Modified · German Tax Litigation

In August 2024, we received a favorable ruling regarding a German tax litigation. Pursuant to the Tax Matters Agreement ("TMA") with United Technologies Corporation ("UTC"), our former parent, subsequently renamed RTX Corporation ("RTX"), and based on the facts and contractual provisions, additional information received from RTX and indemnity payments during 2025, the Company estimated the amount payable to RTX as a result of the outcome of the German tax litigation to be $56 million as of December 31, 2025. Based on indemnity payments made to RTX and adjustments to the indemnity payable in the quarter six months ended March 31June 30, 2026, the Company now estimates the remaining amount payable to RTX to be $55 million, resulting . The adjustments to the indemnity payable resulted in indemnification expense of $5 million for the six months ended June 30, 2026 compared to $6 million and $5258 million for the quarters ended March 31, 2026 and quarter and six months ended June 30, 2025, respectively. There was no indemnification expense in the quarter ended June 30, 2026. This indemnification expense is included in Other income (expense), net in the Condensed Consolidated Statements of Operations for the quarters and six months ended March 31June 30, 2026 and 2025. This estimate could further change due to the parties' continuing dispute concerning the scope of the final indemnity amount, which will be resolved pursuant to the procedures set forth in the TMA.