The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates.

Cash in excess of daily requirements may be invested in time deposits and marketable securities and is included in the accompanying balance sheets at fair value. We consider time deposits and marketable securities with an original maturity of three months or less when purchased to be cash equivalents.

We record accounts receivable at net realizable value. This value includes a reserve for doubtful accounts to reflect our estimate of expected credit losses over the contractual terms of our receivables. Our estimation of current expected credit losses reflects our considerations of historical write-offs, an analysis of past due accounts based on the contractual terms of the receivables, and the economic status of customers, if known. We additionally consider the impact of general economic conditions, including construction spending, unemployment rates, and macroeconomic growth, on our customers' future ability to meet their obligations. We believe that the reserve is sufficient to cover uncollectible amounts; however, there can be no assurance that unanticipated future business conditions of customers will not have a negative impact on our results of operations, financial condition, or cash flows.

Concentrations of credit risk with respect to receivables, which are typically unsecured, are generally limited due to the wide variety of customers and markets using our products and services as well as their dispersion across many different geographic areas. No single customer accounted for more than 10% of receivables at August 31, 2026 or August 31, 2025. No single customer accounted for more than 10% of net sales in fiscal 2026, 2025, or 2024.

Inventories include materials, direct labor, inbound freight, customs, duties, tariffs, and related manufacturing overhead. Inventories are stated on a first-in, first-out basis at the lower of cost and net realizable value and consist of the following as of the dates presented (in millions):

(1) Due to the immaterial amount of estimated work in process and the short lead times for the conversion of raw materials to finished goods, we do not believe the segregation of raw materials and work in process is meaningful information.

We review inventory quantities on hand and record a provision for excess or obsolete inventory primarily based on estimated future demand and current market conditions. Although our historical experience related to demand and market conditions has been within expectations, a significant change in customer demand, market conditions, or technology could render certain inventory obsolete and thus could have a material adverse impact on our operating results in the period the change occurs. The following table summarizes the changes in our inventory reserves for the periods presented (in millions):


	Year Ended August 31,
	2026		2025		2024
Beginning balance	$	26.8	$	25.6	$	25.8
Additions to reserve	17.4		11.9		10.9
Disposals of reserved inventory	(13.1)		(10.4)		(11.0)
Foreign currency translation adjustments	(0.2)		(0.3)		(0.1)
Ending balance	$	30.9	$	26.8	$	25.6

We classify assets as held for sale when a plan for disposal is developed and approved, the asset is available for immediate sale, an active program to locate a buyer at a price reasonable in relation to current fair value is initiated, and transfer of the asset is expected to be completed within one year. We cease the depreciation and amortization of the assets when all of these criteria have been met and generally reflect balances within Prepayments and other current assets on our Consolidated Balance Sheets.

As of August 31, 2026 and August 31, 2025, one of our assets with a carrying value of $5.5 million met the criteria to be classified as held for sale. This asset is reflected within Prepayments and other current assets on our Consolidated Balance Sheets as of August 31, 2026 and August 31, 2025. Prior to classification as held for sale, this asset was included within Property, Plant, and Equipment.


	ABL		AIS		Total
Balance as of August 31, 2024	$	1,015.1	$	83.6	$	1,098.7
Additions from acquired businesses	—		394.6		394.6


Foreign currency translation adjustments	0.9		1.3		2.2
Balance as of August 31, 2025	1,016.0		479.5		1,495.5



Foreign currency translation adjustments	(1.1)		(0.9)		(2.0)
Balance as of August 31, 2026	$	1,014.9	$	478.6	$	1,493.5

Through multiple acquisitions, we acquired definite-lived intangible assets that are amortized over their estimated useful lives as well as indefinite-lived intangible assets, which consist of trade names that are expected to generate cash flows indefinitely. Significant estimates and assumptions were used to determine the initial fair value of these acquired intangible assets, including, but not limited to, estimated future short-term and long-term net sales and profitability, customer attrition rates, royalty rates, and discount rates. Certain of our intangible assets are attributable to foreign operations and are impacted by currency translation due to movements in foreign currency rates year over year. Summarized information for our intangible assets is as follows as of the dates presented (in millions):


	August 31,
	2026				2025
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Definite-lived intangible assets:
Developed technology and patents	$	618.8	$	(237.7)	$	616.7	$	(170.5)
Trademarks and trade names	169.1		(27.6)		176.9		(29.0)
Distribution networks	61.8		(55.7)		61.8		(53.7)
Customer relationships	565.0		(224.8)		571.1		(206.9)

Total definite-lived intangible assets	$	1,414.7	$	(545.8)	$	1,426.5	$	(460.1)
Indefinite-lived trade names	$	132.6			$	132.6

We recorded amortization expense of $93.1 million, $76.5 million, and $39.7 million related to acquired intangible assets during fiscal 2026, 2025, and 2024, respectively. Amortization expense is generally recorded on a straight-line basis.

