

| Balance, January 1, 2018 | 347.8 | | | 3.5 | | | | — | | | — | | | | 2,444.1 | | | | 1,346.4 | | | | (7.6 | | ) | | 17.9 | | |

| Non-cash adjustment to Net Former Parent investment | — | | | — | | | | — | | | — | | | | 9.1 | | | | — | | | | — | | | | — | | |

| Depreciation | 133.3 | | | | 125.7 | | | | 93.3 | | |

| Amortization | 292.9 | | | | 135.1 | | | | 65.0 | | |

| Impairment charges on intangible assets | — | | | | 1.1 | | | | 2.3 | | |

| Change in inventories | 118.8 | | | | (73.4 | | ) | | 17.5 | | |

Fortive Corporation (“Fortive” or “the Company”) is a diversified industrial technology growth company encompassing businesses that are recognized leaders in attractive markets.

Fortive separated from Danaher Corporation (“Danaher”) on July 2, 2016 (the “Separation”).

Management’s annual report on its internal control over financial reporting (as such term is defined in Rules 13a-15(f) under the Exchange Act) and the independent registered public accounting firm’s audit report on the effectiveness of the Company’s internal control over financial reporting are included in the Company’s financial statements for the year ended December 31, [removed: 2019] [added: 2020] included in Item 8 of this Annual Report on Form 10-K, under the headings “Report of Management on Fortive Corporation’s Internal Control Over Financial Reporting” and “Report of Independent Registered Public Accounting Firm,” respectively, and are incorporated herein by reference.

The Company completed the acquisitions of the Advanced Sterilization Products business (“ASP”) on April 1, 2019, Intelex Technologies on June 27, 2019, Pruftechnik on July 5, 2019, and Censis Technologies on October 31, 2019, collectively the “Acquired Businesses.” The Company has not yet fully incorporated the internal controls and procedures of the Acquired Businesses into the Company’s internal control over financial reporting, and as such, management excluded the Acquired Businesses from its assessment of the effectiveness of the Company’s internal control over financial reporting as of and for the year ended December 31, 2019.

The Acquired Businesses constituted less than 25% of the Company’s total assets as of December 31, 2019 and less than 10% of the Company’s total revenues for the year ended December 31, 2019.

Other than the information below, the information required by this Item is incorporated by reference from the sections entitled Election of [removed: Directors, Corporate Governance,] [added: Directors] and [removed: Delinquent Section 16(a) Reports] [added: Corporate Governance] in the Proxy Statement for our [removed: 2020] [added: 2021] annual meeting and to the information under the caption “Information about our Executive Officers” in Part I hereof.

The information required by this Item is incorporated by reference from the sections entitled Compensation Discussion and Analysis, Compensation Committee Report, Executive Compensation Tables, Pay Ratio Disclosure, and Director Compensation in the Proxy Statement for our [removed: 2020] [added: 2021] annual meeting (other than the Compensation Committee Report, which shall not be deemed to be “filed”).

The information required by this Item is incorporated by reference from the sections entitled Beneficial Ownership of Fortive Common Stock by Directors, Officers and Principal Shareholders, and Equity Compensation Plan Information in the Proxy Statement for our [removed: 2020] [added: 2021] annual meeting.

The information required by this Item is incorporated by reference from the sections entitled Corporate Governance and Certain Relationships and Related Transactions in the Proxy Statement for our [removed: 2020] [added: 2021] annual meeting.

The information required by this Item is incorporated by reference from the section entitled Ratification of Independent Registered Public Accounting Firm in the Proxy Statement for our [removed: 2020] [added: 2021] annual meeting.

[removed: |] a) [removed: |] The following documents are filed as part of this report. [removed: |]

[removed: | (1) |] Financial [removed: Statements. The financial statements are set forth under “Item 8. Financial] Statements and Supplementary Data” of this Annual Report on Form 10-K. [removed: |]

[removed: | (2) | Schedules. An index of Exhibits and] Schedules [removed: is on page 103 of this report. Schedules] other than those listed below have been omitted from this Annual Report on Form 10-K because they are not required, are not applicable or the required information is included in the financial statements or the notes thereto. [removed: |]

[removed: | (3) | Exhibits.] The exhibits listed in the accompanying Exhibit Index are filed or incorporated by reference as part of this Annual Report on Form 10-K. [removed: |]

(1)Financial Statements.

