ITT Inc.: Form 10-Q for the period ended Jun 28, 2025

(In millions, except per share amounts, unless otherwise stated)

OVERVIEW

ITT Inc., through its worldwide subsidiaries, is a diversified manufacturer of highly engineered critical components and customized technology solutions for the transportation, industrial, and energy markets. We manufacture components that are integral to the operation of systems and manufacturing processes in these key markets. Our products enable functionality for applications where reliability and performance are critically important to our customers and the users of their products.

Our businesses share a common, repeatable operating model centered on our engineering capabilities. Each business applies its technology and engineering expertise to solve our customers’ most pressing challenges. Our applied engineering provides a valuable business relationship with our customers given the critical nature of their applications. This in turn provides us with unique insight to our customers’ requirements and enables us to develop solutions to assist our customers in achieving their business goals. Our technology and customer intimacy produce opportunities to capture recurring revenue streams, aftermarket opportunities and long-lived platforms from original equipment manufacturers (OEMs).

Our product and service offerings are organized into three reportable segments: Motion Technologies (MT), Industrial Process (IP), and Connect & Control Technologies (CCT). See Note 3, Segment Information, to the Consolidated Condensed Financial Statements for a summary description of each segment. Additional information is also available in our 2024 Annual Report within Part I, Item 1, “Description of Business.”

All comparisons included within Management’s Discussion and Analysis of Financial Condition and Results of Operations refer to the comparable three and six months ended June 29, 2024, unless stated otherwise.

Effective January 1, 2025, the Company changed its method of determining the cost for certain inventories from a last-in, first-out (LIFO) to first-in, first out (FIFO) for all inventories previously accounted for under LIFO. For additional information on the change in accounting principle, refer to Note 1, Description of Business and Basis of Presentation. Management’s discussion and analysis of financial condition and results of operations have been adjusted to reflect the change in accounting principle.

Global Macroeconomic Conditions

Tariff Pressures and Uncertainty

In early 2025, the U.S. government announced or extended tariffs on a range of imported goods, including certain industrial components and raw materials, as part of ongoing trade actions involving China and other countries. In response, a number of countries including China and several key U.S. trading partners implemented or expanded retaliatory tariffs on various U.S.-origin goods. While certain U.S. tariff rates were subsequently paused or reduced for a limited period under ongoing trade negotiations, the overall tariff environment remains fluid. These trade measures have contributed to increased volatility in global markets and heightened uncertainty regarding international trade policies. As a result, we are experiencing greater complexity and uncertainty in managing our cost structure, sourcing strategies and global supply chain. The tariffs have the potential to increase our input costs and may affect the pricing and competitiveness of some of our products, particularly those that rely on imported materials or components. While we have not experienced a material impact on our business to date, we are continuing to evaluate the situation and assess mitigation strategies, including supply chain adjustments and pricing actions. The ultimate impact of these tariffs on our operations and financial results is currently uncertain and will depend on the scope, duration, and potential expansion or expiration of the measures implemented.

Inflationary Pressures

Inflationary pressures, driven by factors such as supply chain disruptions and the ongoing Russia-Ukraine and broader Middle East conflicts, have continued into 2025 and have led to increased prices for energy and raw materials we use in our production processes, including commodities such as steel, oil, copper and tin. Recent escalations in the conflict involving Israel and Iran have contributed to heightened regional instability and volatility in global energy markets, further pressuring input costs. Additionally, the manufacturing industry continues to experience a skilled labor shortage, which has created difficulties in attracting and retaining factory employees and has resulted in higher labor costs. We have been able to offset most of these impacts through pricing actions and productivity savings, which we continue to pursue. Future impacts on our business and

ITT Inc. | Q2 2025 Form 10-Q | 27 financial results as a result of these conditions are not estimable at this time, and depend, in part, on the extent to which these conditions improve or worsen, which remains uncertain. For additional discussion of the risks related to global macroeconomic conditions, see Part I, Item IA, “Risk Factors” in our 2024 Annual Report.

