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

The following discussion contains management’s discussion and analysis of our financial condition and results of operations and should be read together with the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs and involve numerous risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section of our 2025 Annual Report. Actual results may differ materially from those contained in any forward-looking statements. You should carefully read “Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q.

Overview

Our Company

Ingersoll Rand is a global market leader with a broad flow creation and industrial product portfolio across air, gas, powder, and liquid handling applications, providing services and solutions to increase industrial and life science productivity, efficiency, and sustainability. We manufacture one of the broadest and most complete ranges of compressor, pump, vacuum and blower products in our markets, which, when combined with our global geographic footprint and application expertise, allows us to provide differentiated product and service offerings to our customers. Our products are sold under a collection of premier, market-leading brands, including Ingersoll Rand, Gardner Denver, Nash, CompAir, ILC Dover, Thomas, Milton Roy, Seepex, Elmo Rietschle, ARO, Robuschi, Emco Wheaton and Runtech Systems, which we believe are globally recognized in their respective end-markets and known for product quality, reliability, efficiency and superior customer service.

We operate with two reportable segments: Industrial Technologies and Services and Precision and Science Technologies. See Note 19 “Segment Reporting” to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q for a description of our reportable segments.

Items Affecting our Business, Industry and End Markets

General Economic Conditions

Our financial results closely follow changes in the industries and end-markets we serve. Demand for most of our products depends on the level of new capital investment and planned and unplanned maintenance expenditures by our customers. The level of capital expenditures depends, in turn, on the general economic conditions as well as access to capital at reasonable cost, which can vary significantly based on geography and customer segmentation.

To date, 2026 has been marked by continued uncertainty in global markets, driven by investor concerns over inflation, elevated interest rates, ongoing political and regulatory uncertainty, including potential shifts in U.S. trade policy and the imposition of new tariffs, as well as geopolitical instability stemming from the conflicts in Ukraine and the Middle East.

Further contributing to economic uncertainty, the current U.S. presidential administration has signaled its intention to implement significant changes to U.S. trade policy, the size of the federal government and the enforcement of various regulations. These policy shifts could introduce additional market instability and reduce investor confidence. In 2025, the U.S. government announced tariffs on goods imported from various countries to the United States. Countries subject to such tariffs have imposed, or may in the future, impose reciprocal or retaliatory tariffs and other trade measures. We are actively monitoring the tariff developments and analyzing the potential impacts on our business, cost structure, supply chain and broader economic environment. We are identifying actions necessary to maintain competitiveness while we adapt to these new economic challenges. While these developments have not had a material impact on our financial condition or results of operations to date, due to their evolving nature, and the expected persistence of macroeconomic conditions and volatility in the near term, we cannot predict with certainty the ultimate impacts they may have on our business and results in the future, but those impacts could be material.

Foreign Currency Fluctuations

A significant portion of our revenues, approximately 57% for the three month period ended March 31, 2026, was denominated in currencies other than the U.S. dollar. Because much of our manufacturing facilities and labor force costs are outside of the United States, a significant portion of our costs are also denominated in currencies other than the U.S. dollar. Changes in foreign exchange rates can therefore impact our results of operations and are quantified when significant to our discussion.

Factors Affecting the Comparability of our Results of Operations

Key factors affecting the comparability of our results of operations are summarized below.

Acquisitions

Part of our strategy for growth is to acquire complementary businesses that provide access to new technologies or geographies or expand our offerings. While acquisitions, as discussed further in Note 2, are not individually significant or significant in the aggregate, they may be relevant when comparing our results from period to period.

See Note 2 “Acquisitions” to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q for further discussion of these acquisitions.

Restructuring and Other Business Transformation Initiatives

We continue to execute business transformation initiatives. A key element of those initiatives are restructuring programs within our Industrial Technologies and Services and Precision and Science Technologies segments, as well as at the Corporate level. Restructuring charges, program related facility reorganization, relocation and other costs, and related capital expenditures were impacted most significantly.

How We Assess the Performance of Our Business

We manage operations through the two business segments described above. In addition to our consolidated GAAP financial measures, we review various non-GAAP financial measures, including Adjusted EBITDA, Adjusted Net Income and Free Cash Flow.

