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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 10-Q


þ☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2017March 31, 2024
¨☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission File Number 1-2958


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HUBBELL INCORPORATED
(Exact name of registrant as specified in its charter)
 
Connecticut06-0397030
STATE OF CONNECTICUT06-0397030
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
40 Waterview Drive Shelton, CT
Shelton,CT06484
(Address of principal executive offices)(Zip Code)
(475)882-4000
(Registrant’s telephone number, including area code)
 
N/A
N/A
(Former name, former address and former fiscal year, if changed since last report.)
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock - par value $0.01 per shareHUBBNew York Stock Exchange
Indicate by check markYESNO
•
whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
þ
Yes
¨
☑		No☐
•
whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
þ
Yes
¨
☑		No☐
•
whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filerþ
☑
Accelerated filer
Accelerated☐
Non-accelerated filer ¨
Non-accelerated filer
(Do not check if a smaller
reporting company) ¨
☐
Smaller reporting company¨
☐
Emerging growth company¨
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standard provided pursuant to Section 13(a) of the Exchange Act. ¨☐
•
whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
¨Yesþ☐No☑
 
The number of shares outstanding of Hubbell Common Stockcommon stock as of October 20, 2017April 25, 2024 was 54,706,039.

53,685,997.
HUBBELL INCORPORATED-Form 10-Q    1
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Index

Table of contentsContents
3
Condensed Consolidated Statements of Income
3
Condensed Consolidated Statements of Comprehensive Income
4
Condensed Consolidated Balance Sheets
5
Condensed Consolidated Statements of Cash Flows
6
Notes to Condensed Consolidated Financial Statements
7
2291
3414
3424
3435
3435
3435
43
3446
3457



HUBBELL INCORPORATED-Form 10-Q    2
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PART IFINANCIAL INFORMATION


ITEM 1Financial Statements


Condensed Consolidated Statements of Income (unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
(in millions, except per share amounts)2017
2016
2017
2016
(in millions, except per share amounts)
(in millions, except per share amounts)
Net sales
Net sales
Net sales$950.5
$907.4
$2,751.1
$2,651.0
Cost of goods sold643.6
618.7
1,887.7
1,808.9
Cost of goods sold
Cost of goods sold
Gross profit
Gross profit
Gross profit306.9
288.7
863.4
842.1
Selling & administrative expenses160.5
152.7
482.3
472.1
Selling & administrative expenses
Selling & administrative expenses
Operating income
Operating income
Operating income146.4
136.0
381.1
370.0
Interest expense, net(11.6)(11.6)(34.3)(31.9)
Loss on extinguishment of debt(10.1)—
(10.1)—
Other (expense) income, net(1.1)(0.3)(5.5)(5.6)
Interest expense, net
Interest expense, net
Loss on disposition of business
Loss on disposition of business
Loss on disposition of business
Other expense, net
Other expense, net
Other expense, net
Total other expense
Total other expense
Total other expense(22.8)(11.9)(49.9)(37.5)
Income before income taxes123.6
124.1
331.2
332.5
Income before income taxes
Income before income taxes
Provision for income taxes
Provision for income taxes
Provision for income taxes40.8
36.0
103.7
100.4
Net income82.8
88.1
227.5
232.1
Net income
Net income
Less: Net income attributable to noncontrolling interest2.0
1.4
4.8
3.5
Net income attributable to Hubbell$80.8
$86.7
$222.7
$228.6
Earnings per share 
 
 
 
Basic$1.47
$1.56
$4.05
$4.10
Diluted$1.47
$1.56
$4.02
$4.08
Cash dividends per common share$0.70
$0.63
$2.10
$1.89
Less: Net income attributable to noncontrolling interest
Less: Net income attributable to noncontrolling interest
Net income attributable to Hubbell Incorporated
Net income attributable to Hubbell Incorporated
Net income attributable to Hubbell Incorporated
Earnings per share:
Earnings per share:
Earnings per share:
Basic earnings per share
Basic earnings per share
Basic earnings per share
Diluted earnings per share
Diluted earnings per share
Diluted earnings per share
See notes to unaudited condensed consolidated financial statements.

Condensed Consolidated Financial Statements.
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Condensed Consolidated Statements of Comprehensive Income (unaudited)
 
Three Months Ended September 30, Three Months Ended March 31,
(in millions)2017
2016
(in millions)20242023
Net income$82.8
$88.1
Other comprehensive income (loss): 
 
Other comprehensive income (loss):  
Foreign currency translation adjustments16.1
(2.6)
Pension and post-retirement benefit plans’ prior service costs, net actuarial gains and other pension-related, net of taxes of ($0.9) and ($1.1)1.8
2.1
Unrealized gain (loss) on investments, net of taxes of ($0.3) and $0.10.5
(0.2)
Unrealized gain (loss) on cash flow hedges, net of taxes of $0.5 and ($0.2)(1.0)0.6
Foreign currency translation adjustments
Foreign currency translation adjustments
Defined benefit pension and post-retirement plans, net of taxes of $(0.6) and $(1.2)
Defined benefit pension and post-retirement plans, net of taxes of $(0.6) and $(1.2)
Defined benefit pension and post-retirement plans, net of taxes of $(0.6) and $(1.2)
Unrealized gain (loss) on investments, net of taxes of $0.1 and $(0.1)
Unrealized gain (loss) on cash flow hedges, net of taxes of $(0.1) and $0.1
Other comprehensive income (loss)17.4
(0.1)
Total comprehensive income100.2
88.0
Comprehensive income
Less: Comprehensive income attributable to noncontrolling interest2.0
1.4
Comprehensive income attributable to Hubbell$98.2
$86.6
Comprehensive income attributable to Hubbell Incorporated
See notes to unaudited condensed consolidated financial statements.Condensed Consolidated Financial Statements.



   
 Nine Months Ended September 30,
(in millions)2017
2016
Net income$227.5
$232.1
Other comprehensive income (loss):  
Foreign currency translation adjustments35.3
(15.7)
Pension and post retirement benefit plans’ prior service costs, net actuarial gains and other pension-related, net of taxes of ($2.8) and ($3.6)5.5
6.2
Unrealized gain on investments, net of taxes of ($0.7) and ($0.1)1.0
0.3
Unrealized loss on cash flow hedges, net of taxes of $0.9 and $0.8(1.9)(1.9)
Other comprehensive income (loss)39.9
(11.1)
Total comprehensive income267.4
221.0
Less: Comprehensive income attributable to noncontrolling interest4.8
3.5
Comprehensive income attributable to Hubbell$262.6
$217.5




Comprehensive income attributable to Hubbell Incorporated$138.5 $191.2 
enotes to unaudited Condensed Consolidated Financial Statements.
See notes to unaudited condensed consolidated financial statements.



Condensed Consolidated Financial
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Condensed Consolidated Balance Sheets (unaudited)
 
(in millions)September 30, 2017
December 31, 2016
(in millions)March 31, 2024December 31, 2023
ASSETS 
 
ASSETS  
Current Assets 
 
Current Assets  
Cash and cash equivalents$386.4
$437.6
Short-term investments13.6
11.2
Accounts receivable, net615.1
530.0
Accounts receivable (net of allowances of $11.4 and $11.6)
Inventories, net623.6
532.4
Other current assets46.3
40.1
Assets held for sale - current
Total Current Assets1,685.0
1,551.3
Property, Plant, and Equipment, net449.1
439.8
Other Assets 
 
Other Assets  
Investments56.5
56.4
Goodwill1,063.5
991.0
Intangible assets, net437.1
431.5
Other intangible assets, net
Other long-term assets52.0
55.0
Assets held for sale - non-current
TOTAL ASSETS$3,743.2
$3,525.0
LIABILITIES AND EQUITY 
 
LIABILITIES AND EQUITY  
Current Liabilities 
 
Current Liabilities  
Short-term debt$93.8
$3.2
Short-term debt and current portion of long-term debt
Accounts payable349.4
291.6
Accrued salaries, wages and employee benefits79.3
82.8
Accrued insurance59.8
55.8
Other accrued liabilities158.3
156.2
Liabilities held for sale - current
Total Current Liabilities740.6
589.6
Long-Term Debt986.7
990.5
Other Non-Current Liabilities348.2
341.7
Liabilities held for sale - non-current
TOTAL LIABILITIES2,075.5
1,921.8
Total Hubbell Shareholders’ Equity1,656.0
1,592.8
Commitments and contingencies (Note 15)
Commitments and contingencies (Note 15)
Commitments and contingencies (Note 15)
Hubbell Incorporated Shareholders’ Equity
Noncontrolling interest11.7
10.4
TOTAL EQUITY1,667.7
1,603.2
TOTAL LIABILITIES AND EQUITY$3,743.2
$3,525.0
See notes to unaudited condensed consolidated financial statements.Condensed Consolidated Financial Statements.




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Condensed Consolidated Statements of Cash Flows (unaudited)
Nine Months Ended September 30, Three Months Ended March 31,
(in millions)20172016(in millions)20242023
Cash Flows from Operating Activities 
 
Cash Flows from Operating Activities  
Net income$227.5
$232.1
Adjustments to reconcile net income to net cash provided by operating activities: 
 
Depreciation and amortization76.0
68.6
Depreciation and amortization
Depreciation and amortization
Deferred income taxes4.2
4.3
Stock-based compensation11.9
13.1
Loss on extinguishment of debt10.1
—
Provision for bad debt expense
Loss on disposition of business
Loss on sale of assets
Loss on sale of assets
Loss on sale of assets
Changes in assets and liabilities, excluding effects of acquisitions: 
 
Increase in accounts receivable, net(73.0)(73.8)
(Increase) decrease in inventories, net(79.2)8.6
Increase in current liabilities65.6
0.8
Increase in accounts receivable, net
Increase in accounts receivable, net
Increase in inventories, net
Increase in accounts payable
Decrease in current liabilities
Changes in other assets and liabilities, net(12.3)8.8
Contribution to qualified defined benefit pension plans(1.3)(1.4)
Other, net(0.9)8.1
Net cash provided by operating activities228.6
269.2
Cash Flows from Investing Activities 
 
Cash Flows from Investing Activities  
Capital expenditures(53.2)(45.8)
Acquisition of businesses, net of cash acquired(110.3)(172.5)
Acquisitions, net of cash acquired
Proceeds from disposal of business, net of cash
Purchases of available-for-sale investments(15.1)(13.1)
Proceeds from available-for-sale investments14.1
8.8
Other, net2.9
3.3
Net cash used in investing activities(161.6)(219.3)
Net cash provided by (used in) investing activities
Cash Flows from Financing Activities 
 
Cash Flows from Financing Activities 
Long-term debt borrowings, net(2.4)397.0
Short-term debt borrowings, net90.7
(47.7)
Payment of long-term debt
Payment of long-term debt
Payment of long-term debt
Borrowings of short-term debt, net
Borrowings of short-term debt, net
Borrowings of short-term debt, net
Payment of dividends(115.5)(105.1)
Payment of dividends to noncontrolling interest(3.5)(2.8)
Repurchase of common shares(92.6)(246.8)
Make whole payment for retirement of long term debt(9.9)—
Debt issuance costs(3.0)(3.6)
Acquisition of common shares
Acquisition of common shares
Acquisition of common shares
Other, net(3.7)(5.3)
Net cash used by financing activities(139.9)(14.3)
Effect of foreign currency exchange rate changes on cash and cash equivalents21.7
(14.6)
(Decrease) increase in cash and cash equivalents(51.2)21.0
Cash and cash equivalents  
Beginning of period437.6
343.5
End of period$386.4
$364.5
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents within assets held for sale, beginning of year
Restricted cash, included in other assets, beginning of year
Less: Restricted cash, included in Other Assets
Cash and cash equivalents, end of period
Cash and cash equivalents, end of period
Cash and cash equivalents, end of period
See notes to unaudited condensed consolidated financial statements.Condensed Consolidated Financial Statements.


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Notes to Condensed Consolidated Financial Statements (unaudited)


NOTE 1 Basis of Presentation
 
The accompanying unaudited condensed consolidated financial statementsCondensed Consolidated Financial Statements of Hubbell Incorporated (“Hubbell”, the “Company”, “registrant”, “we”, “our” or “us”, which references shall include its divisions and subsidiaries) have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“U.S.”) GAAP for completeaudited financial statements. In the opinion of management, all adjustments consisting only of normal recurring adjustments considered necessary for a fair statement of the results of the periods presented have been included. Operating results for the ninethree months ended September 30, 2017March 31, 2024 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2017.2024.

The balance sheet at December 31, 20162023 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the U.S. GAAP for complete financial statements.


For further information, refer to the consolidated financial statements and footnotes thereto included in the Hubbell Incorporated Annual Report on Form 10-K for the year ended December 31, 2016.2023.
Recent
Supplier Finance Program Obligations

In September 2022, the FASB issued ASU 2022-04, "Liabilities - Supplier Finance Programs (Subtopic 405-50: Disclosure of Supplier Finance Program Obligations)", which the Company adopted in the first quarter of 2023, with the exception of the rollforward information, which was effective for the Company in the first quarter of 2024.

Payment Services Arrangements
The Company has ongoing agreements with financial institutions to facilitate the processing of vendor payables. Under these agreements, the Company pays the financial institution the stated amount of confirmed invoices from participating suppliers on their original maturity date. The terms of the vendor payables are not affected by vendors participating in these agreements. As a result, the amounts owed are presented as accounts payable in the Company’s Condensed Consolidated Balance Sheet, of which $99.6 million and $101.3 million was outstanding at March 31, 2024 and December 31, 2023, respectively. Either party may terminate the agreements with 30 days written notice. Cash flows under the program are reported in operating activities in the Company’s Condensed Consolidated Statement of Cash Flows. The rollforward of the Company's outstanding obligations confirmed as valid under the Payment Services Arrangements supplier finance program for the three months ended March 31, 2024, is as follows:
(in millions)Three Months Ended March 31, 2024
Confirmed obligations outstanding at the beginning of the period$101.3 
Invoices confirmed during the period84.5 
Confirmed invoices paid during the period(86.2)
Confirmed obligations outstanding at the end of the period$99.6 


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Commercial Card Program
In 2021, the Company entered into an agreement with a financial institution that allows participating suppliers to receive payment for outstanding invoices through a commercial purchasing card sponsored by a financial institution. The Company is required to then settle such outstanding invoices through a consolidated payment to the financial institution 15 days after the commercial card billing cycle. The Company receives the benefit of extended payment terms and a rebate from the financial institution. Either party may terminate the agreement with 60 days written notice. The amount outstanding to the financial institution is presented as short-term debt in the Company’s Condensed Consolidated Balance Sheet, of which, $1.5 million and $2.0 million was outstanding at March 31, 2024 and December 31, 2023, respectively. Cash flows under the program are reported in financing activities in the Company’s Condensed Consolidated Statement of Cash Flows. The rollforward of the Company's outstanding obligations confirmed as valid under the commercial card supplier finance program for the three months ended March 31, 2024, is as follows:
(in millions)Three Months Ended March 31, 2024
Confirmed obligations outstanding at the beginning of the period$2.0 
Invoices confirmed during the period5.9 
Confirmed invoices paid during the period(6.4)
Confirmed obligations outstanding at the end of the period$1.5 


Recently Issued Accounting Pronouncements Not Yet Adopted


In March 2017,November 2023, the Financial Accounting Standards Board ("FASB")FASB issued an Accounting Standards Update (ASU 2017-07) on the presentation of net periodic pension costASU No. 2023-07, "Segment Reporting-Improvements to Reportable Segment Disclosures", which adds a requirement for public entities to disclose its significant segment expense categories and net periodic post-retirement benefit cost. The new guidance requires the service cost component of net periodic pension and post-retirement benefit costsamounts for each reportable segment for all periods presented. This information is required to be reporteddisclosed at both interim and annual periods. In addition, this ASU requires a public entity to disclose the title and position of the Chief Operating Decision Maker ("CODM") in the same income statement line item as other employee compensation costs,consolidated financial statements. Public entities are also required to disclose how the CODM uses each reported measure of segment profit or loss to assess performance and allocate resources to the other non-service components to be reported outside of operating income. This new guidancesegments. The ASU is effective for public entities for fiscal years beginning after December 15, 20172023, and must be applied on a retrospective basis. Upon adoption, the Company expects 2016 Operating income to increase by $12.0 million and 2017 Operating income to increase by an estimated $15.0 million, due to the removal of the non-service components of net periodic pension and post-retirement benefit costs.interim periods in fiscal years beginning after December 15, 2024. The Company expects a corresponding increase to Other expense, net, resulting in zerois assessing the impact to net income in both periods.of adopting this standard on its financial statements.


In August 2016,December 2023, the FASB issued ASU No. 2023-09, "Income Taxes: Improvements to Income Tax Disclosures", which enhances the disaggregation of income tax disclosures. The ASU requires public entities on an Accounting Standards Update (ASU 2016-15)annual basis to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold equal to or greater than 5%. Public entities are required to provide additional guidancean explanation of certain rate reconciling items if not otherwise evident, such as the nature, causes and reduce diversity in practice in how certain cash receipts and cash payments are presented and classified injudgement used to categorize the statement of cash flows.item. The Company adopted the standard during the third quarter of 2017, and the comparable period within the Condensed Consolidated Statements of Cash Flows has been recast to reflect adoption. The adoption did not have a material impact on the Company's financial statements.

In March 2016, the FASB issued an Accounting Standards Update (ASU 2016-09) relating to the accounting for share-based payments. The new guidance requires all income tax effects of share-based awards to be recognized in the income statement when the awards vest or are settled, and allows companies an additional election in the method to estimate forfeitures of share-based payments. The new guidanceASU also requires excess tax benefits to be classified as an operating activity in the statementdisclosure of cash flows,income taxes paid (net of refund received) detailed by federal, state/local and cashforeign, and amounts paid to a tax authority when sharesindividual jurisdictions that are withheldequal to satisfy the employer's statutoryor greater than 5% of total income tax withholdings be classified as a financing activity.taxes paid. The Company adopted the standard on January 1, 2017. The Company elected to adopt all provisions impacting the Condensed Consolidated Statements of Cash Flows retrospectively; as such, the comparable period within the Condensed Consolidated Statements of Cash Flows has been recast to reflect the adoption. The income statement provisions of the new guidance have been adopted prospectively. ThereASU is no change to the Company's accounting policy with respect to estimation of forfeitures. The adoption did not have a material impact on the Company's financial statements.

In February 2016, the FASB issued an Accounting Standards Update (ASU 2016-02) related to the accounting and financial statement presentationeffective for leases. This new guidance will require a lessee to recognize a right-to-use asset and a lease liability for both financing and operating leases, with a policy election permitting an exception to this guidance for leases with a term of twelve months or less. For financing leases, the lessee will recognize interest expense and amortization of the right-of-use asset, and for operating leases, the lessee will recognize a straight-line lease expense. This guidance is effectivepublic entities for fiscal years beginning after December 15, 2018, with early adoption permitted. The new standard must be adopted using a modified retrospective transition at the2024 and for interim periods for fiscal years beginning of the earliest comparative period presented.after December 15, 2025. The Company expects to recognize less than $100 million of right-of-use assets and corresponding lease liabilities on the balance sheet upon adoption. The Company does not expect the adoption will have a material impact to the Statement of Income or Cash Flows.

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In May 2014, the FASB issued an Accounting Standards Update (ASU 2014-09) related to new revenue recognition guidance that supersedes the existing revenue recognition guidance and most industry-specific guidance applicable to revenue recognition. According to the new guidance, an entity will apply a principles-based five step model to recognize revenue upon the transfer of promised goods or services to customers and in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. Subsequently, the FASB has issued amendments to certain aspects of the guidance including the effective date. The Company expects to adopt the guidance in the first quarter of 2018 using the modified-retrospective method.

The Company has a project team that is currently reviewing contract terms and assessing the impact of adopting thethis standard including impactson its financial statements.




