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, Ireland and the Republic of the Philippines. The Company also participates in joint ventures in Hong Kong and 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 employed approximately 18,300 individuals worldwide as of June 30, 2024.

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

Results for the six months ended June 30, 2024 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 half 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, as 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 and six months ended June 30, 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 – Second Quarter of 2024 compared to the Second Quarter of 2023

Overview

Second quarter 2024 net sales were $1,452.5 million and grew by 6%, including 2% organic growth from price realization and 4% growth from acquisitions net of divestitures.

Organic growth in the Electrical Solutions segment was strong, led by datacenter and renewables verticals as electrification drives strong project activity. Organic growth was down 1.5% in the Utility Solutions segment as strength in transmission, substation and grid automation markets was offset by continued customer inventory management in distribution markets and weak telcom markets in the quarter. Price realization remains positive in both segments as compared to the second 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 3.5% decline in net sales as compared to the second quarter of 2023.

Operating margin in the second quarter of 2024 was 20.7% and contracted by 40 basis points. Adjusted operating margin, which excludes amortization of acquisition-related intangibles and transaction, integration and separation costs, was 22.8% and expanded by 40 basis points. Margin expansion in the quarter was primarily driven by favorable price realization and benefits from operational productivity, as well as the impact of recent portfolio transformation efforts. Those factors were partially offset by higher material and other cost inflation, and investments. 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 in the first quarter of 2024, 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 June 30,
			2024			% of Net sales			2023			% of Net sales
Net sales			$	1,452.5					$	1,365.9
Cost of goods sold			943.8			65.0		%	869.7			63.7		%
Gross profit			508.7			35.0		%	496.2			36.3		%
Selling & administrative ("S&A") expense			207.5			14.3		%	208.4			15.2		%
Operating income			301.2			20.7		%	287.8			21.1		%
Net income			215.2			14.8		%	208.2			15.2		%
Less: Net income attributable to non-controlling interest			(1.6)			(0.1)		%	(1.4)			(0.1)		%
Net income attributable to Hubbell Incorporated			213.6			14.7		%	206.8			15.1		%
Less: Earnings allocated to participating securities			(0.4)						(0.5)
Net income available to common shareholders			$	213.2					$	206.3
Average number of diluted shares outstanding			54.1						54.0
DILUTED EARNINGS PER SHARE			$	3.94					$	3.82

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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 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 comprise the following:

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 resulted in a significant increase in 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 our operating performance.

Gains or losses on disposition of a business

Certain of the Company's adjusted 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 to 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 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, 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 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 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 the 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 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.

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,
			2024			% of Net sales			2023			% of Net sales
Operating income (GAAP measure)			$	301.2		20.7		%	$	287.8		21.1		%
Amortization of acquisition-related intangible assets			28.5			2.0		%	18.1			1.3		%
Transaction, integration & separation costs			1.7			0.1		%	—			—		%
Adjusted operating income (non-GAAP measure)			$	331.4		22.8		%	$	305.9		22.4		%
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 June 30,
			2024			Diluted Per Share			2023			Diluted Per Share
Net income attributable to Hubbell Incorporated (GAAP measure)			$	213.6		$	3.95		$	206.8		$	3.83
Amortization of acquisition-related intangible assets			28.5			0.53			18.1			0.34
Transaction, integration & separation costs			1.7			0.03			—			—
Subtotal			$	243.8		$	4.51		$	224.9		$	4.17
Income tax effects(1)			7.3			0.13			4.5			0.09
Adjusted net income attributable to Hubbell Incorporated (non-GAAP measure)			$	236.5		$	4.38		$	220.4		$	4.08
Less: Earnings allocated to participating securities			(0.5)			(0.01)			(0.5)			(0.01)
Adjusted net income available to common shareholders (non-GAAP measure)			$	236.0		$	4.37		$	219.9		$	4.07

(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.