We believe Adjusted EBITDA and Adjusted Net Income are helpful supplemental measures to assist us and investors in evaluating our operating results as they exclude certain items whose fluctuation from period to period do not necessarily correspond to changes in the operations of our business. Adjusted EBITDA represents net income (loss) before interest, taxes, depreciation, amortization and certain non-cash, non-recurring and other adjustment items. We believe that the adjustments applied in presenting Adjusted EBITDA are appropriate to provide additional information to investors about certain material non-cash items and about non-recurring items that we do not expect to continue at the same level in the future. Adjusted Net Income is defined as net income (loss) including interest, depreciation and amortization of non-acquisition related intangible assets and excluding other items used to calculate Adjusted EBITDA and further adjusted for the tax effect of these exclusions.

We use Free Cash Flow to review the liquidity of our operations. We measure Free Cash Flow as cash flows from operating activities less capital expenditures. We believe Free Cash Flow is a useful supplemental financial measure for us and investors in assessing our ability to pursue business opportunities and investments and to service our debt. Free Cash Flow is not a measure of our liquidity under GAAP and should not be considered as an alternative to cash flows from operating activities.

Management and our board of directors regularly use these measures as tools in evaluating our operating and financial performance and in establishing discretionary annual compensation. Such measures are provided in addition to, and should not be considered to be a substitute for, or superior to, the comparable measures under GAAP. In addition, we believe that Adjusted EBITDA, Adjusted Net Income and Free Cash Flow are frequently used by investors and other interested parties in the evaluation of issuers, many of which also present Adjusted EBITDA, Adjusted Net Income and Free Cash Flow when reporting their results in an effort to facilitate an understanding of their operating and financial results and liquidity.

Adjusted EBITDA, Adjusted Net Income and Free Cash Flow should not be considered as alternatives to net income (loss) or any other performance measure derived in accordance with GAAP, or as alternatives to cash flow from operating activities as a measure of our liquidity. Adjusted EBITDA, Adjusted Net Income and Free Cash Flow have limitations as analytical tools, and you should not consider such measures either in isolation or as substitutes for analyzing our results as reported under GAAP.

See “Non-GAAP Financial Measures” below for reconciliation information.

Results of Operations

Consolidated results should be read in conjunction with the segment results section herein and Note 19 “Segment Reporting” to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q, which provides more detailed discussions concerning certain components of our Condensed Consolidated Statements of Operations. All intercompany accounts and transactions have been eliminated within the consolidated results. The following table presents selected Condensed Consolidated Results of Operations of our business for the three month periods ended March 31, 2026 and 2025.

									For the Three Month Period Ended March 31,
(In millions, except percentages)															2026						2025
Condensed Consolidated Statement of Operations:
Revenues															$	1,847.2					$	1,716.8
Cost of sales															1,054.8						951.3
Gross profit															792.4						765.5
Selling and administrative expenses															370.7						350.0
Amortization of intangible assets															107.5						91.3
Other operating expense, net															24.5						21.7
Operating income															289.7						302.5
Interest expense															63.8						61.2
Other income, net															(4.0)						(11.8)
Income before income taxes															229.9						253.1
Provision for income taxes															36.1						58.5
Loss on equity method investments															—						(6.2)
Net income															193.8						188.4
Less: Net income attributable to noncontrolling interests															1.7						1.9
Net income attributable to Ingersoll Rand Inc.															$	192.1					$	186.5
Percentage of Revenues:
Gross profit															42.9		%				44.6		%
Selling and administrative expenses															20.1		%				20.4		%
Operating income															15.7		%				17.6		%
Net income															10.5		%				11.0		%
Adjusted EBITDA															25.4		%				26.8		%
Other Financial Data:
Adjusted EBITDA (1)															$	469.1					$	459.7
Adjusted Net Income (1)															304.6						293.2
Cash flows - operating activities															199.7						256.4
Cash flows - investing activities															(84.4)						(197.1)
Cash flows - financing activities															(83.8)						(10.0)
Free Cash Flow (1)															163.4						222.7

(1)See the “Non-GAAP Financial Measures” section for a reconciliation to comparable GAAP measure.

Revenues

Revenues for the three month period ended March 31, 2026 were $1,847.2 million, an increase of $130.4 million, or 7.6%, compared to $1,716.8 million for the same three month period in 2025. The increase in revenues was primarily due to favorable impact of foreign currencies of $72.4 million and acquisitions of $63.9 million, partially offset by lower organic revenues of $5.9 million. The percentage of consolidated revenues derived from aftermarket parts and services was 37.4% in the three month period ended March 31, 2026 compared to 38.1% in the same three month period in 2025.