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NOTE 2 Business Acquisitions and financial statement disclosures. The implementation team reports the progress and findings of its review to Management on a periodic basis. Based on the reviews and assessments performed to date, the Company expects the pattern of revenue recognition for the vast majority of its businesses to be unchanged, and that upon adoption revenue will generally continue to be recognized at a single point in time when control is transferred to the customer. The Company anticipates impacts to the financial statements primarily related to balance sheet classification, including of amounts associated with sales returns reserves. In the fourth quarter of 2017, the Company expects to continue to evaluate and update controls and policies affected by the new standard as necessary and to identify and gather the data necessary for new disclosure requirements. Additional updates will be provided in future filings, as appropriate.

NOTE 2 Business Acquisitions
Dispositions
 
In the first quarter of 2017, the Company completed two acquisitions for $9.5 million, net of cash received, resulting in the recognition of intangible assets of $3.4 million and goodwill of $4.5 million. The $3.4 million of intangible assets consists primarily of customer relationships and trade names that will be amortized over a weighted average period of approximately 13 years. These acquisitions have been added to the Power segment and $2.7 million of the goodwill related to one of the acquisitions is currently expected to be deductible for tax purposes.2023 Acquisitions


In the second quarter of 2017,2023, the Company acquired all of the issued and outstanding limited liability companymembership interests in iDevices,of EI Electronics LLC ("iDevices"EIG") for $59.2 million. iDevices is a developer with embedded firmware and application development expertise with custom-built Internetcash purchase price of Things ("IoT") Cloud infrastructure. The iDevices acquisition adds capabilities and expertise in IoT technology that is requiredapproximately $60 million, net of cash acquired, subject to provide Tier 3customary purchase price adjustments. EIG offers fully integrated energy management and power quality monitoring solutions via connected hardware with a software front-end. iDevicesfor the electric utility and commercial and industrial markets. This business is reported in the ElectricalUtility Solutions segment. We have recognized intangible assets of $9.6 million and goodwill of $45.3 million as a result of this acquisition. The $9.6 million of intangible assets consists primarily of developed technology, customer relationships and trade names and will be amortized over a weighted average period of approximately 12 years. All of the goodwill is expected to be deductible for tax purposes.


In the secondfourth quarter of 2017,2023, the Company also acquired substantially all of the assetsissued and outstanding shares of Advance Engineering Corporation and related companies (collectively "AEC"Indústria Eletromecânica Balestro Ltda. ("Balestro") for $31.6 million. AECa cash purchase price of approximately $88 million, net of cash acquired, subject to customary purchase price adjustments. Balestro is a gas components manufacturer that complementscompany headquartered in Mogi Mirim, São Paulo, Brazil and designs, manufactures, and delivers top quality products for the Company's existingelectrical utility industry in Brazil and other countries in Latin America, as well as other parts of the world. This business in the natural gas distribution vertical. AEC joins the Company's recent acquisitions of GasBreaker and Lyall to bolster its main-to-meter mechanical solutions in this area. AEC is reported in the ElectricalUtility Solutions segment. We have recognized intangible assets

In the fourth quarter of $16.8 million and goodwill2023 the Company acquired Northern Star Holdings, Inc. ("Systems Control") for approximately $1.1 billion, net of $12.1 million as a result of this acquisition. The $16.8 million of intangible assets consists primarily of customer relationships and trade names and will be amortized over a weighted average period of approximately 18 years. All of the goodwill is expectedcash acquired, subject to be deductible for tax purposes.
These business acquisitions have been accounted for as business combinations and have resulted in the recognition of goodwill. The goodwill relates to a number of factors built into thecustomary purchase price including the future earningsadjustments. Systems Control is a manufacturer of substation control and cash flow potential of the businessesrelay panels, as well as turnkey substation control building solutions. This business is reported in the complementary strategic fitUtility Solutions segment.
Preliminary Allocation of Consideration Transferred to Net Assets Acquired

The following table presents the updated preliminary determination of the fair values of identifiable assets acquired and resulting synergies they bringliabilities assumed from the Company's 2023 acquisitions. The final determination of the fair value of certain assets and liabilities will be completed within the applicable one year measurement period as required by FASB ASC Topic 805, “Business Combinations.” As the Company finalizes the fair values of assets acquired and liabilities assumed, additional purchase price adjustments may be recorded during the measurement period. Fair value estimates are based on a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions. The judgments used to determine the Company’s existing operations.estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact the Company's results of operations and financial position. The finalization of the purchase accounting assessment may result in a change in the valuation of assets acquired and liabilities assumed and may have a material impact on the Company's results of operations and financial position.

The following table summarizes the updated preliminary fair values of the assets acquired and liabilities assumed at the datesdate of acquisition related to these transactionsfor all of the Company's 2023 acquisitions (in millions):

Accounts receivable$71.5 
Inventories85.7 
Other current assets49.8 
Property, plant and equipment31.9 
Other non-current assets2.8 
Intangible assets602.7 
Accounts payable(18.5)
Other accrued liabilities(87.0)
Deferred tax liabilities, net(134.8)
Other non-current liabilities(11.9)
Goodwill619.5 
Total Estimate of Consideration Transferred, Net of Cash Acquired$1,211.7

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Tangible assets acquired$21.3
Intangible assets29.8
Goodwill61.9
Net deferred taxes(0.2)
Other liabilities assumed(12.5)
TOTAL CONSIDERATION, NET OF CASH RECEIVED$100.3
Dispositions

In December 2023, the Company entered into a definitive agreement to sell its residential lighting business for a cash purchase price of $131 million, subject to customary adjustments. The Company concluded the business met the criteria for classification as held for sale in the fourth quarter of 2023. The residential lighting business was reported within the Electrical Solutions Segment. The transaction closed in the first quarter of 2024 and the Company recorded a pre-tax loss on the sale of $5.3 million, which is recorded within Total other expense in the Company's Condensed Consolidated Statement of Income.

Under the terms of the transaction, Hubbell and the buyer entered into a transition services agreement ("TSA"), pursuant to which the Company agreed to provide certain administrative and operational services for a period of 12 months or less. Income from the TSA was $2.0 million for the three months ended March 31, 2024, and was recorded in Other expense, net in the Condensed Consolidated Statement of Income.
The following table presents balance sheet information of the residential lighting business' assets and liabilities held for sale as of December 31, 2023:
At December 31,
(in millions)2023
Cash and cash equivalents$— 
Accounts receivable, net29.8 
Inventories, net37.8 
Other current assets2.9 
Assets held for sale - current$70.5
Property, Plant, and Equipment, net1.6 
Goodwill63.2 
Other Intangible assets, net6.5 
Other long-term assets20.6 
Assets held for sale - non-current$91.9
Accounts payable1.9 
Accrued salaries, wages and employee benefits3.5 
Accrued insurance3.4 
Other accrued liabilities15.8 
Liabilities held for sale - current$24.6
Other Non-Current Liabilities17.5 
Liabilities held for sale - non-current$17.5



HUBBELL INCORPORATED-Form 10-Q    10
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NOTE 3 Revenue
 
The allocationCompany recognizes revenue when performance obligations identified under the terms of purchase pricecontracts with its customers are satisfied, which generally occurs, for these acquisitionsproducts, upon the transfer of control in accordance with the contractual terms and conditions of the sale. The majority of the Company’s revenue associated with products is based on preliminary estimates and assumptions, andrecognized at a point in time when the product is subjectshipped to revision based on final information received and other analysis that support the underlying estimates. We expect to complete our purchase accountingcustomer, with a relatively small amount of transactions, primarily in the Utility Solutions segment, recognized upon delivery of the product at the destination.

The Company also has performance obligations, primarily within the measurement period for each acquisition.


HUBBELL INCORPORATED-Form 10-Q    8
BackUtility Solutions segment, that are recognized over time due to Contents

The Condensed Consolidated Financial Statements include the results of operationscustomized nature of the entities acquired fromproduct and the Company's enforceable right to receive payment for work performed to date in the event of acquisition. Net sales and earnings relateda cancellation. The Company uses an input measure to these acquisitions fordetermine the nine months ended September 30, 2017 were not significantextent of progress towards completion of the performance obligation, which the Company believes best depicts the transfer of control to the customer. Under this method, revenue recognition is primarily based upon the ratio of costs incurred to date compared with estimated total costs to complete.

Revenue from service contracts and post-shipment performance obligations are approximately two percent of total annual consolidated results. Pro forma information related to these acquisitions hasnet revenue and those service contracts and post-shipment obligations are primarily within the Utility Solutions segment. Revenue from service contracts and post-shipment performance obligations is recognized when or as those obligations are satisfied. The Company primarily offers assurance-type standard warranties that do not been included because the impact to the Company’s consolidated results of operations was not material.

Cash used for the acquisition of businesses, net of cash acquired as reported in the Consolidated Statement of Cash Flows for the nine months ended September 30, 2017, is$110.3 millionrepresent separate performance obligations and includes payments associated with a 2016 acquisitionon occasion will separately offer and price extended warranties that are separate performance obligations for which the purchaseassociated revenue is recognized over-time based on the extended warranty period. The Company records amounts billed to customers for reimbursement of shipping and handling costs within revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment costs and are included in cost of goods sold. Sales taxes and other usage-based taxes are excluded from revenue.

Certain of our businesses require a portion of the transaction price to be paid in advance of transfer of control. Advance payments are not considered a significant financing component as they are received less than one year before the related performance obligations are satisfied. In addition, in the Utility Solutions segment, certain businesses offer annual maintenance service contracts that require payment at the beginning of the contract period. These payments are treated as a contract liability and are classified in Other accrued liabilities in the Condensed Consolidated Balance Sheets. Once control transfers to the customer and the Company meets the revenue recognition criteria, the deferred revenue is recognized in the Condensed Consolidated Statements of Income. The deferred revenue relating to the annual maintenance service contracts is recognized in the Condensed Consolidated Statements of Income on a straight-line basis over the expected term of the contract.

The following table presents disaggregated revenue by business group. On January 1, 2024, we internally reorganized certain businesses within our Utility Solutions segment to streamline the organization and align the organization to better serve our customers. This change had no impact to our reportable segments. In conjunction with this change, prior period amounts have been reclassified to conform to the organizational changes within the Utility Solutions segment. In addition, the residential lighting business, included in the Retail and Builder section below was sold in the first quarter of 2024.
Three Months Ended March 31,
in millions20242023
Net sales
   Grid Infrastructure$612.8 $561.7 
   Grid Automation281.2 219.9 
Total Utility Solutions$894.0 $781.6 
   Electrical Products$211.5 $204.0 
   Connection and Bonding175.5 153.9 
   Industrial Controls96.9 93.9 
   Retail and Builder21.2 52.0 
Total Electrical Solutions$505.1 $503.8 
TOTAL$1,399.1 $1,285.4 

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The following table presents disaggregated revenue by geographic location (on a geographic basis, the Company defines "international" as operations based outside of the United States and its possessions):
Three Months Ended March 31,
in millions20242023
Net sales
   United States$853.2 $740.3 
   International40.8 41.3 
Total Utility Solutions$894.0 $781.6 
   United States$434.2 $439.0 
   International70.9 64.8 
Total Electrical Solutions$505.1 $503.8 
TOTAL$1,399.1 $1,285.4 

Contract Balances

Our contract liabilities consist of advance payments for products as well as deferred revenue on service obligations and extended warranties. Deferred revenue is included in Other accrued liabilities in the Condensed Consolidated Balance Sheets.

Contract liabilities were $140.8 million as of March 31, 2024 compared to $118.6 million as of December 31, 2023. The $22.2 million increase in our contract liabilities balance was primarily due to a $51.7 million net increase in current year deferrals primarily due to timing of advance payments on certain orders, partially offset by the recognition of $29.5 million in revenue related to amounts that were recorded in contract liabilities at January 1, 2024. The ending balance of contract assets as of March 31, 2024 and December 31, 2023, was $28.5 million and $41.6 million, respectively. Impairment losses recognized on our receivables and contract assets were immaterial for the three months ended March 31, 2024.

Unsatisfied Performance Obligations

As of March 31, 2024, the Company had approximately $150 million of unsatisfied performance obligations for contracts with an original expected length of greater than one year, primarily relating to long-term contracts of the Utility Solutions segment to deliver and install meters, metering communications and grid monitoring sensor technology. The Company expects that a majority of the unsatisfied performance obligations will be settled in installments.completed and recognized over the next two years.


HUBBELL INCORPORATED-Form 10-Q    12
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NOTE 34 Segment Information


The Company's reporting segments consist of the ElectricalUtility Solutions segment and the PowerElectrical Solutions segment. The Utility Solutions segment consists of businesses that design, manufacture, and sell a wide variety of electrical distribution, transmission, substation, and telecommunications products. This includes utility transmission & distribution (T&D) components such as arresters, insulators, connectors, anchors, bushings, enclosures, cutouts and switches. The Utility Solutions segment also offers solutions that serve the utility infrastructure, including smart meters, communications systems, substation control and relay panels, and protection and control devices. The Hubbell Utility Solutions segment supports the electrical distribution, electrical transmission, water, gas distribution, telecommunications, and solar and wind markets. Products are sold to distributors and directly to users such as utilities, telecommunication companies, industrial firms, construction and engineering firms.

The Electrical Solutions segment is comprised ofcomprises businesses that sell stock and custom products including standard and special application wiring device products, rough-in electrical products, connector and grounding products, lightlighting fixtures, and controls, components and assemblies for the natural gas distribution market as well as other electrical equipment. The products are typically used in and around industrial, commercial and institutional facilities by electrical contractors, maintenance personnel, electricians, utilities, and telecommunications companies. In addition, certain of our businesses design and manufacture industrial controls and communication equipment, somesystems used in the non-residential and industrial markets. Many of which isthese products are designed such that itthey can also be used in harsh and hazardous locations where a potential for fire and explosion exists due to the presence of flammable gases and vapors. Harsh and hazardous products are primarily used in the oil and gas (onshore and offshore) and mining industries. There are also a variety of wiring devices, lighting fixtures and electrical products that have residential and utility applications, including residential products with Internet-of-Things ("IoT") enabled technologies. These products are primarily sold through electrical and industrial distributors, home centers, retail and hardware outlets, lighting showrooms and residential product-orientedproduct oriented internet sites. The Electrical segment is comprised of three business groups, which have been aggregated as they have similar long-term economic characteristics,Special application products are primarily sold through wholesale distributors to contractors, industrial customers and distribution channels, among other factors. The Power segment primarily serves the electric utility industry and is comprised of a wide variety of electrical distribution, transmission, and substation products with high voltage applications as well as telecommunication products. OEMs.

The following table sets forth financial information by businessreporting segment (in millions):
 Net SalesOperating IncomeOperating Income as a % of Net Sales
 202420232024202320242023
Three Months Ended March 31,      
Utility Solutions$894.0 $781.6 $157.5 $177.5 17.6 %22.7 %
Electrical Solutions505.1 503.8 71.0 71.3 14.1 %14.2 %
TOTAL$1,399.1 $1,285.4 $228.5 $248.8 16.3 %19.4 %


HUBBELL INCORPORATED-Form 10-Q    13
 Net SalesOperating IncomeOperating Income as a % of Net Sales
 2017
2016
2017
2016
2017
2016
Three Months Ended September 30,  
  
  
Electrical$654.0
$634.6
$85.6
$80.9
13.1%12.7%
Power296.5
272.8
60.8
55.1
20.5%20.2%
TOTAL$950.5
$907.4
$146.4
$136.0
15.4%15.0%
Nine Months Ended September 30,  
  
  
Electrical$1,897.9
$1,858.7
$206.6
$213.5
10.9%11.5%
Power853.2
792.3
174.5
156.5
20.5%19.8%
TOTAL$2,751.1
$2,651.0
$381.1
$370.0
13.9%14.0%

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NOTE 45 Inventories, net
 
Inventories, net are comprisedconsists of the following (in millions):
 March 31, 2024December 31, 2023
Raw material$390.2 $394.1 
Work-in-process208.1 189.2 
Finished goods405.9 412.1 
Subtotal1,004.2 995.4 
Excess of FIFO over LIFO cost basis(161.8)(162.5)
TOTAL$842.4 $832.9 
HUBBELL INCORPORATED-Form 10-Q    14
 September 30, 2017
December 31, 2016
Raw material$188.4
$162.7
Work-in-process116.4
102.8
Finished goods379.7
327.9
 684.5
593.4
Excess of FIFO over LIFO cost basis(60.9)(61.0)
TOTAL$623.6
$532.4


HUBBELL INCORPORATED-Form 10-Q    9
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NOTE 56 Goodwill and Other Intangible Assets, net


Changes in the carrying values of goodwill for the ninethree months ended September 30, 2017,March 31, 2024, by segment, were as follows (in millions):
 Segment 
 Utility SolutionsElectrical SolutionsTotal
BALANCE AT DECEMBER 31, 2023$1,897.5 $635.9 $2,533.4 
Prior year acquisitions(1)
4.8 — 4.8 
Foreign currency translation(4.2)(1.3)(5.5)
BALANCE AT MARCH 31, 2024$1,898.1 $634.6 $2,532.7 
 Segment 
 Electrical
Power
Total
BALANCE DECEMBER 31, 2016$652.0
$339.0
$991.0
Current year acquisitions (Note 2 – Business Acquisitions)57.4
4.5
61.9
Foreign currency translation and prior year acquisitions7.6
3.0
10.6
BALANCE SEPTEMBER 30, 2017$717.0
$346.5
$1,063.5
In the first quarter of 2017 we completed two acquisitions that were added(1)Refer to the Power segment. In the second quarter of 2017, we completed the acquisitions of AEC and iDevices. The AEC and iDevices acquisitions were added to the Electrical segment. These acquisitions have been accounted for as business combinations and have resulted in the recognition of $61.9 million of goodwill. See Note 2 –- Business Acquisitions for additional information.


The carrying value of other intangible assets included in IntangibleOther intangible assets, net in the Condensed Consolidated Balance SheetSheets is as follows (in millions):
September 30, 2017December 31, 2016 March 31, 2024December 31, 2023
Gross Amount
Accumulated
Amortization

Gross Amount
Accumulated
Amortization

 Gross AmountAccumulated
Amortization		Gross AmountAccumulated
Amortization
Definite-lived: 
 
 
 
Definite-lived:  
Patents, tradenames and trademarks$151.1
$(49.1)$143.7
$(43.4)
Customer/agent relationships and other431.1
(150.1)405.9
(128.0)
Total$582.2
$(199.2)$549.6
$(171.4)
Customer relationships, developed technology and other
TOTAL DEFINITE-LIVED INTANGIBLES
Indefinite-lived: 
 
 
 
Tradenames and other54.1
—
53.3
—
TOTAL$636.3
$(199.2)$602.9
$(171.4)
Tradenames and other
Tradenames and other
TOTAL OTHER INTANGIBLE ASSETS
 
Amortization expense associated with definite-lived intangible assets was $26.4$28.5 million and $24.0$17.8 million forduring the ninethree months ended September 30, 2017March 31, 2024 and 2016,2023, respectively. Future amortization expense associated with these intangible assets is expectedestimated to be $8.0$84.8 million for the remainder of 2017, $32.72024, $95.5 million in 2018, $31.02025, $90.3 million in 2019, $31.32026, $85.7 million in 2020, $30.72027, $82.2 million in 2021,2028, and $29.2$78.0 million in 2022.2029. The Company amortizes intangible assets with definite lives using either an accelerated method that reflects the pattern in which economic benefits of the intangible assets are consumed and results in higher amortization in the earlier years of the assets useful lives, or using a straight line method. Approximately 85% of the gross value of definite-lived intangible assets follow an accelerated amortization method.


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NOTE 67 Other Accrued Liabilities


Other accrued liabilities are comprisedconsists of the following (in millions):
 March 31, 2024December 31, 2023
Customer program incentives$27.7 $57.4 
Accrued income taxes45.1 21.1 
Contract liabilities - deferred revenue134.0 111.5 
Customer refund liability18.9 18.1 
Accrued warranties short-term(1)
16.1 15.6 
Current operating lease liabilities32.7 30.6 
Other94.4 110.9 
TOTAL$368.9 $365.2 
(1) Refer to Note 22 - Guarantees, in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2023 for additional information regarding warranties.