We test goodwill and indefinite-lived intangible assets for impairment on an annual basis as of the first date of our fourth fiscal quarter (June 1) or more frequently if facts and circumstances indicate an asset is more likely than not impaired, as required by Accounting Standards Codification (“ASC”) Topic 350, Intangibles—Goodwill and Other (“ASC 350”). ASC 350 allows for an optional qualitative analysis for goodwill and indefinite-lived intangible assets to determine the likelihood of impairment. If the qualitative review results in a more likely than not probability of impairment, a quantitative analysis is required. The qualitative step may be bypassed entirely in favor of a quantitative test.

The quantitative analysis for goodwill tests for impairments by comparing the fair value of a reporting unit to its carrying value, including goodwill. Reporting unit fair values can be determined based on a combination of valuation techniques including the expected present value of future cash flows, a market multiple approach, and a comparable transaction approach. If the fair value of a reporting unit exceeds its carrying value, goodwill is not considered impaired. Conversely, if the carrying value of a reporting unit exceeds its fair value, an impairment charge for the difference would be recorded.

As of June 1, 2026, the current fiscal year testing date, we performed a quantitative analysis to assess the fair value of our reporting units. For our quantitative analysis, we used a combination of discounted future cash flows and relevant market multiples. Based on the results of our analysis, the fair value of each reporting unit exceeded its carrying value; therefore, no impairment was recognized for our $1.5 billion of goodwill in fiscal 2026.

In fiscal 2025 and 2024, we performed qualitative analyses to assess the fair value of our reporting units. Our qualitative analyses considered and assessed external factors for each reporting unit such as macroeconomic, industry, cost, and market conditions as well as Company-specific factors, including but not limited to, our actual and planned financial performance. Based on the results of our analyses, we determined there was not a more likely than not probability of impairment for each of our reporting units. Thus, no quantitative tests were required for our $1.5 billion and $1.1 billion of goodwill in fiscal 2025 and fiscal 2024, respectively.

Annually we perform an impairment analysis for our indefinite-lived intangibles as of June 1st. For fiscal 2026, 2025, and 2024, we performed a qualitative analysis to assess our indefinite-lived intangible assets for impairment. Our qualitative analysis considers and assesses external factors such as macroeconomic, industry, cost, and market conditions as well as asset-specific factors, such as each trade name's actual and planned financial performance.

As of June 1, 2026, the current fiscal year testing date, we held eight indefinite-lived intangible assets with an aggregate carrying value of $132.6 million. Based on the results of our analysis, we determined there was not a more likely than not probability of impairment for all of the indefinite-lived intangible assets, and no quantitative test for these assets was required.

As of June 1, 2025, we held eight indefinite-lived intangible assets with an aggregate carrying value of $132.5 million. Based on the results of our analysis, we determined there was not a more likely than not probability of impairment for all of the indefinite-lived intangible assets, and no quantitative test for these assets was required.

As of June 1, 2024, we held eight indefinite-lived intangible assets with an aggregate carrying value of $135.5 million. Based on the results of our analyses, we determined there was not a more likely than not probability of impairment for seven of the indefinite-lived intangible assets, and no quantitative test for these assets was required. In the fourth quarter of fiscal 2024, management committed to a plan to rebrand certain products in ABL's portfolio. We determined this plan adversely impacted one trade name. Therefore, we performed a quantitative analysis to compare the fair value of this trade name with its carrying value. We estimated the fair value of this indefinite-lived trade name using the relief-from-royalty method, a fair value model based on discounted future cash flows. Our assumptions in valuing the trade name primarily reflected a projected decline in revenues generated by the trade name due to management’s planned reduction in future use of the asset. We additionally considered other inputs, including theoretical royalty rates and discount rates, in valuing the asset. Based on the results of the

indefinite-lived intangible asset analyses for fiscal 2024, we recorded an impairment charge of $3.0 million for one indefinite-lived trade name asset within Selling, distribution, and administrative expenses in the Consolidated Statements of Comprehensive Income related to our ABL segment. Any reasonably likely change in the assumptions used in the analysis for the trade name would not be material to the impairment charge recorded or to our financial condition or results of operations.