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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,
			2024			Inc/(Dec) %			2023			Inc/(Dec) %
Net sales growth (GAAP measure)			$	86.6		6.3			$	109.9		8.7
Impact of acquisitions			108.8			8.0			38.1			3.0
Impact of divestitures			(47.2)			(3.5)			—			—
Foreign currency exchange			(1.2)			(0.1)			(1.1)			(0.1)
Organic net sales growth (non-GAAP measure)			$	26.2		1.9			$	72.9		5.8

Net Sales

Net sales of $1,452.5 million in the second quarter of 2024 increased by $86.6 million compared to the second quarter of 2023. Organic net sales increased by 1.9% driven by a low single digit percentage increase in price realization. The impact of volume on net sales was flat quarter over quarter. Acquisitions net of divestitures contributed 4.5% to net sales growth. 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 increased by 130 basis points to 65.0% in the second quarter of 2024, resulting in gross profit margin contracting to 35.0%. Approximately four percentage points of gross profit margin contraction was driven by higher intangible amortization expense, material and other cost inflation, which was partially offset by approximately three percentage points of margin expansion driven by favorable price realization and improved operational productivity.

Selling & Administrative Expenses

S&A expense in the second quarter of 2024 was $207.5 million and decreased by $0.9 million or 0.4% compared to the prior year period. This decrease was driven by lower professional services and employee incentive expense, partially offset by the impact of 2023 acquisitions net of divestitures, including an increase in intangible amortization expense. S&A expense as a percentage of Net sales was 14.3% in the second quarter of 2024, compared to 15.2% in the second quarter of 2023.

Total Other Expense

Total other expense increased by $7.0 million in the second quarter of 2024 to $21.0 million, primarily due to higher net interest expense of $10.6 million in the second quarter of 2024 compared to the same period in 2023, partially offset by $2.5 million of TSA income related to the disposal of the residential lighting business. The increase in interest expense was primarily attributable to debt incurred in connection with the acquisition of Systems Control and higher market interest rates.

Income Taxes

The effective tax rate in the second quarter of 2024 decreased to 23.2% as compared to 24.0% in the second quarter of 2023, primarily due to earnings mix offset by lower tax benefit from stock-based compensation in the second quarter of 2024 compared to the second quarter of 2023.

Net Income Attributable to Hubbell Incorporated and Earnings Per Diluted Share

Net income attributable to Hubbell Incorporated was $213.6 million in the second quarter of 2024 and increased 3.3% as compared to the same period of the prior year, reflecting the factors described above. As a result, earnings per diluted share in the second quarter of 2024 increased 3% as compared to the second quarter of 2023. Adjusted net income attributable to Hubbell Incorporated, which excludes amortization of acquisition-related intangibles from both periods and transaction, integration & separation costs in the second quarter of 2024, was $236.5 million in the second quarter of 2024 and increased by 7% as compared to the second quarter of 2023.

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Segment Results

UTILITY SOLUTIONS

The following table reconciles our Utility Solutions segment adjusted operating income and adjusted operating margin to the directly comparable GAAP financial measure (in millions and percentage change):

			Three Months Ended June 30,
(In millions)			2024			2023
Net sales			$	926.5		$	830.8
Operating income (GAAP measure)			196.1			199.5
Amortization of acquisition-related intangible assets			24.4			13.6
Transaction, integration & separation costs			1.7			—
Adjusted operating income			$	222.2		$	213.1
Operating margin (GAAP measure)			21.2		%	24.0		%
Adjusted operating margin			24.0		%	25.6		%

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

			Three Months Ended June 30,
Utility Solutions			2024			Inc/(Dec) %			2023			Inc/(Dec) %
Net sales growth (GAAP measure)			$	95.7		11.5			$	102.3		14.0
Impact of acquisitions			108.8			13.1			9.7			1.3
Impact of divestitures			—			—			—			—
Foreign currency exchange			(1.0)			(0.1)			(0.7)			(0.1)
Organic net sales growth (decline) (non-GAAP measure)			$	(12.1)		(1.5)			$	93.3		12.8

Net sales in the Utility Solutions segment in the second quarter of 2024 were $926.5 million, and increased by $95.7 million, or 11.5%, as compared to the second quarter of 2023. That increase was driven by a 13.1% increase in net sales from acquisitions, partially offset by a 1.5% decrease in organic net sales. The decrease in organic net sales was driven by a low single digit percentage decrease in unit volume, partially offset by a low single digit percentage increase in price realization. The decrease in unit volume was largely driven by volume declines in enclosures products primarily driven by weakness in the telcom markets, as well as continued customer inventory management in distribution markets. These factors were partially offset by robust growth in transmission and substation markets, as well as backlog conversion in meters and AMI products. Favorable price realization was driven by actions to offset inflation, as well as by service levels.

