This Annual Report on Form 10-K (“Form 10-K”) is being filed by Federal Signal Corporation and its subsidiaries (referred to collectively as the “Company,” “we,” “our” or “us” herein, unless the context otherwise indicates) with the United States (“U.S.”) Securities and Exchange Commission (the “SEC”), and includes comments made by management that may contain words such as “may,” “will,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “project,” “estimate” and “objective” or similar terminology, or the negative thereof, concerning the Company’s future financial performance, business strategy, plans, goals and objectives. These expressions are intended to identify forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information concerning the Company’s possible or assumed future performance or results of operations and are not guarantees. While these statements are based on assumptions and judgments that management has made in light of industry experience as well as perceptions of historical trends, current conditions, expected future developments and other factors believed to be appropriate under the circumstances, they are subject to risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different.

Products manufactured and supplied, and services rendered, by the Company are divided into two reportable segments: the Environmental Solutions Group and the Safety and Security Systems Group. The individual operating businesses are organized as such because they share certain characteristics, including technology, marketing, distribution and product application, which create long-term synergies. Corporate contains those items that are not included in ourthe Company’s reportable segments.

Depending primarily on the type and geographic location of the end-customer, the Environmental Solutions Group uses either a dealer network including JJE, or direct sales to serve customers. The 2017 acquisition of Truck Bodies and Equipment International (“TBEI”) increased the number of dealers within ourthe Company’s network and also added additional direct sales resources. The dealer network serves both municipal and industrial end markets.end-markets. Within municipal markets, the majority of ourthe Company’s dealers operate exclusively in their assigned territory. In conjunction with selling vehicles to end-customers, dealer representatives demonstrate vehicle functionality and capability and provide vehicle service. In addition to selling products manufactured by the Company, JJE distributescertain of our businesses distribute and re-sellsre-sell products manufactured by other companies. The Company believes its regional, national and global dealer networks for vehicles is a distinguishing factor from its competitors. The Company has an ownership interest in certain dealers.

No single customer accounted for 10% or more of the Company’s net sales in any year within the three-year period ended December 31, 2018. Of the $1,173.2 million total orders reported in 2018, approximately 31% were from U.S. municipal and governmental customers, 47% were from U.S. commercial and industrial customers and 22% were from non-U.S. customers.

The Company purchases a wide variety of raw materials from around the world for use in the manufacture of its products, although the majority of current purchases are from North American sources. To minimize risks relating to availability, price and quality of key products and components, the Company is party to numerous strategic supplier arrangements. Although certain materials are obtained from either a single-source supplier or a limited number of suppliers, the Company has generally identified alternative sources to minimize the interruption of its business in the event of supply disruptions.

TheAs part of its ongoing commitment to environmental, social and governance initiatives, the Company endeavors to establish environmentally-friendly policies and objectives, and believes that these actions are also consistent with cost-effective operating practices. With the application of these policies, the Company believes it complies with federal, state and local provisions that have been enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment. The Company endeavors to establish environmentally-friendly policies and objectives, and believes that these actions are also consistent with cost-effective operating practices. Capital expenditures in 20182020 attributable to compliance with such laws were not material. The Company also believes that the overall impact of compliance with environmental regulations will not have a material adverse effect on our financial position, results of operations or cash flow.

Certain of the Company’s businesses are susceptible to the influences of seasonal factors, including buying patterns, delivery patterns and productivity influences from holiday periods and weather. In general, the Company tends to have lower equipment sales in the first calendar quarter of each year compared to other quarters as a result of these factors. In addition, rental income and parts sales are generally higher in the second and third quarters of the year, because many of the Company’s products are used for maintenance activities in North America, where usage is typically lower during periods of harsher weather conditions.

The following is a list of the Company’s executive officers, including their ages, business experience and positions as of February 1, 2019:2021:

We may occasionally make forward-looking statements and estimates such as forecasts and projections of our future performance or statements of our plans and objectives. These forward-looking statements may be contained in, but are not limited to, filings with the SEC, including this Form 10-K, press releases made by us and oral statements made by our officers. Actual results could differ materially from those contained in such forward-looking statements. Important factors that could cause our actual results to differ from those contained in such forward-looking statements include, but are not limited to, the risks described below. Many of such risks and uncertainties may be exacerbated by the COVID-19 pandemic and any worsening of the global business and economic environment that may result.

