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

Executive Overview of the Business

Hubbell is a global manufacturer of quality electrical products and utility solutions for a broad range of customer and end market applications. We provide utility and 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, Puerto Rico, Mexico, China, the UK, Brazil, Australia, Spain and Ireland. The Company also participates in joint ventures in Hong Kong and the Philippines, and maintains offices in Singapore, Italy, China, India, Mexico, South Korea, Chile, and countries in the Middle East. The Company employed approximately 17,000 individuals worldwide as of June 30, 2023.

The Company’s reporting segments consist of the Utility Solutions segment and Electrical Solutions segment.

Results for the six months ended June 30, 2023 by segment are included under “Segment Results” within this Management’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.

Our strategy to complement organic revenue growth with acquisitions is focused on acquiring assets that extend our capabilities, expand our product offerings, and present opportunities to compete in core, adjacent or complementary markets. Our acquisition strategy also provides the opportunity to advance our revenue growth objectives during periods of weakness or inconsistency in our end-markets.

Our strategy to deliver products through a competitive cost structure has resulted in past and ongoing restructuring and related 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 complement our restructuring and related activities to minimize the impact of rising material costs and other administrative cost inflation. Because material costs are approximately two thirds of our cost of goods sold, continued volatility in this area could 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 affect virtually all functional areas within the Company by reducing or eliminating waste and improving processes. We continue to expand our efforts related to global product and component sourcing and 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. We have recently experienced significant inflationary pressure across much of our business. We have had to take various pricing actions to cover the higher costs and protect our profitability. Because we expect inflation to remain a factor for the foreseeable future, we expect to continue these pricing actions subject, however, 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.

HUBBELL INCORPORATED-Form 10-Q 30

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Discontinued Operations

On February 1, 2022, the Company completed the sale of the C&I Lighting business to GE Current, a Daintree Company, for total net cash consideration of $332.8 million. The sale of this business is reported as a discontinued operation in our Condensed Consolidated Financial Statements. For additional information regarding this transaction and its effect on our financial reporting, see Note 2 – Discontinued Operations, in the accompanying Condensed Consolidated Financial Statements, which note is incorporated herein by reference.

The following is a discussion and analysis of our business, financial condition and results of operations as of and for the three and six month periods ended June 30, 2023 and 2022. 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, 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, 2022.

Results of Operations – Second Quarter of 2023 compared to the Second Quarter of 2022

Overview

Hubbell delivered a strong quarter of sales growth and margin expansion. Grid modernization and electrification continue to drive demand for our products and solutions. Margin expansion in the quarter was driven primarily by favorable price realization and modestly lower material costs. Improvements in productivity were more than offset by non-material cost inflation and investments in our business.

Utility Solutions segment sales growth was strong in the quarter, driven by price realization, improved availability of semiconductors and strong backlog. In the Electrical Solutions segment, commercial markets remained modest driven by customer inventory management and residential markets showed continued softness, partially offset by broad-based strength across industrial end markets and strong growth in renewables and datacenters.

SUMMARY OF CONDENSED CONSOLIDATED RESULTS (IN MILLIONS, EXCEPT PER SHARE DATA):

			Three Months Ended June 30,
			2023			% of Net sales			2022			% of Net sales
Net sales			$	1,365.9					$	1,256.0
Cost of goods sold			869.7			63.7		%	872.8			69.5		%
Gross profit			496.2			36.3		%	383.2			30.5		%
Selling & administrative ("S&A") expense			208.4			15.2		%	192.6			15.3		%
Operating income			287.8			21.1		%	190.6			15.2		%
Net income from continuing operations			208.2			15.2		%	137.1			10.9		%
Less: Net income from continuing operations attributable to non-controlling interest			(1.4)			(0.1)		%	(1.5)			(0.1)		%
Net income from continuing operations attributable to Hubbell Incorporated			206.8			15.1		%	135.6			10.8		%
Income from discontinued operations, net of tax			—						(13.6)
Net income attributable to Hubbell incorporated			206.8						122.0
Less: Earnings allocated to participating securities			(0.5)						(0.4)
Net income available to common shareholders			$	206.3					$	121.6
Average number of diluted shares outstanding			54.0						53.9
DILUTED EARNINGS PER SHARE - CONTINUING OPERATIONS			$	3.82					$	2.51
DILUTED EARNINGS PER SHARE - DISCONTINUED OPERATIONS			$	—					$	(0.25)

HUBBELL INCORPORATED-Form 10-Q 31

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In the following discussion of results of operations, we refer to "adjusted" operating measures. We believe those adjusted measures, which exclude the impact of certain costs, 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 we do not consider a component of our core operating performance.