Operating income in the Utility Solutions segment for the second quarter of 2024 was $196.1 million, a decrease of 1.7% compared to the second quarter of 2023. Operating margin decreased by 280 basis points to 21.2% in the second quarter of 2024, as compared to the same period of 2023. Excluding amortization of acquisition-related intangibles and transaction, integration and separation costs, the adjusted operating margin decreased by 160 basis points to 24.0%, as compared to the 2023 period. The decrease in operating margin includes approximately three percentage points of margin expansion primarily due to favorable price realization and improved operational productivity, but that expansion was more than offset by approximately five percentage points of margin contraction primarily due to material and other cost inflation, lower unit volume and higher restructuring and related costs. The acquisition of Systems Control also contributed to second quarter operating margin contraction. The impact of lower unit volume includes an impact of approximately 150 basis points from enclosures products, driven primarily by weakness in the telcom market.

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ELECTRICAL SOLUTIONS

The following table reconciles our Electrical Solutions segment adjusted operating income and adjusted operating margin to the directly comparable GAAP financial measure (in millions and percentage change):

			Three Months Ended June 30,
(In millions)			2024			2023
Net sales			$	526.0		$	535.1
Operating income (GAAP measure)			105.1			88.3
Amortization of acquisition-related intangible assets			4.1			4.5
Adjusted operating income			$	109.2		$	92.8
Operating margin (GAAP measure)			20.0		%	16.5		%
Adjusted operating margin			20.8		%	17.3		%

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

			Three Months Ended June 30,
Electrical Solutions			2024			Inc/(Dec) %			2023			Inc/(Dec) %
Net sales growth (GAAP measure)			$	(9.1)		(1.7)			$	7.6		1.4
Impact of acquisitions			—			—			28.4			5.4
Impact of divestitures			(47.2)			(8.8)			—			—
Foreign currency exchange			(0.2)			(0.1)			(0.4)			(0.1)
Organic net sales growth (decline) (non-GAAP measure)			$	38.3		7.2			$	(20.4)		(3.9)

Net sales in the Electrical Solutions segment in the second quarter of 2024 were $526.0 million and decreased by $9.1 million, or 1.7%, as compared to the second quarter of 2023. That decrease includes 7.2% growth in organic net sales, which was more than offset by an 8.8% decline in net sales resulting from the disposition of our residential lighting business during the first quarter of 2024. The increase in organic net sales was driven by a mid-single digit percentage increase in unit volume and a low single digit percentage increase in price realization. Volume growth in the quarter was driven primarily by strength in datacenter and renewables markets, while broader industrial and electrical markets were steady. Favorable price realization was driven primarily by actions to recover inflationary costs.

Operating income in the Electrical Solutions segment for the second quarter of 2024 was $105.1 million and increased approximately 19.0% compared to the second quarter of 2023, while operating margin in the second quarter of 2024 expanded by 350 basis points to 20.0%. Excluding amortization of acquisition-related intangibles, the adjusted operating margin expanded by 350 basis points to 20.8%. The increase in operating margin was primarily due to approximately six percentage points of margin expansion from favorable price realization, improved operational productivity, higher volume and business mix. The disposition of the residential lighting business also contributed to that expansion. Those factors were partially offset by approximately two percentage points of margin contraction driven by higher material and other cost inflation.