In 2018,2020, we generated approximately 78%77% of our net sales in the U.S. Our ability to be profitable depends heavily on varying conditions in the U.S. governmental and municipal markets, as well as the overall U.S. economy. The industrial markets in which we compete are subject to considerable cyclicality, and move in response to cycles in the overall business environment. Many of our customers are municipal government agencies, and as a result, we are dependent on municipal government spending. Spending by our municipal customers can be affected by federal, state and local political circumstances, budgetary constraints, changing priorities, actual or potential government shutdowns and other factors. The U.S. government and municipalities depend heavily on tax revenues as a source of spending and accordingly, there is a historical correlation that suggests a lag of one to two years between the condition of the U.S. economy and our sales to the U.S. government and municipalities. Therefore, downturns in the U.S. economy are likely to result in decreases in demand for our products. During previous economic downturns, we experienced decreases in sales and profitability, and we expect our business to remain subject to similar economic fluctuations in the future. In addition, the Tax Cutsextent of any potential changes to policies and Jobs Actregulations under the new U.S. administration, and how any such changes may impact the Company’s operations, is currently uncertain.

The COVID-19 pandemic has created significant worldwide volatility, uncertainty and disruption. In particular, the COVID-19 pandemic and the governmental responses to the pandemic have resulted in a substantial curtailment of 2017 (the “2017 Tax Act”) may resultbusiness activities, a significant number of business closures, slowdowns, suspensions or delays of production and commercial activity, and weakened economic conditions, both in changes in federal, statethe United States and local tax revenuesmany foreign countries. As such, the COVID-19 pandemic has directly and indirectly adversely impacted the Company and such adverse impact will likely continue. However, the extent to which the COVID-19 pandemic will ultimately adversely impact the Company’s business, financial condition and operating results, which could impact be material, will depend on numerous evolving factors that are highly uncertain, rapidly changing and cannot be predicted at this time, including:

Our business is subject to fluctuations in demand and changing international economic, legal and political conditions that are beyond our control. In 2018,2020, approximately 22%23% of our net sales were to customers outside the U.S. and we expect a significant portion of our revenues to come from international sales in the foreseeable future. Operating in the international marketplace exposes us to a number of risks, including the need to comply with U.S. and foreign laws and regulations applicable to our foreign operations, such as the Foreign Corrupt Practices Act, the United Kingdom (“U.K.”) Bribery Act and their counterparts in other foreign jurisdictions in which we operate, restrictive domestic and international trade regulations, and changes in these laws, regulations and policies by the U.S. and foreign governments. In addition, we may be exposed to risks associated with actual or threatened imposition of tariffs or trade barriers on our products or materials incorporated into our products, actual or threatened trade disputes, including so-called “trade wars,” political and economic instability in the jurisdictions in which we operate, foreign receivables collection risk, local labor market conditions, and, in some cases, international hostilities. The costs of compliance with these various laws, regulations and policies can be significant and penalties for non-compliance could significantly impact our business.

Economic downturns result in tighter credit markets, which could adversely affect our customers’ ability to secure financing or to secure financing at favorable terms or interest rates necessary to proceed or continue with purchases of our products and services. Our customers’ or potential customers’ inability to secure financing for projects could result in the delay, cancellation or downsizing of new purchases or the suspension of purchases already under contract, which could cause a decline in the demand for our products and services and negatively impact our financial position, results of operations or cash flow.

We place a high priority on developing new products and services, as well as enhancing our existing products and services. As a result of these efforts, we may be required to expend substantial research, development and marketing resources, and the time and expense required to develop a new product or service or enhance an existing product or service are difficult to predict. We may not succeed in developing, introducing or marketing new products or services or product or service enhancements. In addition, we cannot be certain that any new or enhanced product or service will generate sufficient revenue to justify the expense and resources devoted to the related product diversification effort.

We continue to evaluate opportunities to restructure our business and rationalize our manufacturing operations in an effort to optimize our cost structure. These actions could result in significant charges that could adversely affect our financial condition and results of operations. Future actions could result in restructuring and related charges, including but not limited to impairments, employee termination costs and charges for pension and other postretirement contractual benefits and pension curtailments that could be significant and could have an adverse effect on our financial condition, results of operations or cash flow.