Gross Profit

Gross profit for the three month period ended March 31, 2026 was $792.4 million, an increase of $26.9 million, or 3.5%, compared to $765.5 million for the same three month period in 2025, and as a percentage of revenues was 42.9% for the three month period ended March 31, 2026 and 44.6% for the same three month period in 2025. The increase in gross profit is primarily due to the favorable impact of foreign currencies and acquisitions. The decrease in gross profit as a percentage of revenues is

primarily due to unfavorable cost leverage on lower organic revenues, unfavorable product mix, and tariff related pricing targeted to offset tariff cost increases one for one, partially offset by cost measures.

Selling and Administrative Expenses

Selling and administrative expenses were $370.7 million for the three month period ended March 31, 2026, an increase of $20.7 million, or 5.9%, compared to $350.0 million for the same three month period in 2025. The increase in selling and administrative expenses was primarily due to acquisitions. Selling and administrative expenses as a percentage of revenues decreased to 20.1% for the three month period ended March 31, 2026 from 20.4% in the same three month period in 2025. The decrease in selling and administrative expenses as a percentage of revenues is primarily due to cost measures, partially offset by lower organic revenues.

Amortization of Intangible Assets

Amortization of intangible assets was $107.5 million for the three month period ended March 31, 2026, an increase of $16.2 million, compared to $91.3 million in the same three month period in 2025. The increase was primarily due to businesses acquired in 2025 and amortization related to certain tradenames that were determined to no longer have indefinite lives during the fourth quarter of 2025. Refer to Note 2 “Acquisitions” to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q for further information regarding businesses acquired.

Other Operating Expense, Net

Other operating expense, net was $24.5 million for the three month period ended March 31, 2026, an increase of $2.8 million, compared to $21.7 million in the same three month period in 2025. The increase in expense was primarily due to higher acquisition and other transaction related expenses of $3.8 million and higher restructuring charges of $3.4 million, partially offset by lower foreign currency transaction losses, net of $4.6 million.

Interest Expense

Interest expense was $63.8 million for the three month period ended March 31, 2026, an increase of $2.6 million, compared to $61.2 million in the same three month period in 2025. The increase was primarily due to gains from terminated cash flow hedges that were reclassified into earnings during the 2025 period. The weighted average interest rate, including the impact of the active interest rate derivative contracts, was approximately 4.9% for the three month period ended March 31, 2026 and 5.0% in the same three month period in 2025.

Other Income, Net

Other income, net was $4.0 million and $11.8 million in the three month periods ended March 31, 2026 and 2025, respectively. The decrease was primarily due to a decrease in interest income from holdings of cash and cash equivalents.

Provision for Income Taxes

The provision for income taxes was $36.1 million, resulting in a 15.7% effective income tax provision rate for the three month period ended March 31, 2026, compared to a provision for income taxes of $58.5 million, resulting in a 23.1% effective income tax provision rate in the same three month period in 2025. The decrease in the tax provision and the effective income tax provision rate for the three month period ended March 31, 2026 when compared to the same three month period of 2025 is primarily due to a benefit of a windfall tax deduction.

Net Income

Net income was $193.8 million for the three month period ended March 31, 2026 compared to net income of $188.4 million in the same three month period in 2025. The increase in net income was primarily due to higher gross profit, partially offset by higher selling and administrative expenses and higher amortization expense discussed above.

Adjusted EBITDA

Adjusted EBITDA increased $9.4 million to $469.1 million for the three month period ended March 31, 2026 compared to $459.7 million in the same three month period in 2025. Adjusted EBITDA as a percentage of revenues decreased 140 basis points to 25.4% for the three month period ended March 31, 2026 from 26.8% for the same three month period in 2025. The increase in Adjusted EBITDA was primarily due to the favorable impact of foreign currencies of $17.2 million, acquisitions of $14.1 million and lower selling and administrative costs of $6.2 million, partially offset by lower organic gross profit of $27.8 million. The decrease in Adjusted EBITDA as a percentage of revenues is primarily attributable to input cost inflation and product mix.

Adjusted Net Income

Adjusted Net Income increased $11.4 million to $304.6 million for the three month period ended March 31, 2026 compared to $293.2 million in the same three month period in 2025. The increase was primarily due to higher Adjusted EBITDA and lower income tax provision, as adjusted, partially offset by lower interest income on cash and cash equivalents and higher interest expense.