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Results of Operations - Six months ended June 30, 2024 compared to the Six months ended June 30, 2023

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

			Six Months Ended June 30,
			2024			% of Net sales			2023			% of Net sales
Net sales			$	2,851.6					$	2,651.3
Cost of goods sold			1,895.2			66.5		%	1,706.8			64.4		%
Gross profit			956.4			33.5		%	944.5			35.6		%
Selling & administrative ("S&A") expense			426.7			14.9		%	407.9			15.4		%
Operating income			529.7			18.6		%	536.6			20.2		%
Net income			364.3			12.8		%	391.6			14.8		%
Less: Net income attributable to non-controlling interest			(2.9)			(0.1)		%	(2.9)			(0.1)		%
Net income attributable to Hubbell Incorporated			361.4			12.7		%	388.7			14.7		%
Less: Earnings allocated to participating securities			(0.7)						(0.9)
Net income available to common shareholders			$	360.7					$	387.8
Average number of diluted shares outstanding			54.1						53.9
DILUTED EARNINGS PER SHARE			$	6.67					$	7.19

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,
			2024			% of Net sales			2023			% of Net sales
Operating income (GAAP measure)			$	529.7		18.6		%	$	536.6		20.2		%
Amortization of acquisition-related intangible assets			67.9			2.4		%	35.9			1.4		%
Transaction, integration & separation costs			9.0			0.3		%	—			—		%
Adjusted operating income (non-GAAP measure)			$	606.6		21.3		%	$	572.5		21.6		%
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).
			Six Months Ended June 30,
			2024			Diluted Per Share			2023			Diluted Per Share
Net income attributable to Hubbell Incorporated (GAAP measure)			$	361.4		$	6.68		$	388.7		$	7.21
Amortization of acquisition-related intangible assets			67.9			1.26			35.9			0.67
Transaction, integration & separation costs			9.0			0.17			—			—
Loss on disposition of business			5.3			0.10			—			—
Subtotal			$	443.6		$	8.21		$	424.6		$	7.88
Income tax effects(1)			11.9			0.22			8.9			0.17
Adjusted net income attributable to Hubbell Incorporated (non-GAAP measure)			$	431.7		$	7.99		$	415.7		$	7.71
Less: Earnings allocated to participating securities			(0.9)			(0.02)			(1.0)			(0.02)
Adjusted net income available to common shareholders (non-GAAP measure)			$	430.8		$	7.97		$	414.7		$	7.69

(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.

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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,
			2024			Inc/(Dec) %			2023			Inc/(Dec) %
Net sales growth (GAAP measure)			$	200.3		7.6			$	239.2		9.9
Impact of acquisitions			217.3			8.2			58.8			2.4
Impact of divestitures			(75.3)			(2.8)			—			—
Foreign currency exchange			2.0			0.1			(5.8)			(0.2)
Organic net sales growth (non-GAAP measure)			$	56.3		2.1			$	186.2		7.7

Net Sales

Net sales of $2,851.6 million in the first six months of 2024 increased by $200.3 million compared to the same period in 2023. Organic net sales increased by 2.1%, driven by a low single digit percentage increase in price realization. The impact of volume on net sales was flat year over year. Acquisitions net of divestitures contributed 5.4% to net sales growth. 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 increased by 210 basis points to 66.5% in the first six months of 2024, resulting in gross profit margin contracting to 33.5%. Approximately five percentage points of gross profit margin contraction was driven by higher intangible amortization expense, material and other cost inflation, higher restructuring and related costs, as well as continued investments in long-term growth and productivity initiatives, which was partially offset by approximately three percentage points of margin expansion driven by favorable price realization and improved operational productivity.

Selling & Administrative Expenses

S&A expense in the first six months of 2024 was $426.7 million and increased by $18.8 million or 4.6% compared to the prior year period. This increase was driven by the impact of 2023 acquisitions net of divestitures, including an increase in intangible amortization expense, partially offset by lower employee incentive cost. S&A expense as a percentage of net sales was 14.9% in the first six months of 2024, as compared to 15.4% in the first six months of 2023.