EXECUTIVE SUMMARY

The following table provides a summary of key performance indicators for the second quarter of 2025 as compared to the second quarter of 2024.

*Represents a non-GAAP financial measure

Further details related to these results are contained elsewhere in the Discussion of Financial Results section. Refer to the section titled “Key Performance Indicators and Non-GAAP Measures” for definitions and reconciliations between GAAP and non-GAAP metrics, including organic revenue, adjusted operating income, adjusted operating margin, and adjusted EPS.

Our second quarter 2025 results are summarized below:

• Revenue of $972.4 increased by $66.5 primarily driven by pump project shipments in IP; aerospace and industrial connectors demand and pricing actions in CCT; and strength in Friction original equipment and KONI rail demand in MT. In addition, revenue growth benefited from foreign currency translation of $17.4 and M&A activity provided a net benefit of $12.0, principally from the acquisition of kSARIA partially offset by the divestiture of Wolverine.
• Operating income of $175.1 increased by $15.4 primarily due to benefits from pricing actions, productivity savings, and higher volumes, including contributions from Svanehøj and kSARIA, which were partially offset by higher material and labor, unfavorable foreign currency transaction impacts, and temporary acquisition amortization.
• Income from continuing operations was $1.52 per diluted share, an increase of $0.07 as compared to the prior year, primarily due to higher operating income and a lower weighted-average share count, partially offset by the loss of earnings from the Wolverine divestiture in 2024 and higher interest and income tax expenses. Adjusted income from continuing operations was $1.64 per diluted share, an increase of $0.15 as compared to the prior year.

ITT Inc. | Q2 2025 Form 10-Q | 28

DISCUSSION OF FINANCIAL RESULTS

REVENUE

The following table illustrates the revenue derived from each of our segments.

(a) See the section titled “Key Performance Indicators and Non-GAAP Measures” for a definition and reconciliation of organic revenue.

Motion Technologies

MT revenue for the three and six months ended June 28, 2025 decreased $18.8 and $65.1, respectively, primarily due to a loss of revenue of $42.2 and $81.7, respectively, as a result of the Wolverine divestiture. This decrease was offset by foreign currency translation of $13.0 and $4.6, respectively. Organic revenue for the three and six-month periods increased $10.4 and $12.0, respectively, due to strength in Friction original equipment and KONI rail shipments..

ITT Inc. | Q2 2025 Form 10-Q | 29

Industrial Process

IP revenue for the three months ended June 28, 2025 increased $25.2 due primarily to pump project growth, and pricing actions, $4.5 from acquisitions and $2.6 foreign currency translation. For the six months ended June 28, 2025, revenue grew $24.6, driven by pump projects and pricing and $13.9 from acquisitions offset by $3.9 foreign currency impact. Organic revenue for the three and six-month periods increased by $18.1 and $14.6, respectively.

Connect & Control Technologies

CCT revenue for the three and six months ended June 28, 2025 increased by $60.1 and $109.7, respectively, primarily due to the acquisition of kSARIA in September 2024, which contributed $49.7 and $97.8, respectively. Organic revenue for the three-month period increased by $8.6 driven by growth in aerospace and defense, inclusive of pricing actions. Organic revenue for the six-month period increased by $11.1, primarily due to growth in defense connectors, inclusive of pricing actions.

GROSS PROFIT

Gross profit for the three months ended June 28, 2025 and June 29, 2024 was $346.8 and $316.8, respectively, reflecting gross margins of 35.7% and 35.0%, respectively. Gross profit for the six months ended June 28, 2025 and June 29, 2024 was $663.1 and $618.3, respectively, reflecting gross margins of 35.2% and 34.0%, respectively. The increases in gross profit and margin for both periods were primarily driven by benefits from pricing actions, net savings from productivity and sourcing initiatives, partially offset by unfavorable sales mix.

OPERATING EXPENSES

The following table summarizes our operating expenses, including by segment.