 September 30, 2017
December 31, 2016
Customer program incentives$36.1
$41.2
Accrued income taxes10.8
8.4
Deferred revenue14.9
11.8
Other96.5
94.8
TOTAL$158.3
$156.2


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NOTE 78 Other Non-Current Liabilities


Other non-current liabilities are comprisedconsists of the following (in millions):
 March 31, 2024December 31, 2023
Pensions$133.6 $135.0 
Other post-retirement benefits14.4 14.4 
Deferred tax liabilities259.0 240.3 
Accrued warranties long-term(1)
24.0 23.6 
Non-current operating lease liabilities115.5 118.8 
Other128.1 128.5 
TOTAL$674.6 $660.6 
(1) Refer to Note 22 - Guarantees, in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2023 for additional information regarding warranties.
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 September 30, 2017
December 31, 2016
Pensions$209.6
$208.3
Other post-retirement benefits23.9
24.0
Deferred tax liabilities46.3
41.2
Other68.4
68.2
TOTAL$348.2
$341.7

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NOTE 89 Total Equity


TotalA summary of changes in total equity for the three months ended March 31, 2024 and the three months ended March 31, 2023 is comprised of the followingprovided below (in millions, except per share amounts):
Common StockAdditional
Paid-in
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Total Hubbell
Shareholders'
Equity		Non-
controlling
interest
BALANCE AT DECEMBER 31, 2023$0.6 $6.1 $3,182.7 $(312.4)$2,877.0 $12.3 
Net income— — 147.8 — 147.8 1.3 
Other comprehensive (loss) income— — — (9.3)(9.3)— 
Stock-based compensation— 12.8 — — 12.8 — 
Acquisition/surrender of common shares(1)
— (17.6)(14.6)— (32.2)— 
Cash dividends declared ($1.22 per share)— — (65.7)— (65.7)— 
Dividends to noncontrolling interest— — — — — (0.9)
Directors deferred compensation— — — — — — 
BALANCE AT MARCH 31, 2024$0.6 $1.3 $3,250.2 $(321.7)$2,930.4 $12.7 
 September 30, 2017
December 31, 2016
Common stock, $.01 par value: 
 
Common Stock-- authorized 200.0 shares; issued and outstanding 54.7 and 55.5 shares$0.5
$0.6
Additional paid-in capital3.8
15.4
Retained earnings1,914.3
1,879.3
Accumulated other comprehensive loss: 
 
   Pension and post retirement benefit plan adjustment, net of tax(175.0)(180.5)
   Cumulative translation adjustment(85.5)(120.8)
   Unrealized gain on investment, net of tax(0.2)(1.2)
   Cash flow hedge (loss) gain, net of tax(1.9)—
Total Accumulated other comprehensive loss(262.6)(302.5)
Hubbell shareholders’ equity1,656.0
1,592.8
Noncontrolling interest11.7
10.4
TOTAL EQUITY$1,667.7
$1,603.2

Common StockAdditional
Paid-in
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Total Hubbell
Shareholders'
Equity		Non-
controlling
interest
BALANCE AT DECEMBER 31, 2022$0.6 $— $2,705.5 $(345.2)$2,360.9 $9.7 
Net income— — 181.9 — 181.9 1.5 
Other comprehensive (loss) income— — — 9.3 9.3 — 
Stock-based compensation— 11.7 — — 11.7 — 
Acquisition/surrender of common shares(1)
— (9.9)(21.2)— (31.1)— 
Cash dividends declared ($1.12 per share)— — (60.0)— (60.0)— 
Dividends to noncontrolling interest— — — — — (0.8)
Directors deferred compensation— — — — — — 
BALANCE AT MARCH 31, 2023$0.6 $1.8 $2,806.2 $(335.9)$2,472.7 $10.4 
(1)For accounting purposes, the Company treats repurchased shares as constructively retired when acquired and accordingly charges the purchase price against Common Stockcommon stock par value, Additional paid-in capital, to the extent available, and Retained earnings. As a resultThe change in Retained earnings of $14.6 million and $21.2 million in the first three months of 2024 and 2023, respectively, reflects this accounting treatment, during the first nine months of 2017, $72.1 million of purchase price of repurchased shares was allocated to retained earnings.treatment.

A summary of the changes in equity for the nine months ended September 30, 2017 and 2016 is provided below (in millions):
 Nine Months Ended September 30,
 20172016
 
Hubbell
Shareholders’
Equity

Noncontrolling
interest

Total Equity
Hubbell
Shareholders’
Equity

Noncontrolling
interest

Total Equity
EQUITY, JANUARY 1$1,592.8
$10.4
$1,603.2
$1,740.6
$8.4
$1,749.0
Total comprehensive income262.6
4.8
267.4
217.5
3.5
221.0
Stock-based compensation11.9
—
11.9
13.1
—
13.1
Income tax windfall from stock-based awards, net—
—
—
2.2
—
2.2
Repurchase/surrender of shares of common stock(96.0)—
(96.0)(242.9)—
(242.9)
Issuance of shares related to directors’ deferred compensation, net0.4
—
0.4
0.4
—
0.4
Dividends to noncontrolling interest—
(3.5)(3.5)—
(2.8)(2.8)
Cash dividends declared(115.7)—
(115.7)(105.4)—
(105.4)
EQUITY, SEPTEMBER 30$1,656.0
$11.7
$1,667.7
$1,625.5
$9.1
$1,634.6


The detailed components of total comprehensive income are presented in the Condensed Consolidated StatementStatements of Comprehensive Income.


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NOTE 910 Accumulated Other Comprehensive Loss


A summary of the changes in Accumulated other comprehensive loss (net of tax) for the ninethree months ended September 30, 2017March 31, 2024 is provided below (in millions):
(debit) creditCash flow
hedge gain (loss)		Unrealized
gain (loss) on
available-for-
sale securities		Pension
and post
retirement
benefit plan
adjustment		Cumulative
translation
adjustment		Total
BALANCE AT DECEMBER 31, 2023$(0.3)$(0.2)$(178.4)$(133.5)$(312.4)
Other comprehensive income (loss) before reclassifications0.5 (0.3)— (11.9)(11.7)
Amounts reclassified from accumulated other comprehensive income (loss)(0.1)— 2.5 — 2.4 
Current period other comprehensive income (loss)0.4 (0.3)2.5 (11.9)(9.3)
BALANCE AT MARCH 31, 2024$0.1 $(0.5)$(175.9)$(145.4)$(321.7)
(debit) credit
Cash flow
hedge loss


Unrealized
gain (loss) on
available-for-
sale securities

Pension
and post
retirement
benefit plan
adjustment

Cumulative
translation
adjustment

Total
BALANCE AT DECEMBER 31, 2016$—
$(1.2)$(180.5)$(120.8)$(302.5)
Other comprehensive income (loss) before reclassifications(2.3)1.0
—
35.3
34.0
Amounts reclassified from accumulated other comprehensive loss0.4
—
5.5
—
5.9
Current period other comprehensive income (loss)(1.9)1.0
5.5
35.3
39.9
BALANCE AT SEPTEMBER 30, 2017$(1.9)$(0.2)$(175.0)$(85.5)$(262.6)

A summary of the gain (loss) reclassifications out of Accumulated other comprehensive loss for the three and nine months ended September 30, 2017March 31, 2024 and 20162023 is provided below (in millions): 
Three Months Ended March 31,
Details about Accumulated Other
Comprehensive Loss Components		20242023 Location of Gain (Loss) Reclassified into Income
Cash flow hedges gain (loss):    
Forward exchange contracts$— $— Net sales
0.1 0.4  Cost of goods sold
— — Other expense, net
 0.1 0.4  Total before tax
 — (0.1) Tax benefit (expense)
 $0.1 $0.3  Gain (loss) net of tax
Amortization of defined benefit pension and post retirement benefit items:    
Prior-service costs (a)$(0.1)$(0.1) 
Actuarial gains (losses) (a)(3.0)(2.5) 
 (3.1)(2.6)Total before tax
 0.6 1.2 Tax benefit (expense)
 $(2.5)$(1.4)Gain (loss) net of tax
Gains (losses) reclassified into earnings$(2.4)$(1.1)Gain (loss) net of tax

(a) These accumulated other comprehensive loss components are included in the computation of net periodic pension cost (see Note 12 - Pension and Other Benefits in the Notes to Condensed Consolidated Financial Statements for additional details).
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Details about Accumulated Other
Comprehensive Loss Components
Three Months Ended September 30, 2017Three Months Ended September 30, 2016 
Location of Gain (Loss)
Reclassified into Income
Cash flow hedges gain (loss): 
 
  
Forward exchange contracts$(0.2)$—
 Net sales
 (0.4)(0.4) Cost of goods sold
 (0.6)(0.4) Total before tax
 0.2
0.1
 Tax (expense) benefit
 $(0.4)$(0.3) Gain (loss) net of tax
Defined benefit pension and post retirement benefit items: 
 
  
Amortization of prior-service costs$0.3
$0.2
(a)  
Amortization of actuarial gains/(losses)(3.0)(3.4)(a)  
Settlement and curtailment losses—
—
(a)  
 (2.7)(3.2) Total before tax
 0.9
1.1
 Tax benefit (expense)
 $(1.8)$(2.1) (Loss) gain net of tax
Losses reclassified into earnings$(2.2)$(2.4) (Loss) gain net of tax
(a)These accumulated other comprehensive loss components are included in the computation of net periodic pension cost (see Note 11 - Pension and Other Benefits for additional details).


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Details about Accumulated Other
Comprehensive Loss Components		Nine Months Ended September 30, 2017Nine Months Ended September 30, 2016 Location of Gain (Loss)
Reclassified into Income
Cash flow hedges gain (loss): 
 
  
Forward exchange contracts$(0.2)$(0.2) Net sales
 (0.4)0.3
 Cost of goods sold
 (0.6)0.1
 Total before tax
 0.2
—
 Tax (expense) benefit
 $(0.4)$0.1
 Gain (loss) net of tax
Defined benefit pension and post retirement benefit items: 
 
  
Amortization of prior-service costs$0.7
$0.6
(a)  
Amortization of actuarial gains/(losses)(8.5)(10.4)(a)  
Settlement and curtailment losses(0.5)—
(a)  
 (8.3)(9.8) Total before tax
 2.8
3.6
 Tax benefit (expense)
 $(5.5)$(6.2) (Loss) gain net of tax
Losses reclassified into earnings$(5.9)$(6.1) (Loss) gain net of tax
(a)These accumulated other comprehensive loss components are included in the computation of net periodic pension cost (see Note 11 - Pension and Other Benefits for additional details).

NOTE 1011 Earnings Per Share


The Company computes earnings per share using the two-class method, which is an earnings allocation formula that determines earnings per share for common stock and participating securities. Service-based and performance-based restricted stock awards granted by the Company are considered participating securities as these awards contain a non-forfeitable right to dividends.
 
The following table sets forth the computation of earnings per share for the three and nine months ended September 30, 2017March 31, 2024 and 20162023 (in millions, except per share amounts):
Three Months Ended March 31,
Three Months Ended March 31,
Three Months Ended March 31,
Three Months Ended September 30,Nine Months Ended September 30,
2017
2016
2017
2016
Numerator: 
 
 
 
Net income attributable to Hubbell$80.8
$86.7
$222.7
$228.6
Numerator:
Numerator:
Net income attributable to Hubbell Incorporated
Net income attributable to Hubbell Incorporated
Net income attributable to Hubbell Incorporated
Less: Earnings allocated to participating securities
Less: Earnings allocated to participating securities
Less: Earnings allocated to participating securities(0.3)(0.3)(0.7)(0.7)
Net income available to common shareholders$80.5
$86.4
$222.0
$227.9
Net income available to common shareholders
Net income available to common shareholders
Denominator:
Denominator:
Denominator: 
 
 
 
Average number of common shares outstanding54.6
55.3
54.9
55.6
Average number of common shares outstanding
Average number of common shares outstanding
Potential dilutive common shares
Potential dilutive common shares
Potential dilutive common shares0.3
0.2
0.3
0.2
Average number of diluted shares outstanding54.9
55.5
55.2
55.8
Average number of diluted shares outstanding
Average number of diluted shares outstanding
Earnings per share: 
 
 
 
Basic$1.47
$1.56
$4.05
$4.10
Diluted$1.47
$1.56
$4.02
$4.08
Earnings per share:
Earnings per share:
Basic earnings per share
Basic earnings per share
Basic earnings per share
Diluted earnings per share
Diluted earnings per share
Diluted earnings per share
 
The Company did not have outstanding any significant anti-dilutive securities outstanding during the three and nine months ended September 30, 2017March 31, 2024 and 2016.


2023.
HUBBELL INCORPORATED-Form 10-Q    14    19
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NOTE 1112 Pension and Other Benefits
 
The following table sets forth the components of net pension and other benefit costs for the three and nine months ended September 30, 2017March 31, 2024 and 20162023 (in millions):
 Pension BenefitsOther Benefits
 2024202320242023
Three Months Ended March 31,    
Service cost$0.1 $0.1 $— $— 
Interest cost8.3 8.7 0.2 0.2 
Expected return on plan assets(7.7)(7.0)— — 
Amortization of prior service cost0.1 0.1 — — 
Amortization of actuarial losses (gains)3.1 2.6 (0.1)(0.1)
NET PERIODIC BENEFIT COST$3.9 $4.5 $0.1 $0.1 
 Pension BenefitsOther Benefits
 2017
2016
2017
2016
Three Months Ended September 30, 
 
 
 
Service cost$1.5
$3.1
$—
$—
Interest cost9.3
10.5
0.4
0.3
Expected return on plan assets(8.6)(11.3)—
—
Amortization of prior service cost—
0.1
(0.3)(0.3)
Amortization of actuarial losses3.0
3.4
—
—
Curtailment and settlement losses—
—
—
—
NET PERIODIC BENEFIT COST$5.2
$5.8
$0.1
$—
Nine Months Ended September 30, 
 
 
 
Service cost$4.5
$10.1
$—
$—
Interest cost27.8
31.5
0.8
0.9
Expected return on plan assets(25.6)(33.3)—
—
Amortization of prior service cost—
0.1
(0.7)(0.7)
Amortization of actuarial losses8.5
10.4
—
—
Curtailment and settlement losses0.5
—
—
—
NET PERIODIC BENEFIT COST$15.7
$18.8
$0.1
$0.2


Employer Contributions
 
The Company made no contributions to its qualified domestic defined benefit pension plan and no contributions to its foreign pension plans during the three months ended March 31, 2024. Although not required by ERISA and the Internal Revenue Code, the Company may elect to make aadditional voluntary contributioncontributions to its qualified domestic defined benefit pension plan in 2017. The Company anticipates making required contributions of approximately $1.7 million2024.
HUBBELL INCORPORATED-Form 10-Q    20
Back to its foreign pension plans during 2017, of which $1.3 million has been contributed through September 30, 2017.Contents
NOTE 1213 Guarantees


The Company records a liability equal to the fair value of guarantees in accordance with the accounting guidance for guarantees. When it is probable that a liability has been incurred and the amount can be reasonably estimated, the Company accrues for costs associated with guarantees. The most likely costs to be incurred are accrued based on an evaluation of currently available facts and, where no amount within a range of estimates is more likely, the minimum is accrued.

As of September 30, 2017March 31, 2024 and December 31, 2016,2023, the fair value and maximum potential payment related to the Company’s guarantees were not material.
 
The Company offers product warranties that cover defects on most of its products. These warranties primarily apply to products that are properly installed, maintained and used for their intended purpose. The Company accrues estimated warranty costs at the time of sale. Estimated warranty expenses, recorded in cost of goods sold, are based upon historical information such as past experience, product failure rates, or the estimated number of units to be repaired or replaced. Adjustments are made to the product warranty accrual as claims are incurred, additional information becomes known, or as historical experience indicates.
 
Changes in the accrual for product warranties during the ninethree months ended September 30, 2017March 31, 2024 and 20162023 are set forth below (in millions):
20242023
BALANCE AT JANUARY 1, (a)
$39.2 $46.2 
Provision2.6 3.4 
Expenditures/payments/other(1.7)(6.4)
BALANCE AT MARCH 31, (a)
$40.1 $43.2 
(a) Refer to Note 7 – Other Accrued Liabilities and Note 8 – Other Non-Current Liabilities for a breakout of short-term and long-term warranties.
HUBBELL INCORPORATED-Form 10-Q    21
 20172016
BALANCE AT JANUARY 1,$13.8
$13.2
Provision9.6
7.0
Expenditures/other(8.2)(6.7)
BALANCE AT SEPTEMBER 30,$15.2
$13.5

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NOTE 1314 Fair Value Measurement
 
Financial Instruments

Financial instruments which potentially subject the Company to significant concentrations of credit loss risk consist of trade receivables, cash equivalents and investments. The Company grants credit terms in the normal course of business to its customers. Due to the diversity of its product lines, the Company has an extensive customer base including electrical distributors and wholesalers, electric utilities, equipment manufacturers, electrical contractors, telecommunication companies and retail and hardware outlets. As part of its ongoing procedures, the Company monitors the credit worthiness of its customers. Bad debt write-offs have historically been minimal. The Company places its cash and cash equivalents with financial institutions and limits the amount of exposure in any one institution.
At March 31, 2024, our accounts receivable balance was $865.6 million, net of allowances of $11.4 million. During the three months ended March 31, 2024, our allowances decreased by approximately $0.2 million.
Investments
 
At September 30, 2017March 31, 2024 and December 31, 2016,2023, the Company had $56.9$62.3 million and $57.4$65.0 million, respectively, of available-for-sale municipal debt securities. These investments had an amortized cost of $63.0 million and $65.3 million, respectively. No allowance for credit losses related to our available-for-sale debt securities consistingwas recorded for the three months ended March 31, 2024 or March 31, 2023. As of municipal bonds classified in Level 2 ofMarch 31, 2024 and December 31, 2023, the unrealized losses attributable to our available-for-sale debt securities were $0.8 million and $0.6 million, respectively. The fair value hierarchyof available-for-sale debt securities with unrealized losses was $42.9 million at March 31, 2024 and an investment in the redeemable preferred stock of a privately-held electrical utility substation security provider classified in Level 3 of the fair value hierarchy. $34.5 million at December 31, 2023.

The Company also had $13.2 million of trading securities of $25.1 million at September 30, 2017March 31, 2024 and $10.2$23.4 million at December 31, 20162023 that are carried on the balance sheet at fair value. Unrealized gains and losses associated with available-for-sale debt securities are reflected in Accumulated other comprehensive loss, net of tax, while unrealized gains and losses associated with trading securities are reflected in the resultsCondensed Consolidated Statement of operations.Income.


Fair value measurements


Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The FASB fair value measurement guidance established a fair value hierarchy that prioritizes the inputs used to measure fair value. The three broad levels of the fair value hierarchy are as follows:
 
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.
 
Level 2 – Quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly.
 
Level 3 – Unobservable inputs for which little or no market data exists, therefore requiring a company to develop its own assumptions.






