Adjusted operating measures exclude amortization of all intangible assets associated with our business acquisitions, 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, 2022.

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 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 net income attributable to Hubbell Incorporated.

Adjusted operating measurers also exclude a pension settlement charge of $4.4 million recognized during the second quarter of 2022.

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 divestitures 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 difference between local currency Net sales of the 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 activities 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 viewed 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.

HUBBELL INCORPORATED-Form 10-Q 32

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

			Three Months Ended June 30,
			2023			% of Net sales			2022			% of Net sales
Operating income (GAAP measure)			$	287.8		21.1		%	$	190.6		15.2		%
Amortization of acquisition-related intangible assets			18.1			1.3		%	17.4			1.4		%
Adjusted operating income (non-GAAP measure)			$	305.9		22.4		%	$	208.0		16.6		%
The following table reconciles Adjusted net income from continuing operations attributable to Hubbell Incorporated, Adjusted net income from continuing operations 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 June 30,
			2023			Diluted Per Share			2022			Diluted Per Share
Net income from continuing operations attributable to Hubbell Incorporated (GAAP measure)			$	206.8		$	3.83		$	135.6		$	2.52
Amortization of acquisition-related intangible assets			18.1			0.34			17.4			0.32
Pension charge			—			—			4.4			0.08
Subtotal			$	224.9		$	4.17		$	157.4		$	2.92
Income tax effects(1)			4.5			0.09			5.4			0.10
Adjusted net income from continuing operations attributable to Hubbell Incorporated (non-GAAP measure)			$	220.4		$	4.08		$	152.0		$	2.82
Less: Earnings allocated to participating securities			(0.5)			(0.01)			(0.4)			(0.01)
Adjusted net income from continuing operations available to common shareholders (non-GAAP measure)			$	219.9		$	4.07		$	151.6		$	2.81

(1) The income tax effects are calculated using the statutory tax rate, taking into consideration the nature of the item and the relevant taxing jurisdiction, unless otherwise noted.

The following table reconciles our Organic net sales to the directly comparable GAAP financial measure (in millions and percentage change):

			Three Months Ended June 30,
			2023			Inc/(Dec) %			2022			Inc/(Dec) %
Net sales growth (GAAP measure)			$	109.9		8.7			$	201.7		19.1
Impact of acquisitions			38.1			3.0			—			—
Impact of divestitures			—			—			(1.3)			(0.1)
Foreign currency exchange			(1.1)			(0.1)			(3.2)			(0.4)
Organic net sales growth (non-GAAP measure)			$	72.9		5.8			$	206.2		19.6

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Net Sales

Net sales of $1,365.9 million in the second quarter of 2023 increased by $109.9 million compared to the second quarter of 2022. Organic net sales increased by 5.8% which was composed of a high single digit percentage increase in price realization partially offset by a low single digit percentage decrease in volumes. Acquisitions contributed 3.0% 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 Net sales, cost of goods sold decreased by 580 basis points to 63.7% in the second quarter of 2023, as compared to 69.5% in the second quarter of 2022, resulting in a related 580 basis point increase in second quarter 2023 Gross profit margin to 36.3% as compared to 30.5% in the second quarter of 2022. The increase in the Gross profit margin primarily reflects approximately ten percentage points of margin expansion driven by favorable price realization, improved operational productivity and modestly lower material costs. Operational productivity was driven by improving supply chain conditions and reduced rates of absenteeism as compared to the prior year period. Those increases were offset by approximately four percentage points of margin headwind driven by continued non-material cost inflation, lower unit volumes, as well as increased investments in capacity, innovation and productivity.

Selling & Administrative Expenses

S&A expense in the second quarter of 2023 was $208.4 million and increased by $15.8 million compared to the prior year period. Approximately two thirds of this increase was driven by labor and other cost inflation, while the remainder of the increase was primarily driven by added S&A costs from acquisitions and increased investments in the business. S&A expense as a percentage of Net sales was 15.2% in the second quarter of 2023, compared to 15.3% in the second quarter of 2022.

Total Other Expense

Total other expense decreased by $0.6 million in the second quarter of 2023 to $14.0 million, primarily due to a $4.4 million pension charge recorded in the second quarter of 2022 that did not recur in 2023, lower net interest expense in the second quarter of 2023 compared to the same period of the prior year, and favorable foreign exchange. Those were partially offset by a reduction of $4.8 million of income related to the C&I Lighting business disposition in 2022 that did not recur in 2023 and higher non-service pension cost recognized in the second quarter of 2023 as compared to the same period of the prior year.