Non-GAAP Financial Measures

Set forth below are the reconciliations of Net Income to Adjusted EBITDA and Adjusted Net Income and Cash Flows from Operating Activities to Free Cash Flow.

									For the Three Month Period Ended March 31,
(In millions)															2026						2025
Net Income															$	193.8					$	188.4
Plus:
Interest expense															63.8						61.2
Provision for income taxes															36.1						58.5
Depreciation expense (a)															28.3						27.6
Amortization expense (b)															107.5						91.3
Restructuring and related business transformation costs (c)															8.7						5.4
Acquisition and other transaction related expenses and non-cash charges (d)															13.6						9.8
Stock-based compensation															15.9						14.2
Foreign currency transaction losses, net															2.2						6.8
Loss on equity method investments															—						6.2
Adjustments to LIFO inventories															5.4						3.0
Cybersecurity incident costs (e)															—						(0.2)
Interest income on cash and cash equivalents															(5.1)						(10.3)
Other adjustments (f)															(1.1)						(2.2)
Adjusted EBITDA															$	469.1					$	459.7
Minus:
Interest expense															$	63.8					$	61.2
Income tax provision, as adjusted (g)															75.2						85.7
Depreciation expense															28.3						27.6
Amortization of non-acquisition related intangible assets															2.3						2.3
Interest income on cash and cash equivalents															(5.1)						(10.3)
Adjusted Net Income															$	304.6					$	293.2
Free Cash Flow
Cash flows from operating activities															$	199.7					$	256.4
Minus:
Capital expenditures															36.3						33.7
Free Cash Flow															$	163.4					$	222.7

(a)Depreciation expense excludes $1.1 million and $1.1 million of depreciation of rental equipment for the three month periods ended March 31, 2026 and 2025, respectively.

(b)Represents $105.2 million and $89.0 million of amortization of intangible assets arising from acquisitions (customer relationships, technology, tradenames and backlog) and $2.3 million and $2.3 million of amortization of non-acquisition related intangible assets, in each case for the three month periods ended March 31, 2026 and 2025, respectively.

(c)Restructuring and related business transformation costs consisted of the following.

									For the Three Month Period Ended March 31,
(In millions)															2026						2025
Restructuring charges															$	8.7					$	5.3
Facility reorganization, relocation and other costs															—						0.1
Total restructuring and related business transformation costs															$	8.7					$	5.4

(d)Represents costs associated with successful and/or abandoned acquisitions and divestitures, including third-party expenses, post-closure integration costs, and non-cash charges and credits arising from fair value purchase accounting adjustments.

(e)Represents expected non-recoverable costs associated with a cybersecurity event, net of insurance recoveries.

(f)Includes (i) pension and other postemployment plan costs other than service costs and (ii) other miscellaneous adjustments.

(g)Represents our income tax provision adjusted for the tax effect of pre-tax items excluded from Adjusted Net Income and the removal of the applicable discrete tax items. The tax effect of pre-tax items excluded from Adjusted Income is computed using the statutory tax rate related to the jurisdiction that was impacted by the adjustment after taking into account the impact of permanent differences and valuation allowances. Discrete tax items include changes in tax laws or rates, changes in uncertain tax positions relating to prior years and changes in valuation allowances. The adjusted amounts are then used to calculate an adjusted provision for the quarter.

The income tax provision, as adjusted for each of the periods presented below consisted of the following.

									For the Three Month Period Ended March 31,
(In millions)															2026						2025
Provision for income taxes															$	36.1					$	58.5
Tax impact of pre-tax income adjustments															30.9						26.7
Discrete tax items															8.2						0.5
Income tax provision, as adjusted															$	75.2					$	85.7

Segment Results

We classify our business into two segments: Industrial Technologies and Services and Precision and Science Technologies. Our Corporate operations are not discussed separately as any results that had a significant impact on operating results are included in the “Results of Operations” discussion above.

We evaluate the performance of our segments based on Segment Revenues and Segment Adjusted EBITDA. Segment Adjusted EBITDA is indicative of operational performance and ongoing profitability. Our management closely monitors Segment Adjusted EBITDA to evaluate past performance and identify actions required to improve profitability.