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The following table shows, by level within the fair value hierarchy, our financial assets and liabilities that are accounted for at fair value on a recurring basis at September 30, 2017March 31, 2024 and December 31, 20162023 (in millions):
Asset (Liability)
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Quoted Prices in
Active Markets for
Similar Assets
(Level 2)		Unobservable inputs
for which little or no
market data exists
(Level 3)		Total
March 31, 2024   
Money market funds(a)
$144.2 $— $— $144.2 
Available for sale investments— 62.3 — 62.3 
Trading securities25.1 — — 25.1 
Deferred compensation plan liabilities(25.1)— — (25.1)
Derivatives:
Forward exchange contracts-Assets(b)
— 0.2 — 0.2 
Forward exchange contracts-(Liabilities)(c)
— (0.1)— (0.1)
TOTAL$144.2 $62.4 $— $206.6 
Asset (Liability)Quoted Prices in
Active Markets for
Identical Assets
(Level 1)		Quoted Prices in
Active Markets for
Similar Assets
(Level 2)		Unobservable inputs
for which little or no
market data exists
(Level 3)		Total
December 31, 2023   
Money market funds(a)
$105.1 $— $— $105.1 
Available for sale investments— 65.0 — 65.0 
Trading securities23.4 — — 23.4 
Deferred compensation plan liabilities(23.4)— — (23.4)
Derivatives:
Forward exchange contracts-(Liabilities)(c)
— (0.5)— (0.5)
TOTAL$105.1 $64.5 $— $169.6 
Asset (Liability)
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Quoted Prices in
Active Markets for
Similar Assets
(Level 2)
Unobservable inputs for which little or no market data exists (Level 3)Total
September 30, 2017    
Money market funds (a)
$198.1
$—
$—
$198.1
Time deposits (a)
—
29.9
—
29.9
Available for sale investments—
52.6
4.3
56.9
Trading securities13.2
—
—
13.2
Deferred compensation plan liabilities(13.2)—
—
(13.2)
Derivatives:    
Forward exchange contracts-Assets (b)
—
—
—
—
Forward exchange contracts-(Liabilities) (c)
—
(2.2)—
(2.2)
TOTAL$198.1
$80.3
$4.3
$282.7
     
 
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Quoted Prices in
Active Markets for
Similar Assets
(Level 2)
Unobservable inputs for which little or no market data exists (Level 3)Total
December 31, 2016    
Money market funds (a)
$263.5
$—
$—
$263.5
Available for sale investments—
53.6
3.8
57.4
Trading securities10.2
—
—
10.2
Deferred compensation plan liabilities(10.2)—
—
(10.2)
Derivatives:    
Forward exchange contracts-Assets (b)
—
0.8
—
0.8
Forward exchange contracts-(Liabilities) (c)
—
(0.1)—
(0.1)
TOTAL$263.5
$54.3
$3.8
$321.6
(a) Money market funds and time deposits are reflected in Cash and cash equivalents in the Condensed Consolidated Balance Sheet.Sheets.
(b) Forward exchange contracts-Assets are reflected in Other current assets in the Condensed Consolidated Balance Sheet.Sheets.
(c)Forward exchange contracts-(Liabilities) are reflected in Other accrued liabilities in the Condensed Consolidated Balance Sheet.Sheets.



The methods and assumptions used to estimate the Level 2 and Level 3 fair values were as follows:
 
Forward exchange contracts – The fair value of forward exchange contracts werewas based on quoted forward foreign exchange prices at the reporting date.


Available-for-sale municipal bonds classified in Level 2 – The fair value of available-for-sale investments in municipal bonds is based on observable market-based inputs, other than quoted prices in active markets for identical assets. 

Available-for-sale redeemable preferred stock classified in Level 3 – The fair value of the available-for-sale investment in redeemable preferred stock is valued based on a discounted cash flow model, using significant unobservable inputs, including expected cash flows and the discount rate.
During the three and nine months ended September 30, 2017 there were no transfers of financial assets or liabilities in or out of Level 1, Level 2, or Level 3 of the fair value hierarchy.


Deferred compensation plans
 
The Company offers certain employees the opportunity to participate in non-qualified deferred compensation plans. A participant’s deferrals are invested in a variety of participant-directed debt and equity mutual funds that are classified as trading securities. During the nine months ended September 30, 2017 and 2016, theThe Company purchased $1.8$2.8 million and $1.3$2.1 million respectively, of trading securities related to these deferred compensation plans.plans during the three months ended March 31, 2024 and 2023, respectively. As a result of participant distributions, the Company sold $0.3$2.7 million of these trading securities during the ninethree months ended September 30, 2017March 31, 2024 and $1.2$2.0 million during the ninethree months ended September 30, 2016.March 31, 2023. The unrealized gains and losses associated with these trading securities are directly offset by the changes in the fair value of the underlying deferred compensation plan obligation.

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Derivatives
In order to limit financial risk in the management of its assets, liabilities and debt, the Company may use derivative financial instruments such as foreign currency hedges, commodity hedges, interest rate hedges and interest rate swaps. All derivative financial instruments are matched with an existing Company asset, liability or forecasted transaction. Market value gains or losses on the derivative financial instrument are recognized in income when the effects of the related price changes of the underlying asset, liability or forecasted transaction are recognized in income. Derivative assets and derivative liabilities are not offset in the Condensed Consolidated Balance Sheet.
In 2017 and 2016, the Company entered into a series of forward exchange contracts to purchase U.S. dollars in order to hedge exposure to fluctuating rates of exchange for both anticipated inventory purchases and forecasted sales by its subsidiaries that transact business in Canada. As of September 30, 2017, the Company had 52 individual forward exchange contracts for an aggregate notional amount of $38.0 million, having various expiration dates through September 2018. These contracts have been designated as cash flow hedges in accordance with the accounting guidance for derivatives.
The following table summarizes the results of cash flow hedging relationships for the three months ended September 30, 2017 and 2016 (in millions):
 
Derivative Gain/(Loss) Recognized in
Accumulated Other Comprehensive
Income (net of tax)
Location of Gain/(Loss)
Reclassified into Income
Gain/(Loss) Reclassified into
Earnings Effective Portion (net of tax)
Derivative Instrument2017
2016
(Effective Portion)2017
2016
Forward exchange contract$(1.4)$(0.3)Net sales$(0.1)$—
   Cost of goods sold$(0.3)$(0.3)

The following table summarizes the results of cash flow hedging relationships for the nine months ended September 30, 2017 and 2016 (in millions):
 
Derivative Gain/(Loss) Recognized in
Accumulated Other Comprehensive
Loss (net of tax)
Location of Gain/(Loss)
Reclassified into Income
Gain/(Loss) Reclassified into
Earnings Effective Portion (net of tax)
Derivative Instrument2017
2016
(Effective Portion)2017
2016
Forward exchange contract$(2.3)$(1.8)Net sales$(0.1)$(0.2)
   Cost of goods sold$(0.3)$0.3

Hedge ineffectiveness was immaterial with respect to the forward exchange cash flow hedges during the three and nine months ended September 30, 2017 and 2016.


Long Term Debt


As of September 30, 2017March 31, 2024 and December 31, 2016,2023, the carrying value of long-term debt, net of unamortized discount and debt issuance costs, including the $18.7 million and $15.0 million, respectively, current portion of the Term Loan, was $1,914.4 million and $2,038.2 million, respectively. The estimated fair value of ourthe long-term debt as of March 31, 2024 and December 31, 2023 was $1,018.8$1,820.0 million and $1,017.8$1,951.6 million, respectively, using quoted market prices in active markets for similar liabilities (Level 2).


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NOTE 1415 Commitments and Contingencies


The Company is subject to various legal proceedings arising in the normal course of its business. These proceedings include claims for damages arising out of use of the Company’s products, intellectual property, workers’ compensation and environmental matters. The Company is self-insured up to specified limits for certain types of claims, including product liability and workers’ compensation, and is fully self-insured for certain other types of claims, including environmental and intellectual property matters. The Company recognizes a liability for any contingency that in management’s judgment is probable of occurrence and can be reasonably estimated. We continually reassess the likelihood of adverse judgments and outcomes in these matters, as well as estimated ranges of possible losses based upon an analysis of each matter which includes considerationadvice of outside legal counsel and, if applicable, other experts.


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NOTE 1516 Restructuring Costs and Other


In the ninethree months ended September 30, 2017,March 31, 2024, we incurred costs for restructuring actions initiated in 20172024 as well as costs for restructuring actions initiated in the prior year.years. Our restructuring actions are associated with cost reduction efforts that include the consolidation of manufacturing and distribution facilities as well as workforce reductions and the sale or exit of business units we determine to be non-strategic.reductions. Restructuring costs include severance and employee benefits, asset impairments, accelerated depreciation, as well as facility closure, contract termination and certain pension costs that are directly related to restructuring actions. These costs are predominantly settled in cash from our operating activities and are generally settled within one year, with the exception of asset impairments, which are non-cash, and a $12.5 million charge in the fourth quarter of 2016 to recognize the estimated liability associated with the withdrawal from a multi-employer pension plan. That withdrawal liability may be settled either in periodic payments over approximately 19 years, or in a lump sum, subject to negotiations expected to occur before the end of 2017.non-cash.


Pre-tax restructuring costs incurred in each of our reporting segments and the location of the costs in the Condensed Consolidated StatementStatements of Income for the three and nine months ended September 30, 2017March 31, 2024 and 2016 is2023 are as follows (in millions):
 Three Months Ended September 30,
 201720162017201620172016
 Cost of goods soldSelling & administrative expenseTotal
Electrical Segment$1.9
$4.2
$0.9
$0.1
$2.8
$4.3
Power Segment0.3
—
0.2
0.2
0.5
0.2
Total Pre-Tax Restructuring Costs$2.2
$4.2
$1.1
$0.3
$3.3
$4.5
Three Months Ended March 31,
202420232024202320242023
Cost of goods soldSelling & administrative expenseTotal
Utility Solutions$1.4 $0.7 $0.5 $0.1 $1.9 $0.8 
Electrical Solutions3.0 (0.3)0.3 — 3.3 (0.3)
Total Pre-Tax Restructuring Costs$4.4 $0.4 $0.8 $0.1 $5.2 $0.5 
 Nine Months Ended September 30,
 201720162017201620172016
 Cost of goods soldSelling & administrative expenseTotal
Electrical Segment$8.2
$7.8
$3.3
$5.0
$11.5
$12.8
Power Segment1.4
0.5
0.6
0.6
2.0
1.1
Total Pre-Tax Restructuring Costs$9.6
$8.3
$3.9
$5.6
$13.5
$13.9

Three Months Ended March 31,
The following table summarizes the accrued liabilities for our restructuring actions (in millions):
Beginning Accrued
 Restructuring Balance 1/1/24		Pre-tax Restructuring CostsUtilization and Foreign ExchangeEnding Accrued
Restructuring Balance 3/31/24
2024 Restructuring Actions
Severance$— $4.3 $(0.2)$4.1 
Asset write-downs— — — — 
Facility closure and other costs— 0.4 (0.4)— 
    Total 2024 Restructuring Actions$— $4.7 $(0.6)$4.1 
2023 and Prior Restructuring Actions
Severance$3.9 $0.2 $(0.6)$3.5 
Asset write-downs— — — — 
Facility closure and other costs0.1 0.3 (0.4)— 
    Total 2023 and Prior Restructuring Actions$4.0 $0.5 $(1.0)$3.5 
Total Restructuring Actions$4.0 $5.2 $(1.6)$7.6 
 Beginning Accrued Restructuring Balance 1/1/17
Pre-tax Restructuring Costs
Utilization and Foreign Exchange
Ending Accrued Restructuring Balance 9/30/2017
2017 Restructuring Actions    
Severance$—
$5.8
$(2.6)$3.2
Asset write-downs—
0.1
(0.1)—
Facility closure and other costs—
2.5
(2.0)0.5
    Total 2017 Restructuring Actions$—
$8.4
$(4.7)$3.7
2016 and Prior Restructuring Actions    
Severance$10.4
$(0.6)$(4.7)$5.1
Asset write-downs—
—
—
—
Facility closure and other costs (a)
14.1
5.7
(6.0)13.8
    Total 2016 and Prior Restructuring Actions$24.5
$5.1
$(10.7)$18.9
Total Restructuring Actions$24.5
$13.5
$(15.4)$22.6
(a) Facility closure and other costs as of 1/1/17 includes a charge of approximately $12.5 million to accrue the estimated liability associated with the anticipated withdrawal from a multi-employer pension plan as a result of a restructuring action.


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The actual costs incurred and total expected cost in each of our reporting segments of our on-going restructuring actions are as follows (in millions):
Total expected costsCosts incurred during 2023Costs incurred in the first three months of 2024Remaining costs at 3/31/2024
2024 Restructuring Actions
Utility Solutions$2.0 $— $1.5 $0.5 
Electrical Solutions7.8 — 3.2 4.6 
    Total 2024 Restructuring Actions$9.8 $— $4.7 $5.1 
2023 and Prior Restructuring Actions
Utility Solutions$4.2 $2.9 $0.4 $0.9 
Electrical Solutions4.2 2.5 0.1 1.6 
    Total 2023 and Prior Restructuring Actions$8.4 $5.4 $0.5 $2.5 
Total Restructuring Actions$18.2 $5.4 $5.2 $7.6 

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 Total expected costs
Costs incurred during 2016
Costs incurred during first nine months of 2017
Remaining costs at 9/30/2017
2017 Restructuring Actions    
Electrical Segment$8.4
$—
$6.4
$2.0
Power Segment3.7
—
2.0
1.7
    Total 2017 Restructuring Actions$12.1
$—
$8.4
$3.7
2016 and Prior Restructuring Actions    
Electrical Segment (a)
$41.8
$33.9
$5.1
$2.8
Power Segment1.4
1.1
—
0.3
    Total 2016 and Prior Restructuring Actions$43.2
$35.0
$5.1
$3.1
Total Restructuring Actions$55.3
$35.0
$13.5
$6.8

(a) Costs incurred in 2016 relating to 2016 Restructuring Actions in the Electrical segment include the $12.5 million previously mentioned charge representing the estimated withdrawal liability from a multi-employer pension plan. Any potential future liability in excess of the amount already recognized in 2016 is not included in the remaining costs at September 30, 2017. Additional information about the estimated withdrawal liability can be found in Note 10 - Retirement Benefits in the Notes to Consolidated Financial Statements in the Hubbell Incorporated Annual Report on Form 10-K for the year ended December 31, 2016.

NOTE 16 Long Term17 Debt and Financing Arrangements


Long-term debt consists of the following (in millions):
 MaturityMarch 31, 2024December 31, 2023
Senior notes at 3.35%2026$398.7 $398.6 
Senior notes at 3.15%2027298.1 298.0 
Senior notes at 3.50%2028447.2 447.0 
Senior notes at 2.300%2031296.9 296.7 
Term loan, net of current portion of $18.7 million and $15.0 million, respectively2026454.8 582.9 
TOTAL LONG-TERM DEBT(a)
$1,895.7 $2,023.2 
 MaturitySeptember 30, 2017
December 31, 2016
Senior notes at 5.95%2018$—
$299.3
Senior notes at 3.625%2022297.8
297.5
Senior notes at 3.35%2026394.2
393.7
Senior notes at 3.15%2027294.7
—
TOTAL LONG-TERM DEBT (a)
 $986.7
$990.5
(a)Long-term debt is presented net of debt issuance costs and unamortized discounts.


Term Loan Agreement

In August 2017,connection with the December 2023 acquisition of Systems Control, the Company completedentered into a public debt offeringTerm Loan Agreement with a syndicate of $300lenders under which the Company borrowed $600 million aggregateon an unsecured basis. Borrowings under the Term Loan Agreement bear interest generally at either the adjusted term SOFR rate plus an applicable margin (determined by a ratings based-grid) or the alternative base rate. Currently the loans bear interest based on the adjusted term SOFR rate, which was 6.7% as of March 31, 2024. The principal amount of borrowings under the Term Loan Agreement amortize in equal quarterly installments of 2.5% of the original outstanding principal amounts in 2024, 2.5% in 2025, and 5% in 2026, with the remaining outstanding principal amount under the Term Loan Agreement due and payable in full at maturity in December 2026. The Company may make principal payments in excess of the amortization schedule at its long-term unsecured, unsubordinated notes maturingdiscretion. During the three months ended March 31, 2024 the Company made $125 million of principal payments. The sole financial covenant in August 2027 and bearing interest at a fixed ratethe Term Loan Agreement requires that total debt not exceed 65% of 3.15% (the "2027 Notes"). Net proceeds fromtotal capitalization as of the issuance were $294.6 million after deducting the discount on the notes and offering expenses paid bylast day of each fiscal quarter of the Company. The 2027 Notes are fixed rate indebtedness, are callable at any time with a make whole premium and are only subject to accelerated payment prior to maturity in the event of a default (including as a result of the Company's failure to meet certain non-financial covenants) under the indenture governing the 2027 Notes, as modified by the supplemental indenture creating such notes, or upon a change in control event as defined in such indenture. The Company was in compliance with all non-financial covenantsthis covenant as of March 31, 2024.

2021 Credit Facility

The Company has a five-year credit agreement with a syndicate of lenders and JPMorgan Chase, N.A., as administrative agent, that provides a $750 million committed revolving credit facility (the “2021 Credit Facility"). Commitments under the indenture2021 Credit Facility may be increased to an aggregate amount not to exceed $1.25 billion.

The 2021 Credit Facility contains a financial covenant requiring that, as of September 30, 2017.

In September 2017, the last day of each fiscal quarter, the ratio of total indebtedness to total capitalization shall not be greater than 65%. The Company applied the net proceeds from the 2027 Notes to redeem all of its $300 million outstanding long-term, unsecured, unsubordinated notes maturingwas in 2018 and bearing interest at a fixed rate of 5.95% (the "2018 Notes"). In connectioncompliance with this redemption,covenant as of March 31, 2024. As of March 31, 2024, the Company recognized a loss on the early extinguishment2021 Credit Facility was undrawn.

Short-Term Debt and Current Portion of the 2018 Notes of $6.3 million on an after-tax basis.Long-Term Debt


At December 31, 2016, theThe Company had $3.2$219.7 million and $117.4 million of short-term debt outstanding. The Company had $93.8and current portion of long-term debt outstanding at March 31, 2024 and December 31, 2023, respectively, composed of the following:

•$199.0 million of commercial paper borrowings outstanding at March 31, 2024, and $100.0 million of commercial paper borrowings outstanding at December 31, 2023, which was used to fund the Systems Control acquisition.

•$18.7 million and $15.0 million of long-term debt classified as current within current liabilities in the Condensed Consolidated Balance Sheets, reflecting maturities within the next 12 months related to borrowing under the Term Loan Agreement at March 31, 2024 and December 31, 2023, respectively.

•$2.0 million and $2.4 million of other short-term debt outstanding at September 30, 2017,March 31, 2024 and December 31, 2023, respectively, which consisted primarily of borrowings to support our international operations in China and amounts outstanding under our commercial paper.card program.











HUBBELL INCORPORATED-Form 10-Q    20    26
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Note 18 Stock-Based Compensation

As of March 31, 2024, the Company had various stock-based awards outstanding which were issued to executives and other key employees. The Company recognizes the grant-date fair value of all stock-based awards to employees over their respective requisite service periods (generally equal to an award’s vesting period), net of estimated forfeitures. A stock-based award is considered vested for expense attribution purposes when the employee’s retention of the award is no longer contingent on providing subsequent service. For those awards that vest immediately upon retirement eligibility, the Company recognizes compensation cost immediately for retirement-eligible individuals or over the period from the grant date to the date retirement eligibility is achieved, if less than the stated vesting period.
The Company’s long-term incentive program for awarding stock-based compensation includes a combination of restricted stock, stock appreciation rights (“SARs”), and performance shares of the Company’s common stock pursuant to the Hubbell Incorporated 2005 Incentive Award Plan as amended and restated (the "Award Plan"). Under the Award Plan, the Company may authorize up to 9.7 million shares of common stock to settle awards of restricted stock, performance shares, or SARs. The Company issues new shares to settle stock-based awards. During the three months ended March 31, 2024, the Company's grant of stock-based awards included restricted stock, SARs and performance shares.

Each of the compensation arrangements is discussed below.

Restricted Stock

The Company issues various types of restricted stock, of which the restricted stock awards are considered outstanding at the time of grant, as the award holders are entitled to dividends and voting rights. Unvested restricted stock awards are considered participating securities when computing earnings per share. Restricted stock unit award holders are not entitled to dividends or voting rights until settlement. Restricted stock grants are not transferable and are subject to forfeiture in the event of the recipient’s termination of employment prior to vesting.

Restricted Stock Awards Issued to Employees - Service Condition
Restricted stock awards that vest based upon a service condition are expensed on a straight-line basis over the requisite service period. These awards generally vest either in three equal installments on each of the first three anniversaries of the grant date or on the third-year anniversary of the grant date. The fair value of these awards is measured by the average of the high and low trading prices of the Company’s common stock on the most recent trading day immediately preceding the grant date (“measurement date”).