We purchase from suppliers raw materials, component parts and finished goods to be used in the manufacturing and sale of our products. In addition, we may incorporate vehicle chassis provided directly by our customers in our production process. Although the vast majority of our raw materials and component parts are sourced domestically, certain of our competitorssuppliers are based overseas, and certain of our domestic suppliers may source subcomponents from overseas. Outbreaks of communicable diseases have been known to occur in certain of these international regions, resulting in public health crises. Changes in our relationships with suppliers, shortages in availability of materials, production delays, regulatory restrictions, public health crises, or other supply chain disruptions, whether due to our suppliers or customers, could have a material adverse effect on our ability to timely manufacture and market products. Increases in the costs of purchased raw materials, component parts or finished goods could result in manufacturing interruptions, delays, inefficiencies or our inability to market products. In addition, our profit margins would decrease if prices of purchased raw materials, component parts or finished goods increase and we are unable to pass on those increases to our customers.

Our long-term strategy includes exploring acquisitions of companies or material costs.businesses to facilitate our growth, enhance our global market position and broaden our product offerings. Such acquisitions may help us expand into adjacent markets, add complementary products and services or allow us to leverage our distribution channels. In some cases,connection with this strategy, we could face certain risks and uncertainties in addition to those we face in the day-to-day operations of our contractsbusiness. We also may be unable to identify suitable targets for acquisition or to make acquisitions at favorable prices. If we identify a suitable acquisition candidate, our ability to successfully implement the acquisition would depend on a variety of factors, including our ability to obtain financing on acceptable terms. In addition, our acquisition activities could be disrupted by overtures from competitors for the targeted companies, governmental regulation and rapid developments in our industry that decrease the value of a potential target’s products or services.

We may assume liabilities in connection with the acquisition of businesses. There may be liabilities that we fail or renewingare unable to discover in the course of performing due diligence investigations on the acquired businesses, or that may be more material than we discovered. In these contracts, whichcircumstances, we cannot assure that our rights to indemnification will be sufficient in amount, scope or duration to fully offset the possible liabilities associated with the businesses or property acquired. Further, these liabilities could result in unexpected legal or regulatory exposure, unexpected increases in taxes or other adverse effects on our business. Any such liabilities, individually or in the aggregate, could have ana material adverse effect on our financial condition, results of operations or cash flow.

Our ability to operate our businesses and implement our strategies depends in part on the efforts of our executive officers and other key employees. In addition, our future success will depend on, among other factors, our ability to attract and retain qualified personnel. The loss of the services of any key employee or the usefailure to attract or retain other qualified personnel could have a material adverse effect on our business or business prospects.

As a portion of our products results, orworkforce is alleged to result, in bodily injury and/or property damage. For example, we have been sued by firefighters seeking damages claiming that exposure to our sirens has impaired their hearing and that the sirens are, therefore, defective. In addition,unionized, we are subject to risk of work stoppages and other claimslabor relations matters. As of December 31, 2020, approximately 16% of our U.S. hourly workers were represented by labor unions and litigation from timewere covered by collective bargaining agreements with various unions. Any strikes, threats of strikes or other organized disruptions in connection with the negotiation of new labor agreements or other negotiations could materially adversely affect our business as well as impair our ability to time asimplement further described in the accompanying notesmeasures to our consolidated financial statements. We could experience material warranty or product liability costs in the future and incur significant costs to defend ourselves against these claims. While we carry insurance and maintain reserves for product liability claims, our insurance coverage may be inadequate if such claims do arise, and any defensereduce costs and liability not coveredimprove production efficiencies. In addition, the stoppage of work for a prolonged period of time at one, or several, of our principal manufacturing facilities, due to public health concerns, or any other reason, could materially adversely affect our business.