Income Taxes

The effective tax rate in the second quarter of 2023 increased to 24.0% as compared to 22.1% in the second quarter of 2022, primarily due to increased income in higher taxed jurisdictions partially offset by a higher stock based compensation tax benefit.

Net Income From Continuing Operations Attributable to Hubbell Incorporated and Earnings Per Diluted Share From Continuing Operations

Net income from continuing operations attributable to Hubbell Incorporated was $206.8 million in the second quarter of 2023 and increased 52.5% as compared to the same period of the prior year, reflecting the factors described above. As a result, earnings per diluted share from continuing operations in the second quarter of 2023 increased 52.2% as compared to the second quarter of 2022. Adjusted net income from continuing operations attributable to Hubbell Incorporated, which excludes amortization of acquisition-related intangibles from both periods, and a $4.4 million pension settlement charge recognized in the second quarter of 2022, was $219.9 million in the second quarter of 2023 and increased by 45.0% as compared to the second quarter of 2022.

Loss From Discontinued Operations, Net of Tax

Loss from discontinued operations, was $13.6 million net of tax in the second quarter of 2022 and included $4.5 million of pre-tax transaction and separation costs. There was no income or loss from discontinued operations in the second quarter of 2023.

HUBBELL INCORPORATED-Form 10-Q 34

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Segment Results

UTILITY SOLUTIONS

			Three Months Ended June 30,
(In millions)			2023			2022
Net sales			$	830.8		$	728.5
Operating income (GAAP measure)			199.5			111.4
Amortization of acquisition-related intangible assets			13.6			13.9
Adjusted operating income			$	213.1		$	125.3
Operating margin (GAAP measure)			24.0		%	15.3		%
Adjusted operating margin			25.6		%	17.2		%

The following table reconciles our Utility Solutions Organic net sales to the directly comparable GAAP financial measure (in millions and percentage change):

			Three Months Ended June 30,
Utility Solutions			2023			Inc/(Dec) %			2022			Inc/(Dec) %
Net sales growth (GAAP measure)			$	102.3		14.0			$	139.7		23.7
Impact of acquisitions			9.7			1.3			—			—
Impact of divestitures			—			—			(1.3)			(0.3)
Foreign currency exchange			(0.7)			(0.1)			0.5			0.1
Organic net sales growth (non-GAAP measure)			$	93.3		12.8			$	140.5		23.9

Net sales in the Utility Solutions segment in the second quarter of 2023 were $830.8 million, an increase of $102.3 million, or 14.0%, as compared to the second quarter of 2022. This increase was due to a 12.8% increase in organic net sales in the second quarter of 2023 as compared to the same prior year period, driven by a low double digit percentage increase in price realization and low single digit percentage increase in unit volumes. Net sales increased by 1.3% due to acquisitions. Volume increases were primarily driven by growth in Communications and Controls due to improved availability of semiconductors. Favorable price realization was driven by actions to offset inflation, as well as by our service levels.

Operating income in the Utility Solutions segment for the second quarter of 2023 was $199.5 million, an increase of 79.1% compared to the second quarter of 2022. Operating margin increased to 24.0% in the second quarter of 2023, as compared to 15.3% in the same period of 2022. Excluding amortization of acquisition-related intangibles, the adjusted operating margin increased to 25.6% in the second quarter of 2022 compared to 17.2% in the prior year period. The increase in operating margin was primarily driven by approximately 12 percentage points of margin expansion from favorable price realization, improved operational productivity, lower material costs, increased volumes and favorable product mix. Those increases were partially offset by four percentage points of margin headwind due to increases in non-material cost inflation and investments in capacity, innovation and productivity.

HUBBELL INCORPORATED-Form 10-Q 35

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ELECTRICAL SOLUTIONS

			Three Months Ended June 30,
(In millions)			2023			2022
Net sales			$	535.1		$	527.5
Operating income (GAAP measure)			88.3			79.2
Amortization of acquisition-related intangible assets			4.5			3.5
Adjusted operating income			$	92.8		$	82.7
Operating margin (GAAP measure)			16.5		%	15.0		%
Adjusted operating margin			17.3		%	15.7		%

The following table reconciles our Electrical Solutions Organic net sales to the directly comparable GAAP financial measure (in millions and percentage change):

			Three Months Ended June 30,
Electrical Solutions			2023			Inc/(Dec) %			2022			Inc/(Dec) %
Net sales growth (GAAP measure)			$	7.6		1.4			$	62.0		13.3
Impact of acquisitions			28.4			5.4			—			—
Impact of divestitures			—			—			—			—
Foreign currency exchange			(0.4)			(0.1)			(3.7)			(0.8)
Organic net sales (decline) growth (non-GAAP measure)			$	(20.4)		(3.9)			$	65.7		14.1