The financial statements are set forth under “Item 8.

(2)Schedules.

An index of Exhibits and Schedules is on page 110 of this report.

(3)Exhibits.

| | |

| --- | --- |

| | [added: | |] Page Number [removed: in Form] [added: in Form] 10-K | [added: | |]

| Schedule: | | [added: | | | |]

| Valuation and Qualifying Accounts | [removed: [110](#s7E87BFD1F38751EF85C234CC160FADF2)] | [added: | [118](#i365c529b01a247e3884b2b16298fb029_292) | | |]

| Exhibit Number | | [added: | | | |] Description | | | [added: | | | | | |]

| [removed: 2.1] [added: 10.25] | | [removed: [Separation and Distribution Agreement, dated as] [added: | | | | [Form] of [removed: July 1, 2016, by and between Fortive Corporation and Danaher Corporation](http://www.sec.gov/Archives/edgar/data/1659166/000119312516491973/d43850dex21.htm)] [added: D&O Indemnification Agreement*](http://www.sec.gov/Archives/edgar/data/1659166/000119312516533838/d43850dex1010.htm)] | | [added: | | | |] Incorporated by reference from Exhibit [removed: 2.1] [added: 10.10] to Amendment No. [removed: 1] [added: 2] to Fortive Corporation’s Registration Statement on Form 10, filed on [removed: March 3,] [added: April 7,] 2016 (Commission File Number: 1-37654) | [added: | |]

| [removed: 2.2] [added: 2.1] | | [added: | | | |] [Separation and Distribution Agreement, [removed: dates as] [added: date](http://www.sec.gov/Archives/edgar/data/1374535/000119312518077590/d545839dex101.htm)[d](http://www.sec.gov/Archives/edgar/data/1374535/000119312518077590/d545839dex101.htm) [as] of March 7, 2018, among Fortive Corporation, Stevens Holding Company, Inc. and Altra Industrial Motion Corp.](http://www.sec.gov/Archives/edgar/data/1374535/000119312518077590/d545839dex101.htm) | | [added: | | | |] Incorporated by reference from Exhibit 10.1 to Altra Industrial Motion Corp.’s Current Report on Form 8-K filed on March 9, 2018 (Commission File No. 1-33209) | [added: | |]

| [removed: 2.3] [added: 2.2] | | [added: | | | |] [Agreement and Plan of Merger and Reorganization, dated as of March 7, 2018, among Fortive Corporation, Stevens Holding Company, Inc., Altra Industrial Motion Corp. and McHale Acquisition Corp.](http://www.sec.gov/Archives/edgar/data/1374535/000119312518077590/d545839dex21.htm) | | [added: | | | |] Incorporated by reference from Exhibit 2.1 to Altra Industrial Motion Corp.’s Current Report on Form 8-K filed on March 9, 2018 (Commission File No. 1-33209) | [added: | |]

| [removed: 2.4] [added: 2.3] | | [added: | | | |] [Transaction Agreement, dated as of July 30, 2018, by and among Athena SuperHoldCo, Inc., TLFN Holding II Company, Gilbarco Catlow LLC, Gryphon Merger Sub Inc., Genstar Capital VII, L.P., solely in its capacity as the Seller Representative, and Fortive Corporation, solely in its capacity as the Parent Guarantor](http://www.sec.gov/Archives/edgar/data/1659166/000119312518232406/d592779dex21.htm) | | [added: | | | |] Incorporated by reference from Exhibit 2.1 to Fortive Corporation’s Current Report on Form 8-K filed on July 31, 2018 (Commission File Number: 1-37654) | [added: | |]

