•Delivered outstanding financial performance despite continued COVID, supply chain and foreign exchange headwinds

•Q2 revenue growth of 11%, up 9% core, ahead of expectations, reflects effective mitigation of expected Shanghai lockdown impact

•Continued demand for workflow solutions yields high single-digit hardware orders and software annual recurring revenue growth in Q2

•Flat Q2 GAAP diluted net earnings per share, up 18% adjusted diluted earnings per share

•Narrows full-year 2022 revenue growth to 10-11%, raises core growth outlook to 8-9.5%; narrows and raises GAAP EPS range to $2.03-$2.09, and Adjusted EPS of $3.07-$3.13, Up 12-14%

This information is presented for reference only. A complete copy of Fortive’s Form 10-Q financial statements is available on the Company’s website (www.fortive.com).

•Excluding on a pretax basis amortization of acquisition-related intangible assets;

•Excluding on a pretax basis acquisition and other transaction costs deemed significant (“Transaction Costs”);

•Excluding on a pretax basis Russia exit and wind down costs;

•Excluding on a pretax basis the effect of inventory fair value adjustments related to significant acquisitions;

•Excluding on a pretax basis the effect of losses from our equity method investments;

•Excluding the pretax loss on debt extinguishment, net of non-recurring gain on our investment in Vontier common stock;

•Excluding on a pretax basis the non-cash interest expense associated with our 0.875% convertible senior notes;

•Excluding on a pretax basis the gain on litigation resolution;

•Excluding the tax effect (to the extent tax deductible) of the adjustments noted above. The tax effect of such adjustments was calculated by applying our overall estimated effective tax rate to the pretax amount of each adjustment (unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment). We expect to apply our overall estimated effective tax rate to each adjustment going forward;

•With respect to the adjusted diluted net earnings per share, included the impact of the assumed conversion of our Mandatory Convertible Preferred Stock at the beginning of the period; and

•Including the actual cash interest expense on our 0.875% Senior Convertible Notes due 2022 (“Convertible Notes”) that was not included under the if-converted methodology mandated in 2022 and, with respect to the adjusted diluted net earnings per share, excluding the outstanding shares of common stock imputed under the in-converted methodology for the Convertible Notes that, in fact, were repaid and settled without issuance of any shares of common stock.

As a result of the exit of our business operations in Russia, the Company recorded a pre-tax charge totaling $16.2 million in the second quarter of 2022 to reflect the write-off of net assets, the write-off of the cumulative translation adjustment in earnings for legal entities deemed substantially liquidated, and to record provisions for employee severance and legal contingencies. These costs are identified as the “Russia exit and wind down costs” in the Condensed Consolidated Statements of Earnings. We adjust for the non-recurring Russia exit and wind down costs because we believe that this adjustment facilitates comparison of our performance with prior and future periods and provides our investors with additional insight into our operational performance.

Adjusted Net Earnings From Continuing Operations

			Three Months Ended												Six Months Ended
($ in millions)			July 1, 2022						July 2, 2021						July 1, 2022						July 2, 2021
Net Earnings Attributable to Common Stockholders from Continuing Operations (GAAP) (a)			$	173.0								$	164.8								$	338.1								$	259.2
Dividends on the mandatory convertible preferred stock to apply if-converted method (a)			—									17.2									—									34.5
Net Earnings from Continuing Operations (GAAP)			$	173.0								$	182.0								$	338.1								$	293.7
Interest on the Convertible Notes to apply if-converted method (b)			—									—									2.1									—
Tax effect of the Convertible Notes to apply if-converted method (c)			—									—									(0.3)									—
Diluted Net Earnings from Continuing Operations (GAAP)			173.0									182.0									339.9									293.7
Pretax amortization of acquisition-related intangible assets			95.7									77.5									192.1									155.0
Pretax acquisition and other transaction costs			8.1									3.6									15.6									9.4
Pretax Russia exit and wind down costs			16.2									—									16.2									—
Pretax acquisition-related fair value adjustments to inventory related to significant acquisitions			0.3									1.2									0.7									6.7
Pretax losses from equity method investments			3.1									4.0									5.7									6.6
Pretax loss on debt extinguishment, net of gain on Vontier common stock			—									—									—									47.9
Pretax non-cash interest expense associated with our 0.875% Convertible Notes			—									7.1									—									14.8
Pretax interest expense on Convertible Notes to reverse if-converted method (b)			—									—									(2.1)									—
Pretax gain on litigation resolution			—									(26.0)									—									(26.0)
Tax effect of the adjustments reflected above (c)			(15.3)									(10.6)									(32.0)									(40.2)
Adjusted Net Earnings from Continuing Operations (Non-GAAP)			$	281.1								$	238.8								$	536.1								$	467.9
(a) On July 1, 2021, all outstanding shares of our MCPS converted at a rate of 14.0978 common shares per share of preferred stock into an aggregate of approximately 19.4 million shares (net of fractional shares). The MCPS were anti-dilutive for the three and six months ended July 2, 2021 and as such GAAP net earnings per share was calculated using net earnings from continuing operations attributable to common stockholders.
(b) Beginning with our adoption of ASU 2020-06 on January 1, 2022 we assumed share settlement of our outstanding Convertible Notes under the if-converted method when calculating GAAP diluted net earnings per share. Since we settled the Convertible Notes in cash on February 15, 2022 and no common share conversion occurred, we have reversed the impacts of applying the if-converted method and included the actual cash interest expense in calculating the adjusted net earnings per share.
(c) The dividend on the MCPS is not tax deductible and the convertible note interest is calculated on a net of tax basis and therefore the tax effect of the adjustments includes only the amortization of acquisition-related intangible assets, acquisition and other transaction costs, acquisition-related fair value adjustments to inventory, losses from equity method investments, the loss on extinguishment of debt, the non-cash interest expense associated with the 0.875% convertible notes, and the interest expense on the Convertible Notes. The gain on the fair value change in Vontier common stock had no tax effect.