Net sales in the Electrical Solutions segment in the second quarter of 2023 were $535.1 million and increased by $7.6 million, or 1.4%, as compared to the second quarter of 2022. Net sales increased 5.4% due to acquisitions and was partially offset by a 3.9% decrease in organic net sales in the second quarter of 2023 as compared to the same prior year period, driven by a high single digit percentage decrease in unit volume partially offset by a mid single digit percentage increase in price realization. Markets for the Electrical Solutions segment were mixed, with weakness in residential and customer inventory management in commercial markets driving the decline in unit volume. Industrial end markets were solid and renewables and datacenter verticals were also notably strong in the quarter. Favorable price realization was driven primarily by actions to recover inflationary costs.

Operating income in the Electrical Solutions segment for the second quarter of 2023 was $88.3 million and increased approximately 11.5% compared to the second quarter of 2022, while operating margin in the second quarter of 2023 increased by 150 basis points to 16.5%. Excluding amortization of acquisition-related intangibles, adjusted operating margin increased by 160 basis points to 17.3%, as compared to the same prior year period. The increase in the adjusted operating margin in the second quarter of 2023 is primarily due to approximately nine percentage points of margin expansion from favorable price realization, lower material and freight costs and improved operational productivity. Those increases were partially offset by approximately seven percentage points of margin headwind driven by lower volumes, increases in non-material cost inflation, investments in capacity, innovation and productivity, and our SKU optimization efforts.

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Results of Operations – Six months ended June 30, 2023 compared to the Six months ended June 30, 2022

SUMMARY OF CONDENSED CONSOLIDATED RESULTS (IN MILLIONS, EXCEPT PER SHARE DATA):

			Six Months Ended June 30,
			2023			% of Net sales			2022			% of Net sales
Net sales			$	2,651.3					$	2,412.1
Cost of goods sold			1,706.8			64.4		%	1,705.8			70.7		%
Gross profit			944.5			35.6		%	706.3			29.3		%
Selling & administrative ("S&A") expense			407.9			15.4		%	372.8			15.5		%
Operating income			536.6			20.2		%	333.5			13.8		%
Net income from continuing operations			391.6			14.8		%	240.9			10.0		%
Less: Net income from continuing operations attributable to non-controlling interest			(2.9)			(0.1)		%	(2.8)			(0.1)		%
Net income from continuing operations attributable to Hubbell Incorporated			388.7			14.7		%	238.1			9.9		%
Income from discontinued operations, net of tax			—						64.1
Net income attributable to Hubbell incorporated			388.7						302.2
Less: Earnings allocated to participating securities			(0.9)						(0.8)
Net income available to common shareholders			$	387.8					$	301.4
Average number of diluted shares outstanding			53.9						54.1
DILUTED EARNINGS PER SHARE - CONTINUING OPERATIONS			$	7.19					$	4.39
DILUTED EARNINGS PER SHARE - DISCONTINUED OPERATIONS			$	—					$	1.18

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

			Six Months Ended June 30,
			2023			% of Net sales			2022			% of Net sales
Operating income (GAAP measure)			$	536.6		20.2		%	$	333.5		13.8		%
Amortization of acquisition-related intangible assets			35.9			1.4		%	34.9			1.5		%
Adjusted operating income (non-GAAP measure)			$	572.5		21.6		%	$	368.4		15.3		%

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The following table reconciles Adjusted net income from continuing operations attributable to Hubbell Incorporated, Adjusted net income from continuing operations 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).
			Six Months Ended June 30,
			2023			Diluted Per Share			2022			Diluted Per Share
Net income from continuing operations attributable to Hubbell Incorporated (GAAP measure)			$	388.7		$	7.21		$	238.1		$	4.40
Amortization of acquisition-related intangible assets			35.9			0.67			34.9			0.64
Pension charge			—			—			4.4			0.08
Subtotal			$	424.6		$	7.88		$	277.4		$	5.12
Income tax effects(1)			8.9			0.17			9.8			0.18
Adjusted net income from continuing operations attributable to Hubbell Incorporated (non-GAAP measure)			$	415.7		$	7.71		$	267.6		$	4.94
Less: Earnings allocated to participating securities			(1.0)			(0.02)			(0.7)			(0.01)
Adjusted net income from continuing operations available to common shareholders (non-GAAP measure)			$	414.7		$	7.69		$	266.9		$	4.93

(1) The income tax effects are calculated using the statutory tax rate, taking into consideration the nature of the item and the relevant taxing jurisdiction, unless otherwise noted.