| [removed: 2.5] [added: 2.4] | | [added: | | | |] [Stock and Asset Purchase Agreement, dated as of June 6, [removed: 2018 and executed on September 20,] 2018, [added: by and] between [removed: Ethicon] [added: Ethicon, Inc.] and [removed: the Company](http://www.sec.gov/Archives/edgar/data/1659166/000119312518280050/d629005dex21.htm)] [added: Fortive Corporation](https://www.sec.gov/Archives/edgar/data/1659166/000119312518280050/d629005dex21.htm)] | | [added: | | | |] Incorporated by reference from Exhibit 2.1 to Fortive Corporation’s Current Report on Form [removed: 8-K] [added: 8-k] filed on September 21, 2018 (Commission File [removed: Number:] [added: Number] 1-37654) | [added: | |]

| 3.1 | | [added: | | | |] [Amended and Restated Certificate of Incorporation of Fortive Corporation](http://www.sec.gov/Archives/edgar/data/1659166/000119312517200124/d408502dex31.htm) | | [added: | | | |] Incorporated by reference from Exhibit 3.1 to Fortive Corporation’s Current Report on Form 8-K filed on June 9, 2017 (Commission File Number: 1-37654) | [added: | |]

| 3.2 | | [added: | | | |] [Certificate of Designations of the 5.00% Mandatory Convertible Preferred Stock, Series A](http://www.sec.gov/Archives/edgar/data/1659166/000119312518209698/d798107dex31.htm) | | [added: | | | |] Incorporated by reference from Exhibit 3.1 to Fortive Corporation’s Current Report on Form 8-K filed on June 29, 2018 (Commission File Number: 1-37654) | [added: | |]

| 3.3 | | [added: | | | |] [Amended and Restated Bylaws of Fortive Corporation](http://www.sec.gov/Archives/edgar/data/1659166/000119312517200124/d408502dex32.htm) | | [added: | | | |] Incorporated by reference from Exhibit 3.2 to Fortive Corporation’s Current Report on Form 8-K filed on June 9, 2017 (Commission File Number: 1-37654) | [added: | |]

| 4.1 | | [added: | | | |] [Indenture, dated as of June 20, 2016, between Fortive Corporation, as issuer, and The Bank of New York Mellon Trust Company, N.A., as trustee](http://www.sec.gov/Archives/edgar/data/1659166/000119312516627924/d213986dex41.htm) | | [added: | | | |] Incorporated by reference from Exhibit 4.1 to Fortive Corporation’s Current Report on Form 8-K filed on June 21, 2016 (Commission File Number: 1-37654) | [added: | |]

| 4.2 | | [added: | | | |] [Specimen Certificate of the 5.00% Mandatory Convertible Preferred Stock, Series A](http://www.sec.gov/Archives/edgar/data/1659166/000119312518209698/d798107dex31.htm) | | [added: | | | |] Incorporated by reference from Exhibit [removed: 4.1] [added: 3.1] to Fortive Corporation’s Current Report on Form 8-K filed on June 29, 2018 (Commission File Number: 1-37654) | [added: | |]

| 4.3 | | [added: | | | |] [Indenture, dated as of February 22, 2019, among Fortive Corporation, the guarantors party thereto, and The Bank of New York Mellon Trust Company, N.A., as trustee](http://www.sec.gov/Archives/edgar/data/1659166/000119312519048296/d701628dex41.htm) | | [added: | | | |] Incorporated by reference to Exhibit 4.1 to Fortive Corporation’s Current Report on Form 8-K filed on February 22, 2019 (Commission File Number: 1-37654) | [added: | |]

| 4.4 | | [added: | | | |] [Description of Securities](https://www.sec.gov/Archives/edgar/data/1659166/000165916620000071/a20191231-ex44.htm) | | | [added: | | | Incorporated by reference to Exhibit 4.4 to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2019 (Commission File Number: 1-37654) | | |]