Adjusted Diluted Net Earnings Per Share from Continuing Operations

			Three Months Ended(a)												Six Months Ended(a)
			July 1, 2022						July 2, 2021						July 1, 2022						July 2, 2021
Net Earnings Attributable to Common Stockholders from Continuing Operations (GAAP) (b)			$	0.48					$	0.48					$	0.93					$	0.76
Dividends on the mandatory convertible preferred stock to apply if-converted method (b)			—						0.05						—						0.10
Assumed dilutive impact on the Diluted Net Earnings Per Share Attributable to Common Stockholders if the MCPS Converted Shares had been outstanding (b)			—						(0.03)						—						(0.05)
Net Earnings Per Share from Continuing Operations (GAAP)			0.48						0.50						0.93						0.81
Interest on the Convertible Notes to apply if-converted method (c)			—						—						—						—
Tax effect of the Convertible Notes to apply if-converted method (c)			—						—						—						—
Diluted Net Earnings Per Share from Continuing Operations (GAAP)			0.48						0.50						0.93						0.81
Pretax amortization of acquisition-related intangible assets			0.27						0.21						0.53						0.43
Pretax acquisition and other transaction costs			0.02						0.01						0.04						0.03
Pretax Russia exit and wind down costs			0.05						—						0.04
Pretax acquisition-related fair value adjustments to inventory related to significant acquisitions			—						—						—						0.02
Pretax losses from equity method investments			0.01						0.01						0.02						0.02
Pretax loss on debt extinguishment, net of gain on Vontier common stock			—						—						—						0.13
Pretax non-cash interest expense associated with our 0.875% Convertible Notes			—						0.02						—						0.04
Pretax gain on litigation resolution			—						(0.07)						—						(0.07)
Pretax interest on Convertible Notes to reverse if-converted method (c)			—						—						—						—
Tax effect of the adjustments reflected above (d)			(0.05)						(0.03)						(0.08)						(0.11)
Adjusted Diluted Net Earnings Per Share from Continuing Operations (Non-GAAP)			$	0.78					$	0.66					$	1.49					$	1.30
(a) The July 2, 2021 per share adjustments below were calculated assuming the MCPS Converted Shares had converted at the beginning of the period prior to their conversion on July 1, 2021. The six months ended July 1, 2022 per share adjustments were calculated assuming the Convertible Notes converted during the period.
(b) Prior to their conversion on July 1, 2021, the MCPS were anti-dilutive for the three and six months ended July 2, 2021, and as such GAAP net earnings per share was calculated using net earnings from continuing operations attributable to common stockholders.
(c) Beginning with our adoption of ASU 2020-06 on January 1, 2022 we assumed share settlement of our outstanding Convertible Notes under the if-converted method when calculating GAAP diluted net earnings per share. Since we settled the Convertible Notes in cash on February 15, 2022 and no common share conversion occurred, we have reversed the impacts of applying the if-converted method and included the actual cash interest expense in calculating the adjusted net earnings per share. The impact of the after tax adjustment to GAAP diluted net earnings per share for the six months ended July 2, 2022 rounds to zero.
(d) The dividend on the MCPS is not tax deductible and the convertible note interest is calculated on a net of tax basis and therefore the tax effect of the adjustments includes only the amortization of acquisition-related intangible assets, acquisition and other transaction costs, acquisition-related fair value adjustments to inventory, losses from equity method investments, the loss on extinguishment of debt, the non-cash interest expense associated with the 0.875% Convertible Notes, and the interest expense on Convertible Notes. The gain on the fair value change in Vontier common stock had no tax effect.
The sum of the components of adjusted diluted net earnings per share from continuing operations may not equal due to rounding.

Core Revenue Growth

			% Change Three Months Ended July 1, 2022 vs. Comparable 2021 Period						% Change Six Months Ended July 1, 2022 vs. Comparable 2021 Period
Total Revenue Growth (GAAP)			10.9		%				10.1		%
Core (Non-GAAP)			8.9		%				7.1		%
Acquisitions (Non-GAAP)			5.0		%				5.3		%
Impact of currency translation (Non-GAAP)			(3.0)		%				(2.3)		%

Forecasted Adjusted Diluted Net Earnings Per Share from Continuing Operations

			Three Months Ending September 30, 2022												Twelve Months Ending December 31, 2022
			Low End						High End						Low End						High End
Forecasted Net Earnings Per Share from Continuing Operations (GAAP)			$	0.49					$	0.53					$	2.03					$	2.09
Anticipated pretax amortization of acquisition-related intangible assets			0.27						0.27						1.06						1.06
Anticipated pretax significant acquisition and other transaction costs			0.02						0.02						0.07						0.07
Anticipated pretax Russia exit and wind down costs			—						—						0.05						0.05
Anticipated pretax losses from equity method investments			—						—						0.02						0.02
Tax effect of the adjustments reflected above			(0.05)						(0.05)						(0.16)						(0.16)
Forecasted Adjusted Diluted Net Earnings Per Share from Continuing Operations			$	0.74					$	0.77					$	3.07					$	3.13
The impact of interest expense on Convertible Notes to reverse the if-converted method rounds to zero for the three months ending September 30, 2022 and twelve months ending December 31, 2022.
The sum of the components of forecasted adjusted diluted net earnings per share from continuing operations may not equal due to rounding.