RESULTS OF OPERATIONS- 2025 COMPARED WITH 2024 CONSOLIDATED RESULTS The following table presents consolidated results (in millions):
Year Ended December 31,
2025
2024
Change
% Change
Net sales
$ 10,422.3 $ 10,730.2 $
(307.9) (157.5) (150.4)
-2.9% -1.8% -7.6%
Cost of sales Gross income
8,603.3
8,760.8
$ 1,819.0 $ 1,969.4 $
% of sales
17.5%
18.4%
-90 bps
Selling, general and administrative Amortization of purchased intangibles
$
818.7 $
852.4 $
(33.7)
-4.0% 0.7% -89.0%
55.1
54.7 51.6
0.4
Intangible asset impairments
5.7
(45.9) (71.2)
Operating income
$
939.5 $ 1,010.7 $
-7.0%
% of sales -40 bps Consolidated net sales decreased primarily due to lower organic sales volume in the Access ($659 million) and Transport ($107 million) segments, offset in part by higher sales volume in the Vocational segment ($261 million), incremental sales related to the September 2024 acquisition of AUSACORP S.L. (AUSA) ($91 million) and improved pricing ($69 million). 9.0% 9.4% The decrease in consolidated gross margin was primarily due to higher labor and overhead costs (100 basis points). Consolidated selling, general and administrative expenses decreased primarily due to lower incentive compensation accruals ($30 million). During 2024, the Company recorded impairment charges related to Pratt Miller goodwill and intangibles ($52 million) as a result of unfavorable performance compared to forecast and adverse market conditions related to mobility and motorsports. During 2025, the Company impaired the remaining Pratt Miller goodwill ($6 million) as a reduction in royalties expected on defense contracts led to a further decline in the Company's expectations of future performance of the reporting unit. The decrease in consolidated operating income was primarily due to the impact of lower gross margin associated with lower sales volume ($107 million), higher labor and overhead costs ($90 million) and higher warranty expense ($37 million), offset in part by improved pricing ($69 million), lower intangible asset impairments ($46 million), lower selling, general and administrative expenses ($34 million) and lower adverse changes in cumulative catch-up adjustments on contracts ($12 million). The following table presents consolidated non-operating changes (in millions): Year Ended December 31, 2025 2024 Change Interest expense, net of interest income $ (108.9) $ (111.9) $ 3.0 Miscellaneous, net 11.4 4.2 7.2
Provision for income taxes
191.5
210.0
(18.5)
Effective tax rate
22.7%
23.3%
Losses of unconsolidated affiliates 8.1 Miscellaneous, net includes gains and losses on investments, net foreign currency transaction gains and losses, and non- service costs of the Company’s pension plans. Results for 2025 included income related to the non-service portion of the Company's pension plans of $7 million and gains related to investments of $4 million. $ (3.5) $ (11.6) $
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