The following table reconciles our Organic net sales to the directly comparable GAAP financial measure (in millions and percentage change):

			Six Months Ended June 30,
			2023			Inc/(Dec) %			2022			Inc/(Dec) %
Net sales growth (GAAP measure)			$	239.2		9.9			$	401.5		20.0
Impact of acquisitions			58.8			2.4			—			—
Impact of divestitures			—			—			(4.0)			(0.2)
Foreign currency exchange			(5.8)			(0.2)			(3.5)			(0.1)
Organic net sales growth (non-GAAP measure)			$	186.2		7.7			$	409.0		20.3

Net Sales

Net sales of $2,651.3 million in the first six months of 2023 increased by $239.2 million compared to the same period of 2022. Organic net sales increased by 7.7% which was composed of a high single digit percentage increase in price realization partially offset by a low single digit percentage decrease in volumes. Acquisitions contributed 2.4% to sales growth, partially offset by 0.2% of headwind from foreign exchange. 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 Net sales, cost of goods sold decreased by 630 basis points to 64.4% in the first six months of 2023, as compared to 70.7% in the first six months of 2022, resulting in a related 630 basis point increase in Gross profit margin in the first six months of 2023 to 35.6% as compared to 29.3% in the first six months of 2022. The increase in the Gross profit margin primarily reflects approximately ten percentage points of margin expansion driven by favorable price realization, improved operational productivity and modestly lower material costs. Operational productivity was driven by improving supply chain conditions and reduced rates of absenteeism as compared to the prior year period. Those increases were offset by approximately three percentage points of margin headwind driven by continued non-material cost inflation as well as increased investments in capacity, innovation and productivity.

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Selling & Administrative Expenses

S&A expense in the first six months of 2023 was $407.9 million and increased by $35.1 million compared to the prior year period. Approximately half of this increase was driven by labor and other cost inflation, while the remainder of the increase was primarily driven by added S&A costs from acquisitions, higher travel and entertainment costs, as well as increased investments in the business. S&A expense in the first six months of 2023 as a percentage of Net sales decreased to 15.4% by 10 basis points from 15.5% in the first six months of 2022.

Total Other Expense

Total other expense increased by $3.7 million in the first six months of 2023 to $27.8 million, primarily due to a reduction of $7.6 million of income related to the C&I Lighting business disposition in 2022 that did not recur in 2023 and higher non-service pension cost recognized in the first six months of 2023 as compared to the same period of the prior year. Those items were partially offset by a pension settlement charge of $4.4 million recorded in the second quarter of 2022 that did not recur in 2023, and lower net interest expense recorded in the first six months of 2023 compared to the same period of 2022.

Income Taxes

The effective tax rate in the first six months of 2023 increased to 23.0% as compared to 22.2% in the first six months of 2022, primarily due to increased income in higher taxed jurisdictions, partially offset by a higher stock based compensation tax benefit.

Net Income From Continuing Operations Attributable to Hubbell Incorporated and Earnings Per Diluted Share From Continuing Operations

Net income from continuing operations attributable to Hubbell Incorporated was $388.7 million in the first six months of 2023 and increased 63.3% as compared to the same period of the prior year, reflecting the factors described above. As a result, earnings per diluted share from continuing operations in the first six months of 2023 increased 63.8% as compared to the first six months of 2022. Adjusted net income from continuing operations attributable to Hubbell Incorporated, which excludes amortization of acquisition-related intangibles from both periods, and a $4.4 million pension settlement charge recognized in the second quarter of 2023, was $414.7 million in first six months of 2023 and increased by 55.3% as compared to the same period of 2022.

Income From Discontinued Operations, Net of Tax

Income from discontinued operations, was $64.1 million net of tax in the first six months of 2022 and included a pre-tax gain on disposal of $80.7 million, partially offset by $6.7 million of pre-tax transaction and separation costs. There was no income or loss from discontinued operations in 2023.