In February 2024, the Company granted 37,817 restricted stock awards with a fair value per share of $352.55.
Restricted Stock Units Issued to Employees - Service Condition
Restricted stock units that vest based upon a service condition are expensed on a straight-line basis over the requisite service period. These awards generally vest in three equal installments on each of the first three anniversaries of the grant date. The fair value of these awards is measured by the average of the high and low trading prices of the Company’s common stock on the measurement date reduced by the present value of dividends expected to be paid during the requisite service period.

In February 2024, the Company granted 1,773 restricted stock units with a fair value per share of $341.19.

Stock Appreciation Rights

SARs grant the holder the right to receive, once vested, the value in shares of the Company's common stock equal to the positive difference between the grant price, as determined using the mean of the high and low trading prices of the Company’s common stock on the measurement date, and the fair market value of the Company’s common stock on the date of exercise. This amount is payable in shares of the Company’s common stock. SARs vest and become exercisable in three equal installments during the first three years following the grant date and expire ten years from the grant date.

In February 2024, the Company granted 62,908 SAR awards. The fair value of each SAR award was measured using the Black-Scholes option pricing model.

The following table summarizes the weighted-average assumptions used in estimating the fair value of the SARs granted during February 2024:

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Grant DateExpected Dividend YieldExpected VolatilityRisk Free Interest RateExpected TermWeighted Avg. Grant Date Fair Value of 1 SAR
February 20241.6%25.7%4.0%4.8 years$88.03
The expected dividend yield was calculated by dividing the Company’s expected annual dividend by the average stock price for the past three months. Expected volatilities are based on historical volatilities of the Company’s stock for a period consistent with the expected term. The expected term of SARs granted was based upon historical exercise behavior of SARs. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the award.

Performance Shares

Performance shares represent the right to receive a share of the Company’s common stock subject to the achievement of certain market or performance conditions established by the Company’s Compensation Committee and measured over a three-year period. Partial vesting in these awards may occur after separation from the Company for retirement eligible employees. Shares are not vested until approved by the Company’s Compensation Committee.

Performance Shares - Market Condition

In February 2024, the Company granted 8,736performance shares that will vest subject to a market condition and service condition through the performance period. The market condition associated with the awards is the Company's total shareholder return ("TSR") compared to the TSR generated by the companies that comprise the S&P Capital Goods 900 index over a three year performance period.Performance at target will result in vesting and issuance of the number of performance shares granted, equal to 100% payout. Performance below or above target can result in issuance in the range of 0%-200% of the number of shares granted. Expense is recognized irrespective of the market condition being achieved.

The fair value of the performance share awards with a market condition for the 2024 grant was determined based upon a lattice model.

The following table summarizes the related assumptions used to determine the fair values of the performance share awards with a market condition granted during February 2024:

Grant DateStock Price on Measurement DateDividend YieldExpected VolatilityRisk Free Interest RateExpected TermWeighted Avg. Grant Date Fair Value
February 2024$352.551.4%30.6%4.1%2.9 years$483.99

Expected volatilities are based on historical volatilities of the Company’s and members of the peer group's stock over the expected term of the award. The risk free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant for the expected term of the award.

Performance Shares - Performance Condition

In February 2024, the Company granted 17,770 performance shares that will vest subject to an internal Company-based performance condition and service requirement.

Fifty percent of these performance shares granted will vest based on Hubbell’s compounded annual growth rate of Net sales as compared to that of the companies that comprise the S&P Capital Goods 900 index. Fifty percent of these performance shares granted will vest based on achieved operating profit margin performance as compared to internal targets. Each of these performance conditions is measured over the same three-year performance period. The cumulative result of these performance conditions can result in a number of shares earned in the range of 0%-200% of the target number of shares granted.

The fair value of the award is measured based upon the average of the high and low trading prices of the Company's common stock on the measurement date reduced by the present value of dividends expected to be paid during the requisite service period. The Company expenses these awards on a straight-line basis over the requisite service period and including an assessment of the performance achieved to date. The weighted average fair value per share was $341.19 for the awards granted during February 2024.
Grant DateFair ValuePerformance PeriodPayout Range
February 2024$341.19Jan 2024 - Dec 20260%-200%


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ITEM 2Management’s Discussion and Analysis of Financial Condition and Results of Operations




Executive Overview of the Business
 
The CompanyHubbell is primarily engaged in the design, manufacture and salea global manufacturer of quality electrical products and electronic productsutility solutions for a broad range of non-residentialcustomer and residential construction, industrialend market applications. We provide utility and utility applications.electrical solutions that enable our customers to operate critical infrastructure reliably and efficiently, and we empower and energize communities through innovative solutions supporting energy infrastructure In Front of the Meter, on The Edge, and Behind the Meter. In Front of the Meter is where utilities transmit and distribute energy to their customers. The Edge connects utilities with owner/operators and allows energy and data to be distributed back and forth. Behind the Meter is where owners and operators of buildings and other critical infrastructure consume energy. Products are either sourced complete, manufactured or assembled by subsidiaries in the United States, Canada, Switzerland, Puerto Rico, Mexico, China, Mexico, Italy, the United Kingdom,UK, Brazil, Australia, Spain, Ireland and Ireland.the Republic of the Philippines. The Company also participates in joint ventures in TaiwanHong Kong and Hong Kong,the Republic of the Philippines, and maintains offices in Singapore, Italy, China, India, Mexico, South Korea, Chile, and countries in the Middle East. The Company employsemployed approximately 17,90018,400 individuals worldwide.worldwide as of March 31, 2024.

The Company’s reporting segments consist of the ElectricalUtility Solutions segment and the PowerElectrical Solutions segment.

Results for the three and nine months ended September 30, 2017March 31, 2024 by segment are included under “Segment Results” within this ManagementManagement’s Discussion and Analysis.

The Company's long-term strategy is to serve its customers with reliable and innovative electrical and related infrastructure solutions with desired brands and high-quality service, delivered through a competitive cost structure; to complement organic revenue growth with acquisitions that enhance its product offerings; and to allocate capital effectively to create shareholder value. In executing this strategy, the Company is focused on growing profits and delivering attractive returns to shareholders by executing a business plan focused on the following key initiatives: growing revenue, aligning the cost structure, improving productivity and deploying capital effectively.
 
Our strategy to growcomplement organic revenue growth with acquisitions is focused on complementing organic growth with acquisitionsacquiring assets that extend our capabilities, expand our product offerings, and present opportunities to compete in core, adjacent or complementary markets. Our organic growth initiatives remain focused on expanding market share through new product introductions and more effective utilization of sales and marketing efforts acrossacquisition strategy also provides the organization. Acquisitions are a key component of our revenue growth strategy, not only to expand our reach into new markets and further into existing markets with new products, but alsoopportunity to advance our revenue growth objectives during periods of weakness or inconsistency in our end-markets.


Aligning ourOur strategy to deliver products through a competitive cost structure with the needs of our business is a key initiative and has resulted in thepast and ongoing restructuring and related activities we have initiated, beginning in 2014.activities. Our restructuring and related efforts include the consolidation of manufacturing and distribution facilities, and workforce actions, as well as streamlining and consolidating our back-office functions. The primary objectives of our restructuring and related activities are to optimize our manufacturing footprint, cost structure, and effectiveness and efficiency of our workforce.


Productivity improvement also continues to be a key area of focus for the Company and efforts to drive productivity work withcomplement our restructuring and related activities to minimize the impact of rising material costs and other administrative cost inflation. MaterialBecause material costs are approximately two-thirdstwo thirds of our cost of goods sold, thereforecontinued volatility in this area cancould significantly impact profitability. Our goal is to have pricing and productivity programs that offset material and other inflationary cost increases as well as pay for investments in key growth areas.


Productivity programs impactaffect virtually all functional areas within the Company by reducing or eliminating waste and improving processes. We continue to expand our efforts surroundingrelated to global product and component sourcing, andas well as supplier cost reduction programs. Value engineering efforts, product transfers and the use of lean process improvement techniques are expected to continue to increase manufacturing efficiency. In addition, we continue to build upon the benefits of our enterprise resource planning system across all functions.



Our sales are also subject to market conditions that may cause customer demand for our products to be volatile and unpredictable, particularly in our Electrical Solutions segment. Product demand can be affected by fluctuations in domestic and international economic conditions, as well as currency fluctuations, commodity costs, and a variety of other factors. Since early 2021, we have experienced significant inflationary pressure across much of our business. As a result, we have taken various pricing actions to cover the higher costs and protect our profitability. Although there has been some mitigation in the rate of inflation starting in 2023, we expect inflation to remain a factor for the foreseeable future and we expect to continue to take these pricing actions subject to demand and market conditions. Accordingly, there can be no assurance that we will be able to maintain our margins in response to further changes in inflationary pressures. In addition, macroeconomic effects such as increases in interest rates and other measures taken by central banks and other policy makers could have a negative effect on overall economic activity which could reduce our customers’ demand for our products, and cause the continuation of relatively high market interest rates that increase our borrowing costs.











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The following is a discussion and analysis of our business, financial condition and results of operations as of and for the three months ended March 31, 2024 and 2023. This discussion and analysis should be read in conjunction with our Condensed Consolidated Financial Statements and notes thereto in Item 1 of this Quarterly Report on Form 10-Q (the "Condensed Financial Statements"), and the audited consolidated financial statements, accompanying notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Results of Operations – ThirdFirst Quarter of 20172024 compared to the ThirdFirst Quarter of 20162023
 
Overview

First quarter 2024 net sales were $1,399.1 million and grew by 9%, including 2% organic growth from price realization and 6% growth from acquisitions net of divestitures.

Organic growth in the Electrical Solutions segment was strong, where electrification is driving broad-based strength across electrical products and industrial markets, with continued high rates of renewables growth. Organic growth was flat in the Utility Solutions segment as strength in grid automation products and continued backlog conversion in metering products, was offset by continued channel inventory management in distribution markets and weak Telcom markets in the quarter. Price realization continues to be positive in our segments as compared to the first quarter of 2023.

Acquisitions within Utility Solutions contributed to 8% net sales growth driven by our acquisition of Systems Control in the fourth quarter of 2023, while the divestiture of our residential lighting business from the Electrical Solutions segment was completed in the first quarter of 2024 and contributed to a 2% decline in net sales as compared to the first quarter of 2023.

Operating margin in the first quarter of 2024 was 16.3% and contracted by 310 basis points. Adjusted operating margin, which excludes amortization of acquisition-related intangibles and transaction, integration and separation costs, was 19.7% and contracted by 100 basis points. Margin contraction in the quarter was primarily driven by material and other cost inflation, lower volume and our continuing investments in the business. Margins in the first quarter of 2024 also reflect the effect of favorable price realization and benefits from operational productivity. These factors are further described within Segment Results below.

In December 2023, the Company entered into a definitive agreement to sell its residential lighting business for a cash purchase price of $131 million, subject to customary adjustments. The Company concluded the business met the criteria for classification as held for sale in the fourth quarter of 2023. The residential lighting business was reported within the Electrical Solutions Segment. The transaction closed in the first quarter of 2024 and the Company recorded a pre-tax loss on the sale of $5.3 million, which is recorded within Total other expense in the Company's Condensed Consolidated Statement of Income.

In addition, during 2023, the Company completed a number of acquisitions that affect the comparability of current period results of operations to those of prior year periods. For additional information regarding such transactions, see Note 2, Business Acquisitions and Dispositions in the notes to the Condensed Financial Statements.


SUMMARY OF CONDENSED CONSOLIDATED RESULTS (IN MILLIONS, EXCEPT PER SHARE DATA):
 Three Months Ended March 31,
 2024% of Net sales2023% of Net sales
Net sales$1,399.1  $1,285.4  
Cost of goods sold951.4 68.0 %837.1 65.1 %
Gross profit447.7 32.0 %448.3 34.9 %
Selling & administrative ("S&A") expense219.2 15.7 %199.5 15.5 %
Operating income228.5 16.3 %248.8 19.4 %
Net income149.1 10.7 %183.4 14.3 %
Less: Net income attributable to non-controlling interest(1.3)(0.1)%(1.5)(0.1)%
Net income attributable to Hubbell Incorporated147.8 10.6 %181.9 14.2 %
Less: Earnings allocated to participating securities(0.3)(0.4)
Net income available to common shareholders$147.5 $181.5 
Average number of diluted shares outstanding54.0 53.9 
DILUTED EARNINGS PER SHARE$2.73 $3.37 
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 Three Months Ended September 30,
 2017
% of Net sales
2016
% of Net sales
Net sales$950.5
 
$907.4
 
Cost of goods sold643.6
67.7%618.7
68.2%
Gross profit306.9
32.3%288.7
31.8%
Selling & administrative ("S&A") expense160.5
16.9%152.7
16.8%
Operating income146.4
15.4%136.0
15.0%
Net income attributable to Hubbell80.8
8.5%86.7
9.6%
EARNINGS PER SHARE – DILUTED$1.47
 
$1.56
 

Our consolidatedIn the following discussion of results of operations, in the three and nine months ending September 30, 2017 and 2016 include what we refer to as "Restructuring and Related Costs." Restructuring actions support our cost reduction efforts involving the consolidation of manufacturing and distribution facilities as well as workforce reductions and the sale or exit of business units we determine to be non-strategic. Restructuring costs include severance and employee benefits, asset impairments, as well as facility closure, contract termination and certain pension costs that are directly related to restructuring actions. Restructuring-related costs are costs associated with our business transformation initiatives, including the consolidation of back-office functions and streamlining our processes, and certain other costs and gains associated with restructuring actions.

Our consolidated results of operations in 2017 also include a $10.1 million pre-tax loss on the early extinguishment of long-term debt from the redemption of all of our $300 million outstanding long-term unsecured, unsubordinated notes that were scheduled to mature in 2018.
"adjusted" operating measures. We believe those adjusted measures, which exclude the impact of certain non-GAAP measures that exclude these itemscosts, gains and losses, may provide investors with useful information regarding our underlying performance from period to period and allow investors to understand our results of operations without regard to items that, in management's judgement, significantly affect the comparability of operating results, or we do not consider a components of our core operating performance.

Significant items impacting comparability:

Transaction, integration and separation costs

The effects that acquisitions and divestitures may have on our results fluctuate significantly based on the timing, size and number of transactions, and therefore result in significant volatility in the costs to complete transactions and to integrate or separate the businesses.

Transaction costs are primarily professional services and other fees incurred to complete the transactions. Integration and separation costs are the internal and external incremental costs directly relating to these activities for the acquired or divested business.

The acquisition and divestiture actions taken by the Company in the fourth quarter of 2023 have resulted in a significant increase in current period integration and separation costs. As a result, we believe excluding costs relating to these fourth quarter transactions provides useful and more comparable information to investors to better assess the impactour operating performance.

Gains or losses on disposition of a business

Certain of the Company's restructuringadjusted measures exclude these gains or losses because we believe it enhances management's and investors' ability to analyze underlying business performance and facilitates comparisons of our financial results over multiple periods. In the first quarter of 2024 the Company recognized a $5.3 million pre-tax loss on the disposition of the residential lighting business.

Certain of the Company's adjusted measures also exclude the income tax effect directly related activitiesto the disposition of the residential lighting business. In the first quarter of 2024, the Company recognized $6.8 million of income tax expense on the sale of the residential lighting business, primarily driven by differences between book and tax basis in goodwill.

Amortization of intangible assets

Adjusted operating measures exclude amortization of all intangible assets associated with our business transformation initiativesacquisitions, including inventory step-up amortization associated with those acquisitions. The intangible assets associated with our business acquisitions arise from the allocation of the purchase price using the acquisition method of accounting in accordance with Accounting Standards Codification 805, “Business Combinations.” These assets consist primarily of customer relationships, developed technology, trademarks and tradenames, and patents, as reported in Note 7 – Goodwill and Other Intangible Assets, under the heading “Total Definite-Lived Intangibles,” within the Company’s audited consolidated financial statements set forth in its Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

The Company believes that the exclusion of these non-cash expenses (i) enhances management’s and investors’ ability to analyze underlying business performance, (ii) facilitates comparisons of our financial results over multiple periods, and (iii) provides more relevant comparisons of our results with the results of operations. Adjusted gross profit,other companies as the amortization expense associated with these assets may fluctuate significantly from period to period based on the timing, size, nature, and number of acquisitions. Although we exclude amortization of these acquired intangible assets and inventory step-up from our non-GAAP results, we believe that it is important for investors to understand that revenue generated, in part, from such intangibles is included within revenue in determining adjusted selling & administrative ("S&A") expense, and adjusted operating income each exclude Restructuring and Related Costs. Adjusted net income attributable to Hubbell Incorporated.

Adjusted results also excluded the income tax effects of the above adjustments which are calculated using the statutory tax rate, taking into consideration the nature of the item and adjusted earnings per diluted share exclude Restructuringthe relevant taxing jurisdiction, unless otherwise noted.

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Organic net sales (or organic net sales growth), a non-GAAP measure, represents Net sales according to U.S. GAAP, less Net sales from acquisitions and Related Costs as welldivestitures during the first twelve months of ownership or divestiture, respectively, less the effect of fluctuations in Net sales from foreign currency exchange. The period-over-period effect of fluctuations in Net sales from foreign currency exchange is calculated as the loss on early extinguishmentdifference between local currency Net sales of long-term debt. Management usesthe prior period translated at the current period exchange rate as compared to the same local currency Net sales translated at the prior period exchange rate. We believe this measure provides management and investors with a more complete understanding of the underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and foreign currency as these adjustedactivities can obscure underlying trends. When comparing Net sales growth between periods, excluding the effects of acquisitions, business dispositions and currency exchange rates, those effects are different when comparing results for different periods. For example, because Net sales from acquisitions are considered inorganic from the date we complete an acquisition through the end of the first year following the acquisition, Net sales from such acquisition are reflected as organic net sales thereafter.

There are limitations to the use of non-GAAP measures. Non-GAAP measures do not present complete financial results. We compensate for this limitation by providing a reconciliation between our non-GAAP financial measures and the respective most directly comparable financial measure calculated and presented in accordance with GAAP. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. These financial measures should not be considered in isolation from, as substitutes for, or alternative measures of, reported GAAP financial results, and should be viewed in conjunction with the most comparable GAAP financial measures and the provided reconciliations thereto. We believe, however, that these non-GAAP financial measures, when assessingviewed together with our GAAP results and related reconciliations, provide a more complete understanding of our business. We strongly encourage investors to review our consolidated financial statements and publicly filed reports in their entirety and not rely on any single financial measure.

The following table reconciles Adjusted operating income, a non-GAAP measure, to Operating income, the performancedirectly comparable GAAP financial measure (in millions):

 Three Months Ended March 31,
 2024% of Net sales2023% of Net sales
Operating income (GAAP measure)$228.5 16.3 %$248.8 19.4 %
Amortization of acquisition-related intangible assets39.4 2.8 %17.8 1.3 %
Transaction, integration & separation costs7.3 0.6 %— — %
Adjusted operating income (non-GAAP measure)$275.2 19.7 %$266.6 20.7 %
The following table reconciles Adjusted net income attributable to Hubbell Incorporated, Adjusted net income available to common shareholders, and the diluted per share amounts thereof, each a non-GAAP measure, to the directly comparable GAAP financial measures (in millions, except per share data).
Three Months Ended March 31,
2024Diluted Per Share2023Diluted Per Share
Net income attributable to Hubbell Incorporated (GAAP measure)$147.8 $2.73 $181.9 $3.37 
Amortization of acquisition-related intangible assets39.4 0.73 17.8 0.33 
Transaction, integration & separation costs7.3 0.14 — — 
Loss on disposition of business5.3 0.10 — — 
   Subtotal$199.8 $3.70 $199.7 $3.70 
Income tax effects(1)
4.6 0.09 4.4 0.08 
Adjusted net income attributable to Hubbell Incorporated (non-GAAP measure)$195.2 $3.61 $195.3 $3.62 
Less: Earnings allocated to participating securities(0.4)(0.01)(0.5)(0.01)
Adjusted net income available to common shareholders (non-GAAP measure)$194.8 $3.60 $194.8 $3.61 
(1) The income tax effects are calculated using the statutory tax rate, taking into consideration the nature of the business.item and the relevant taxing jurisdiction, unless otherwise noted.