| 10.1 | | [added: | | | |] [Amended and Restated Credit Agreement, dated as of November 30, 2018, among Fortive Corporation and certain of its subsidiaries party thereto, Bank of America, N.A., as Administrative Agent and Swing Line Lender, and the lenders referred to therein](http://www.sec.gov/Archives/edgar/data/1659166/000119312518341138/d665431dex101.htm) | | [added: | | | |] Incorporated by reference from Exhibit 10.1 to Fortive Corporation’s Current Report on Form 8-K filed on December 3, 2018 (Commission File Number 1-37654) | [added: | |]

| [removed: 10.2] [added: 10.5] | | [removed: [Credit] [added: | | | | [Term Loan Credit] Agreement, dated as of [removed: August 22, 2018,] [added: March 1, 2019,] among Fortive Corporation, Bank of America, N.A., as Administrative Agent, and the lenders referred to [removed: therein](http://www.sec.gov/Archives/edgar/data/1659166/000119312518255151/d620248dex101.htm)] [added: therein](http://www.sec.gov/Archives/edgar/data/1659166/000119312519062417/d717451dex101.htm)] | | [added: | | | |] Incorporated by reference [removed: from] [added: to] Exhibit 10.1 to Fortive Corporation’s Current Report on Form 8-K filed on [removed: August 22, 2018] [added: March 4, 2019] (Commission File Number: 1-37654) | [added: | |]

| [removed: 10.3] [added: 10.2] | | [added: | | | |] [Amendment No. 1 to [removed: Term Loan] [added: Revolving] Credit Agreement, dated as of February 21, 2019, among Fortive Corporation, Bank of [removed: America,] [added: America] N.A., as Administrative [removed: Agent,] [added: Agent] and [added: a Swing Line Lender, and] the lenders referred to [removed: therein](http://www.sec.gov/Archives/edgar/data/1659166/000119312519048296/d701628dex101.htm)] [added: therein](http://www.sec.gov/Archives/edgar/data/1659166/000119312519048296/d701628dex102.htm)] | | [added: | | | |] Incorporated by reference to Exhibit [removed: 10.1] [added: 10.2] to Fortive Corporation’s Current Report on Form 8-K filed on February 22, 2019 (Commission File Number: 1-37654) | [added: | |]

| [removed: 10.4] [added: 10.6] | | [added: | | | |] [Amendment No. 1 to [removed: Revolving] [added: Term Loan] Credit Agreement, dated as of February [removed: 21, 2019,] [added: 25, 2020, by and] among Fortive Corporation, Bank of [removed: America] [added: America,] N.A., as Administrative [removed: Agent and a Swing Line Lender,] [added: Agent,] and the lenders referred to [removed: therein](http://www.sec.gov/Archives/edgar/data/1659166/000119312519048296/d701628dex102.htm)] [added: therein](https://www.sec.gov/Archives/edgar/data/1659166/000119312520056528/d896019dex102.htm)] | | [added: | | | |] Incorporated by reference to Exhibit 10.2 to Fortive Corporation’s Current Report on Form 8-K filed on February [removed: 22, 2019] [added: 28, 2020] (Commission File Number: 1-37654) | [added: | |]

| [removed: 10.5] [added: 10.7] | | [removed: [Term] [added: | | | | [Amendment No. 2 to Term] Loan Credit Agreement, dated as of [removed: March 1, 2019,] [added: April 24, 2020, by and] among Fortive Corporation, Bank of America, N.A., as Administrative Agent, and the lenders referred to [removed: therein](http://www.sec.gov/Archives/edgar/data/1659166/000119312519062417/d717451dex101.htm)] [added: therein](https://www.sec.gov/Archives/edgar/data/1659166/000165916620000077/exhibit10-2.htm)] | | [added: | | | |] Incorporated by reference to Exhibit [removed: 10.1] [added: 10.2] to Fortive Corporation’s Current Report on Form 8-K filed on [removed: March 4, 2019] [added: April 30, 2020] (Commission File Number: 1-37654) | [added: | |]