Our funding obligations and pension expense for our defined benefit pension plans are driven by the performance of assets set aside in trusts for these plans, the discount rate used to value the plans’ liabilities, actuarial assumptions and experience and legal and regulatory funding requirements. Changes in these factors could have a materialan adverse impact on our financial condition, results of operations or cash flow. A future claim could involve the imposition of punitive damages, the award of which, pursuant to state laws, may not be covered by insurance. In addition, warrantya portion of our pension plan assets are invested in equity securities, which can experience significant declines if financial markets weaken. The level of the funding of our defined benefit pension plan liabilities was approximately 84% as of December 31, 2020. Funding of the Company’s U.S. defined benefit pension plan is determined in accordance with guidelines set forth in the Employee Retirement Income Security Act. The current year funding status was impacted by a lower discount rate than in the prior year. Our future pension expenses and certain other claims are not typically covered by insurance. Any product liabilityfunding requirements could increase significantly due to the effect of adverse changes in the discount rate, asset values or warranty issues may adversely impact our reputation as a manufacturer of high quality, safe productsthe estimated expected return on plan assets. In addition, we could become legally required to make increased cash contributions to the pension plans, and may have athese contributions could be material adverse effect on our business.

We have observed a global increase in information technology security threats and more sophisticated cyber-attacks. Our business could be impacted by such disruptions, which in turn could pose a risk to the security of our systems and networks and the confidentiality, accessibility and integrity of information stored and transmitted on those systems and networks. We have adopted measures to address cyber-attacks and mitigate potential risks to our systems from these information technology-related disruptions. However, given the unpredictability of the timing, nature and scope of such disruptions, our systems and networks remain potentially vulnerable to attacks. Depending on their nature and scope, such attacks could potentially lead to the compromising of confidential information, misuse of our systems and networks, manipulation and destruction of data, misappropriation of assets or production stoppages and supply shortages, which in turn could adversely affect our reputation, financial condition, results of operations or cash flow.

We rely on a combination of patents, trademarks, copyrights, nondisclosure agreements, information technology security systems, physical security and other measures to protect our proprietary intellectual property and the intellectual property of certain customers and suppliers. However, we cannot be certain that our efforts to protect these intellectual property rights will be sufficient. Intellectual property protection is subject to applicable laws in various jurisdictions where interpretations and protections differ or can be unpredictable and costly to enforce. Further, our ability to protect our intellectual property rights may be limited in certain foreign jurisdictions that do not have, or do not enforce, strong intellectual property rights. Any failure to protect or enforce our intellectual property rights could have a material adverse effect on our competitive position, financial condition, results of operations or cash flow.

We are exposed to product liability and warranty claims in the manufacturing and salenormal course of business in the event that our products. In addition, we may incorporate vehicle chassis provided directly by our customers in our production process. Changes in our relationships with suppliers, shortagesproducts actually or production delays, whether dueallegedly fail to our suppliers or customers, regulatory restrictions or work stoppages by the employees of our suppliersperform as expected, or the chassis suppliers for our customers could have a material adverse effect on our ability to timely manufacture and market products. In addition, increases in the costs of purchased raw materials, component parts or finished goods could result in manufacturing interruptions, delays, inefficiencies or our inability to market products. In addition, our profit margins would decrease if prices of purchased raw materials, component parts or finished goods increase and we are unable to pass on those increases to our customers.

We, like other manufacturers, continue to face heavy governmental regulation of our products, especially in the areas of the environment and employee health and safety. Complying with environmental and safety requirements has added and will continue to add to the cost of our products, and could increase the capital required to support our business. While we believe that we are in compliance in all material respects with these laws and regulations, we may be adversely impacted by costs, liabilities or claims with respect to our operations under existing laws or those that may be adopted. These requirements are complex, change frequently and have tended to become more stringent over time. Therefore, we could incur substantial costs, including cleanup costs, fines and civil or criminal sanctions as a result of violation of, or liabilities under, environmental laws and safety regulations. Further, climate change regulations at the federal, state or local level or in international jurisdictions could require us to limit emissions, change our manufacturing processes or product offerings, or undertake other activities which may require us to incur additional expense. These requirements may increase the cost of our products, which may diminish demand for those products. In addition, uneven application of environmental or safety regulations could place our products at a cost or features disadvantage, which could reduce our revenues and profitability.

None.

The information concerning the Company’s legal proceedings included in Note 1213 – Legal Proceedings to the accompanying consolidated financial statements is incorporated herein by reference.

Not applicable.

The Company’s common stock is listed and traded on the New York Stock Exchange (“NYSE”) under the symbol “FSS”.

As of January 31, 2019,2021, there were 1,5711,489 holders of record of the Company’s common stock.