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The following table reconciles our restructuring costs to our Restructuring and Related Costs for the three months ended September 30, 2017 and 2016 (in millions):
 Three Months Ended September 30,
 20172016 20172016 20172016
 Cost of goods sold S&A expense Total
Restructuring costs (See Note 15 - Restructuring Costs)$2.2
$4.2
 $1.1
$0.3
 $3.3
$4.5
Restructuring related costs0.5
0.1
 2.0
1.3
 2.5
1.4
Restructuring and related costs (non-GAAP measure)$2.7
$4.3
 $3.1
$1.6
 $5.8
$5.9

Of the $5.8 million of Restructuring and Related Costs incurred in the third quarter of 2017, $4.7 million is recorded in the Electrical segment and $1.1 million is recorded in the Power segment. Of the $5.9 million of Restructuring and Related Costs incurred in the third quarter of 2016, $5.2 million is recorded in the Electrical segment and $0.7 million is recorded in the Power segment.

Our full year 2017 earnings per diluted share expectation anticipates (eachorganic net of tax) approximately $0.30 of Restructuring and Related Costs, of which $0.07 has been incurred in the third quarter of 2017 and $0.26 has been incurred the first nine months of 2017.










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The following table reconciles our adjusted financial measuressales to the directly comparable GAAP financial measure (in millions except per share amounts)and percentage change):


Three Months Ended March 31,
2024Inc/(Dec) %2023Inc/(Dec) %
Net sales growth (GAAP measure)$113.7 8.8 $129.3 11.2 
Impact of acquisitions108.5 8.4 20.7 1.8 
Impact of divestitures(28.1)(2.2)— — 
Foreign currency exchange3.2 0.3 (4.7)(0.4)
Organic net sales growth (non-GAAP measure)$30.1 2.3 $113.3 9.8 
 Three Months Ended September 30,
 2017
% of Net sales2016
% of Net sales
Gross profit (GAAP measure)$306.9
32.3%$288.7
31.8%
Restructuring and related costs2.7
 4.3
 
Adjusted gross profit$309.6
32.6%$293.0
32.3%
     
S&A expenses (GAAP measure)$160.5
16.9%$152.7
16.8%
Restructuring and related costs3.1
 1.6
 
Adjusted S&A expenses$157.4
16.6%$151.1
16.7%
     
Operating income (GAAP measure)$146.4
15.4%$136.0
15.0%
Restructuring and related costs5.8
 5.9
 
Adjusted operating income$152.2
16.0%$141.9
15.6%
     
Net income attributable to Hubbell (GAAP measure)$80.8
 $86.7
 
Restructuring and related costs, net of tax3.9
 4.0
 
Loss on extinguishment of debt, net of tax6.3
 —
 
Adjusted net income attributable to Hubbell$91.0
 $90.7
 
Less: Earnings allocated to participating securities(0.3) (0.3) 
Adj. net income available to common shareholders$90.7
 $90.4
 
Average number of diluted shares outstanding54.9
 55.5
 
ADJUSTED EARNINGS PER SHARE – DILUTED$1.65
 
$1.63




Net Sales


Net sales of $950.5$1,399.1 million in the thirdfirst quarter of 20172024 increased five percentby $113.7 million compared to the thirdfirst quarter of 2016 due to higher organic volume and the contribution of acquisitions. 2023. Organic volume, including the impact of pricing headwinds, added approximately four percentage points to net sales and acquisitionsincreased by 2.3%, which was composed of a low single digit percentage increase in price realization partially offset by a low single digit percentage decrease in volume. Acquisitions net of divestitures contributed one percentage point.6.2% to sales growth. The primary drivers of these changes are discussed in more detail in the Segment Results section below.

Cost of Goods Sold and Gross Profit

As a percentage of netNet sales, cost of goods sold decreasedincreased by 290 basis points to 67.7%68.0% in the thirdfirst quarter of 20172024, as compared to 68.2%65.1% in the thirdfirst quarter of 2016. The decrease2023, resulting in gross profit margin of 32.0% in the first quarter of 2024 as compared to 34.9% in the first quarter of 2023. Approximately six percentage points of margin contraction was primarily due to gains from productivity in excess ofdriven by higher intangible amortization expense, material and other cost inflation greater realized savings from our restructuring and related actions and lower Restructuringvolumes, as well as continued investments in long-term growth and Related Costs,productivity initiatives, which was partially offset by approximately four percentage points of margin expansion driven by favorable price realization and material cost headwinds as well as a 40 basis point headwind from acquisitions.improved operational productivity.

Gross Profit
The gross profit margin in the third quarter of 2017 increased to 32.3% as compared to 31.8% in the third quarter of 2016. Restructuring and Related Costs in Cost of goods sold in the third quarter of 2017 decreased by $1.6 million as compared to the same period of the prior year. Excluding Restructuring and Related Costs, the adjusted gross profit margin was 32.6% in the third quarter of 2017 as compared to 32.3% in the third quarter of 2016. The increase in the adjusted gross profit margin was primarily due to gains from productivity in excess of cost inflation and greater realized savings from our restructuring and related actions, partially offset by price and material cost headwinds as well as acquisitions, which reduced the adjusted gross profit margin by approximately 40 basis points in the third quarter of 2017.


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Selling & Administrative Expenses

S&A expense in the thirdfirst quarter of 20172024 was $160.5$219.2 million as compared to $152.7and increased by $19.7 million in the same period of the prior year. Restructuring and Related Costs in S&A expense in the third quarter of 2017 were $1.5 million higher asor 9.9% compared to the same periodprior year period. Approximately two thirds of this increase was driven by the prior year. 2023 acquisitions net of divestitures, with the remaining increase being driven by labor and other cost inflation. S&A expense as a percentage of netNet sales increased by 10 basis points to 16.9%was 15.7% in the thirdfirst quarter of 2017. Excluding Restructuring and Related Costs, adjusted S&A expense as a percentage of net sales declined by 10 basis points2024, compared to 16.6%15.5% in the thirdfirst quarter of 2017 primarily due to higher net sales volume and greater realized savings from our restructuring and related actions, partially offset by acquisitions, which increased the adjusted S&A expense as a percentage of net sales by approximately 20 basis points.2023.


Total Other Expense
 
Total other expense was $22.8increased by $13.3 million in the thirdfirst quarter of 2017 as compared2024 to $11.9$27.1 million, primarily due to higher net interest expense of $11.4 million in the thirdfirst quarter of 2016.2024 compared to the same period in 2023, along with the $5.3 million loss recognized on the disposition of the residential lighting business. The increase in interest expense was primarily dueattributable to a $10.1 million pre-tax loss onhigher debt balances (primarily related to debt incurred in connection with the early extinguishment of long-term debt recognized in the third quarter of 2017 from the redemption of all of our $300 million outstanding long-term notes that were scheduled to mature in 2018.Systems Control acquisition) and higher market interest rates.


Income Taxes
 
The effective tax rate in the thirdfirst quarter of 20172024 increased to 33.0% from 29.0%26.0% as compared to 22.0% in the thirdfirst quarter of 2016. The increase is2023, primarily attributabledue to favorable returnan income tax expense related to provision and other discrete itemsthe closing of the sale of our residential lighting business that was divested in the prior year that did not repeat in the current year and unfavorable earnings mix in jurisdictions with higher tax rates in the thirdfirst quarter of 2017.2024, partially offset by a stock-based compensation tax benefit.


Net Income Attributable to Hubbell Incorporated and Earnings Per Diluted Share
 
Net income attributable to Hubbell Incorporated was $80.8$147.8 million in the thirdfirst quarter of 20172024 and decreased seven percent as compared to the third quarter of 2016. Excluding Restructuring and Related Costs and the loss on debt extinguishment, adjusted net income attributable to Hubbell was $91.0 million in the third quarter of 2017 and was flat as compared to the third quarter of the prior year. Earnings per diluted share in the third quarter of 2017 decreased six percent as compared to the third quarter of 2016. Adjusted earnings per diluted share in the third quarter of 2017 increased one percent as compared to the third quarter of 2016 and reflects the decline in the average number of diluted shares outstanding of 0.6 million18.7% as compared to the same period of the prior year.

Segment Results

ELECTRICAL

Three Months Ended September 30,
(In millions)2017
2016
Net sales$654.0
$634.6
Operating income$85.6
$80.9
Restructuring and related costs4.7
5.2
Adjusted operating income$90.3
$86.1
Operating margin13.1%12.7%
Adjusted operating margin13.8%13.6%
Net salesyear, reflecting the factors described above. As a result, earnings per diluted share in the Electrical segment in the thirdfirst quarter of 2017 were $654.0 million, up approximately three percent2024 decreased 19% as compared to the thirdfirst quarter of 2016 due2023. Adjusted net income attributable to higher organic volume, including the impactHubbell Incorporated, which excludes amortization of pricing headwinds,acquisition-related intangibles from both periods and the contributiontransaction, integration & separation costs and a loss on disposition of net sales from acquisitions. Organic volume, including the impact of pricing headwinds, added two percentage points and acquisitions added one percentage point.

Within the segment, the aggregate net sales of our Commercial and Industrial and Construction and Energya business groups increased by six percentage points, due to four percentage points of organic growth, driven primarily by net sales growth of our harsh and hazardous products serving the energy-related markets, and two percentage points of net sales growth from acquisitions. Net sales of our Lighting business group decreased two percent in the thirdfirst quarter of 2017 primarily due to headwinds from pricing as organic volume2024, was higher, by less than one percent. Within the Lighting business group, organic net sales of residential products and commercial and industrial lighting products each declined by two percentage points.

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Operating income$195.2 in the Electrical segment for the thirdfirst quarter of 20172024 and was $85.6 million and increased six percent compared to the third quarter of 2016. Operating margin in the third quarter of 2017 increased by 40 basis points to 13.1%flat as compared to the same period of 2016. Excluding Restructuring and Related Costs, the adjusted operating margin increased by 20 basis points to 13.8%. The increase in the adjusted operating margin is primarily due to greater realized savings from our restructuring and related actions as well as incremental earnings from higher net sales volume. The favorable impact of those items was partially offset by acquisitions, which reduced the adjusted operating margin by approximately 80 basis points in the thirdfirst quarter of 2017, as well as price erosion and material and inflationary costs in excess of productivity gains.2023.


POWER
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Three Months Ended September 30,
(In millions)2017
2016
Net sales$296.5
$272.8
Operating income$60.8
$55.1
Restructuring and related costs1.1
0.7
Adjusted operating income$61.9
$55.8
Operating margin20.5%20.2%
Adjusted operating margin20.9%20.5%
Segment Results

UTILITY SOLUTIONS
Three Months Ended March 31,
(In millions)20242023
Net sales$894.0 $781.6 
Operating income (GAAP measure)157.5 177.5 
Amortization of acquisition-related intangible assets35.2 13.3 
Transaction, integration & separation costs2.5 — 
Adjusted operating income$195.2 $190.8 
Operating margin (GAAP measure)17.6 %22.7 %
Adjusted operating margin21.8 %24.4 %
 
Net sales in the Power segment in the third quarter of 2017 were $296.5 million, up nine percent as compared to the third quarter of 2016, primarily due to higher organic volume and the net sales contribution from acquisitions. Organic volume added approximately eight percentage points, driven by growth in the distribution and transmission markets including storm-related sales associated with recent hurricanes, and acquisitions contributed one percentage point to net sales growth.

Operating income in the Power segment increased ten percent to $60.8 million in the third quarter of 2017. Operating margin in the third quarter of 2017 increased by 30 basis points to 20.5% as compared to the same period of 2016. Excluding Restructuring and Related Costs, the adjusted operating margin was 20.9% in the third quarter of 2017 and increased by 40 basis points as compared to the same period of 2016 as gains from productivity initiatives in excess of cost inflation and incremental earnings from higher net sales volume were partially offset by price and material cost headwinds.

Results of Operations – Nine Months Ended September 30, 2017 compared to the Nine Months Ended September 30, 2016
SUMMARY OF CONSOLIDATED RESULTS (IN MILLIONS, EXCEPT PER SHARE DATA):
     
 Nine Months Ended September 30,
 2017
% of Net sales
2016
% of Net sales
Net sales$2,751.1
 
$2,651.0
 
Cost of goods sold1,887.7
68.6%1,808.9
68.2%
Gross profit863.4
31.4%842.1
31.8%
Selling & administrative expense482.3
17.5%472.1
17.8%
Operating income381.1
13.9%370.0
14.0%
Net income attributable to Hubbell222.7
8.1%228.6
8.6%
EARNINGS PER SHARE – DILUTED$4.02
 
$4.08
 

The following table reconciles our restructuring costs to our Restructuring and Related Costs for the nine months ended September 30, 2017 and 2016 (in millions):
 Nine Months Ended September 30,
 20172016 20172016 20172016
 Cost of goods sold S&A expense Total
Restructuring costs (See Note 15 - Restructuring Costs)$9.6
$8.3
 $3.9
$5.6
 $13.5
$13.9
Restructuring related costs1.3
1.8
 5.7
3.3
 7.0
5.1
Restructuring and related costs (non-GAAP measure)$10.9
$10.1
 $9.6
$8.9
 $20.5
$19.0


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Of the $20.5 million of Restructuring and Related Costs incurred in the first nine months of 2017, $16.6 million is recorded in the ElectricalUtility Solutions segment and $3.9 million is recorded in the Power segment. Of the $19.0 million of Restructuring and Related Costs incurred in the first nine months of 2016, $16.7 million is recorded in the Electrical segment and $2.3 million is recorded in the Power segment.

The following table reconciles our adjusted financial measuresorganic net sales to the directly comparable GAAP financial measure (in millions except per share amounts)and percentage change):


Three Months Ended March 31,
Utility Solutions2024Inc/(Dec) %2023Inc/(Dec) %
Net sales growth (GAAP measure)$112.4 14.4 $129.8 19.9 
Impact of acquisitions108.5 13.9 5.6 0.9 
Impact of divestitures— — — — 
Foreign currency exchange1.3 0.2 (1.7)(0.3)
Organic net sales growth (non-GAAP measure)$2.6 0.3 $125.9 19.3 
 Nine Months Ended September 30,
 2017
% of Net sales2016
% of Net sales
Gross profit (GAAP measure)$863.4
31.4%$842.1
31.8%
Restructuring and related costs10.9
 10.1
 
Adjusted gross profit$874.3
31.8%$852.2
32.1%
     
S&A expenses (GAAP measure)$482.3
17.5%$472.1
17.8%
Restructuring and related costs9.6
 8.9
 
Adjusted S&A expenses$472.7
17.2%$463.2
17.5%
     
Operating income (GAAP measure)$381.1
13.9%$370.0
14.0%
Restructuring and related costs20.5
 19.0
 
Adjusted operating income$401.6
14.6%$389.0
14.7%
     
Net income attributable to Hubbell (GAAP measure)$222.7
 $228.6
 
Restructuring and related costs, net of tax13.9
 12.9
 
Loss on extinguishment of debt, net of tax6.3
 —
 
Adjusted net income attributable to Hubbell$242.9
 $241.5
 
Less: Earnings allocated to participating securities(0.8) (0.7) 
Adj. net income available to common shareholders$242.1
 $240.8
 
Average number of diluted shares outstanding55.2
 55.8
 
ADJUSTED EARNINGS PER SHARE – DILUTED$4.39
 
$4.31




Net Sales
Net sales of $2.8 billion forin the Utility Solutions segment in the first nine monthsquarter of 20172024 were $894.0 million, and increased four percentby $112.4 million, or 14.4%, as compared to the first nine monthsquarter of 2016 primarily due to higher organic volume and the contribution of2023. That increase was driven by a 13.9% increase in net sales from acquisitions. Organic volume, including the impact of pricing headwinds, contributed two percentage pointsacquisitions and acquisitions contributed two percentage points toa 0.3% increase in organic net sales. The increase in organic net sales growth.was driven by a low single digit percentage increase in price realization, partially offset by a low single digit percentage decrease in unit volume. The decrease in unit volume was largely driven by weakness in the Telcom market that results in lower demand for our enclosure products, and to a much smaller degree by channel inventory normalization in the distribution market. Transmission markets and demand for our protection and controls products were strong, and we continued to convert our backlog of metering products. Favorable price realization was driven by actions to offset inflation, as well as by our service levels.

Cost of Goods Sold
As a percentage of net sales, cost of goods sold increased to 68.6%Operating income in the Utility Solutions segment for the first nine monthsquarter of 20172024 was $157.5 million, a decrease of 11.3% compared to 68.2% for the first nine monthsquarter of 2016. The increase was primarily due to price and material cost headwinds as well as a 20 basis point headwind from acquisitions and higher Restructuring and Related Costs, partially offset by gains from productivity initiatives that exceeded cost inflation and greater realized savings from our restructuring and related actions.
Gross Profit
The gross profit2023. Operating margin was 31.4%17.6% in the first nine monthsquarter of 2017 compared to 31.8% in the first nine months of 2016. Restructuring and Related Costs in Cost of goods sold in the first nine months of 2017 were $0.8 million higher2024, as compared to the same period of the prior year. Excluding Restructuring and Related Costs, the adjusted gross profit margin was 31.8% in the first nine months of 2017 as compared to 32.1%22.7% in the same period of the prior year. The decrease in2023. Excluding amortization of acquisition-related intangibles and transaction, integration and separation costs, the adjusted gross profitoperating margin was primarily due to price and material cost headwinds as well as a 20 basis point headwind from acquisitions, partially offset by gains from productivity initiatives that exceeded cost inflation and greater realized savings from our restructuring and related actions.





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Selling & Administrative Expenses

S&A expense in the first nine months of 2017 was $482.3 million and increased by $10.2 million compared the same period of the prior year. S&A expense as a percentage of net sales declined by 30 basis points to 17.5% in the first nine months of 2017. Excluding Restructuring and Related Costs, adjusted S&A expense as a percentage of net sales also declined by 30 basis points to 17.2% in the first nine months of 2017 primarily due to higher net sales volume and greater realized savings from our restructuring and related actions, partially offset by acquisitions, which increased the adjusted S&A expense as a percentage of net sales by approximately 10 basis points.

Total Other Expense

Total other expense was $49.9 million in the first nine months of 2017 compared to $37.5 million in the first nine months of 2016. The increase was primarily due to a $10.1 million pre-tax loss on the early extinguishment of long-term debt recognized in the third quarter of 2017 from the redemption of all of our $300 million outstanding long-term notes that were scheduled to mature in 2018, in addition we incurred higher interest expense in the first nine months of 2017 and higher foreign exchange losses in the first nine months of 2017. Those increases were partially offset by the write-off of an escrow receivable in the second quarter of 2016 associated with a prior acquisition. This write off had no effect on net income of the prior year as it was offset in income taxes by the release of a related liability.
Income Taxes

The effective tax rate in the first nine months of 2017 increased to 31.3% from 30.2% in the first nine months of 2016. The increase is primarily attributable to return to provision and other discrete favorable items in the prior year that did not repeat in the current year, including the release of a liability in the second quarter of 2016 caused by the expiration of certain statutes associated with an uncertain tax position from a prior acquisition, partially offset by a favorable settlement of a tax examination21.8% in the first quarter of 2017.2024 compared to 24.4% in the prior year period. The decrease in operating margin includes approximately four percentage points of margin expansion primarily due to favorable price realization and improved operational productivity, but that expansion was more than offset by approximately six percentage points of margin contraction primarily due to material and other cost inflation, lower unit volume and continuing investments in long-term growth and productivity initiatives. The impact of lower unit volume mentioned here includes approximately 150 basis points from weakness in the Telcom market. Operating margin also declined by approximately 260 basis points due to an increase in amortization of acquisition-related intangibles and transaction, integration and separation costs.