	August 31,
	2026		2025
Customer incentive programs(1)	$	49.7	$	46.5
Refunds to customers(1)	27.1		31.7
Current deferred revenues(1)	25.7		21.4
Sales commissions	34.1		30.8
Freight costs	22.1		13.3
Product warranty costs(2)	27.2		29.4
Tax-related items(3)	37.8		25.3
Interest on borrowings(4)	2.8		3.8
Other	49.9		55.8
Total other current liabilities	$	276.4	$	258.0


	August 31,
	2026		2025
Deferred compensation and postretirement benefits other than pensions(1)	$	55.8	$	51.6
Deferred revenues(2)	30.6		38.0
Unrecognized tax position liabilities, including interest(3)	21.0		20.9

Product warranty costs(4)	10.6		14.7
Other	16.0		14.1
Total other long-term liabilities	$	134.0	$	139.3

____________________________________

(1)We maintain several non-qualified retirement plans for the benefit of eligible employees, primarily deferred compensation plans. The deferred compensation plans provide for elective deferrals of an eligible employee’s compensation and, in some cases, matching contributions by the organization. We maintain life insurance policies on certain former officers and other key employees as a means of satisfying a portion of these obligations.

We include shipping and handling fees billed to customers in Net sales in the Consolidated Statements of Comprehensive Income. Refer to the Revenue Recognition footnote of the Notes to Financial Statements for further information.

When a product is sold, the associated shipping and handling costs are recorded in the Consolidated Statements of Comprehensive Income based on their function. Costs associated with inbound freight and freight between manufacturing facilities and distribution centers are generally recorded in Cost of products sold. Other shipping and handling costs, which primarily include amounts incurred to transfer finished goods to a customer's desired location, are included in Selling, distribution, and administrative expenses and totaled $137.6 million, $141.1 million, and $134.2 million in fiscal 2026, 2025, and 2024, respectively.

We account for stock options, restricted stock, performance stock units, and stock units representing certain deferrals into the Nonemployee Director Deferred Compensation Plan (referred to as the “Director Plan” and discussed further in the Share-based Payments footnote) based on their grant-date fair values estimated under the provisions of ASC Topic 718, Compensation—Stock Compensation (“ASC 718”).

We generally recognize compensation cost for share-based payment transactions on a straight-line basis over an award's requisite service period as defined by ASC 718. We apply the accelerated attribution method in certain circumstances for awards with graded vesting, including those with market and performance conditions. For awards subject to a market condition, we consider both actual and derived service periods, as well as the expected performance period, to determine the appropriate compensation recognition method.

We have recorded share-based payment expense, net of estimated forfeitures, in Selling, distribution, and administrative expenses in the Consolidated Statements of Comprehensive Income. Share-based payment expense includes expense related to restricted stock, performance stock units, options issued, and stock units deferred into the Director Plan. We recorded $49.5 million, $45.1 million, and $46.6 million of share-based payment expense for the years ended August 31, 2026, 2025, and 2024, respectively. The total income tax benefit recognized for share-based payment expense was $12.0 million, $12.2 million, and $8.3 million for the years ended August 31, 2026, 2025, and 2024, respectively.

Excess tax benefits and/or expense related to share-based payment awards are reported within Income tax expense on the Consolidated Statements of Comprehensive Income. We recognized net excess tax benefits related to share-based payment cost of $5.4 million, $6.0 million, and $1.5 million for the years ended August 31, 2026, 2025, and 2024, respectively.

Property, plant, and equipment is initially recorded at cost and depreciated principally on a straight-line basis using estimated useful lives of plant and equipment (3 to 40 years for buildings and related improvements and 3 to 15 years for machinery, equipment, and information technology) for financial reporting purposes. Accelerated depreciation methods are used for income tax purposes. Leasehold improvements are amortized over the shorter of the life of the lease or the estimated useful life of the improvement. Land is not depreciated. Depreciation expense amounted to $63.3 million, $56.6 million, and $51.4 million during fiscal 2026, 2025, and 2024, respectively. The balance of property, plant, and equipment consists of the following as of the dates presented (in millions):


	August 31,
	2026		2025
Land	$	22.6	$	22.2
Buildings and leasehold improvements	248.3		235.3
Machinery, equipment, and information technology	895.2		839.4
Total property, plant, and equipment, at cost	1,166.1		1,096.9
Less: Accumulated depreciation and amortization	(809.3)		(753.7)
Property, plant, and equipment, net	$	356.8	$	343.2

Research and development (“R&D”) expense consists of compensation, payroll taxes, employee benefits, materials, supplies, and other administrative costs, but it does not include all new or enhanced product development costs. R&D expense is expensed as incurred and is included in Selling, distribution, and administrative expenses in our Consolidated Statements of Comprehensive Income. R&D expense amounted to $165.6 million, $140.2 million, and $102.3 million during fiscal 2026, 2025, and 2024, respectively.