Information concerning the Company’s equity compensation plans is included under Item 12 of Part III of this Form 10-K.

The following graph compares the cumulative five-year total return to stockholders of the Company’s common stock relative to the cumulative total returns of the Russell 2000 index, the S&P Midcap 400 index and the S&P Industrials index. The graph assumes that the value of the investment in the Company’s common stock, and in each index, was $100 on December 31, 20132015 and assumes reinvestment of all dividends through December 31, 2018.2020.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide information that is supplemental to, and shall be read together with, the consolidated financial statements and the accompanying notes contained in this Form 10-K. Information in MD&A is intended to assist the reader in obtaining an understanding of (i) the consolidated financial statements, (ii) the Company’s business segments and how the results of those segments impact the Company’s results of operations and financial condition as a whole and (iii) how certain accounting principles affect the Company’s consolidated financial statements.

The Company is a leading global manufacturer and supplier of (i) vehicles and equipment for maintenance and infrastructure end-markets, including sewer cleaners, industrial vacuum loaders, safe-digging trucks, street sweepers, waterblasting equipment, road-marking and line-removal equipment, dump truck bodies and trailers and (ii) public safety security and communication equipment, such as lights,vehicle lightbars and sirens, industrial signaling equipment, public warning systems and warninggeneral alarm/public address systems. In addition, we sellengage in the sale of parts, service and provide service, repair, equipment rentals and training as part of a comprehensive aftermarket offering to our customer base. We operate 1415 manufacturing facilities in five countries and provide products and integrated solutions to municipal, governmental, industrial and commercial customers in all regions of the world.

We continue to closely monitor the Companyimpact of the COVID-19 pandemic on all aspects of our business, including how it is affecting our employees, customers, supply chain and distribution network. In February 2020, we established a cross-functional task force to monitor ongoing developments, implement mitigation plans and centrally coordinate our response to the pandemic.

Our consolidated financial results in 2018 reflected year-over-year improvement in many areas, driven by both organic growthThe following table summarizes our Consolidated Statements of Operations as of, and benefits from our recent acquisitions:

A discussion regarding these non-GAAP metricsof changes in the Company’s financial condition and a reconciliationresults of eachoperations during the year ended December 31, 2019 compared to the most comparable GAAP measure for eachyear ended December 31, 2018 has been omitted from this Annual Report on Form 10-K, but may be found under the heading “Item 7. Management’s Discussion and Analysis of the periods presented.

Net sales for the year ended December 31, 2018,2020 decreased by $90.5 million, or 7%, compared to the prior year. Within the Environmental Solutions Group, net sales increaseddecreased by $170.9$77.1 million, or 25%8%, largely due to $98.1 million of incremental net sales resulting from the prior-year TBEI acquisition and organic sales growth of $72.8 million, or 12%. The organic growth was primarily due to improveddecreases in shipments of safe-digging trucks, industrial vacuum trucks andloaders, sweepers, dump bodies, waterblasting equipment, sewer cleaners, trailers and snow removal equipment of $26.4 million, $22.0 million, $20.7 million, $7.8 million, $7.5 million, $6.7 million, $4.7 million and $3.2 million, respectively. Partially offsetting these reductions was an increase in addition to higher aftermarket revenues, represented by increases in rental income, partsshipments of road-marking and services revenuesline removal equipment and salesrefuse equipment of used equipment. These improvements included benefits from pricing actions$12.4 million and were partially offset by lower sales of products manufactured by other companies, such as refuse trucks. In$8.0 million, respectively. Within the Safety and Security Systems

Group, net sales increaseddecreased by $20.1$13.4 million, or 10%6%, primarily due to higherreductions in sales into globalof industrial signaling equipment, warning systems and public safety marketsequipment of $7.9 million, $4.0 million and improved international sales of outdoor warning systems.$1.7 million, respectively.