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Segment Results

UTILITY SOLUTIONS

			Six Months Ended June 30,
(In millions)			2023			2022
Net sales			$	1,612.4		$	1,380.3
Operating income (GAAP measure)			377.0			199.5
Amortization of acquisition-related intangible assets			26.9			27.9
Adjusted operating income			$	403.9		$	227.4
Operating margin (GAAP measure)			23.4		%	14.5		%
Adjusted operating margin			25.0		%	16.5		%

The following table reconciles our Utility Solutions Organic net sales to the directly comparable GAAP financial measure (in millions and percentage change):

			Six Months Ended June 30,
Utility Solutions			2023			Inc/(Dec) %			2022			Inc/(Dec) %
Net sales growth (GAAP measure)			$	232.1		16.8			$	259.3		23.1
Impact of acquisitions			15.3			1.1			—			—
Impact of divestitures			—			—			(4.0)			(0.4)
Foreign currency exchange			(2.4)			(0.2)			1.0			0.1
Organic net sales growth (non-GAAP measure)			$	219.2		15.9			$	262.3		23.4

Net sales in the Utility Solutions segment in the first six months of 2023 were $1.6 billion, an increase of $232.1 million, or 16.8%, as compared to the first six months of 2022. This increase was due to a 15.9% increase in Organic net sales in the first six months of 2023 as compared to the same prior year period, driven by a low double digit percentage increase in price realization and mid single digit percentage increase in unit volumes. Net sales increased by 1.1% due to acquisitions, and decreased 0.2% due to foreign exchange. Volume increases were primarily driven by strong demand in Utility T&D Components as utility customers continued to actively invest to upgrade aging infrastructure and modernize the grid and growth in Communications and Controls due to improved availability of semiconductors. Favorable price realization was driven by actions to offset inflation, as well as by our service levels.

Operating income in the Utility Solutions segment for the first six months of 2023 was $377.0 million, an increase of 89.0% compared to the first six months of 2022. Operating margin increased to 23.4% as compared to 14.5% in the same period of 2022. Excluding amortization of acquisition-related intangibles, the adjusted operating margin increased to 25.0% in the first six months of 2023 compared to 16.5% in the prior year period. The increase in operating margin was primarily driven by approximately 12 percentage points of margin expansion from favorable price realization, increased volumes, improved operational productivity and lower material costs. Those increases were partially offset by three percentage points of margin headwind due to increases in non-material cost inflation and investments in capacity, innovation and productivity.

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ELECTRICAL SOLUTIONS

			Six Months Ended June 30,
(In millions)			2023			2022
Net sales			$	1,038.9		$	1,031.8
Operating income (GAAP measure)			159.6			134.0
Amortization of acquisition-related intangible assets			9.0			7.0
Adjusted operating income			$	168.6		$	141.0
Operating margin (GAAP measure)			15.4		%	13.0		%
Adjusted operating margin			16.2		%	13.7		%

The following table reconciles our Electrical Solutions Organic net sales to the directly comparable GAAP financial measure (in millions and percentage change):

			Six Months Ended June 30,
Electrical Solutions			2023			Inc/(Dec) %			2022			Inc/(Dec) %
Net sales growth (GAAP measure)			$	7.1		0.7			$	142.2		16.0
Impact of acquisitions			43.5			4.2			—			—
Impact of divestitures			—			—			—			—
Foreign currency exchange			(3.4)			(0.3)			(4.5)			(0.5)
Organic net sales (decline) growth (non-GAAP measure)			$	(33.0)		(3.2)			$	146.7		16.5

Net sales in the Electrical Solutions segment in the first six months of 2023 were $1.0 billion and increased by $7.1 million, or 0.7%, as compared to the first six months of 2022. The increase was due to a 4.2% increase in sales due to acquisitions, partially offset by a 3.2% decrease in Organic net sales in the first six months of 2023 as compared to the same prior year period, driven by a high single digit percentage decrease in unit volume partially offset by a mid single digit percentage increase in price realization. Net sales decreased by 0.3% due to foreign exchange. Markets for the Electrical Solutions segment were mixed, with weakness in residential and customer inventory management in commercial markets driving the decline in unit volume. Industrial end markets were solid and renewables and datacenter verticals were also notably strong in the first six months of 2023. Favorable price realization was driven primarily by actions to recover inflationary costs.

Operating income in the Electrical Solutions segment for the first six months of 2023 was $159.6 million and increased approximately 19.1% compared to the first six months of 2022, while operating margin in the first six months of 2023 increased by 240 basis points to 15.4%. Excluding amortization of acquisition-related intangibles, adjusted operating margin increased by 250 basis points to 16.2%, as compared to the same prior year period. The increase in the adjusted operating margin in the first six months of 2023 is primarily due to approximately nine percentage points of margin expansion from favorable price realization, lower material and freight costs and improved operational productivity. Those increases were partially offset by approximately six percentage points of margin headwind driven by lower volumes, increases in non-material cost inflation and investments in capacity, innovation and productivity.