Advertising costs are expensed as incurred and are included within Selling, distribution, and administrative expenses in our Consolidated Statements of Comprehensive Income. These costs totaled $36.2 million, $29.2 million, and $20.1 million during fiscal 2026, 2025, and 2024, respectively.


	Year Ended August 31,
	2026		2025		2024
Interest expense (income), net:
Interest expense(1)	$	35.9	$	42.5	$	25.3
Interest income(2)	(10.3)		(20.5)		(29.8)
Interest expense (income), net	25.6		22.0		(4.5)
Miscellaneous expense, net:
Non-service components of net periodic pension cost(3)	3.7		34.9		4.5
Foreign currency transaction losses	3.2		1.1		5.3

Other items	0.5		5.7		(0.6)
Miscellaneous expense, net	7.4		41.7		9.2
Other expense	$	33.0	$	63.7	$	4.7

____________________________________

We are taxed at statutory corporate rates after adjusting income reported for financial statement purposes for certain items that are treated differently for income tax purposes. Deferred income tax expenses or benefits result from changes during the year in cumulative temporary differences between the tax basis and book basis of assets and liabilities. Refer to the Income Taxes footnote of the Notes to Consolidated Financial Statements for additional information.

The functional currency for foreign operations is generally the local currency where the foreign operations are domiciled. The translation of foreign currencies into U.S. dollars is performed for asset and liability accounts using exchange rates in effect at the balance sheet dates and for revenue and expense accounts using a weighted average exchange rate each month during the year. The gains or losses resulting from the balance sheet translation are included in Foreign currency translation adjustments in the Consolidated Statements of Comprehensive Income and are excluded from net income.

Comprehensive income represents a measure of all changes in equity that result from recognized transactions and other economic events other than transactions with owners in their capacity as owners. Other comprehensive income (loss) items includes foreign currency translation and pension adjustments.


	Foreign Currency Items		Defined Benefit Pension Plans		Accumulated Other Comprehensive Loss Items
Balance as of August 31, 2024	$	(70.9)	$	(44.0)	$	(114.9)
Other comprehensive income before reclassifications	10.8		2.1		12.9
Amounts reclassified from accumulated other comprehensive loss(1)	—		25.5		25.5
Net current period other comprehensive income	10.8		27.6		38.4
Balance as of August 31, 2025	(60.1)		(16.4)		(76.5)
Other comprehensive income before reclassifications	2.4		0.2		2.6
Amounts reclassified from accumulated other comprehensive loss(1)	—		1.1		1.1
Net current period other comprehensive income	2.4		1.3		3.7
Balance as of August 31, 2026	$	(57.7)	$	(15.1)	$	(72.8)


	Year Ended August 31,
	2026						2025						2024
	Before Tax Amount		Tax (Expense) or Benefit		Net of Tax Amount		Before Tax Amount		Tax (Expense) or Benefit		Net of Tax Amount		Before Tax Amount		Tax (Expense) or Benefit		Net of Tax Amount
Foreign currency translation adjustments	$	2.4	$	—	$	2.4	$	10.8	$	—	$	10.8	$	(5.9)	$	—	$	(5.9)
Defined benefit pension plans:

Actuarial amounts	0.2		—		0.2		2.8		(0.7)		2.1		1.4		(0.4)		1.0
Amortization of defined benefit pension items:
Prior service cost	—		—		—		0.1		—		0.1		0.1		—		0.1
Actuarial losses	1.5		(0.4)		1.1		2.6		(0.7)		1.9		3.3		(0.8)		2.5
Settlement losses	—		—		—		30.9		(7.4)		23.5		—		—		—
Total defined benefit plans, net	1.7		(0.4)		1.3		36.4		(8.8)		27.6		4.8		(1.2)		3.6
Other comprehensive income (loss)	$	4.1	$	(0.4)	$	3.7	$	47.2	$	(8.8)	$	38.4	$	(1.1)	$	(1.2)	$	(2.3)