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ELECTRICAL SOLUTIONS
Three Months Ended March 31,
(In millions)20242023
Net sales$505.1 $503.8 
Operating income (GAAP measure)71.0 71.3 
Amortization of acquisition-related intangible assets4.2 4.5 
Transaction, integration & separation costs4.8 — 
Adjusted operating income$80.0 $75.8 
Operating margin (GAAP measure)14.1 %14.2 %
Adjusted operating margin15.8 %15.0 %
 
Net Income Attributable to Hubbell and Earnings Per Diluted Share

Net income attributable to Hubbell was $222.7 million in the first nine months of 2017 compared to $228.6 million in the first nine months of 2016. Excluding Restructuring and Related Costs and the loss on debt extinguishment, adjustedThe following table reconciles our Electrical Solutions segment organic net income attributable to Hubbell was $242.9 million in the first nine months of 2017 and increased one percent as comparedsales to the first nine months of the prior year. Earnings per diluted share in the first nine months of 2017 decreased one percent as compared to the first nine months of 2016. Adjusted earnings per diluted share in the first nine months of 2017 increased two percent as compared to the first nine months of 2016directly comparable GAAP financial measure (in millions and reflects a decline in the average number of diluted shares outstanding of 0.6 million as compared to the same period of the prior year.percentage change):

Segment Results
Three Months Ended March 31,
Electrical Solutions2024Inc/(Dec) %2023Inc/(Dec) %
Net sales growth (GAAP measure)$1.3 0.3 $(0.5)(0.1)
Impact of acquisitions— — 15.1 3.0 
Impact of divestitures(28.1)(5.6)— — 
Foreign currency exchange1.9 0.4 (3.0)(0.6)
Organic net sales (decline) growth (non-GAAP measure)$27.5 5.5 $(12.6)(2.5)
ELECTRICAL
 Nine Months Ended September 30,
(In millions)2017
2016
Net sales$1,897.9
$1,858.7
Operating income$206.6
$213.5
Restructuring and related costs16.6
16.7
Adjusted operating income$223.2
$230.2
Operating margin10.9%11.5%
Adjusted operating margin11.8%12.4%

Net sales in the Electrical Solutions segment were $1.9 billion in the first nine monthsquarter of 20172024 were $505.1 million and increased by approximately two percent$1.3 million, or 0.3%, as compared to the first nine monthsquarter of 2016 due to two percentage points of2023. That increase was driven by a 5.5% increase in organic net sales growth from higher organic volume, including the impactand a favorable effect of pricing headwinds, and one percentage point contributed by acquisitions. Headwinds from foreign currency translation were less than one percentage point.

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Within the segment, the aggregateexchange, largely offset by a 5.6% decline in net sales resulting from the disposition of our Commercialresidential lighting business in February 2024. The increase in organic net sales was driven by a low single digit percentage increase in unit volume and Industriala low single digit percentage increase in price realization. Volume growth was driven by strength in markets for electrical and Constructionindustrial products on electrification and Energy business groups increased by four percentage points, due to three percentage points of organic growth,renewables. Favorable price realization was driven primarily by net sales growth of our harsh and hazardous products serving the energy-related markets as well as our products serving the non-residential construction market, and one percentage point of net sales growth from acquisitions. Net sales of our Lighting business group decreased one percent in the first nine months of 2017 with two percentage points of headwind from pricing, partially offset by one percentage point of volume growth. Within the Lighting business group, net sales of residential lighting products increased by four percent, while net sales of commercial and industrial lighting products declined by three percentage points, primarily dueactions to headwinds on pricing.recover inflationary costs.


Operating income in the Electrical Solutions segment for the first nine monthsquarter of 20172024 was $206.6$71.0 million and decreased three percentapproximately 0.4% compared to the same periodfirst quarter of 2016. Operating2023, while operating margin in the first nine monthsquarter of 20172024 decreased by 6010 basis points to 10.9% as compared to the same period14.1%. Excluding amortization of 2016. Excluding Restructuringacquisition-related intangibles and Related Costs, the adjusted operating margin also decreased by 60transaction, integration and separation costs, which contributed 90 basis points to 11.8%. The decreasethe decline in the adjusted operating margin, is primarily due to price and material cost headwinds and acquisitions. Acqusitions reduced the adjusted operating margin by approximately 50 basis points in the third quarter of 2017. The unfavorable impact of those items was partially offset by greater realized savings from our restructuring and related actions.
POWER
 Nine Months Ended September 30,
(In millions)2017
2016
Net sales$853.2
$792.3
Operating income$174.5
$156.5
Restructuring and related costs3.9
2.3
Adjusted operating income$178.4
$158.8
Operating margin20.5%19.8%
Adjusted operating margin20.9%20.0%

Net sales in the Power segment in the first nine months of 2017 were $853.2 million, up approximately eight percent as compared to the first nine months of 2016 primarily due to higher organic volume and the net sales contribution from acquisitions. The increase in organic volume contributed five percentage points driven by growth in the distribution and telecommunications markets including storm-related sales associated with recent hurricanes, and acquisitions contributed three percentage points to net sales growth.

Operating income in the Power segment increased twelve percent to $174.5 million in the first nine months of 2017. Operating margin in the first nine months of 2017 increased by 70 basis points to 20.5% as compared to the same period of 2016. Excluding Restructuring and Related Costs, the adjusted operating margin increased by 9080 basis points to 20.9% in the first nine months of 2017. The15.8%. That increase in the adjusted operating margin is primarily due to gainsapproximately four percentage points of margin expansion from favorable price realization, improved operational productivity initiatives in excess of cost inflation as well as from incremental earnings onand higher net sales volume, partially offset by priceapproximately three percentage points of margin headwind driven by, higher material and materialother cost headwinds.

Outlook

2017

In 2017, we continue to expect end market growthinflation, and investments in the range of two and a half to three percent in the aggregate, including two to three percent growth in the electrical transmission and distribution as well as the industrial market, two to four percent growth in the non-residential and oil and gas markets, and four to five percent growth in the residential market. Our acquisitions are expected to contribute approximately two percent of net sales growth in 2017.

In the first half of 2017, we invested in IoT engineering and research and development resources through the acquisition of iDevices, which adds important capabilities for further enhancing our products, but we expect will be dilutive to our operating margin in 2017.

We expect recent hurricanes will impact our operating income in 2017 by providing a benefit from storm-related sales and headwind from a temporary outage in our manufacturing facility in Vega Baja, Puerto Rico.
We estimate 2017 earnings per diluted share will be within a range of $5.40 to $5.50, including approximately $0.30 of Restructuring and Related Costs and an $0.11 loss on the early extinguishment of debt. We continue to expect free cash flow (defined as cash flows from operating activities less capital expenditures) equal to net income attributable to Hubbell in 2017.




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2018

In 2018, we expect our end markets to grow by approximately two to four percent in aggregate and that the trend toward more consistent growth in our end markets will continue. We expect our operating margin in 2018 will benefit from lower restructuring spend, incremental savings from restructuring and related actions, and the absence of restructuring-driven inefficiencies within our Lighting business group. Our net income is also expectedactivities.




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Financial Condition, Liquidity and Capital Resources


Cash Flow
Three months ended March 31,
(In millions)20242023
Net cash provided by (used in):  
Operating activities$92.2 $113.7 
Investing activities88.6 (35.1)
Financing activities(125.3)(91.8)
Effect of foreign currency exchange rate changes on cash and cash equivalents(3.5)2.7 
NET CHANGE IN CASH AND CASH EQUIVALENTS$52.0 $(10.5)
 Nine Months Ended September 30,
(In millions)2017
2016
Net cash provided by (used in): 
 
Operating activities$228.6
$269.2
Investing activities(161.6)(219.3)
Financing activities(139.9)(14.3)
Effect of foreign currency exchange rate changes on cash and cash equivalents21.7
(14.6)
NET CHANGE IN CASH AND CASH EQUIVALENTS$(51.2)$21.0


Cash provided by operating activities for the ninethree months ended September 30, 2017March 31, 2024 was $228.6$92.2 million compared to $269.2cash provided by operating activities of $113.7 million infor the same period in 2016 and decreased2023. The decrease was primarily due a decrease in net income, along with higher cash payments of employee incentive payments during the first three months of 2024 compared to an increasethe same period in inventory during 2017 to meet increased demand,2023, partially offset by higher amortization and the timing of other payments.depreciation expense.

Cash used forprovided by investing activities was $161.6$88.6 million in the ninethree months ended September 30, 2017March 31, 2024 compared to cash used of $219.3$35.1 million during the comparable period in 2016 and primarily reflects decreased cash used for acquisitions.2023. This change was driven by the $122.9 million of proceeds received in 2024 as a result of the disposition of our residential lighting business.
 
Cash used byin financing activities was $139.9$125.3 million in the ninethree months ended September 30, 2017March 31, 2024 as compared to cash providedused of $14.3$91.8 million in the samecomparable period of 2016. The2023. This change primarily reflects an increase in cash used for financing activities reflects lower cash provided by long-term borrowings, partially offset by a $154.2the repayment of debt of $26.7 million decrease in cash used for the repurchase of Common Stock in 2017 and approximately $91 million of net short-term borrowings in the ninefirst three months ended September 30, 2017 asof 2024 compared to approximately $48 million of net short-term repayments in the same period of the prior year.year period.


The favorableunfavorable impact of foreign currency exchange rates on cash was $21.7$3.5 million infor the ninethree months ended September 30, 2017March 31, 2024 and the change compared to prior year is primarily related to strengthening in the British Pound, Canadian Dollar, and Australian Dollar versusweakening of the U.S. Dollar inagainst the nine months ended September 30, 2017.Canadian Dollar, Brazilian Real and Australian Dollar.
 
Investments in the Business
 
Investments in our business include cash outlays for the acquisition of businesses, to invest in capacity and innovation, as well as for expenditures to support our restructuring and related activitieson productivity initiatives and to maintain the operation of our equipment and facilities.facilities and invest in restructuring activities.

During the first ninethree months of 2017,2024, we invested $40.3 million in capital expenditures, an increase of $6.9 million from the Company completed four acquisitions with an aggregate purchase pricecomparable period of $100.3 million, net of cash received. In April 2017, the Company acquired all of the issued2023, as we continue to invest in footprint optimization, automation and outstanding limited liability company interestsproductivity initiatives.

We continue to invest in iDevices, LLC ("iDevices") for $59.2 million. iDevices is a developer with embedded firmware and application development expertise with custom-built Internet of Things ("IoT") Cloud infrastructure. iDevices has been allocated to the Electrical segment. In April 2017, the Company also acquired substantially all of the assets of Advance Engineering Corporation and related companies (collectively "AEC") for $31.6 million. AEC is a gas components manufacturer that complements the Company's existing business in the natural gas distribution vertical. AEC has been added to the Electrical segment. The Company also completed two acquisitions that have been added to the Power segment in the first quarter of 2017 for $9.5 million, net of cash received. See also Note 2 — Business Acquisitions and our discussion of the 2017 Outlook in Management's Discussion and Analysis of Financial Condition and Results of Operations.

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Beginning in the fourth quarter of 2014 and continuing through the third quarter of 2017 we have initiated certain restructuring and related actions, primarilyprograms to align ourmaintain a competitive cost structure, withto drive operational efficiencies and to mitigate the needsimpact of rising material costs and administrative cost inflation. We expect our business and alsoinvestment in response to conditions in certain of our end markets. As a result of those restructuring and related activities to continue through 2024 as we continue to invest in previously initiated actions we have exited a total of 26 manufacturing and warehousing facilities.initiate further footprint consolidation and other cost reduction initiatives.


In connection with our restructuring and related actions, we have incurred restructuring costs as defined by U.S. GAAP, which are primarily severance and employee benefits, asset impairments, and accelerated depreciation, as well as facility closure, contract termination and certain pension costs that are directly related to restructuring actions. TheseWe also incurred restructuring-related costs, which are costs associated with our business transformation initiatives, including the consolidation of back-office functions and streamlining of our processes, and certain other costs and gains associated with restructuring actions. We refer to these costs on a combined basis as "restructuring and related costs", which is a non-GAAP measure. We believe this non-GAAP measure provides investors with useful information regarding our underlying performance from period to period. Restructuring costs are predominantly settled in cash from our operating activities and are generally settled within one year, with the exception of asset impairments, which are non-cash. Restructuring costs in 2016 also included a $12.5 million charge

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Back to recognize the estimated liability associated with the anticipated withdrawal from a multi-employer pension plan, which may be settled either in periodic payments over approximately 19 years, or in a lump sum, subject to negotiations expected to occur before the end of 2017.Contents

The table below presents the restructuring and related costs incurred in the first ninethree months of 2017,2024, additional expected restructuring costs, and the expected completion date of restructuring actions that have been initiated as of March 31, 2024 and in prior years (in millions):
Costs incurred in the three months ended March 31, 2024Additional expected costsExpected completion date
2024 Restructuring Actions$4.7 $5.1 2025
2023 and Prior Restructuring Actions0.5 2.5 2025
Total Restructuring cost (GAAP measure)$5.2 $7.6 
Restructuring-related costs1.3 10.0 
Restructuring and related costs (Non-GAAP measure)$6.5 $17.6 
 Costs incurred in the nine months ended September 30, 2017Additional expected costsExpected completion date
2017 Restructuring Actions$8.4
$3.7
2018
2016 Restructuring Actions (a)
5.1
3.1
2017
Total$13.5
$6.8
 
(a) Additional expected costs does not include any potential future liability, in excess of amounts already recognized in 2016, associated with the anticipated withdrawal from the multi-employer pension plan referred to in the preceding paragraph. Additional information about the estimated withdrawal liability associated with that multi-employer plan is included in Note 10 — Retirement Benefits in the Notes to Consolidated Financial Statements in the Hubbell Incorporated Annual Report on Form 10-K for the year ended December 31, 2016.

In connection with our restructuring and related actions we also incur restructuring-related costs. Restructuring-related costs are costs associated with our business transformation initiatives, including the consolidation of back-office functions and streamlining our processes, and certain other costs and gains associated with restructuring actions. We refer to restructuring costs (which is a GAAP measure) and restructuring-related costs on a combined basis as "Restructuring and Related Costs", which is a non-GAAP measure. Refer to the Results of Operations discussion within this Management's Discussion and Analysis of Financial Condition and Results of Operations, for further detail of the costs associated with our restructuring and related activities and reconciliations of our non-GAAP measures.

During the first nine months of 2017, we invested $53.2 million for capital expenditures, an increase of $7.4 million from the comparable period of 2016 and primarily relating to our manufacturing productivity initiatives.


Stock Repurchase Program


At December 31, 2016, we had total remaining share repurchase authorization of $153.6 million under the repurchase program approved by our Board of Directors in August 2015. In the first six months of 2017, the Company repurchased shares for an aggregate purchase price of $92.6 million and that repurchase program expires in October 2017. On October 20, 2017,2022, the Board of Directors approved a new stockshare repurchase program (the “October 2017 program”) that authorized the repurchase of up to $400$300 million of Common Stock andcommon stock, which expires onin October 20, 2020. As2025. In the first three months of October 25, 2017,2024, the entire $400Company repurchased $10.0 million remainsof shares of common stock authorized for repurchase under the October 20172022 program. At March 31, 2024, our remaining share repurchase authorization was $290.0 million. Subject to numerous factors, including market conditions and alternative uses of cash, we may conduct discretionary repurchases through open market or privately negotiated transactions, which may include repurchases under plans complying with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended. See also Item 2 - Issuer Purchases of Equity Securities for additional information.


Debt to Capital
 
At September 30, 2017March 31, 2024 and December 31, 2016, Long-term debt in2023, the Condensed Consolidated Balance Sheets was $986.7Company had $1,895.7 million and $990.5$2,023.2 million, respectively, of long-term debt outstanding, net of the unamortized balance of capitalized debt issuance costs. The Company had $18.7 million and $15.0 million at March 31, 2024 and December 31, 2023 respectively of maturities due within the next 12 months related to the Term Loan Agreement described below, which were classified within short term debt in the Consolidated Balance Sheet.

Term Loan Agreement

In connection with the December 2023 acquisition of Systems Control, the Company entered into a Term Loan Agreement with a syndicate of lenders under which the Company borrowed $600 million on an unsecured unsubordinatedbasis. Borrowings under the Term Loan Agreement bear interest generally at either the adjusted term SOFR rate plus an applicable margin (determined by a ratings based grid) or the alternative base rate. Currently, the loans bear interest based on the adjusted term SOFR rate. The principal amount of borrowings under the Term Loan Agreement amortize in equal quarterly installments of 2.5% of the original outstanding principal amount in 2024, 2.5% in 2025, and, 5% in 2026, with the remaining outstanding principal amount under the Term Loan Agreement due and payable in full at maturity in December 2026. The Company may make principal payments in excess of the amortization schedule at its discretion. During the three months ended March 31, 2024, the Company made $125 million of principal payments. The sole financial covenant in the Term Loan Agreement requires that total debt not exceed 65% of total capitalization as of the last day of each fiscal quarter of the Company. The Company was in compliance with this covenant as of March 31, 2024.

Revolving Credit Facility

On March 12, 2021, the Company, as borrower, and its subsidiaries Hubbell Power Holdings S.à r.l. and Harvey Hubbell Holdings S.à r.l., each as a subsidiary borrower (collectively, the “Subsidiary Borrowers”) entered into a new five-year credit agreement with a syndicate of lenders and JPMorgan Chase Bank, N.A., as administrative agent, that provides a $750 million committed revolving credit facility (the “2021 Credit Facility"). Commitments under the 2021 Credit Facility may be increased to an aggregate amount not to exceed $1.25 billion. The 2021 Credit Facility includes a $50 million sub-limit for the issuance of letters of credit. The sum of the dollar amount of loans and letters of credits to the Subsidiary Borrowers under the 2021 Credit Facility may not exceed $75 million. There were no borrowings outstanding under the 2021 Credit Facility at March 31, 2024.

The interest rate applicable to borrowings under the 2021 Credit Facility is either (i) the alternate base rate (as defined in the 2021 Credit Facility) or (ii) the adjusted SOFR rate (as defined in the 2021 Credit Facility) plus an applicable margin based on the Company’s credit ratings. All revolving loans outstanding under the 2021 Credit Facility will be due and payable on March 12, 2026.

The 2021 Credit Facility contains a financial covenant requiring that, as of the last day of each fiscal quarter, the ratio of total indebtedness to total capitalization shall not be greater than 65%. The Company was in compliance with this covenant as of March 31, 2024. As of March 31, 2024, the 2021 Credit Facility was undrawn.

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Unsecured Senior Notes

At both March 31, 2024 and December 31, 2023, the Company had outstanding unsecured, senior notes (the "Notes") in principal amounts of $400 million due in 2026, $300 million due in 2027, $450 million due in 2028 and $300 million due in 2031.

The carrying value of the Notes, net of unamortized discount and the unamortized balance of capitalized debt issuance costs.costs, was $1,440.9 million and $1,440.3 million at March 31, 2024 and December 31, 2023, respectively.

In August 2017, the Company completed a public debt offering of $300 million of long-term, unsecured, unsubordinated notes maturing in August 2027 and bearing interest at a fixed rate of 3.15% (the "2027 Notes"). Net proceeds from the issuance were $294.6 million after deducting the discount on the notes and offering expenses paid by the Company. In September 2017, the Company applied the net proceeds from the 2027 Notes to redeem all of its $300 million of long-term, unsecured, unsubordinated notes maturing in 2018 and bearing interest at a fixed rate of 5.95%. In connection with this redemption, the Company recognized a loss on the early extinguishment of the 2018 Notes of $6.3 million on an after-tax basis.


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At September 30, 2017 principal amounts of the Company's long-term unsecured, unsubordinated notes are $300 million due in 2022, $400 million due in 2026, and $300 million due in 2027.


The Company's long-term unsecured, unsubordinated notes are fixed rate indebtedness,Notes are callable at any time with a make whole premiumat specified prices and are only subject to accelerated payment prior to maturity in the eventupon customary events of a default, (including as a result of the Company's failure to meet certain non-financial covenants) under the indenture governing the notes, as modified by the supplemental indentures creating such notes, or upon a change in control triggering event as defined in such indenture.the indenture governing the Notes, as supplemented. The Company was in compliance with all non-financial covenants (none of which are financial) as of September 30, 2017.March 31, 2024.

