INCOME TAXES

3 Months Ended

Apr. 04, 2026

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The following table summarizes our income tax expense and effective tax rate (ETR).

For the Three Months Ended	April 4, 2026			March 29, 2025
Income tax expense	$	49.3		$	35.2
Effective tax rate	38.3		%	24.4		%

The ETR for the three months ended April 4, 2026 increased to 38.3%, primarily due to the recognition of additional tax expense related to undistributed foreign earnings, transaction-related costs incurred in connection with the acquisition of SPX FLOW, and the impact of amended tax filings in Luxembourg. In addition, the acquisition affected the geographic mix of earnings which further contributed to the higher effective tax rate for the period.

During the quarter, the Company recorded deferred tax liabilities related to the acquisition of SPX FLOW, primarily associated with fair value adjustments to acquired intangible assets and other net assets. These deferred tax balances were recorded as part of preliminary purchase accounting and contributed to the increase in the Company’s deferred tax liabilities during the period. The purchase accounting remains subject to adjustment during the measurement period. In addition to deferred taxes recorded as a result of purchase accounting adjustments, the Company also assumed SPX FLOW’s existing deferred tax balances. These assumed balances are reflected in the Company’s deferred tax position as of the acquisition date.

In October 2021, more than 135 countries and jurisdictions agreed to participate in a “two-pillar” international tax approach developed by the Organisation for Economic Co-operation and Development (OECD), which includes establishing a global minimum corporate tax rate of 15 percent. The OECD published Tax Challenges Arising from the Digitalisation of the Economy — Global Anti-Base Erosion Model Rules (Pillar Two) in December 2021 and subsequently issued additional commentary and administrative guidance clarifying several aspects of the model rules. Since the model rules have been released, many countries have enacted Pillar Two-related laws, many of which became effective January 1, 2024 with additional laws effective January 1, 2025. As of April 4, 2026, Pillar Two did not have a significant impact on our financial statements.

On January 5, 2026, the OECD released a Pillar Two Administrative Guidance package containing the Side-by-Side Safe Harbor (the SbS). Under the SbS, Multinational Enterprises headquartered in a jurisdiction that has a Qualified SbS Regime are eligible for the SbS election. The United States is listed as a jurisdiction with a Qualified SbS Regime. By making the SbS election, top-up taxes under the Income Inclusion Rule and Undertaxed Profits Rule are set to zero. However, the SbS does not have an impact on the application of Pillar Two Qualified Domestic Minimum Top-up Taxes. Jurisdictions are required to implement the SbS effective for fiscal years beginning on or after January 1, 2026 (or at the earliest practicable date where there are constitutional or other superior law constraints preventing retroactive adoption). ITT will monitor the adoption of SbS in each jurisdiction and intends to elect the SbS where available.

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (OBBBA), which includes a broad range of tax reform provisions affecting businesses, including extending and modifying certain key Tax Cuts & Jobs Act provisions (both domestic and international) and expanding certain Inflation Reduction Act incentives while accelerating the phase-out of others. The Company evaluated the OBBBA and implemented certain provisions of the legislation during the current quarter; it continues to evaluate the ongoing effects of the legislation.

The Company operates in various tax jurisdictions and is subject to examination by tax authorities in these jurisdictions. The Company is currently under examination in several jurisdictions including China, Czechia, Germany, India, Italy, and the U.S. The estimated tax liability calculation for unrecognized tax benefits considers uncertainties in the application of complex tax laws and regulations in various tax jurisdictions. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the unrecognized tax benefit. Over the next 12 months, the net amount of the tax liability for unrecognized tax benefits in foreign and domestic jurisdictions could decrease by approximately $1.6 due to changes in audit status, expiration of statutes of limitations, and other events.

In connection with the acquisition of SPX FLOW completed during the quarter, the Company assumed uncertain tax positions, which were recorded as part of the preliminary purchase accounting. The assumed uncertain tax positions primarily relate to tax positions taken by SPX FLOW in prior periods, and their recognition resulted in an increase in the Company’s total uncertain tax positions during the quarter. The purchase accounting remains provisional, and the recorded uncertain tax positions may be subject to adjustment during the measurement period as additional information becomes available regarding the underlying tax exposures and related assumptions.