| [removed: 10.6] [added: 10.22] | | [added: | | | |] [Fortive Corporation [added: Amended and Restated] 2016 [removed: Stock] [added: Executive] Incentive [removed: Plan, as amended and restated*](http://www.sec.gov/Archives/edgar/data/1659166/000119312518118632/d502190ddef14a.htm#toc502190_63)] [added: Compensation Plan*](http://www.sec.gov/Archives/edgar/data/1659166/000165916619000085/a20181231-ex1018.htm)] | | [added: | | | |] Incorporated by reference from [removed: Appendix B] [added: Exhibit 10.18] to Fortive Corporation’s [removed: Proxy Statement on Schedule 14A filed] [added: Annual Report] on [removed: April 16,] [added: Form 10-K for the year ended December 31,] 2018 (Commission File [removed: Number] [added: Number:] 1-37654) | [added: | |]

| [removed: 10.7] [added: 10.16] | | [added: | | | |] [Form of Fortive Corporation Performance Stock Unit Agreement*](http://www.sec.gov/Archives/edgar/data/1659166/000165916618000100/a20171231-ex108.htm) | | [added: | | | |] Incorporated by reference from Exhibit 10.8 to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2017 (Commission File Number: 1-37654) | [added: | |]

| [removed: 10.8] [added: 10.17] | | [added: | | | |] [Form of Fortive Corporation Non-Employee Directors Restricted Stock Unit Agreement *](http://www.sec.gov/Archives/edgar/data/1659166/000165916618000100/a20171231-ex109.htm) | | [added: | | | |] Incorporated by reference from Exhibit 10.9 to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2017 (Commission File Number: 1-37654) | [added: | |]

| [removed: 10.9] [added: 10.18] | | [added: | | | |] [Form of Fortive Corporation Restricted Stock Grant Agreement*](http://www.sec.gov/Archives/edgar/data/1659166/000119312516533838/d43850dex1013.htm) | | [added: | | | |] Incorporated by reference from Exhibit 10.13 to Amendment No. 2 to Fortive Corporation’s Registration Statement on Form 10, filed on April 7, 2016 (Commission File Number: 1-37654) | [added: | |]

| [removed: 10.10] [added: 10.19] | | [added: | | | |] [Form of Fortive Corporation Restricted Stock Unit Agreement*](http://www.sec.gov/Archives/edgar/data/1659166/000165916618000100/a20171231-ex1011.htm) | | [added: | | | |] Incorporated by reference from Exhibit 10.11 to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2017 (Commission File Number: 1-37654) | [added: | |]

| [removed: 10.11] [added: 10.20] | | [added: | | | |] [Form of Fortive Corporation Non-Employee Directors Stock Option Agreement*](http://www.sec.gov/Archives/edgar/data/1659166/000165916618000100/a20171231-ex1012.htm) | | [added: | | | |] Incorporated by reference from Exhibit 10.12 to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2017 (Commission File Number: 1-37654) | [added: | |]

| [removed: 10.12] [added: 10.21] | | [added: | | | |] [Form of Fortive Corporation Stock Option Agreement*](http://www.sec.gov/Archives/edgar/data/1659166/000165916618000100/a20171231-ex1013.htm) | | [added: | | | |] Incorporated by reference from Exhibit 10.13 to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2017 (Commission File Number: 1-37654) | [added: | |]

| [removed: 10.13] [added: 10.35] | | [removed: [Fortive] [added: | | | | [Form of Fortive] Corporation [removed: Amended] and [removed: Restated 2016 Executive Incentive Compensation Plan*](http://www.sec.gov/Archives/edgar/data/1659166/000165916619000085/a20181231-ex1018.htm)] [added: its Affiliated Entities Agreement Regarding Competition and Protection of Proprietary Interests*](http://www.sec.gov/Archives/edgar/data/1659166/000165916619000085/a20181231-ex1031.htm)] | | [added: | | | |] Incorporated by reference from Exhibit [removed: 10.18] [added: 10.31] to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2018 (Commission File Number: 1-37654) | [added: | |]

| [removed: 10.14] [added: 10.23] | | [added: | | | |] [Fortive Corporation Severance and Change in Control Plan for Officers*](http://www.sec.gov/Archives/edgar/data/1659166/000119312517106559/d367740dex101.htm) | | [added: | | | |] Incorporated by reference from Exhibit 10.1 to Fortive Corporation’s Current Report on Form 8-K, filed on March 31, 2017 (Commission File Number: 1-37654) | [added: | |]