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Financial Condition, Liquidity and Capital Resources

Cash Flow

			Six months ended June 30,
(In millions)			2023			2022
Net cash provided by (used in):
Operating activities from continuing operations			$	341.4		$	174.2
Investing activities from continuing operations			(128.2)			293.8
Financing activities from continuing operations			(165.9)			(278.2)
Cash from discontinued operations			—			(46.4)
Effect of foreign currency exchange rate changes on cash and cash equivalents			5.1			(6.0)
NET CHANGE IN CASH AND CASH EQUIVALENTS			$	52.4		$	137.4

Cash provided by operating activities from continuing operations for the six months ended June 30, 2023 was $341.4 million compared to cash provided by operating activities from continuing operations of $174.2 million for the same period in 2022. The increase was primarily due to higher net income during the first six months of 2023 compared to the same period in 2022.

Cash used by investing activities from continuing operations was $128.2 million in the six months ended June 30, 2023 compared to cash provided of $293.8 million during the comparable period in 2022. This change was driven by $348.6 million in net proceeds from the disposal of the C&I Lighting business in 2022, partially offset by the $60.0 million acquisition of EIG and a $27.0 million increase in capital expenditures in the first six months of 2023, as we increased capital investments to expand capacity, optimize footprint, implement automation and productivity initiatives.

Cash used in financing activities from continuing operations was $165.9 million in the six months ended June 30, 2023 as compared to cash used of $278.2 million in the comparable period of 2022. This change primarily reflects a decrease of $130.0 million from the Company's share repurchases in the first six months of 2023 compared to the same prior year period.

We had no cash from discontinued operations in the six months ended June 30, 2023 as compared to cash used in discontinued operations of $46.4 million in the comparable period of 2022.

The favorable impact of foreign currency exchange rates on cash was $5.1 million for the six months ended June 30, 2023 and is primarily related to strengthening of the Mexican Peso, British Pound, and Canadian Dollar versus the U.S. 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 on productivity initiatives and to maintain the operation of our equipment and facilities and invest in restructuring activities.

In May 2023, the Company acquired all of the issued and outstanding membership interests of EIG for a cash purchase price of approximately $60 million, net of cash acquired, subject to customary purchase price adjustments. EIG offers fully integrated energy management and power quality monitoring solutions for the electric utility and commercial and industrial markets. This business is reported in the Utility Solutions segment.

During the first six months of 2023, we invested $68.9 million in capital expenditures, an increase of $27.0 million from the comparable period of 2022 as we continue to invest in capacity expansion, footprint optimization, and automation and productivity initiatives.

We continue to invest in restructuring and related programs to maintain a competitive cost structure, to drive operational efficiencies and to mitigate the impact of rising material costs and administrative cost inflation. We expect our investment in restructuring and related activities to continue in 2023 as we continue to invest in previously initiated actions and initiate further footprint consolidation and other cost reduction initiatives.

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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, accelerated depreciation, as well as facility closure, contract termination and certain pension costs that are directly related to restructuring actions. We 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.

The table below presents the restructuring and related costs incurred in the first six months of 2023, additional expected costs, and the expected completion date of restructuring actions that have been initiated as of June 30, 2023 and in prior years (in millions):

			Costs incurred in the six months ended June 30, 2023			Additional expected costs			Expected completion date
2023 Restructuring Actions			$	0.2		$	—
2022 and Prior Restructuring Actions			2.1			4.2			2024
Total Restructuring cost (GAAP measure)			$	2.3		$	4.2
Restructuring-related costs			3.8			0.6
Restructuring and related costs (Non-GAAP)			$	6.1		$	4.8

Stock Repurchase Program

On October 23, 2020, the Board of Directors approved a stock repurchase program that authorized the repurchase of up to $300 million of common stock and expires in October 2023 (the "October 2020 program"). In the first six months of 2023, the Company repurchased $20.0 million of shares of common stock authorized under the October 2020 program. At June 30, 2023, our remaining share repurchase authorization under the October 2020 program is $86.7 million. On October 21, 2022 the Board of Directors approved a new stock repurchase program that authorized the repurchase of up to $300 million of common stock and expires in October 2025. There have been no repurchases under the October 2022 program. When combined with the $86.7 million of remaining share repurchase authorization under the October 2020 program, we have a total share repurchase authorization of approximately $386.7 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.

Debt to Capital

At June 30, 2023 and December 31, 2022, the Company had $1,439.1 million and $1,437.9 million, respectively, of long-term debt outstanding, net of the unamortized balance of capitalized debt issuance costs.

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 June 30, 2023.

The interest rate applicable to borrowings under the 2021 Credit Facility is (i) either 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 June 30, 2023. As of June 30, 2023, the 2021 Credit Facility was undrawn.