General and administrative (G&A) expenses increased $8.9 and $22.7 for the three and six months ended June 28, 2025, respectively. The increases in both periods were primarily driven by higher incentive-based compensation and M&A-related professional service costs. The six-month period was impacted by higher restructuring expenses.

Sales and marketing expenses increased $6.4 and $9.5 for the three and six months ended June 28, 2025, respectively. The increases in both periods were primarily driven by the acquisition of kSARIA and higher selling expenses in IP, partially offset by the divestiture of the Wolverine business.

Research and development expenses decreased $0.7 and $3.8 for the three and six months ended June 28, 2025, respectively, primarily driven by the divestiture of Wolverine in the prior year and timing of R&D projects.

ITT Inc. | Q2 2025 Form 10-Q | 30

OPERATING INCOME

The following table summarizes our operating income and margin by segment.

MT operating income for the three and six months ended June 28, 2025 was flat and decreased $3.0, respectively, as the prior year divestiture of Wolverine and unfavorable foreign currency impacts were offset by benefits from productivity and higher volume.

IP operating income for the three and six months ended June 28, 2025 increased $10.1 and $9.1, respectively, primarily driven by benefits from pricing actions and net savings from productivity and higher volume. This increase was partially offset by the impact of unfavorable sales mix, higher restructuring expenses, and unfavorable foreign currency impacts.

CCT operating income for the three and six months ended June 28, 2025 increased $9.5 and $12.8, respectively, primarily driven by benefits from pricing actions, net savings from productivity, as well as contributions from kSARIA, partially offset by higher labor and material costs and strategic investments.

Other corporate costs for the three and six months ended June 28, 2025 increased $4.2 and $2.5, respectively, primarily due to higher incentive-based compensation costs and offset by foreign currency impacts.

INTEREST AND NON-OPERATING EXPENSES, NET

The following table summarizes our interest and non-operating income and expenses.

Total interest and non-operating expenses, net for the three and six months ended June 28, 2025 increased $5.3 and $7.5, respectively, primarily due to higher outstanding debt during the 2025 periods, partially offset by lower average interest rates on commercial paper borrowings.

ITT Inc. | Q2 2025 Form 10-Q | 31

INCOME TAX EXPENSE

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

The effective tax rate (ETR) for the three and six months ended June 28, 2025 increased to 25.9% and 25.2% respectively, primarily related to the jurisdictional mix of earnings.

In October 2021, more than 135 countries and jurisdictions agreed to participate in a “two-pillar” international tax approach developed by the 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 June 28, 2025, the Company does not expect Pillar Two taxes to have a significant impact on its 2025 financial statements.

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act, 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. At this time, the Company is in the process of reviewing the legislation in detail and evaluating its potential impacts. We will continue to monitor any forthcoming guidance and will assess the effects on our business as more information becomes available.

See Note 6, Income Taxes, to the Consolidated Condensed Financial Statements for further information.

ITT Inc. | Q2 2025 Form 10-Q | 32

LIQUIDITY AND CAPITAL RESOURCES

Funding and Liquidity Strategy

We monitor our funding needs and execute strategies to meet overall liquidity requirements, including the management of our capital structure, on both a short- and long-term basis. Significant factors that affect our overall management of liquidity include our cash flow from operations, credit ratings, the availability of commercial paper, access to bank lines of credit, term loans, and the ability to attract long-term capital on satisfactory terms. We assess these factors along with current market conditions on a continuous basis, and as a result, may alter the mix of our short- and long-term financing when it is advantageous to do so. We expect to have enough liquidity to fund operations for at least the next 12 months and beyond.

We manage our worldwide cash requirements considering available funds among the many subsidiaries through which we conduct business and the cost effectiveness with which those funds can be accessed. We support our growth and expansion in markets outside of the U.S. through the enhancement of existing products and development of new products, increased capital spending, and potential foreign acquisitions. We look for opportunities to access cash balances in excess of local operating requirements to meet our global liquidity needs in a cost-efficient manner. We transfer cash between certain international subsidiaries and the U.S. when it is cost effective to do so. During the six months ended June 28, 2025, we had net cash distributions from foreign countries to the U.S. of $536.9. During the year ended December 31, 2024, we had net cash distributions from foreign countries to the U.S. of $230.4. The timing and amount of any additional future distributions will be evaluated based on our jurisdictional cash needs.