| [removed: 10.15] [added: 10.24] | | [added: | | | |] [Fortive Executive Deferred Incentive Program*](http://www.sec.gov/Archives/edgar/data/1659166/000119312516609931/d152246dex1010.htm) | | [added: | | | |] Incorporated by reference from Exhibit 10.10 to Fortive Corporation’s Current Report on Form 8-K filed on June 1, 2016 (Commission File Number: 1-37654) | [added: | |]

| [removed: 10.16] [added: 10.31] | | [removed: [Form] [added: | | | | [Offer] of [removed: D&O Indemnification Agreement*](http://www.sec.gov/Archives/edgar/data/1659166/000119312516533838/d43850dex1010.htm)] [added: Employment Letter, dated November 16, 2015, between TGA Employment Services LLC and Chuck McLaughlin*](http://www.sec.gov/Archives/edgar/data/1659166/000119312516491973/d43850dex106.htm)] | | [added: | | | |] Incorporated by reference from Exhibit [removed: 10.10] [added: 10.6] to Amendment No. [removed: 2] [added: 1] to Fortive Corporation’s Registration Statement on Form 10, filed on [removed: April 7,] [added: March 3,] 2016 (Commission File Number: 1-37654) | [added: | |]

| [removed: 10.17] [added: 10.26] | | [added: | | | |] [Aircraft Time Sharing Agreement, dated July 18, 2016, between Fortive Corporation and James Lico*](http://www.sec.gov/Archives/edgar/data/1659166/000165916618000100/a20171231-ex1018.htm) | | [added: | | | |] Incorporated by reference from Exhibit 10.18 to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2017 (Commission File Number: 1-37654) | [added: | |]

| [removed: 10.18] [added: 10.27] | | [added: | | | |] [Aircraft Time Sharing Agreement, dated July 18, 2016, between Fortive Corporation and Charles McLaughlin*](http://www.sec.gov/Archives/edgar/data/1659166/000165916618000100/a20171231-ex1019.htm) | | [added: | | | |] Incorporated by reference from Exhibit 10.19 to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2017 (Commission File Number: 1-37654) | [added: | |]

| [removed: 10.19] [added: 10.29] | | [removed: [Description of compensation arrangements for non-management directors*](http://www.sec.gov/Archives/edgar/data/1659166/000165916617000246/a20170929-ex101.htm)] | | [added: | | [Fortive Corporation Non-Employee Directors’ Deferred Compensation Plan](http://www.sec.gov/Archives/edgar/data/1659166/000165916617000246/a20170929-ex102.htm) | | | | | |] Incorporated by reference from Exhibit [removed: 10.1] [added: 10.2] to Fortive Corporation’s Quarterly Report on Form 10-Q for the quarter ended [removed: June 28, 2019] [added: September 29, 2017] (Commission File Number: 1-37654) | [added: | |]

| [removed: 10.20] [added: 10.30] | | [added: | | | |] [Fortive Corporation Non-Employee Directors’ Deferred Compensation [removed: Plan](http://www.sec.gov/Archives/edgar/data/1659166/000165916617000246/a20170929-ex102.htm)] [added: Plan Election Form](http://www.sec.gov/Archives/edgar/data/1659166/000165916617000246/a20170929-ex103.htm)] | | [added: | | | |] Incorporated by reference from Exhibit [removed: 10.2] [added: 10.3] to Fortive Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 29, 2017 (Commission File Number: 1-37654) | [added: | |]

| [removed: 10.22] [added: 10.32] | | [added: | | | |] [Offer of Employment Letter, dated [removed: November 16, 2015,] [added: February 1, 2016,] between TGA Employment Services LLC and [removed: Chuck McLaughlin*](http://www.sec.gov/Archives/edgar/data/1659166/000119312516491973/d43850dex106.htm)] [added: Barbara Hulit*](http://www.sec.gov/Archives/edgar/data/1659166/000165916617000091/a20161231-ex1022.htm)] | | [added: | | | |] Incorporated by reference from Exhibit [removed: 10.6 to Amendment No. 1] [added: 10.22] to Fortive Corporation’s [removed: Registration Statement] [added: Annual Report] on Form [removed: 10, filed on March 3,] [added: 10-K for the year ended December 31,] 2016 (Commission File Number: 1-37654) | [added: | |]