Total Other Expense

Total other expense increased by $20.3 million in the first six months of 2024 to $48.1 million, primarily due to a $22.0 million increase in interest expense in the first six months of 2024, along with the $5.3 million loss recognized on the disposition of the residential lighting business, partially offset by $4.5 million of TSA income related to the disposal of the residential lighting business. The increase in interest expense was primarily attributable to debt incurred in connection with the Systems Control acquisition and higher market interest rates.

Income Taxes

The effective tax rate in the first six months of 2024 increased to 24.4% as compared to 23.0% in the first six months of 2023, primarily due to an income tax expense related to the sale of our residential lighting business in the first quarter of 2024, partially offset by a tax benefit from stock-based compensation.

Net Income Attributable to Hubbell Incorporated and Earnings Per Diluted Share

Net income attributable to Hubbell Incorporated was $361.4 million in the first six months of 2024 and decreased 7.0% as compared to the same period of the prior year, reflecting the factors described above. As a result, earnings per diluted share in the first six months of 2024 decreased 7.3% as compared to the first six months of 2023. Adjusted net income attributable to Hubbell Incorporated, which excludes amortization of acquisition-related intangibles from both periods and transaction, integration & separation costs and a loss on disposition of a business in the first six months of 2024, was $431.7 million in the first six months of 2024 and was $415.7 million in the first six months of 2023.

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Segment Results

UTILITY SOLUTIONS

The following table reconciles our Utility Solutions segment adjusted operating income and adjusted operating margin to the directly comparable GAAP financial measure (in millions and percentage change):

			Six Months Ended June 30,
(In millions)			2024			2023
Net sales			$	1,820.5		$	1,612.4
Operating income (GAAP measure)			353.6			377.0
Amortization of acquisition-related intangible assets			59.6			26.9
Transaction, integration & separation costs			4.2			—
Adjusted operating income			$	417.4		$	403.9
Operating margin (GAAP measure)			19.4		%	23.4		%
Adjusted operating margin			22.9		%	25.0		%

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

			Six Months Ended June 30,
Utility Solutions			2024			Inc/(Dec) %			2023			Inc/(Dec) %
Net sales growth (GAAP measure)			$	208.1		12.9			$	232.1		16.8
Impact of acquisitions			217.3			13.5			15.3			1.1
Impact of divestitures			—			—			—			—
Foreign currency exchange			0.3			—			(2.4)			(0.2)
Organic net sales growth (decline) (non-GAAP measure)			$	(9.5)		(0.6)			$	219.2		15.9

Net sales in the Utility Solutions segment in the first six months of 2024 were $1,820.5 million, and increased by $208.1 million, or 12.9%, as compared to the first six months of 2023. That increase was driven by a 13.5% increase in net sales from acquisitions offset by a 0.6% decrease in organic net sales. The decrease in organic net sales was driven by a low single digit percentage decrease in unit volume, partially offset by a low single digit percentage increase in price realization. The decrease in unit volume was largely driven by volume declines in enclosures products primarily driven by weakness in the telcom markets, as well as continued customer inventory management in distribution markets. These factors were partially offset by robust growth in transmission and substation markets, as well as backlog conversion in meters and AMI products. 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 2024 was $353.6 million, a decrease of 6.2% compared to the first six months of 2023. Operating margin declined by 400 basis points to 19.4% in the first six months of 2024, as compared to the same period of 2023. Excluding amortization of acquisition-related intangibles and transaction, integration and separation costs, the adjusted operating margin declined by 210 basis points to 22.9% as compared to the 2023 period. The decrease in operating margin includes approximately three percentage points of margin expansion primarily due to favorable price realization and improved operational productivity, but that expansion was more than offset by approximately five 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 acquisition of Systems Control also contributed to 2024 operating margin contraction. The impact of lower unit volume includes approximately 150 basis points from enclosures products, driven primarily by weakness in the telcom market.