For the year ended December 31, 2018,2020, cost of sales increaseddecreased by $130.1$61.3 million, or 19%7%, compared to the prior year, largely due to an increasea decrease of $117.1$58.0 million, or 21%8%, within the Environmental Solutions Group, primarily driven by increasedattributable to lower sales volumes the effects of a full-year of TBEI activity in the current-year period compared with seven months in the prior year, higher material costs and a $3.7favorable foreign currency translation impact of $1.4 million, increase in depreciation expense, partially offset by a $3.7 million reduction in

For the year ended December 31, 2018,2020, gross profit increaseddecreased by $60.9$29.2 million, or 28%9%, compared to the prior year, primarily due to improvementsreductions of $53.8$19.1 million and $7.1$10.1 million within the Environmental Solutions Group and the Safety and Security Systems Group, respectively. Gross margin for the year ended December 31, 20182020 was 25.9%26.0%, compared to 24.6%26.4% in the prior year, primarily driven by a 210 basis point gross margin improvementreductions within the Safety and Security Group and Environmental Solutions Group associated with improved operating leverage, benefits from actions taken in response to higher commodity costs, favorable sales mixof 220 basis points and the reduction in purchase accounting expenses, described above, partially offset by the higher depreciation expense.10 basis points, respectively.

For the year ended December 31, 2018,2020, SEG&A expenses increaseddecreased by $14.8$14.4 million, or 10%8%, primarily represented by a $13.2 million increase within the Environmental Solutions Group, largely the result of the addition of expenses of associated with the TBEI acquisition, including an increasedue to reductions in amortization expense of $3.2 million. SEG&A expenses within the Safety and Security Systems Group, increased by $0.6the Environmental Solutions Group and Corporate of $7.3 million, primarily due to higher expenses associated with new product development$3.9 million and other growth initiatives, while corporate SEG&A expenses increased by $1.0 million.$3.2 million, respectively. As a percentage of net sales, SEG&A expenses decreased from 16.1%14.2% in the prior year, to 14.6%14.0% in the current year.

Operating income for the year ended December 31, 2018 increased2020 decreased by $47.9$15.7 million, or 65%11%, to $121.5 million, compared to the prior year. Within ouryear, primarily driven by reductions of $15.1 million and $3.1 million within the Environmental Solutions Group operating income for the year ended December 31, 2018 increased by $40.6 million, or 56%, with higher sales volumes, improved operating leverage and an incremental operating income contribution of $9.5 million from TBEI, associated with including a full-year of activity in 2018, compared to only seven months in the prior year. TBEI’s operating income contribution in 2018 included the effects of amortization expense on intangible assets acquired, which contributed to an increase in depreciation and amortization expense of $6.9 million. Within our Safety and Security Systems Group, operating income for the year ended December 31, 2018 increased by $7.1 million, or 26%, while corporate expenses decreased by $0.2 million, primarily drivenrespectively, partially offset by a $1.2$2.5 million decrease in acquisition and integration-related expenses, reductions in hearing loss litigation and post-employment expenses and the absence of $0.7 million in executive severance costs, partially offset by higher employee incentive and stock compensation costs.Corporate expenses. Consolidated operating margin for the year ended December 31, 20182020 was 11.2%11.6%, compared to 8.2%12.0% in the prior year.

Interest expense for the year ended December 31, 2018 increased2020 decreased by $2.0$2.2 million, or 27%28%, compared to the prior year, largely due to higher average debt levels following the acquisition of TBEIlower interest rates in June 2017. For further discussion, see Note 8 – Debtcomparison to the accompanying consolidated financial statements.prior year.

For the year ended December 31, 2018,2020, Other expense, (income),net, totaled $1.1 million of expense, largely due to the recognition of a $2.3 million charge associated with the withdrawal from a multi-employer pension plan, partially offset by $0.5 million of net periodic pension benefit and $0.4 million of foreign currency transaction gains. For the year ended December 31, 2019, Other expense, net, totaled $0.6 million of expense, largely due to foreign currency transaction losses and $0.4 million of net periodic pension expense. For the year ended December 31, 2017, $0.8 million of income was reported, largely due to foreign currency transaction gains, which were partially offset by $0.4$0.9 million of net periodic pension expense.