The segment measurements provided to and evaluated by the chief operating decision maker are described in Note 19 “Segment Reporting” to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q.

Segment Results for the Three Month Periods Ended March 31, 2026 and 2025

The following tables display Segment Orders, Segment Revenues, Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin (Segment Adjusted EBITDA as a percentage of Segment Revenues) for each of our Segments.

Industrial Technologies and Services Segment Results

			For the Three Month Period Ended March 31,												Percent Change
(In millions, except percentages)			2026						2025						2026 vs. 2025
Segment Orders			$	1,557.9					$	1,487.0					4.8		%
Segment Revenues			$	1,444.5					$	1,352.1					6.8		%
Segment Adjusted EBITDA			$	385.5					$	389.1					(0.9)		%
Segment Margin			26.7		%				28.8		%				(210)		bps

Segment Orders for the three month period ended March 31, 2026 were $1,557.9 million, an increase of $70.9 million, or 4.8%, compared to $1,487.0 million in the same three month period in 2025. The increase in Segment Orders was due to acquisitions of

$48.4 million or 3.3% and the favorable impact of foreign currencies of $60.6 million or 4.1%, partially offset by lower organic orders of $38.1 million or 2.6%.

Segment Revenues for the three month period ended March 31, 2026 were $1,444.5 million, an increase of $92.4 million, or 6.8%, compared to $1,352.1 million in the same three month period in 2025. The increase in Segment Revenues was due to acquisitions of $56.4 million or 4.2%, and the favorable impact of foreign currencies of $57.8 million or 4.3%, partially offset by lower organic revenues of $21.8 million or 1.6%. The percentage of Segment Revenues derived from aftermarket parts and service was 41.7% in the three month period ended March 31, 2026 compared to 42.5% in the same three month period in 2025.

Segment Adjusted EBITDA for the three month period ended March 31, 2026 was $385.5 million, a decrease of $3.6 million, or 0.9%, from $389.1 million in the same three month period in 2025. Segment Adjusted EBITDA Margin decreased 210 basis points to 26.7% from 28.8% in 2025. The decrease in Segment Adjusted EBITDA was primarily due to lower organic gross profit of $37.4 million or 9.6%, partially offset by favorable impact of foreign currencies of $13.6 million or 3.5%, acquisitions of $12.1 million or 3.1%, and lower selling and administrative costs of $8.2 million or 2.1%.

Precision and Science Technologies Segment Results

			For the Three Month Period Ended March 31,												Percent Change
(In millions, except percentages)			2026						2025						2026 vs. 2025
Segment Orders			$	420.1					$	395.3					6.3		%
Segment Revenues			$	402.7					$	364.7					10.4		%
Segment Adjusted EBITDA			$	121.9					$	106.2					14.8		%
Segment Margin			30.3		%				29.1		%				120		bps

Segment Orders for the three month period ended March 31, 2026 were $420.1 million, an increase of $24.8 million, or 6.3%, compared to $395.3 million in the same three month period in 2025. The increase in Segment Orders was due to the favorable impact of foreign currencies of $15.3 million or 3.9%, acquisitions of $7.1 million or 1.8%, and higher organic orders of $2.4 million or 0.6%.

Segment Revenues for the three month period ended March 31, 2026 were $402.7 million, an increase of $38.0 million, or 10.4%, compared to $364.7 million in the same three month period in 2025. The increase in Segment Revenues was primarily due to higher organic revenues of $15.9 million or 4.4%, favorable impact of foreign currencies of $14.6 million or 4.0%, and acquisitions of $7.5 million or 2.1%. The percentage of Segment Revenues derived from aftermarket parts and service was 22.2% in the three month period ended March 31, 2026 compared to 21.5% in the same three month period in 2025.

Segment Adjusted EBITDA for the three month period ended March 31, 2026 was $121.9 million, an increase of $15.7 million, or 14.8%, from $106.2 million in the same three month period in 2025. Segment Adjusted EBITDA Margin increased 120 basis points to 30.3% from 29.1% in 2025. The increase in Segment Adjusted EBITDA was primarily due to higher organic gross profit of $9.2 million or 8.7%, favorable impact of foreign currencies of $4.9 million or 4.6%, and acquisitions of $2.0 million or 1.9%, partially offset by higher selling and administrative costs of $0.4 million or 0.4%.

Liquidity and Capital Resources

Our investment resources include cash on hand, cash generated from operations and borrowings under our Revolving Credit Facility and Commercial Paper Program. We also have the ability to seek additional secured and unsecured borrowings, subject to credit agreement restrictions.

See the description of these line-of-credit resources in Note 11 “Debt” to the consolidated financial statements in our 2025 Annual Report and Note 10 “Debt” to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q.

As of March 31, 2026, we had $2,600.0 million of unused availability under both the Revolving Credit Facility and Commercial Paper Program.

As of March 31, 2026, we were in compliance with all of our debt covenants and no event of default had occurred or was ongoing.

Liquidity

A substantial portion of our liquidity needs arise from debt service requirements, and from the ongoing cost of operations, working capital and capital expenditures.

(In millions)			March 31, 2026						December 31, 2025
Cash and cash equivalents			$	1,274.4					$	1,248.8
Short-term borrowings and current maturities of long-term debt			$	1.4					$	1.4
Long-term debt			4,777.4						4,783.3
Total debt			$	4,778.8					$	4,784.7

We can increase the borrowing availability under the Revolving Credit Facility by up to $1,000.0 million in the form of additional commitments on the terms set forth in the Revolving Credit Facility. Our liquidity requirements are significant primarily due to debt service requirements. See Note 11 “Debt” to the consolidated financial statements in our 2025 Annual Report and Note 10 “Debt” to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q for further details.

Our principal sources of liquidity have been existing cash and cash equivalents, cash generated from operations and borrowings under the Senior Notes. Our principal uses of cash will be to provide working capital, meet debt service requirements, fund capital expenditures, dividend payments, and finance strategic plans, including possible acquisitions. We may also seek to finance capital expenditures under capital leases or other debt arrangements that provide liquidity or favorable borrowing terms. We continue to consider acquisition opportunities, but the size and timing of any future acquisitions and the related potential capital requirements cannot be predicted. In the event that suitable businesses are available for acquisition upon acceptable terms, we may obtain all or a portion of the necessary financing through the incurrence of additional long-term borrowings. As market conditions warrant, we may from time to time, seek to repay loans that we have borrowed, including the borrowings under the Senior Notes. Based on our current level of operations and available cash, we believe our cash flow from operations, together with availability under the Revolving Credit Facility and Commercial Paper Program, will provide sufficient liquidity to fund our current obligations, projected working capital requirements, debt service requirements and capital spending requirements for the foreseeable future. Our business may not generate sufficient cash flows from operations or future borrowings may not be available to us under our Revolving Credit Facility or Commercial Paper Program in an amount sufficient to enable us to pay our indebtedness, or to fund our other liquidity needs. Our ability to do so depends on, among other factors, prevailing economic conditions, many of which are beyond our control. In addition, upon the occurrence of certain events, such as a change in control, we could be required to repay or refinance our indebtedness. We may not be able to refinance any of our indebtedness, including the Senior Notes, on commercially reasonable terms or at all. Any future acquisitions, joint ventures, or other similar transactions may require additional capital and there can be no assurance that any such capital will be available to us on acceptable terms or at all.

We may from time to time repurchase shares of our common stock in the open market at prevailing market prices (including through Rule 10b5-1 plans), in privately negotiated transactions, a combination thereof or through other transactions. The actual timing, number, manner and value of any shares repurchased will depend on several factors, including the market price of our stock, general market and economic conditions, our liquidity requirements, applicable legal requirements and other business considerations.

A substantial portion of our cash is in jurisdictions outside of the United States. We do not assert ASC 740-30 (formerly APB 23) indefinite reinvestment of our historical non-U.S. earnings or future non-U.S. earnings. The Company records a deferred foreign tax liability to cover all estimated withholding, state income tax and foreign income tax associated with repatriating all non-U.S. earnings back to the United States. Our deferred income tax liability as of March 31, 2026 was $69.2 million which consists mainly of withholding taxes.

Working Capital

(In millions)			March 31, 2026						December 31, 2025
Net Working Capital:
Current assets			$	4,289.8					$	4,248.0
Less: Current liabilities			1,926.2						2,066.3
Net working capital			$	2,363.6					$	2,181.7
Operating Working Capital:
Accounts receivable			$	1,455.2					$	1,518.0
Plus: Inventories (excluding LIFO reserve)			1,338.6						1,269.9
Plus: Contract assets			161.2						163.9
Less: Accounts payable			847.4						996.1
Less: Contract liabilities (current)			344.7						347.2
Operating working capital			$	1,762.9					$	1,608.5

Net working capital increased $181.9 million to $2,363.6 million as of March 31, 2026 from $2,181.7 million as of December 31, 2025. Operating working capital increased $154.4 million to $1,762.9 million as of March 31, 2026 from $1,608.5 million as of December 31, 2025. The increase in operating working capital is due to lower accounts payable, higher inventories, and lower contract liabilities, partially offset by lower accounts receivable and lower contract assets.

The decrease in accounts receivable was primarily due to the timing of revenues in the quarter and seasonal changes in collection timing. The increase in inventories was primarily due to additions to support channel access, foreign currency translation, and acquisitions. The decrease in contract assets was primarily due to the timing of revenue recognition and billing on our overtime contracts. The decrease in accounts payable was primarily due to the timing of vendor cash disbursements. The decrease in contract liabilities was primarily due to the timing of customer milestone payments for in-process engineered to order contracts.

Cash Flows

The following table reflects the major categories of cash flows for the three month periods ended March 31, 2026 and 2025, respectively.

			For the Three Month Period Ended March 31,
(In millions)			2026						2025
Cash flows provided by operating activities			$	199.7					$	256.4
Cash flows used in investing activities			(84.4)						(197.1)
Cash flows used in financing activities			(83.8)						(10.0)
Free cash flow(1)			163.4						222.7

(1)See the “Non-GAAP Financial Measures” section included in this Quarterly Report for a reconciliation to the nearest GAAP measure.

Operating Activities

Cash provided by operating activities decreased $56.7 million to $199.7 million for the three month period ended March 31, 2026 from $256.4 million in the same three month period in 2025. This decrease is primarily attributable to an increase in cash used in operating working capital in 2026, compared to 2025 and higher tax payments in 2026, compared to 2025, partially offset by an increase in net income excluding non-cash adjustments in 2026, compared to 2025.

Investing Activities

Cash used in investing activities included capital expenditures of $36.3 million and $33.7 million for the three month periods ended March 31, 2026 and 2025, respectively. Net cash paid in acquisitions was $52.0 million and $163.4 million in the three month periods ended March 31, 2026 and 2025, respectively.

Financing Activities

Cash used in financing activities of $83.8 million for the three month period ended March 31, 2026 primarily reflected purchases of treasury stock of $89.5 million, cash dividends on common stock of $7.8 million, payments of deferred and contingent acquisition consideration of $1.4 million, and other financing outflows of $1.0 million, partially offset by proceeds from stock option exercises of $15.9 million.

Cash used in financing activities of $10.0 million for the three month period ended March 31, 2025 primarily reflected purchases of treasury stock of $10.0 million, cash dividends on common stock of $8.1 million, and payments of deferred and contingent acquisition consideration of $1.4 million, partially offset by proceeds from stock option exercises of $5.2 million and other financing outflows of $4.3 million.

Free Cash Flow

Free cash flow decreased $59.3 million to $163.4 million in the three month period ended March 31, 2026 from $222.7 million in the same three month period in 2025 due to lower cash provided by operating activities as discussed above.

Critical Accounting Estimates

Management has evaluated the accounting estimates used in the preparation of the Company’s condensed consolidated financial statements and related notes and believe those estimates to be reasonable and appropriate. Certain of these accounting estimates require the application of significant judgment by management in selecting appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on historical experience, trends in the industry, information provided by customers and information available from other outside sources, as appropriate. The most significant areas involving management judgments and estimates may be found in the section “Critical Accounting Estimates” of “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in Note 1 “Summary of Significant Accounting Policies” of “Item 8. Financial Statements and Supplementary Data” included in our 2025 Annual Report.

Environmental Matters

Information with respect to the effect of compliance with environmental protection requirements and resolution of environmental claims on us and our manufacturing operations is contained in Note 18 “Contingencies” to the condensed consolidated financial statements included elsewhere in this Form 10-Q. We believe that as of March 31, 2026, there have been no material changes to the environmental matters disclosed in our 2025 Annual Report.

Recent Accounting Pronouncements

The information set forth in Note 1 “Basis of Presentation and Recent Accounting Pronouncements” to our condensed consolidated financial statements under Part 1, Item 1 “Financial Statements” under the heading “Recently Issued Accounting Pronouncements” is incorporated herein by reference.