At September 30, 2017Short-term Debt and Current Portion of Long-Term Debt

The Company had $219.7 million and $117.4 million of short-term debt and current portion of long-term debt outstanding at March 31, 2024 and December 31, 2016,2023, respectively, composed of the Company had $93.8following:

•$199.0 million of commercial paper borrowings outstanding at March 31, 2024, and $100 million of commercial paper borrowings outstanding at December 31, 2023, which was used to partially fund the Systems Control acquisition.

•$18.7 million of long-term debt classified within current liabilities in the Condensed Consolidated Balance Sheets, reflecting maturities within the next 12 months under the Term Loan Agreement at March 31, 2024 and $15.0 million at December 31, 2023.

•$2.0 million and $3.2$2.4 million of other short term debt outstanding at March 31, 2024 and December 31, 2023, respectively, which consisted of short-term debt outstanding.borrowings to support our international operations in China and amounts outstanding under our commercial card program.

◦Commercial paper borrowings outstanding at September 30, 2017 were $87.0 million. There were no commercial paper borrowings outstanding at December 31, 2016.

◦Short-term debt at September 30, 2017 and December 31, 2016 also includes $6.8 million and $3.2 million, respectively of borrowings to support our international operations in China and Brazil.


Net debt, defined as total debt less cash and investments, is a non-GAAP measure that may not be comparable to definitions used by other companies. We consider net debt to be a useful measure of our financial leverage for evaluating the Company’s ability to meet its funding needs.
(In millions)March 31, 2024December 31, 2023
Total Debt (GAAP measure)$2,115.4 $2,140.6 
Hubbell Incorporated Shareholders’ Equity2,930.4 2,877.0 
TOTAL CAPITAL (GAAP measure)$5,045.8 $5,017.6 
Total Debt to Total Capital (GAAP measure)42 %43 %
Cash and Investments475.6 424.5 
Net Debt (non-GAAP measure)$1,639.8 $1,716.1 
Net Debt to Total Capital (non-GAAP measure)32 %34 %
(In millions)September 30, 2017
December 31, 2016
Total Debt$1,080.5
$993.7
Total Hubbell Shareholders’ Equity1,656.0
1,592.8
TOTAL CAPITAL$2,736.5
$2,586.5
Total Debt to Total Capital39%38%
Cash and Investments456.5
505.2
Net Debt$624.0
$488.5
Net Debt to Total Capital23%19%

Liquidity
 
We measure liquidity on the basis of our ability to meet short-term and long-term operational funding needs, to fund additional investments in our business, including acquisitions, and to make dividend payments to shareholders. Significant factors affecting the management of liquidity are cash flows from operating activities, capital expenditures, cash dividend payments, stock repurchases, access to bank lines of credit and our ability to attract long-term capital with satisfactory terms.

In 2017,the first three months of 2024, we have invested in acquisitions and also returned capital to our shareholders throughby paying $65.5 million of dividends on our common stock and using $10.0 million of cash for share repurchases and shareholder dividends. These activities were funded primarily from cash flows from operations, with the exception of our April 2017 acquisitions that were funded by issuing commercial paper.repurchases.

◦In the first nine months of 2017, cash used for the acquisition of businesses, net of cash acquired was $110.3 million, including the settlement of purchase price installments from prior year acquisitions. Further discussion of our acquisitions can be found in Note 2 — Business Acquisitions.

◦
In the nine months ended September 30, 2017, cash settlements for share repurchases were $92.6 million. Shareholder dividends paid in the nine months ended September 30, 2017 were $115.5 million.


We also require cash outlays to fund our operations, our capital expenditures, and an increase in working capital that would be requiredrequirements to accommodate a higher levelanticipated levels of business activity, for the foreseeable future, as well as our rate of cash dividends, and potential future acquisitions in 2017. In October 2017, the Company’s Board of Directors approved an increase in the common stock dividend rate from $0.70 to $0.77 per share per quarter. The increased quarterly dividend payment will commence with the December 15, 2017 dividend payment made to shareholders of record on November 30, 2017.

acquisitions. We have contractual obligations for long-term debt, operating leases, purchase obligations, and certain other long-term liabilities that wereare summarized in a table of Contractual Obligationsthe Financial Condition, Liquidity and Capital Resources section in our Annual Report on Form 10-K for the year ended December 31, 2016. Since December 31, 2016, there were no material changes2023. As a result of the Tax Cuts and Jobs Act of 2017 (the "TCJA"), we also have an obligation to our contractual obligations.fund, by annual installments through 2025, the Company's liability for the transition tax on the deemed repatriation of foreign earnings.




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Our sources of funds and available borrowing resources to meet these funding needs are as follows.follows:

◦Cash flows from operations and existing cash resources: We continue to target free cash flow (defined as cash flows from operations less capital expenditures) equal to net income in 2017. We also have $386.4 million of cash and cash equivalents at September 30, 2017, of which approximately three percent was held inside of the United States and the remainder held internationally.

◦We have the ability to issue commercial paper for general corporate purposes and our $750 million revolving credit facility, which expires in December 2020, serves as a backup to our commercial paper program. We maintain investment grade credit ratings from the major U.S. rating agencies.


The Company's revolving credit facility is a five-year credit agreement (the "Credit Agreement") with a syndicate◦Cash flows from operating activities and existing cash resources: In addition to cash flows from operating activities, we also had $388.2 million of lenders thatcash and cash equivalents at March 31, 2024, of which approximately 22% was held inside the United States and the remainder held internationally.

◦Our 2021 Credit Facility provides a $750$750.0 million committed revolving credit facility. Commitmentsfacility and commitments under the 2021 Credit AgreementFacility may be increased (subject to certain conditions) to an aggregate amount not to exceed $1.250$1.25 billion. The interest rate applicable to borrowing under the Credit Agreement is generally either the adjusted LIBOR plus an applicable margin (determined by reference to a ratings based grid) or the alternate base rate. The single financial covenant in the Credit Agreement, which the Company was in compliance with at September 30, 2017, requires that total debt not exceed 55% of total capitalization as of the last day of each fiscal quarter of the Company. Annual commitment fees to support availability under the credit facility2021 Credit Facility are not material. The Credit Agreement expires in December 2020. Although not the principal source of liquidity, we believe our credit facility2021 Credit Facility is capable of providing significant financing flexibility at reasonable rates of interest. However,interest and is an attractive alternative source of funding in the event that commercial paper markets experience disruption. However, an increase in usage of the 2021 Credit Facility related to growth or a significant deterioration in the results of our operations or cash flows leading to deterioration in financial condition,could cause our borrowing costs couldto increase and/or our ability to borrow could be restricted. We have not entered into any guarantees that could give rise to material unexpected cash requirements. AsThe full $750.0 million of September 30, 2017borrowing capacity under the 2021 Credit Facility was available to the Company at March 31, 2024.

◦In addition to our commercial paper program and existing revolving credit facility, had not been drawn against.we also have the ability to obtain additional financing through the issuance of long-term debt. Considering our current credit rating, historical earnings performance, and financial position, we believe that we would be able to obtain additional long-term debt financing on attractive terms.

◦In addition to our commercial paper program and existing revolving credit facility, we also have the ability to obtain additional financing through the issuance of long-term debt. Considering our current credit rating, historical earnings performance, and financial position, we believe that we would be able to obtain additional long-term debt financing on attractive terms.
 

Critical Accounting Estimates
 
A summary of our critical accounting estimates is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2016.2023. We are required to make estimates and judgments in the preparation of our financial statements that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures. We continually review these estimates and their underlying assumptions to ensure they are appropriate for the circumstances. Changes in the estimates and assumptions we use could have a material impact on our financial results. During the first ninethree months of 2017,ended March 31, 2024, there were no material changes in our estimates and critical accounting policies.


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Forward-Looking Statements
 
Some of the information included in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, and elsewhere in this Form 10-Q, contain “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. These include statements about our expectations regarding manufacturing efficiency,our financial results, condition and outlook, anticipated end markets, expected capital resources, expenses, employer contributions, liquidity, financial performance, pension funding, and from a multi-employer pension plan in which we participated, and results of operations and are based on our reasonable current expectations. In addition, all statements regarding restructuring plans andthe expected associated costs and benefits, expected future financial performance, expected outcomeimpact of legal proceedings, or improvementthe integration of acquisitions, as well as other statements that are not strictly historic in nature are forward looking. In addition, all statements regarding anticipated growth, changes in operating results, anticipated changes in tax rates, anticipated market conditions potential future acquisitions, enhancement of shareholder value,and economic conditions, adoption of updated accounting standards and any expected effects of such adoption, restructuring plans and expected associated costs and benefits, intent to continue repurchasing shares of common stock, changes in operating results, and anticipated market conditions and productivity initiatives, are also forward looking. Forward-looking statements may be identified by the use of words, such as “believe”, “expect”, “anticipate”, “intend”, “depend”, “should”, “plan”, “estimated”, “predict”, “could”, “may”, “subject to”, “continues”, “growing”, “prospective”, “forecast”, “projected”, “purport”, “might”, “if”, “contemplate”, “potential”, “pending,” “target”, “goals”, “scheduled”, “will“will", "will likely be”, and similar words and phrases. Discussions of strategies, plans or intentions often contain forward-looking statements. Important factors, among others, that could cause our actual results and future actions to differ materially from those described in forward-looking statements include, but are not limited to:
 
•The general impact of inflation on our business, including the impact on raw materials costs, elevated interest rates and increased energy costs and our ability to implement and maintain pricing actions that we have taken to cover higher costs and protect our margin profile.
•Economic and business conditions in particular industries, markets or geographic regions, as well the potential for continued inflation, a significant economic slowdown, stagflation or recession.
•Effects of unfavorable foreign currency exchange rates and the potential use of hedging instruments to hedge the exposure to fluctuating rates of foreign currency exchange on inventory purchases.
•Supply chain disruptions and availability, costs and quantity of raw materials, purchased components, energy and freight.
•Changes in demand for our products, market conditions, product quality, or product availability adversely affecting sales levels.
•Ability to effectively develop and introduce new products.
•Changes in markets or competition adversely affecting realization of price increases.
•Continued softness in the residential market of Electrical Solutions.
•Failure to achieve projected levels of efficiencies, and maintain cost savings and cost reduction measures, including those expected as a result of our lean initiatives and strategic sourcing plans,plans.
•Impacts of trade tariffs, import quotas or other trade restrictions or measures taken by the United States, United Kingdom and restructuring initiatives.other countries, including the recent and potential changes in U.S. trade policies.
The expected benefits•Failure to comply with import and the timingexport laws.
•Changes relating to impairment of our goodwill and other actions in connection withintangible assets.
•Inability to access capital markets or failure to maintain our Enterprise Resource Planning ("ERP") system.credit ratings.
Availability and costs of raw materials, purchased components, energy and freight.
•Changes in expected or future levels of operating cash flow, indebtedness and capital spending.
General economic and business conditions in particular industries, markets or geographic regions, as well as inflationary trends.
•Regulatory issues, changes in tax laws, including multijurisdictional implementation of the Organisation for Economic Co-operation and Development's comprehensive base erosion and profit shifting plan, or changes in geographic profit mix affecting tax rates and availability of tax incentives.
•A major disruption in one or more of our manufacturing or distribution facilities or headquarters, including the impact of plant consolidations and relocations.
•Changes in our relationships with, or the financial condition or performance of, key distributors and other customers, agents or business partners which could adversely affect our results of operations.
•Impact of productivity improvements on lead times, quality and delivery of product.
•Anticipated future contributions and assumptions including changesincreases in interest rates and changes in plan assets with respect to pensions.pensions and other retirement benefits, as well as pension withdrawal liabilities.
•Adjustments to product warranty accruals in response to claims incurred, historical experiences and known costs.
•Unexpected costs or charges, certain of which might be outside of our control.
•Changes in strategy due to economic conditions or other conditions outside of our control affecting anticipated future global product sourcing levels.
•Ability to carry out future acquisitions and strategic investments in our core businesses as well as the acquisition related costs.
•Ability to successfully manage and integrate an acquired business, such as the recent acquisitions of El Electronics LLC, Indústria Eletromecânica Balestro Ltda., and Systems Control, as well as the failure to realize expected synergies and benefits anticipated when we make an acquisition due to potential adverse reactions or changes to business or employee relationships resulting from completion of the transaction, competitive responses to the transaction, the possibility that the anticipated benefits of the transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the acquired business, diversion of management's attention from ongoing business operations and opportunities, and litigation relating to the transaction.
•The impact of certain divestitures, including the benefits and costs of the sale of the residential lighting business.
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•The ability to effectively implement ERPEnterprise Resource Planning systems without disrupting operational and financial processes.
Unanticipated difficulties integrating acquisitions•The ability of government customers to meet their financial obligations.
•Political unrest and military actions in foreign countries, including trade tensions with China and the wars in Ukraine and the Middle East, as well as the realizationimpact on world markets and energy supplies and prices resulting therefrom.
•The impact of expected synergiespotential natural disasters or additional public health emergencies on our financial condition and benefits anticipated when we first enter into a transaction.results of operations.
The ability of governments to meet their financial obligations.
Political unrest in foreign countries.
Natural disasters.
•Failure of information technology systems, or securitycybersecurity breaches, cyber threats, malware, phishing attacks, break-ins and similar events resulting in unauthorized disclosure of confidential information.information or disruptions or damage to information technology systems that could cause interruptions to our operations or adversely affect our internal control over financial reporting.
•Incurring significant and/or unexpected costs to avoid, manage, defend and litigate intellectual property matters.
•Future repurchases of common stock under our common stock repurchase program.
•Changes in accounting principles, interpretations, or estimates.
•Failure to comply with any laws and regulations, including those related to data privacy and information security, environmental and conflict-free minerals.
•The outcome of environmental, legal and tax contingencies or costs compared to amounts provided for such contingencies.contingencies, including contingencies or costs with respect to pension withdrawal liabilities.
•Improper conduct by any of our employees, agents or business partners that damages our reputation or subjects us to civil or criminal liability.
•Our ability to hire, retain and develop qualified personnel.
•Adverse changes in foreign currency exchange rates and the potential use of hedging instruments to hedge the exposure to fluctuating rates of foreign currency exchange on inventory purchases.
•Other factors described in our Securities and Exchange Commission filings, including the “Business”, “Risk Factors”, "Management's Discussion and Analysis of Financial Condition and Results of Operations", and “Quantitative and Qualitative Disclosures about Market Risk” sections in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.2023 and in the Company's Quarterly Reports on Form 10-Q.


Any such forward-looking statements are not guarantees of future performances and actual results, developments and business decisions may differ from those contemplated by such forward-looking statements. The Company disclaims any duty to update any forward-looking statement, all of which are expressly qualified by the foregoing, other than as required by law.



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ITEM 3Quantitative and Qualitative Disclosures About Market Risk
 
In the operation of its business, the Company has exposures to fluctuating foreign currency exchange rates, availability of purchased finished goods and raw materials, changes in material prices, foreign sourcing issues, and changes in interest rates. There have been no significant changes in our exposure to these market risks during the first ninethree months of 2017.ended March 31, 2024. For a complete discussion of the Company’s exposure to market risk, refer to Item 7A, “Quantitative and Qualitative Disclosures about Market Risk”, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.2023.



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ITEM 4Controls and Procedures
 
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed under the Securities Exchange Act of 1934, as amended the (“Exchange(the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.
 
Our management carried out an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures as defined in Exchange Act Rules 13a-15(e) and 15d-15(e), as of the end of the period covered by this reportQuarterly Report on Form 10-Q. Based upon that evaluation, each of the Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2017,March 31, 2024, the Company’s disclosure controls and procedures were effective at the reasonable assurance level.

There have been no changes in the Company’s internal control over financial reporting that occurred during the Company’s most recently completed quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.



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PART IIOTHER INFORMATION
 
ITEM 1ARisk Factors


There have been no material changes in the Company’sCompany's risk factors from those disclosed under the heading "Risk Factors" in theour Annual Report on Form 10-K for the year ended December 31, 2016.2023.




ITEM 2Unregistered Sales of Equity Securities and Use of Proceeds
 
Issuer Purchases of Equity Securities


On August 23, 2015,October 21, 2022, we announced that the Board of Directors authorized a common stock repurchase program in the amount of $250 million (the "August 2015 program") and as of December 31, 2016, we had $153.6 million of remaining share authorization under the repurchase program. In the first six months of 2017, the Company repurchased shares for an aggregate purchase price of $92.6 million, and the August 2015 program expires in October, 2017. On October 20, 2017, the Board of Directors approved a new stockshare repurchase program (the “October 2017 program”"Program") that authorized the repurchase of up to $400$300 million of common stock, andwhich expires onin October 20, 2020. As of October 25, 2017, the entire $400 million remains authorized for repurchases under the October 2017 program.2025. At March 31, 2024, our remaining share repurchase authorization was $290.0 million. Subject to numerous factors, including market conditions and alternative uses of cash, we may conduct discretionary repurchases through open market or privately negotiated transactions, which may include repurchases under plans complying with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended.


The following table summarizes the Company's repurchase activity of common stock under the Program during the quarter ended March 31, 2024.


PeriodTotal Number of Shares of Common Stock Purchased (000s)Average Price Paid Per Share of Common Stock
Approximate Value of Shares that May Yet be Purchased Under the Plans
(in millions)
Total number of shares purchased as part of publicly announced plans
(000s)
January 1, 2024 - January 31, 2024— $— $300.0 — 
February 1, 2024 - February 29, 202429 $350.87 $290.0 29 
March 1, 2024 - March 31, 2024— $— $290.0 — 
TOTAL FOR THE QUARTER ENDED MARCH 31, 202429 $350.87 $290.0 29 




ITEM 5Other Information
During the three months ended March 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
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ITEM 6Exhibits
Incorporated by Reference
Exhibit
Number		Exhibit DescriptionFormFile No.ExhibitFiling
Date		Filed/
Furnished
Herewith
ITEM 631.1Exhibits*
31.2*
32.1**
32.2**
101The following materials from Hubbell Incorporated's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 formatted in Inline Extensible Business Reporting Language (iXBRL): (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to the Condensed Consolidated Financial Statements.*
104The cover page of this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in Inline XBRL (included within the Exhibit 101 attachments)*
*Filed herewith
**Furnished herewith
 

HUBBELL INCORPORATED-Form 10-Q    44
  Incorporated by Reference  
Exhibit
Number
Exhibit DescriptionFormFile No.Exhibit
Filing
Date
Filed/
Furnished
Herewith
4.1
Fourth Supplemental Indenture, dated as of August 3, 2017, between Hubbell Incorporated and The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of New York Trust Company, N.A. (successor as trustee to JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank, formerly known as The Chase Manhattan Bank, formerly known as Chemical Bank))), as trustee.

8-K
001-02958

4.2August 3, 2017 
31.1
Certification of Chief Executive Officer Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
    *
31.2
Certification of Chief Financial Officer Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
    *
32.1
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    **
32.2
Certification of Chief Financial Officer Pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    **
101.INSXBRL Instance Document    *
101.SCHXBRL Taxonomy Extension Schema Document    *
101.CALXBRL Taxonomy Extension Calculation Linkbase Document    *
101.DEFXBRL Taxonomy Extension Definition Linkbase Document    *
101.LABXBRL Taxonomy Extension Label Linkbase Document    *
101.PREXBRL Taxonomy Extension Presentation Linkbase Document    *
*Filed herewith
**Furnished herewith

HUBBELL INCORPORATED-Form 10-Q    36
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Signatures
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
Date: October 25, 2017May 1, 2024
 
HUBBELL INCORPORATED
HUBBELL INCORPORATEDBy
By/s/ William R. SperryBy/s/ Joseph A. CapozzoliJonathan M. Del Nero
William R. SperryJoseph A. CapozzoliJonathan M. Del Nero
SeniorExecutive Vice President and Chief Financial OfficerVice President, Controller (Principal Accounting Officer)

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