The amount and timing of dividends payable on our common stock are within the sole discretion of our Board of Directors and will be based on, and affected by, several factors, including our financial position and results of operations, available cash, expected capital spending plans, prevailing business conditions, and other factors the Board of Directors deems relevant. Therefore, we cannot provide any assurance as to what level of dividends, if any, will be paid in the future. In the second quarter of 2025, we declared a dividend of $0.351 per share for shareholders of record on June 2, 2025, which was a 10% increase from the quarterly dividends of $0.319 that were declared in 2024. Dividend payments during the six months ended June 28, 2025 amounted to $56.2.

From time to time, the Company may repurchase shares of its stock on the open market. The timing of any repurchases and the actual number of shares repurchased depends on a variety of factors, including remaining authorization under existing Board-approved share repurchase programs, the Company’s stock price, restrictions under the Company’s debt obligations, other uses for capital, the dilutive impact of shares issued during the period related to the Company’s long-term incentive plans, impacts on the value of remaining shares, and market and economic conditions. During the six months ended June 28, 2025, we spent $500.1 on open-market share repurchases under our share repurchase programs. During the six months ended June 29, 2024, we spent $79.0 on open-market share repurchases under our share repurchase programs. All repurchased shares are retired immediately following the repurchases. See Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, for additional information.

Commercial Paper

When available and economically feasible, we have accessed the commercial paper market through programs in place in the U.S. and Europe to supplement cash flows generated internally and to provide additional short-term funding.

The following table presents our outstanding commercial paper borrowings.

In the six months ended June 28, 2025, we borrowed under the European commercial paper program to partially refinance the Company’s U.S. commercial paper. The proceeds of the 2025 Term Loan Credit Agreement were used to refresh the U.S. commercial paper capacity and for other general corporate purposes. See Note 14, Debt, to the Consolidated Condensed Financial Statements for further information.

ITT Inc. | Q2 2025 Form 10-Q | 33

All outstanding commercial paper for both periods had maturity terms of less than three months from the date of issuance.

2021 Revolving Credit Agreement

On August 5, 2021, we entered into a revolving credit facility agreement with a syndicate of third-party lenders including Bank of America, N.A., as administrative agent (the 2021 Revolving Credit Agreement). The 2021 Revolving Credit Agreement matures in August 2026 and provides for an aggregate principal amount of up to $700 of (i) revolving extensions of credit (the revolving loans) outstanding at any time, and (ii) letters of credit for a face amount of up to $100 at any time outstanding. Subject to certain conditions, we are permitted to terminate permanently the total commitments and reduce commitments by a minimum aggregate amount of $10 or any whole multiple of $1 in excess thereof. Borrowings under the credit facility are available in U.S. dollars, Euros, British pound sterling or any other currency that may be requested by us, subject to the approval of the administrative agent and each lender. We are permitted to request that lenders increase the commitments under the facility by up to $350 for a maximum aggregate principal amount of $1,050; however, this is subject to certain conditions and therefore may not be available to us. As of June 28, 2025 and December 31, 2024, we had no outstanding borrowings under the 2021 Revolving Credit Agreement.

As discussed in more detail below, on July 30, 2025, the 2021 Revolving Credit Agreement was terminated in connection with the Company’s entry into the 2025 Revolving Credit Agreement (as defined below). See Note 14, Debt, to the Consolidated Condensed Financial Statements for further information.

kSARIA Credit Agreement

On September 12, 2024, the Company entered into a credit agreement (the kSARIA Credit Agreement) among the Company, as borrower, each lender from time-to-time party thereto, and U.S. Bank National Association, as the administrative agent, sole lead arranger and sole bookrunner.

The kSARIA Credit Agreement had a maturity of three years and provided for a term loan of $464 which had been borrowed and was used to finance the Company’s acquisition of kSARIA on September 12, 2024. During the first quarter of 2025, the Company made loan repayments of $229, representing the remaining outstanding balance on the kSARIA Credit Agreement, and the kSARIA Credit Agreement was terminated. See Note 14, Debt, to the Consolidated Condensed Financial Statements for further information.

2025 Term Loan Credit Agreement

On April 30, 2025, the Company entered into a credit agreement (as amended, the 2025 Term Loan Credit Agreement) among the Company, as borrower, certain of our subsidiaries, as guarantors, each lender from time to time party thereto, and U.S. Bank National Association, as the administrative agent. The 2025 Term Loan Credit Agreement has a maturity of two years and provides for a term loan of $750. Proceeds of the term loan were applied to pay down the Company’s U.S. commercial paper capacity and for other general corporate purposes, including working capital needs. In connection with the entry into the 2025 Revolving Credit Agreement described below, on July 30, 2025, the Company and lenders entered into an amendment to the 2025 Term Loan Credit Agreement to modify certain covenant baskets and other terms (including amendments to the leverage ratio definition) to conform to the 2025 Revolving Credit Agreement.

The 2025 Term Loan Credit Agreement has a maturity of two years and provides for a term loan of $750. Proceeds of the term loan were applied to pay down the Company’s U.S. commercial paper capacity and for other general corporate purposes, including working capital needs.

Total outstanding borrowings under the Amended 2025 Term Loan Credit Agreement were $620.0, as of June 28, 2025.

Borrowings under the 2025 Term Loan Credit Agreement bear interest at an annual rate equal to, at the Company’s option, either (i) term secured overnight financing rate (Term SOFR) plus a margin ranging from 0.875% to 1.375%, or (ii) an alternate base rate plus a margin ranging from 0.0% to 0.375%, with the applicable margin determined by reference to the Company’s debt ratings set forth in the 2025 Term Loan Credit Agreement. The loans under the 2025 Term Loan Credit Agreement may be prepaid by the Company at any time, in whole or in part, without penalty or premium, subject to certain conditions.

The 2025 Term Loan Credit Agreement contains customary affirmative and negative covenants. See Note 14, Debt, to the Consolidated Condensed Financial Statements for further information.

ITT Inc. | Q2 2025 Form 10-Q | 34

2025 Revolving Credit Agreement

On July 30, 2025, we terminated the 2021 Revolving Credit Agreement and replaced it with a new revolving credit facility consisting of a syndicate of third-party lenders including U.S. Bank National Association, as administrative agent (the 2025 Revolving Credit Agreement). The 2021 Revolving Credit Agreement was terminated on July 30, 2025. The 2025 Revolving Credit Agreement matures in July 2030 and provides for an aggregate principal amount of up to $1,100. The 2025 Revolving Credit Agreement provides for a potential increase of commitment of up to $550 for a possible maximum of $1,650 in aggregate commitments at the request of the Company and with the consent of the institutions providing such increase of commitments.

Borrowings under the 2025 Revolving Credit Agreement bear interest at an annual rate equal to, at the Company’s option, either (i) Term SOFR plus a margin ranging from 0.785% to 1.150%, or (ii) an alternate base rate plus a margin ranging from 0.0% to 0.150%, with the applicable margin determined by reference to the Company’s debt ratings set forth in the 2025 Revolving Credit Agreement. There is a commitment fee under the 2025 Revolving Credit Agreement ranging from 0.090% to 0.225% of commitments under the 2025 Revolving Credit Agreements.

The 2025 Revolving Credit Agreement contains customary affirmative and negative covenants. See Note 14, Debt, to the Consolidated Condensed Financial Statements for further information.

Sources and Uses of Liquidity

Our principal source of liquidity is our cash flow generated from operating activities, which provides us with the ability to meet the majority of our short-term funding requirements. The following table summarizes net cash provided by or used in operating, investing, and financing activities from continuing operations.

Operating Activities

The increase in net cash from operating activities of $51.6 was primarily due to favorable working capital from timing of accounts receivable collections, higher customer advanced payments, and lower compensation payments in the current year.

Investing Activities

The decrease in net cash used in investing activities of $403.6 was mainly driven by the prior year acquisition of Svanehøj. Refer to Note 19, Acquisitions, to the Consolidated Condensed Financial Statements for further information.

Financing Activities

The change in net cash flows related to financing activities of $422.4 from a source of $213.8 during the prior year to a use of $208.6 during the six months of 2025 was primarily due to an increase of $421.8 in open-market share repurchases.

ITT Inc. | Q2 2025 Form 10-Q | 35

KEY PERFORMANCE INDICATORS AND NON-GAAP MEASURES

Management reviews a variety of key performance indicators including revenue, operating income and margin, and earnings per share. In addition, we consider certain measures to be useful to management and investors when evaluating our operating performance for the periods presented. These measures provide a tool for evaluating our ongoing operations and management of assets from period to period. This information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment among competing strategic alternatives and initiatives, including, but not limited to, acquisitions, dividends, and share repurchases. Some of these metrics, however, are not measures of financial performance under accounting principles generally accepted in the United States of America (GAAP) and should not be considered a substitute for measures determined in accordance with GAAP. We consider the following non-GAAP measures, which may not be comparable to similarly titled measures reported by other companies, to be key performance indicators for purposes of our reconciliation tables.

• “Organic Revenue” is defined as revenue, excluding the impacts of foreign currency fluctuations, acquisitions, and divestitures that may or may not qualify as discontinued operations. Current year activity from acquisitions is excluded for twelve months following the closing date of acquisition. The period-over-period change resulting from foreign currency fluctuations is estimated using a fixed exchange rate for both the current and prior periods. Prior year revenue is adjusted to exclude activity during the comparable period for twelve months post-closing date for divestitures that do not qualify as discontinued operations. We believe that reporting organic revenue provides useful information to investors by helping identify underlying trends in our business and facilitating comparisons of our revenue performance with prior and future periods and to our peers.

Reconciliations of revenue to organic revenue for the three and six months ended June 28, 2025 are provided below.

ITT Inc. | Q2 2025 Form 10-Q | 36

• “Adjusted Operating Income” is defined as operating income adjusted to exclude special items that include, but are not limited to, restructuring, certain asset impairment charges, certain acquisition- and divestiture-related impacts, and unusual or infrequent operating items. Special items represent charges or credits that impact current results, which management views as unrelated to the Company’s ongoing operations and performance. “Adjusted Operating Margin” is defined as adjusted operating income divided by revenue. We believe these financial measures are useful to investors and other users of our financial statements in evaluating ongoing operating profitability, as well as in evaluating operating performance in relation to our competitors.

Reconciliations of operating income to adjusted operating income (loss) for the three and six months ended June 28, 2025 and June 29, 2024 are provided below.

ITT Inc. | Q2 2025 Form 10-Q | 37

• “Adjusted Income from Continuing Operations” is defined as income from continuing operations attributable to ITT Inc. adjusted to exclude special items that include, but are not limited to, restructuring, certain asset impairment charges, certain acquisition- and divestiture-related impacts, income tax settlements or adjustments, and unusual or infrequent items. Special items represent charges or credits, on an after-tax basis, that impact current results, which management views as unrelated to the Company’s ongoing operations and performance. The after-tax basis of each special item is determined using the jurisdictional tax rate of where the expense or benefit occurred. “Adjusted Income from Continuing Operations per Diluted Share” (Adjusted EPS) is defined as adjusted income from continuing operations divided by diluted weighted average common shares outstanding. We believe that adjusted income from continuing operations and adjusted EPS are useful to investors and other users of our financial statements in evaluating ongoing operating profitability, as well as in evaluating operating performance in relation to our competitors.

Reconciliations of adjusted income from continuing operations attributable to ITT to income from continuing operations attributable to ITT and adjusted income from continuing operations attributable to ITT per diluted share to income from continuing operations attributable to ITT per diluted share (EPS) for the three and six months ended June 28, 2025 and June 29, 2024 are provided below. Per share amounts are reported in ones and may not calculate due to rounding.

(a) The three and six months ended June 28, 2025 include tax expense on distributions of non-U.S. income of $4.3 and $3.6, tax expense on undistributed foreign earnings of $0.9 and $3.4, and other tax expense special items of $1.4 and $2.8, respectively.

(b) The three months ended June 29, 2024 included a tax benefit to record a net operating loss deferred tax asset related to a prior year acquisition of $(2.0), tax expense on distributions of non-U.S. income of $1.0, and other tax-related special items of $1.0. The six months ended June 29, 2024 included expense (benefits) from tax on undistributed foreign earnings of $2.4, a tax benefit to record a net operating loss deferred tax asset related to a prior year acquisition of $(2.0), and other tax special items of $1.3.

ITT Inc. | Q2 2025 Form 10-Q | 38

RECENT ACCOUNTING PRONOUNCEMENTS

See Note 2, Recent Accounting Pronouncements, to the Consolidated Condensed Financial Statements for information on recent accounting pronouncements.

CRITICAL ACCOUNTING ESTIMATES

The preparation of the Company’s financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. The Company believes the most complex and sensitive judgments, because of their significance to the Consolidated Condensed Financial Statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 2024 Annual Report describes the critical accounting estimates that are used in the preparation of the Consolidated Condensed Financial Statements. Actual results in these areas could differ from management’s estimates. There have been no material changes concerning the Company’s critical accounting estimates as described in our 2024 Annual Report.

There has been no material change in the information concerning market risk as stated in our 2024 Annual Report. See Note 18, Derivative Financial Instruments, to the Consolidated Condensed Financial Statements for information on the Company’s use of derivative financial instruments to mitigate exposure from foreign currency exchange rate fluctuations and commodity price fluctuations.

Evaluation of Disclosure Controls and Procedures

The Chief Executive Officer and Chief Financial Officer of the Company have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the Exchange Act) as of the end of the period covered by this Report. Based on such evaluation, such officers have concluded that, as of the end of the period covered by this Report, the Company’s disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the period covered by this Report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITT Inc. | Q2 2025 Form 10-Q | 39

Reference is made to the risk factors set forth in Part I, Item 1A, “Risk Factors”, of our 2024 Annual Report, which are incorporated by reference herein. Other than the following risk factor, there have been no material changes with regard to the risk factors disclosed in such report.

Tariffs remain uncertain and may continue to have a negative impact to our business.

Over the last several years, the U.S. government has undertaken a series of actions to impose or increase tariffs on certain goods imported into the U.S., particularly from China and other key trading partners. In early 2025, the U.S. government announced or extended tariffs on a range of imported goods, including certain industrial components and raw materials, as part of ongoing trade actions. In response, several countries, including China, announced or implemented retaliatory tariffs on goods exported from the United States. These reciprocal trade measures have contributed to increased uncertainty in global trade policy and supply chain dynamics. Prior tariffs have negatively impacted demand for our products as well as the cost of certain parts and materials that we purchase from vendors located overseas, particularly in China. Although we have been mitigating, and will continue attempting to mitigate, the impact of tariffs by supplier and customer negotiations, diversification strategies and pricing actions, there can be no assurance that our mitigation actions will be effective. As trade tensions remain elevated and governments continue to adjust their trade policies, it is unclear what additional measures may be taken by the U.S. or other countries. Any new or continued trade disputes, retaliatory tariffs, or additional protectionist policies may adversely affect demand for our products, increase our input costs, disrupt our global supply chain, and create volatility in the broader economic environment. These risks, in turn, could have a material adverse effect on our business, results of operations, and financial condition.