| [removed: 10.23] [added: 10.33] | | [added: | | | |] [Offer of Employment Letter, dated [removed: February 1, 2016,] [added: November 11, 2015] between TGA Employment Services LLC and [removed: Barbara Hulit*](http://www.sec.gov/Archives/edgar/data/1659166/000165916617000091/a20161231-ex1022.htm)] [added: William W. Pringle*](https://www.sec.gov/Archives/edgar/data/1659166/000165916618000100/a20171231-ex1025.htm)] | | [added: | | | |] Incorporated by reference from Exhibit [removed: 10.22] [added: 10.25] to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, [removed: 2016] [added: 2017] (Commission File Number: 1-37654) | [added: | |]

| 21.1 | | [added: | | | |] [Subsidiaries of [removed: Registrant](https://www.sec.gov/Archives/edgar/data/1659166/000165916620000071/a20191231-ex211.htm)] [added: Registrant](https://www.sec.gov/Archives/edgar/data/1659166/000165916621000062/a20201231-ex211.htm)] | | | [added: | | | | | |]

| 23.1 | | [added: | | | |] [Consent of Independent Registered Public Accounting [removed: Firm](https://www.sec.gov/Archives/edgar/data/1659166/000165916620000071/a20191231-ex231.htm)] [added: Firm](https://www.sec.gov/Archives/edgar/data/1659166/000165916621000062/a20201231-ex231.htm)] | | | [added: | | | | | |]

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| 2.5 | | | | | | [Separation and Distribution Agreement, dated as of October 8, 2020, by and between Vontier Corporation and Fortive Corporation](https://www.sec.gov/Archives/edgar/data/1659166/000119312520268470/d35176dex21.htm) | | | | | | Incorporated by reference from Exhibit 2.1 to Fortive Corporation’s Current Report on Form 8-K filed on October 13, 2020 (Commission File Number: 1-37654) | | |

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| 10.3 | | | | | | [Amendment No. 2 to the Revolving Credit Agreement, dated as of February 25, 2020, by and among Fortive Corporation and certain of its subsidiaries from time to time party thereto, Bank of America, N.A., as Administrative Agent and a Swing Line Lender, and the lenders referred to therein](https://www.sec.gov/Archives/edgar/data/1659166/000119312520056528/d896019dex101.htm) | | | | | | Incorporated by reference to Exhibit 10.1 to Fortive Corporation’s Current Report on Form 8-K filed on February 28, 2020 (Commission File Number: 1-37654) | | |

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| 10.4 | | | | | | [Amendment No. 3 to Revolving Credit Agreement, dated as of April 24, 2020, by and among Fortive Corporation and certain of its subsidiaries from time to time party thereto, Bank of America, N.A., as Administrative Agent and a Swing Line Lender, and the lenders referred to therein](https://www.sec.gov/Archives/edgar/data/1659166/000165916620000077/exhibit10-1.htm) | | | | | | Incorporated by reference to Exhibit 10.1 to Fortive Corporation’s Current Report on Form 8-K filed on April 30, 2020 (Commission File Number: 1-37654) | | |

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| 10.8 | | | | | | [Credit Agreement, dated as of September 29, 2020, by and among Vontier Corporation, Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender, and the other Lenders party thereto](https://www.sec.gov/Archives/edgar/data/1659166/000119312520259636/d77006dex101.htm) | | | | | | Incorporated by reference to Exhibit 10.1 to Fortive Corporation’s Current Report on Form 8-K filed on September 30, 2020 (Commission File Number: 1-37654) | | |