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Unsecured Senior Notes

At both June 30, 2023 and December 31, 2022, 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, was $1,439.1 million and $1,437.9 million at June 30, 2023 and December 31, 2022, respectively.

The Notes are callable at any time at specified prices and are only subject to accelerated payment prior to maturity upon customary events of default, or upon a change in control triggering event as defined in the indenture governing the Notes, as supplemented. The Company was in compliance with all covenants (none of which are financial) as of June 30, 2023.

Short-term Debt

The Company had $1.8 million and $4.7 million of short-term debt outstanding at June 30, 2023 and December 31, 2022, respectively, which consisted of borrowings to support our international operations in China and amounts outstanding under our Commercial Card Program.

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)			June 30, 2023			December 31, 2022
Total Debt			$	1,440.9		$	1,442.6
Hubbell Incorporated Shareholders’ Equity			2,620.7			2,360.9
TOTAL CAPITAL			$	4,061.6		$	3,803.5
Total Debt to Total Capital			35		%	38		%
Cash and Investments			578.4			520.7
Net Debt			$	862.5		$	921.9
Net Debt to Total Capital			21		%	24		%

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 the first six months of 2023, we returned capital to our shareholders by paying $120.1 million of dividends on our common stock and using $20.0 million of cash for share repurchases.

We also require cash outlays to fund our operations, capital expenditures, and working capital requirements to accommodate anticipated levels of business activity, as well as our rate of cash dividends, and potential future acquisitions. We have contractual obligations for long-term debt, operating leases, purchase obligations, and certain other long-term liabilities that are summarized in the Financial Condition, Liquidity and Capital Resources section in our Annual Report on Form 10-K for the year ended December 31, 2022. As a result of the Tax Cuts and Jobs Act of 2017 (the "TCJA"), we also have an obligation to 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 resources to meet these funding needs are as follows:

◦Cash flows from operating activities and existing cash resources: In addition to cash flows from operating activities, we also had $492.6 million of cash and cash equivalents at June 30, 2023, of which approximately 29% was held inside the United States and the remainder held internationally.

◦Our 2021 Credit Facility provides a $750.0 million committed revolving credit facility and commitments under the 2021 Credit Facility may be increased (subject to certain conditions) to an aggregate amount not to exceed $1.250 billion. Annual commitment fees to support availability under the 2021 Credit Facility are not material. Although not the principal source of liquidity, we believe our 2021 Credit Facility is capable of providing significant financing flexibility at reasonable rates of 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 could cause our borrowing costs to 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. The full $750.0 million of borrowing capacity under the 2021 Credit Facility was available to the Company at June 30, 2023.

◦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, 2022. 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 six months ended June 30, 2023, 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 our financial results, condition and outlook, anticipated end markets, expected capital resources, liquidity, financial performance, pension funding, and results of operations and are based on our reasonable current expectations. In addition, all statements regarding the expected financial impact of the integration of acquisitions and completion of certain divestitures, 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, market conditions 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, and changes in operating results, 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 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 material 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.

• 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.

• 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.

• Impacts of trade tariffs, import quotas or other trade restrictions or measures taken by the U.S., U.K. and other countries, including the recent and potential changes in U.S. trade policies.

• Failure to comply with import and export laws.

• Changes relating to impairment of our goodwill and other intangible assets.

• Inability to access capital markets or failure to maintain our credit ratings.

• Changes in expected or future levels of operating cash flow, indebtedness and capital spending.

• 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 increases in interest rates and changes in plan assets with respect to 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 key acquisitions, mergers, and other transactions, such as the recent acquisitions of PCX Holding LLC, Ripley Tools, LLC, Nooks Hill Road, LLC, REF Automation Limited, REF Alabama Inc., and El Electronics LLC, as well as the failure to realize expected synergies and benefits anticipated when we make an acquisition.

• The impact of certain divestitures, including the benefits and costs of the sale of the C&I Lighting business to GE Current, a Daintree Company.

• The ability to effectively implement Enterprise Resource Planning systems without disrupting operational and financial processes.

• The ability of government customers to meet their financial obligations.

• Political unrest and military actions in foreign countries, particularly the armed conflict in Ukraine and trade tensions with China, as well as the impact on world markets and energy supplies resulting therefrom.

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• The impact of world economic and political issues, including the long-term effects of Brexit.

• The impact of potential natural disasters or additional public health emergencies on our financial condition and results of operations.

• Failure of information technology systems, security breaches, cyber threats, malware, phishing attacks, break-ins and similar events resulting in unauthorized disclosure of confidential 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, 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, 2022 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.