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ELECTRICAL SOLUTIONS

The following table reconciles our Electrical Solutions segment adjusted operating income and adjusted operating margin to the directly comparable GAAP financial measure (in millions and percentage change):

			Six Months Ended June 30,
(In millions)			2024			2023
Net sales			$	1,031.1		$	1,038.9
Operating income (GAAP measure)			176.1			159.6
Amortization of acquisition-related intangible assets			8.3			9.0
Transaction, integration & separation costs			4.8			—
Adjusted operating income			$	189.2		$	168.6
Operating margin (GAAP measure)			17.1		%	15.4		%
Adjusted operating margin			18.3		%	16.2		%

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

			Six Months Ended June 30,
Electrical Solutions			2024			Inc/(Dec) %			2023			Inc/(Dec) %
Net sales growth (GAAP measure)			$	(7.8)		(0.8)			$	7.1		0.7
Impact of acquisitions			—			—			43.5			4.2
Impact of divestitures			(75.3)			(7.3)			—			—
Foreign currency exchange			1.7			0.2			(3.4)			(0.3)
Organic net sales growth (decline) (non-GAAP measure)			$	65.8		6.3			$	(33.0)		(3.2)

Net sales in the Electrical Solutions segment in the first six months of 2024 were $1,031.1 million and decreased by $7.8 million, or 0.8%, as compared to the first six months of 2023. That decrease was driven by a 7.3% decline in net sales resulting from the disposition of our residential lighting business in the first quarter of 2024, offset by a 6.3% increase in organic net sales. The increase in organic net sales was driven by a mid-single digit percentage increase in unit volume and a low single digit percentage increase in price realization. Volume growth was driven primarily by strength in datacenter and renewables markets, while broader industrial and electrical markets were steady. 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 2024 was $176.1 million and increased approximately 10.3% compared to the first six months of 2023, while operating margin in the first six months of 2024 increased by 170 basis points to 17.1%. Excluding amortization of acquisition-related intangibles and transaction, integration and separation costs, the adjusted operating margin increased by 210 basis points to 18.3%. The increases are primarily due to approximately five percentage points of margin expansion from favorable price realization, improved operational productivity and higher volume. The disposition of the residential lighting business also contributed to that expansion. Those factors were partially offset by approximately three percentage points of margin contraction driven by, higher material and other cost inflation.

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Financial Condition, Liquidity and Capital Resources

Cash Flow

			Six Months Ended June 30,
(In millions)			2024			2023
Net cash provided by (used in):
Operating activities			$	331.8		$	341.4
Investing activities			56.1			(128.2)
Financing activities			(319.3)			(165.9)
Effect of foreign currency exchange rate changes on cash and cash equivalents			(8.0)			5.1
NET CHANGE IN CASH AND CASH EQUIVALENTS			$	60.6		$	52.4

Cash provided by operating activities for the six months ended June 30, 2024 was $331.8 million compared to cash provided by operating activities of $341.4 million for the same period in 2023. The decrease was primarily due lower net income in the current year, and an increase in investments in working capital to serve customer demand, partially offset by higher adjustments to net income for amortization and depreciation expense in 2024.

Cash provided by investing activities was $56.1 million in the six months ended June 30, 2024 compared to cash used of $128.2 million during the comparable period in 2023. This change was driven by $122.9 million cash proceeds in 2024 from the disposition of our residential lighting business as compared to a $60.0 million cash outflow in 2023 for the acquisition of EIG.

Cash used in financing activities was $319.3 million in the six months ended June 30, 2024 as compared to cash used of $165.9 million in the comparable period of 2023. The increase in cash used primarily reflects higher payments against long and short-term borrowings in the first six months of 2024 compared to the same prior year period.

The unfavorable impact of foreign currency exchange rates on cash was $8.0 million for the six months ended June 30, 2024 and the change compared to prior year is primarily related to strengthening of the U.S. Dollar against the Brazilian Real, Canadian Dollar and Mexican Peso.

Investments in the Business

Investments in our business include cash outlays for the acquisition of businesses, and investments 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.

During the first six months of 2024, we invested $74.2 million in capital expenditures, an increase of $5.3 million from the comparable period of 2023, as we continue to invest in footprint optimization, 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 through 2024 as we continue to invest in previously initiated actions and 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. 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.

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The table below presents the restructuring and related costs incurred in the first six months of 2024, additional expected costs, and the expected completion date of restructuring actions that have been initiated as of June 30, 2024 and in prior years (in millions):

			Costs incurred in the six months ended June 30, 2024			Additional expected costs			Expected completion date
2024 Restructuring Actions			$	8.5		$	4.2		2025
2023 and Prior Restructuring Actions			1.2			1.1			2025
Total Restructuring cost (GAAP measure)			$	9.7		$	5.3
Restructuring-related costs			3.3			8.1
Restructuring and related costs (Non-GAAP measure)			$	13.0		$	13.4

Stock Repurchase Program

In October 2022, the Board of Directors approved a share repurchase program that authorized the repurchase of up to $300 million of common stock, which expires in October 2025. In the first six months of 2024, the Company repurchased $20.0 million of shares of common stock authorized under the October 2022 program. At June 30, 2024, our remaining share repurchase authorization was $280.0 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.

Debt to Capital

At June 30, 2024 and December 31, 2023, the Company had $1,892.7 million and $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 June 30, 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 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. 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 six months ended June 30, 2024, the Company made $128.8 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 June 30, 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 June 30, 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 June 30, 2024. As of June 30, 2024, the 2021 Credit Facility was undrawn.

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Unsecured Senior Notes

At both June 30, 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, was $1,441.6 million and $1,440.3 million at June 30, 2024 and December 31, 2023, 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, 2024.

Short-term Debt and Current Portion of Long-Term Debt

The Company had $110.5 million and $117.4 million of short-term debt and current portion of long-term debt outstanding at June 30, 2024 and December 31, 2023, respectively, composed of the following:

• $90.0 million of commercial paper borrowings outstanding at June 30, 2024, and $100.0 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 June 30, 2024 and $15.0 million at December 31, 2023.

• $1.8 million and $2.4 million of other short term debt outstanding at June 30, 2024 and December 31, 2023, 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, 2024			December 31, 2023
Total Debt (GAAP measure)			$	2,003.2		$	2,140.6
Hubbell Incorporated Shareholders’ Equity			3,052.6			2,877.0
TOTAL CAPITAL (GAAP measure)			$	5,055.8		$	5,017.6
Total Debt to Total Capital (GAAP measure)			40		%	43		%
Cash and Investments			487.3			424.5
Net Debt (non-GAAP measure)			$	1,515.9		$	1,716.1
Net Debt to Total Capital (non-GAAP measure)			30		%	34		%

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 2024, we returned capital to our shareholders by paying $131.0 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, 2023. 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 $397.2 million of cash and cash equivalents at June 30, 2024, of which approximately 19% 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 $1.25 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, 2024.

◦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, 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 six months ended June 30, 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 statements generally relate to our expectations and beliefs regarding our financial results, condition and outlook, projections of future performance, anticipated growth and end markets, changes in operating results, market conditions and economic conditions, expected capital resources, liquidity, financial performance, pension funding and results of operations, plans, strategize, opportunities, developments and productivity initiatives, competitive positioning, and trends in particular markets or industries. In addition, all statements regarding the expected financial impact of the integration of acquisitions, adoption of updated accounting standards and any expected effects of such adoption, and intent to continue repurchasing shares of common stock, as well as other statements that are not strictly historic in nature, are 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. Such forward-looking statements are based on our current expectations and involve numerous assumptions, known and unknown risks, uncertainties and other factors, which may cause actual and future performance or the Company's achievements to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such factors 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 telecommunication markets and 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.

• Impacts of trade tariffs, import quotas or other trade restrictions or measures taken by the United States, United Kingdom and other countries, including the recent and potential changes in U.S. trade policies, including those that may be made by the current or a future presidential administration.

• 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 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.

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• The impact of certain divestitures, including the benefits and costs of the sale of the residential lighting business.

• 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, including trade tensions with China and the wars in Ukraine and the Middle East, as well as the impact on world markets and energy supplies and prices resulting therefrom.

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

• Failure of information technology systems, cybersecurity 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 in 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, 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.