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| 10.9 | | | | | | [Employee Matters Agreement, dated as of October 8, 2020, by and between Vontier Corporation and Fortive Corporation](https://www.sec.gov/Archives/edgar/data/1659166/000119312520268470/d35176dex101.htm) | | | | | | Incorporated by reference to Exhibit 10.1 to Fortive Corporation’s Current Report on Form 8-K filed on October 13, 2020 (Commission File Number: 1-37654) | | |

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| 10.10 | | | | | | [Tax Matters Agreement, dated as of October 8, 2020, by and between Vontier Corporation and Fortive Corporation](https://www.sec.gov/Archives/edgar/data/1659166/000119312520268470/d35176dex102.htm) | | | | | | Incorporated by reference to Exhibit 10.2 to Fortive Corporation’s Current Report on Form 8-K filed on October 13, 2020 (Commission File Number: 1-37654) | | |

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| 10.11 | | | | | | [Transition Services Agreement, dated as of October 8, 2020, by and between Vontier Corporation and Fortive Corporation](https://www.sec.gov/Archives/edgar/data/1659166/000119312520268470/d35176dex103.htm) | | | | | | Incorporated by reference to Exhibit 10.3 to Fortive Corporation’s Current Report on Form 8-K filed on October 13, 2020 (Commission File Number: 1-37654) | | |

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| 10.12 | | | | | | [Intellectual Property Matters Agreement, dated as of October 8, 2020, by and between Vontier Corporation and Fortive Corporation](https://www.sec.gov/Archives/edgar/data/1659166/000119312520268470/d35176dex104.htm) | | | | | | Incorporated by reference to Exhibit 10.4 to Fortive Corporation’s Current Report on Form 8-K filed on October 13, 2020 (Commission File Number: 1-37654) | | |

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| 10.21 | | [Fortive Corporation Non-Employee Directors’ Deferred Compensation Plan Election Form](http://www.sec.gov/Archives/edgar/data/1659166/000165916617000246/a20170929-ex103.htm) | | Incorporated by reference from Exhibit 10.3 to Fortive Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 29, 2017 (Commission File Number: 1-37654) |

| 10.24 | | [Offer of Employment Letter, dated November 11, 2015 between TGA Employment Services LLC and Patrick Murphy*](http://www.sec.gov/Archives/edgar/data/1659166/000119312516491973/d43850dex108.htm) | | Incorporated by reference from Exhibit 10.8 to Amendment No. 1 to Fortive Corporation’s Registration Statement on Form 10, filed on March 3, 2016 (Commission File Number: 1-37654) |

| 10.25 | | [Offer of Employment Letter, dated November 11, 2015 between TGA Employment Services LLC and William W. Pringle*](http://www.sec.gov/Archives/edgar/data/1659166/000165916618000100/a20171231-ex1025.htm) | | Incorporated by reference from Exhibit 10.25 to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2017 (Commission File Number: 1-37654 |

| 10.26 | | [Form of Fortive Corporation and its Affiliated Entities Agreement Regarding Competition and Protection of Proprietary Interests*](http://www.sec.gov/Archives/edgar/data/1659166/000165916619000085/a20181231-ex1031.htm) | | Incorporated by reference from Exhibit 10.31 to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2018 (Commission File Number: 1-37654) |

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| Allowance for doubtful accounts | $ | 78.5 | | | $ | 63.7 | | | $ | (0.3 | ) | | $ | 1.5 | | | $ | (61.3 | ) | | $ | 82.1 | |

| Allowance for doubtful accounts | $ | 66.5 | | | $ | 48.5 | | | $ | (0.8 | ) | | $ | 2.5 | | | $ | (38.2 | ) | | $ | 78.5 | |

| Allowance for doubtful accounts | $ | 80.7 | | | $ | 37.5 | | | $ | 1.0 | | | $ | 2.1 | | | $ | (54.8 | ) | | $ | 66.5 | |

| (a) Amounts include allowance for doubtful accounts classified as current and noncurrent. | | | | | | | | | | | | | | | | | | | | | | | |

| (b) Amounts are related to businesses acquired. | | | | | | | | | | | | | | | | | | | | | | | |