The Company recognized income tax expense of $17.9$28.5 million for the year ended December 31, 2018,2020, compared to $0.5$30.2 million for the year ended December 31, 2017.2019. The increasereduction in income tax expense in the current year was primarily due to higherlower earnings and the impact of certain special tax items in the prior year, which did not repeat in 2018. In addition, during the year ended December 31, 2018, the Company recognized a tax benefit of $8.6$1.9 million associated with the completion of a tax planning strategy in Spain, which is expected to reduce cash tax payments in that jurisdiction over the next several years. Tax expense for the year ended December 31, 2017 was lower than in 2018, largely due to the recognition of a $23.0 million net tax benefit associated with the revaluation of the Company’s net deferred tax liabilities in the U.S. following the reduction of the federal corporate tax rate included in the 2017 Tax Act. This benefit was partially offset by a $2.2 million net increase in valuation allowance, inclusive of a $3.0 million valuation allowance recorded against the Company’s foreignexcess tax credits as a result of the enactment of the 2017 Tax Act, the recognition of $0.6 million of additional tax expense associated with a change in the state tax rate in Illinois, and additional taxes resultingbenefits from higher pre-tax earnings. The Company’s effective tax rate for the year

Income from continuing operations for the year ended December 31, 2017,2020 decreased by $12.3 million, or 11%, compared with $39.4 million into the prior year, largely due to the improvedaforementioned reduction in operating income and the $16.9 million reduction in income tax expense, the $2.6$0.5 million increase in other income and the absence of $0.3 million in debt settlement charges,expense, partially offset by the $5.4$2.2 million increasereduction in interest expense, associated with higher average debt levels following the acquisition of TBEI and the $6.1$1.7 million pension settlement charge.

On the date of acquisition, JJE had a backlog of orders from its end customers of $43.3 million. These acquired orders were included in total orders reportedAdjusted EBITDA for the year ended December 31, 2016.

The following table summarizes the Environmental Solutions Group’s operating results as of, and for the years ended, December 31, 2018, 20172020, 2019 and 2016:2018:

Total orders increaseddecreased by $139.5 million, or 17%, for the year ended December 31, 2018. U.S. orders increased by $131.7 million, largely due to the prior year acquisition of TBEI, which contributed an increase in orders of $64.4 million in a full-year in 2018. The organic growth in the U.S. of $67.3 million was largely driven by improvements in orders for vacuum trucks and sewer cleaners of $49.6 million and $12.4 million, respectively. In addition, aftermarket demand, representing orders for parts, service, used and rental equipment, improved by $9.3 million. Non-U.S. orders increased by $7.8 million, primarily due to improvements in orders for vacuum trucks, sewer cleaners, street sweepers, and waterblasting equipment of $11.3 million, $6.8 million, $4.4 million and $2.1 million, respectively. In addition, aftermarket orders improved by $7.3 million. Partially offsetting these improvements was a $23.0 million decrease in refuse truck orders.

The following table summarizes the Safety and Security Systems Group’s operating results as of, and for the years ended, December 31, 2018, 20172020, 2019 and 2016:2018:

Total orders increaseddecreased by $15.7 million or 7%, for the year ended December 31, 2018. In the aggregate, U.S. orders increased by $4.0 million, or 3%, compared to the prior year, driven by increases in orders for public safety products and industrial products of $5.4 million and $1.6 million, respectively. These increases were partially offset by a $3.0 million reduction in orders for outdoor warning systems. Non-U.S. orders increased by $11.7 million, or 16%, largely due to a $9.5 million increase in orders for public safety products, a $2.1 million favorable foreign currency translation impact, and a $0.6 million increase in orders for outdoor warnings systems, partially offset by a $0.5 million reduction in orders for industrial products.

Corporate operating expenses were $25.6$28.4 million, $25.8$30.9 million and $21.6$25.6 million for the years ended December 31, 2018, 20172020, 2019 and 2016,2018, respectively.

The Company uses its cash flow from operations to fund growth and to make capital investments that sustain its operations, reduce costs, or both. Beyond these uses, remaining cash is used to pay down debt, repurchase shares, fund dividend payments and make pension contributions. The Company may also choose to invest in the acquisition of businesses. In the absence of significant unanticipated cash demands, we believe that the Company’s existing cash balances, cash flow from operations and borrowings available under the Amended 20162019 Credit Agreement will provide funds sufficient for these purposes. The net cash flows associated with the Company’s rental equipment transactions are included in cash flow from operating activities. Subsequent to the acquisition of JJE, net cash flows from rental equipment transactions have become more significant, and as such, cash flow from operating activities may not be directly comparable with amounts reported in periods prior to the acquisition.

The following table summarizes the Company’s contractual obligations and payments due by period as of December 31, 2018:2020: