UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30, ~~2021~~2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission File Number 1-2958

HUBBELL INCORPORATED

(Exact name of registrant as specified in its charter)


Connecticut		06-0397030
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
40 Waterview Drive
Shelton,	CT	06484
(Address of principal executive offices)		(Zip Code)
(475)		882-4000
(Registrant’s telephone number, including area code)


N/A
(Former name, former address and former fiscal year, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock - par value $0.01 per share	HUBB	New York Stock Exchange

Indicate by check mark

•whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

☑

☐

•whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes

☑

☐

•whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standard provided pursuant to Section 13(a) of the Exchange Act. ☐

•whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

☐

☑

The number of shares outstanding of Hubbell common stock as of ~~October~~July 22, ~~2021~~2022 was ~~54,410,883.~~53,677,757.

HUBBELL INCORPORATED-Form 10-Q 1

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Index

HUBBELL INCORPORATED-Form 10-Q 2

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PART I			FINANCIAL INFORMATION


ITEM 1			Financial Statements

Condensed Consolidated Statements of Income (unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
(in millions, except per share amounts) 2021 2020 2021 2020
Net sales $ 1,213.6 $ 1,108.6 $ 3,483.8 $ 3,148.1
Cost of goods sold 883.3 779.0 2,532.9 2,224.5
Gross profit 330.3 329.6 950.9 923.6
Selling & administrative expenses 175.0 166.7 525.3 510.4
Operating income 155.3 162.9 425.6 413.2
Interest expense, net (13.5) (15.0) (41.4) (45.8)
Loss on disposition of business (Note 5) (0.1) — (6.9) —
Loss on extinguishment of debt (Note 16) — — (16.8) —
Pension charge — (6.6) — (6.6)
Other expense, net (1.2) (2.3) (3.1) (8.9)
Total other expense (14.8) (23.9) (68.2) (61.3)
Income before income taxes 140.5 139.0 357.4 351.9
Provision for income taxes 29.9 30.4 71.1 78.5
Net income 110.6 108.6 286.3 273.4
Less: Net income attributable to noncontrolling interest 2.1 1.5 4.3 3.1
Net income attributable to Hubbell Incorporated $ 108.5 $ 107.1 $ 282.0 $ 270.3
Earnings per share
Basic $ 1.99 $ 1.97 $ 5.18 $ 4.97
Diluted $ 1.98 $ 1.96 $ 5.14 $ 4.95
Cash dividends per common share $ 0.98 $ 0.91 $ 2.94 $ 2.73


	Three Months Ended June 30,				Six Months Ended June 30,
(in millions, except per share amounts)	2022		2021		2022		2021
Net sales	$	1,256.0	$	1,054.3	$	2,412.1	$	2,010.6
Cost of goods sold	872.8		756.0		1,705.8		1,450.1
Gross profit	383.2		298.3		706.3		560.5
Selling & administrative expenses	192.6		156.1		372.8		308.4
Operating income	190.6		142.2		333.5		252.1
Interest expense, net	(12.7)		(12.6)		(25.8)		(27.8)
Loss on disposition of business	—		(6.8)		—		(6.8)
Loss on extinguishment of debt	—		(16.8)		—		(16.8)
Pension charge (Note 12)	(4.4)		—		(4.4)		—
Other income, net	2.5		0.5		6.1		1.7
Total other expense	(14.6)		(35.7)		(24.1)		(49.7)
Income from continuing operations before income taxes	176.0		106.5		309.4		202.4
Provision for income taxes	38.9		16.9		68.5		38.1
Net income from continuing operations	137.1		89.6		240.9		164.3
Less: Net income from continuing operations attributable to noncontrolling interest	(1.5)		(0.8)		(2.8)		(2.2)
Net income from continuing operations attributable to Hubbell Incorporated	135.6		88.8		238.1		162.1
(Loss) income from discontinued operations, net of tax (Note 2)	(13.6)		7.0		64.1		11.4
Net Income attributable to Hubbell Incorporated	$	122.0	$	95.8	$	302.2	$	173.5

Earnings per share:
Basic earnings per share from continuing operations	$	2.52	$	1.63	$	4.41	$	2.97
Basic earnings per share from discontinued operations	(0.25)		0.13		1.19		0.22
Basic earnings per share	$	2.27	$	1.76	$	5.60	$	3.19

Diluted earnings per share from continuing operations	$	2.51	$	1.62	$	4.39	$	2.95
Diluted earnings per share from discontinued operations	(0.25)		0.12		1.18		0.21
Diluted earnings per share	$	2.26	$	1.74	$	5.57	$	3.16

Cash dividends per common share	$	1.05	$	0.98	$	2.10	$	1.96

See notes to unaudited Condensed Consolidated Financial Statements.

HUBBELL INCORPORATED-Form 10-Q 3

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Condensed Consolidated Statements of Comprehensive Income (unaudited)


		Three Months Ended September 30,					Three Months Ended June 30,
(in millions)	(in millions)	2021		2020		(in millions)	2022		2021
Net income	Net income	$	110.6	$	108.6	Net income	$	123.5	$	96.6
Other comprehensive (loss) income:	Other comprehensive (loss) income:					Other comprehensive (loss) income:
Currency translation adjustment:
Currency translation adjustments:						Currency translation adjustments:
Foreign currency translation adjustments	Foreign currency translation adjustments	(13.5)		11.6		Foreign currency translation adjustments	(29.7)		9.3

Defined benefit pension and post-retirement plans, net of taxes of $(0.7) and $5.1		2.0		(15.7)
Available-for-sale investments, net of taxes of $0.1 and $0.0		(0.2)		0.1
Unrealized gain (loss) on cash flow hedges, net of taxes of $(0.2) and $0.2		0.8		(0.4)
Reclassification of currency translation losses included in net income						Reclassification of currency translation losses included in net income	—		—
Defined benefit pension and post-retirement plans, net of taxes of $(1.3) and $(0.7)						Defined benefit pension and post-retirement plans, net of taxes of $(1.3) and $(0.7)	3.4		2.1
Unrealized losses on investments, net of taxes of $0.0 and $0.0						Unrealized losses on investments, net of taxes of $0.0 and $0.0	—		—
Unrealized (losses) gains on cash flow hedges, net of taxes of $(0.2) and $(0.1)						Unrealized (losses) gains on cash flow hedges, net of taxes of $(0.2) and $(0.1)	0.5		0.2
Other comprehensive (loss) income	Other comprehensive (loss) income	(10.9)		(4.4)		Other comprehensive (loss) income	(25.8)		11.6
Total comprehensive income		99.7		104.2
Comprehensive income						Comprehensive income	97.7		108.2
Less: Comprehensive income attributable to noncontrolling interest	Less: Comprehensive income attributable to noncontrolling interest	2.1		1.5		Less: Comprehensive income attributable to noncontrolling interest	1.5		0.8
Comprehensive income attributable to Hubbell Incorporated	Comprehensive income attributable to Hubbell Incorporated	$	97.6	$	102.7	Comprehensive income attributable to Hubbell Incorporated	$	96.2	$	107.4

See notes to unaudited Condensed Consolidated Financial Statements.


		Nine Months Ended September 30,					Six Months Ended June 30,
(in millions)	(in millions)	2021		2020		(in millions)	2022		2021
Net income	Net income	$	286.3	$	273.4	Net income	$	305.0	$	175.7
Other comprehensive (loss) income:	Other comprehensive (loss) income:					Other comprehensive (loss) income:
Currency translation adjustment:	Currency translation adjustment:					Currency translation adjustment:
Foreign currency translation adjustments	Foreign currency translation adjustments	(10.8)		(12.2)		Foreign currency translation adjustments	(25.1)		2.7

Defined benefit pension and post-retirement plans, net of taxes of $(2.1) and $4.0		6.1		(12.2)
Available-for-sale investments, net of taxes of $0.1 and $(0.1)		(0.3)		0.5
Unrealized gain on cash flow hedges, net of taxes of $(0.3) and $(0.1)		1.1		0.5
Reclassification of currency translation losses included in net income						Reclassification of currency translation losses included in net income	0.5		—
Defined benefit pension and post-retirement plans, net of taxes of $(1.8) and $(1.4)						Defined benefit pension and post-retirement plans, net of taxes of $(1.8) and $(1.4)	5.5		4.1
Unrealized losses on investments, net of taxes of $0.4 and $0.0						Unrealized losses on investments, net of taxes of $0.4 and $0.0	(1.2)		(0.1)
Unrealized (losses) gains on cash flow hedges, net of taxes of $0.0 and $(0.1)						Unrealized (losses) gains on cash flow hedges, net of taxes of $0.0 and $(0.1)	(0.1)		0.3
Other comprehensive (loss) income	Other comprehensive (loss) income	(3.9)		(23.4)		Other comprehensive (loss) income	(20.4)		7.0
Total comprehensive income		282.4		250.0
Comprehensive income						Comprehensive income	284.6		182.7
Less: Comprehensive income attributable to noncontrolling interest	Less: Comprehensive income attributable to noncontrolling interest	4.3		3.1		Less: Comprehensive income attributable to noncontrolling interest	2.8		2.2
Comprehensive income attributable to Hubbell Incorporated	Comprehensive income attributable to Hubbell Incorporated	$	278.1	$	246.9	Comprehensive income attributable to Hubbell Incorporated	$	281.8	$	180.5

See notes to unaudited Condensed Consolidated Financial Statements.

HUBBELL INCORPORATED-Form 10-Q 4

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Condensed Consolidated Balance Sheets (unaudited)


(in millions)	(in millions)	September 30, 2021		December 31, 2020		(in millions)	June 30, 2022		December 31, 2021
ASSETS	ASSETS					ASSETS
Current Assets	Current Assets					Current Assets
Cash and cash equivalents	Cash and cash equivalents	$	257.9	$	259.6	Cash and cash equivalents	$	424.2	$	286.2
Short-term investments	Short-term investments	9.9		9.3		Short-term investments	13.9		9.4
Accounts receivable (net of allowances of $11.6 and $12.5)		798.3		634.7
Accounts receivable (net of allowances of $13.9 and $10.6)						Accounts receivable (net of allowances of $13.9 and $10.6)	780.5		675.3
Inventories, net	Inventories, net	700.7		607.3		Inventories, net	719.5		662.1
Other current assets	Other current assets	66.4		76.7		Other current assets	96.1		66.8
Assets held for sale - current						Assets held for sale - current	—		179.5
Total Current Assets	Total Current Assets	1,833.2		1,587.6		Total Current Assets	2,034.2		1,879.3
Property, Plant, and Equipment, net	Property, Plant, and Equipment, net	521.2		519.2		Property, Plant, and Equipment, net	464.8		459.5
Other Assets	Other Assets					Other Assets
Investments	Investments	72.1		71.1		Investments	71.9		69.1
Goodwill	Goodwill	1,922.6		1,923.3		Goodwill	1,859.4		1,871.3
Other intangible assets, net	Other intangible assets, net	738.0		810.6		Other intangible assets, net	644.1		681.5
Other long-term assets	Other long-term assets	154.6		173.3		Other long-term assets	163.8		143.7
Assets held for sale - non-current						Assets held for sale - non-current	—		177.1
TOTAL ASSETS	TOTAL ASSETS	$	5,241.7	$	5,085.1	TOTAL ASSETS	$	5,238.2	$	5,281.5
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Current Liabilities	Current Liabilities					Current Liabilities
Short-term debt	Short-term debt	$	128.9	$	153.1	Short-term debt	$	5.8	$	9.7
Accounts payable	Accounts payable	491.9		378.0		Accounts payable	550.7		532.8
Accrued salaries, wages and employee benefits	Accrued salaries, wages and employee benefits	81.9		91.5		Accrued salaries, wages and employee benefits	91.7		94.7
Accrued insurance	Accrued insurance	77.1		71.6		Accrued insurance	73.0		73.3
Other accrued liabilities	Other accrued liabilities	255.6		254.0		Other accrued liabilities	281.7		263.4
Liabilities held for sale - current						Liabilities held for sale - current	—		91.3
Total Current Liabilities	Total Current Liabilities	1,035.4		948.2		Total Current Liabilities	1,002.9		1,065.2
Long-Term Debt	Long-Term Debt	1,434.9		1,436.9		Long-Term Debt	1,436.7		1,435.5
Other Non-Current Liabilities	Other Non-Current Liabilities	593.3		614.6		Other Non-Current Liabilities	530.7		521.3
Liabilities held for sale - non-current						Liabilities held for sale - non-current	—		18.8
TOTAL LIABILITIES	TOTAL LIABILITIES	3,063.6		2,999.7		TOTAL LIABILITIES	2,970.3		3,040.8

Hubbell Incorporated Shareholders’ Equity	Hubbell Incorporated Shareholders’ Equity	2,168.8		2,070.0		Hubbell Incorporated Shareholders’ Equity	2,256.9		2,229.8
Noncontrolling interest	Noncontrolling interest	9.3		15.4		Noncontrolling interest	11.0		10.9
Total Equity		2,178.1		2,085.4
TOTAL EQUITY						TOTAL EQUITY	2,267.9		2,240.7
TOTAL LIABILITIES AND EQUITY	TOTAL LIABILITIES AND EQUITY	$	5,241.7	$	5,085.1	TOTAL LIABILITIES AND EQUITY	$	5,238.2	$	5,281.5

See notes to unaudited Condensed Consolidated Financial Statements.

HUBBELL INCORPORATED-Form 10-Q 5

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Condensed Consolidated Statements of Cash Flows (unaudited)


		Nine Months Ended September 30,					Six Months Ended June 30,
(in millions)	(in millions)	2021		2020		(in millions)	2022		2021
Cash Flows from Operating Activities
Net income		$	286.3	$	273.4
Cash Flows from Operating Activities of Continuing Operations						Cash Flows from Operating Activities of Continuing Operations
Net income from continuing operations						Net income from continuing operations	$	240.9	$	164.3
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	122.6		117.0		Depreciation and amortization	69.4		76.9
Deferred income taxes	Deferred income taxes	5.9		(4.3)		Deferred income taxes	(38.4)		6.0
Stock-based compensation	Stock-based compensation	16.5		20.0		Stock-based compensation	16.7		12.8
Provision for bad debt expense	Provision for bad debt expense	(0.1)		8.3		Provision for bad debt expense	4.4		(0.3)
Loss on disposition of business	Loss on disposition of business	6.9		—		Loss on disposition of business	—		6.8
Loss on extinguishment of debt	Loss on extinguishment of debt	16.8		—		Loss on extinguishment of debt	—		16.8
Pension charge	Pension charge	—		6.6		Pension charge	4.4		—
Loss (gain) on sale of assets						Loss (gain) on sale of assets	1.2		(4.0)
Changes in assets and liabilities, excluding effects of acquisitions:	Changes in assets and liabilities, excluding effects of acquisitions:					Changes in assets and liabilities, excluding effects of acquisitions:
Increase in accounts receivable, net	Increase in accounts receivable, net	(165.0)		(42.1)		Increase in accounts receivable, net	(107.4)		(110.9)
Decrease (increase) in inventories, net		(97.9)		45.1
Increase in inventories, net						Increase in inventories, net	(61.0)		(32.6)
Increase in accounts payable	Increase in accounts payable	120.6		45.0		Increase in accounts payable	22.0		78.5
Increase (decrease) in current liabilities	Increase (decrease) in current liabilities	5.3		(44.8)		Increase (decrease) in current liabilities	25.3		(18.3)
Changes in other assets and liabilities, net	Changes in other assets and liabilities, net	(8.0)		27.3		Changes in other assets and liabilities, net	(1.9)		(4.9)
Contribution to qualified defined benefit pension plans	Contribution to qualified defined benefit pension plans	(0.1)		(2.8)		Contribution to qualified defined benefit pension plans	(2.5)		(0.1)
Other, net	Other, net	(3.0)		6.9		Other, net	1.1		(1.2)
Net cash provided by operating activities		306.8		455.6
Cash Flows from Investing Activities
Net cash provided by operating activities from Continuing Operations						Net cash provided by operating activities from Continuing Operations	174.2		189.8
Cash Flows from Investing Activities of Continuing Operations						Cash Flows from Investing Activities of Continuing Operations
Capital expenditures	Capital expenditures	(66.5)		(51.7)		Capital expenditures	(41.9)		(36.9)
Proceeds from disposal of business		8.5		—
Acquisition of businesses, net of cash acquired		0.1		(2.0)
Acquisitions, net of cash acquired						Acquisitions, net of cash acquired	—		0.1
Proceeds from disposal of business, net of cash						Proceeds from disposal of business, net of cash	348.6		8.5
Purchases of available-for-sale investments	Purchases of available-for-sale investments	(10.6)		(14.3)		Purchases of available-for-sale investments	(23.8)		(6.2)
Proceeds from available-for-sale investments	Proceeds from available-for-sale investments	7.2		16.5		Proceeds from available-for-sale investments	9.8		3.3
Other, net	Other, net	7.8		5.1		Other, net	1.1		6.6
Net cash used in investing activities		(53.5)		(46.4)
Cash Flows from Financing Activities
Long-term debt borrowings		298.7		225.0
Long-term debt repayments		(300.0)		(331.3)
Short-term debt (repayments) borrowings, net		(24.2)		(9.0)
Payment of dividends to shareholders		(159.8)		(148.2)
Payment of dividends to noncontrolling interest		(10.1)		(2.1)
Repurchase of common stock		(11.2)		(41.3)
Net cash provided (used in) investing activities from Continuing Operations						Net cash provided (used in) investing activities from Continuing Operations	293.8		(24.6)
Cash Flows from Financing Activities of Continuing Operations						Cash Flows from Financing Activities of Continuing Operations
Issuance of long-term debt						Issuance of long-term debt	—		298.7
Payment of long-term debt						Payment of long-term debt	—		(300.0)

Payment of short-term debt, net						Payment of short-term debt, net	(3.8)		(15.6)
Payment of dividends						Payment of dividends	(113.3)		(106.5)

Debt issuance costs	Debt issuance costs	(4.5)		—		Debt issuance costs	—		(4.5)
Make whole payment for retirement of long-term debt		(16.0)		—
Acquisition of common shares						Acquisition of common shares	(150.0)		(11.2)
Other, net	Other, net	(25.3)		(9.2)		Other, net	(11.1)		(39.2)
Net cash used by financing activities		(252.4)		(316.1)
Net cash used in financing activities from Continuing Operations						Net cash used in financing activities from Continuing Operations	(278.2)		(178.3)
Discontinued Operations:						Discontinued Operations:
Cash (used in) provided by operating activities						Cash (used in) provided by operating activities	(44.7)		19.5
Cash used in investing activities						Cash used in investing activities	(1.7)		(2.2)
Cash (used in) provided by discontinued operations						Cash (used in) provided by discontinued operations	(46.4)		17.3
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(2.6)		(5.9)		Effect of exchange rate changes on cash and cash equivalents	(6.0)		1.7
Increase (decrease) in cash and cash equivalents		(1.7)		87.2
Cash and cash equivalents
Beginning of period		259.6		182.0
End of period		$	257.9	$	269.2
Increase in cash and cash equivalents						Increase in cash and cash equivalents	137.4		5.9
Cash and cash equivalents, beginning of year						Cash and cash equivalents, beginning of year	286.2		259.6
Cash and cash equivalents within assets held for sale, beginning of year						Cash and cash equivalents within assets held for sale, beginning of year	0.7		1.0
Restricted cash, included in other assets, beginning of year						Restricted cash, included in other assets, beginning of year	2.7		—
Less: Restricted cash, included in Other Assets						Less: Restricted cash, included in Other Assets	2.8		—
Less: Cash and cash equivalents within assets held for sale, end of period						Less: Cash and cash equivalents within assets held for sale, end of period	—		1.1
Cash and cash equivalents, end of period						Cash and cash equivalents, end of period	$	424.2	$	265.4

See notes to unaudited Condensed Consolidated Financial Statements.

HUBBELL INCORPORATED-Form 10-Q 6

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Notes to Condensed Consolidated Financial Statements (unaudited)

NOTE 1 Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements of Hubbell Incorporated (“Hubbell”, the “Company”, “registrant”, “we”, “our” or “us”, which references include its divisions and subsidiaries) have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by United States of America (“U.S.”) GAAP for audited financial statements. In the opinion of management, all adjustments consisting only of normal recurring adjustments considered necessary for a fair statement of the results of the periods presented have been included. Operating results for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 are not necessarily indicative of the results that may be expected for the full year ending December 31, ~~2021.~~2022.

Effective January 1, 2021 the Company consolidated the 3 business groups within its Electrical segment and renamed the segment as Hubbell Electrical Solutions ("Electrical Solutions"). The Electrical Solutions segment unites businesses with similar operating models, products, and go to market strategies under one operating banner and common leadership to drive synergies and long-term growth opportunities.

Also effective January 1, 2021, the Company moved its Hubbell Gas Connectors and Accessories business from the Electrical Solutions segment to the Utility Solutions segment to create synergies with the existing gas products already offered within the Utility Solutions segment and to better serve its utility customers. The information provided in the Condensed Consolidated Financial Statements and the related notes reflects the impact of this change for all periods presented.

The balance sheet at December 31, ~~2020~~2021 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.

For further information, refer to the consolidated financial statements and footnotes thereto included in the Hubbell Incorporated Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Discontinued Operations

On February 1, 2022, the Company completed the sale of the Commercial and Industrial Lighting business (the "C&I Lighting business") to GE Current, a Daintree Company, for total cash consideration of $350 million, subject to customary adjustments with respect to working capital. The disposal of the Commercial and Industrial Lighting business met the criteria set forth in ASC 205-20 to be presented as a discontinued operation. The Commercial and Industrial Lighting businesses' results of operations and the related cash flows have been reclassified to income from discontinued operations in the Condensed Consolidated Statements of Income and cash flows from discontinued operations in the Condensed Consolidated Statement of Cash Flows, respectively, for all periods presented. 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.

Impact of the COVID-19 Pandemic

During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (COVID-19). The pandemic has had, and may continue to have, a significant effect on global economic conditions. U.S. Federal, state, local, and foreign governments have reacted to the public health crisis with mitigation measures, creating significant uncertainties in the U.S. and global economies. The extent to which the coronavirus pandemic will continue to affect our business, operations, supply chains, and our financial results will depend on numerous evolving factors that we may not be able to accurately predict and which may cause the actual results to differ from the estimates and assumptions we are required to make in the preparation of financial statements according to GAAP.

Recently ~~Adopted Accounting Pronouncements~~

~~No accounting standards were adopted during the nine months ended September 30, 2021 that had a material impact on the Company's consolidated financial position, results of operations, or cash flows.~~

~~Recently~~ Issued Accounting Pronouncements

In March 2020, the FASB issued ASU No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial ~~Reporting",~~Reporting," which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments are effective for all entities beginning on March 12, 2020 through December 31, 2022. The Company may elect to apply the amendments prospectively through December 31, 2022. The Company has not adopted this ASU as of ~~September~~June 30, ~~2021.~~2022. The Company is currently assessing the impact of adopting this standard on its financial statements and the timing of adoption.

In October 2021, the FASB issued ASU No. 2021-08, "Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers." ASU 2021-08 requires an acquirer to recognize and measure contract assets and contract liabilities, including deferred revenue, acquired in a business combination in accordance with Revenue from Contracts with Customers (Topic 606) as if the acquirer had originated the contracts at the date of the business combination. The provisions of ASU 2021-08 are effective for interim periods and fiscal years beginning after December 15, 2022, with early adoption permitted. If early adopted, the provisions of ASU 2021-08 apply retrospectively to all business combinations that occurred on or after the first day of the fiscal year in which the standard is adopted. The Company is currently assessing the impact of adopting this standard on its financial statements and the timing of adoption.

HUBBELL INCORPORATED-Form 10-Q 7

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In November 2021, the FASB issued ASU No. 2021-10, "Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance." This update requires annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. This standard is effective for financial statements issued for annual periods beginning after December 15, 2021 and should be applied either prospectively or retrospectively. Early adoption is permitted. The Company is currently assessing the impact of adopting this standard on its financial statements and the timing of adoption.

NOTE 2 Discontinued Operations

On February 1, 2022, the Company completed the sale of the Commercial and Industrial Lighting business to GE Current, a Daintree Company, for total cash consideration of $350 million, subject to customary adjustments with respect to working capital. The sale of this business represents a strategic shift that will have a major effect on our operations and financial results, and as a result, is reported as a discontinued operation in our Condensed Consolidated Financial Statements for all periods presented. The assets and liabilities of this business are also presented as held for sale in the Condensed Consolidated Balance Sheets, in the periods prior to the sale. The Commercial and Industrial Lighting business was previously included in the Electrical Solutions segment.

Under the terms of the transaction, Hubbell and the buyer entered into a transition services agreement ("TSA"), pursuant to which the Company agreed to provide certain administrative and operational services for a period of 12 months or less. Furthermore, we entered into a short-term supply agreement whereby the Company will act as a supplier of finished goods and component parts to the Commercial and Industrial Lighting business after the completion of the sale. Income from the TSA and supply agreement was $4.8 million and $7.6 million, respectively, for the three and six months ended June 30, 2022 and was recorded in Other Income in the Condensed Consolidated Financial Statements.

The following table presents the summarized components of income from discontinued operations, net of income taxes, for the Commercial and Industrial Lighting business:


	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2022		2021		2022		2021
Net sales	$	—	$	137.5	$	29.1	$	259.6
Cost of goods sold	—		105.9		27.7		201.9
Gross profit	—		31.6		1.4		57.7
Selling & administrative expenses	4.5		21.9		15.2		41.7
Operating (loss) income	(4.5)		9.7		(13.8)		16.0
(Loss) Gain on disposal of business	(7.7)		—		80.7		—
Other expense	(1.4)		(0.8)		(1.1)		(1.4)
(Loss) income from discontinued operations before income taxes	(13.6)		8.9		65.8		14.6
Provision for income taxes	—		1.9		1.7		3.2
(Loss) income from discontinued operations, net of taxes	$	(13.6)	$	7.0	$	64.1	$	11.4

(Loss) income from discontinued operations, net of taxes for the three and six months ended June 30, 2022 includes transaction and separation costs of $4.5 million and $6.7 million, respectively, and the six months ended June 30, 2022 includes a pre-tax gain on the disposal of $80.7 million.

HUBBELL INCORPORATED-Form 10-Q 8

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The following table presents the major classes of assets and liabilities classified as held for sale in the Condensed Consolidated Balance Sheet for the year ended December 31, 2021:



(in millions)	December 31, 2021
Cash and cash equivalents	$	0.7
Accounts receivable	83.1
Inventories, net	89.8
Other current assets	5.9
Assets held for sale - current	$	179.5
Property, Plant, and Equipment, net	77.7
Goodwill	50.2
Other intangible assets, net	37.3
Other long-term assets	11.9
Assets held for sale - non-current	$	177.1
Accounts payable	50.2
Accrued salaries, wages and employee benefits	8.5
Accrued insurance	3.9
Other accrued liabilities	28.7
Liabilities held for sale - current	$	91.3
Other Non-Current Liabilities	18.8
Liabilities held for sale - non-current	$	18.8

NOTE 3 Revenue

The Company recognizes revenue when performance obligations identified under the terms of contracts with its customers are satisfied, which generally occurs, for products, upon the transfer of control in accordance with the contractual terms and conditions of the sale. The majority of the Company’s revenue associated with products is recognized at a point in time when the product is shipped to the customer, with a relatively small amount of transactions, primarily in the Utility Solutions segment, recognized upon delivery of the product at the destination. Revenue from service contracts and post-shipment performance obligations are approximately 32 percent of total annual consolidated net revenue and those service contracts and post-shipment obligations are primarily within the Utility Solutions segment. Revenue from service contracts and post-shipment performance obligations is recognized when or as those obligations are satisfied. The Company primarily offers assurance-type standard warranties that do not represent separate performance obligations and on occasion will separately offer and price extended warranties that are separate performance obligations for which the associated revenue is recognized over-time based on the extended warranty period. The Company records amounts billed to customers for reimbursement of shipping and handling costs within revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment costs and are included in cost of goods sold. Sales taxes and other usage-based taxes are excluded from revenue.

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

HUBBELL INCORPORATED-Form 10-Q 9

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The following table presents disaggregated revenue by business group. ~~Prior~~On January 1, 2022, we internally reorganized certain businesses within our Electrical Solutions segment to simplify the organization structure and align the organization to better serve our customers. This change had no impact to our reportable segments. In conjunction with this change, prior period amounts have been reclassified to conform to ~~our~~the organizational changes ~~as described in Note 1 - Basis of Presentation:~~within the Electrical Solutions segment.


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
in millions	in millions	2021		2020		2021		2020		in millions	2022		2021		2022		2021
Net sales	Net sales									Net sales
Commercial and Industrial		$	434.9	$	372.9	$	1,237.0	$	1,066.4
Heavy Industrial		85.2		75.1		247.3		228.6
Residential and Retail		91.8		103.0		276.7		289.1
Electrical Products										Electrical Products	$	234.8	$	196.6	$	462.5	$	378.2
Connection and Bonding										Connection and Bonding	156.4		135.4		300.3		251.5
Industrial Controls										Industrial Controls	76.7		64.7		149.7		123.2
Retail and Builder										Retail and Builder	59.6		68.8		119.3		136.7
Total Electrical Solutions	Total Electrical Solutions	$	611.9	$	551.0	$	1,761.0	$	1,584.1	Total Electrical Solutions	$	527.5	$	465.5	$	1,031.8	$	889.6
Utility T&D Components	Utility T&D Components	435.3		396.9		1,231.5		1,089.3		Utility T&D Components	556.5		421.2		1,048.0		796.1
Utility Communications and Controls	Utility Communications and Controls	166.4		160.7		491.3		474.7		Utility Communications and Controls	172.0		167.6		332.3		324.9
Total Utility Solutions	Total Utility Solutions	$	601.7	$	557.6	$	1,722.8	$	1,564.0	Total Utility Solutions	$	728.5	$	588.8	$	1,380.3	$	1,121.0
TOTAL	TOTAL	$	1,213.6	$	1,108.6	$	3,483.8	$	3,148.1	TOTAL	$	1,256.0	$	1,054.3	$	2,412.1	$	2,010.6

~~HUBBELL INCORPORATED~~-~~Form 10-Q~~ 8

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The following table presents disaggregated revenue by geographic location (on a geographic basis, the Company defines "international" as operations based outside of the United States and its possessions):


		Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
in millions	in millions	2021		2020		2021		2020			in millions	2022		2021		2022		2021
Net sales	Net sales										Net sales
United States	United States	$	549.7	$	495.7	$	1,571.7	$	1,427.2		United States	$	461.4	$	396.5	$	901.8	$	763.3
International	International	62.2		55.3		189.3		156.9			International	66.1		69.0		130.0		126.3
Total Electrical Solutions	Total Electrical Solutions	$	611.9	$	551.0	$	1,761.0	$	1,584.1		Total Electrical Solutions	$	527.5	$	465.5	$	1,031.8	$	889.6
United States	United States	571.4		524.9		1,633.1		1,479.3			United States	689.9		560.3		1,308.4		1,061.7
International	International	30.3		32.7		89.7		84.7			International	38.6		28.5		71.9		59.3
Total Utility Solutions	Total Utility Solutions	$	601.7	$	557.6	$	1,722.8	$	1,564.0		Total Utility Solutions	$	728.5	$	588.8	$	1,380.3	$	1,121.0
TOTAL	TOTAL	$	1,213.6	$	1,108.6	$	3,483.8	$	3,148.1		TOTAL	$	1,256.0	$	1,054.3	$	2,412.1	$	2,010.6

Contract Balances

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

Contract liabilities were ~~$19.3~~$21.9 million as of ~~September~~June 30, ~~2021~~2022 compared to ~~$30.9~~$16.7 million as of December 31, ~~2020.~~2021. The ~~$11.6~~$5.2 million ~~decrease~~increase in our contract liabilities balance was primarily due to ~~the recognition of $27.2 million in revenue related to amounts that were recorded in contract liabilities at January 1, 2021 and~~ a ~~$1.5 million decline in contract liabilities relating to the disposition of a business, partially offset by a $17.1~~$15.0 million net increase in current year deferrals primarily due to timing of advance payments on certain ~~orders.~~orders partially offset by the recognition of $9.8 million in revenue related to amounts that were recorded in contract liabilities at January 1, 2022. The Company has an immaterial amount of contract assets relating to performance obligations satisfied prior to payment that is recorded in Other long-term assets in the Condensed Consolidated Balance Sheets. Impairment losses recognized on our receivables and contract assets were immaterial for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022.

Unsatisfied Performance Obligations

As of ~~September~~June 30, ~~2021,~~2022, the Company had approximately ~~$450~~$390 million of unsatisfied performance obligations for contracts with an original expected length of greater than one year, primarily relating to long-term contracts of the Utility Solutions segment to deliver and install meters, metering communications and grid monitoring sensor technology. The Company expects that a majority of the unsatisfied performance obligations will be completed and recognized over the next ~~three~~two years.

HUBBELL INCORPORATED-Form 10-Q 910

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NOTE 34 Segment Information

The Company's reporting segments consist of the Electrical Solutions segment and the Utility Solutions segment. Effective January 1, 2021, the Company moved its Hubbell Gas Connectors and Accessories business, from the Electrical Solutions segment to the Utility Solutions segment, consolidated the former 3 business groups within its Electrical segment and renamed the segment as Hubbell Electrical Solutions ("Electrical Solutions"). The Hubbell Gas Connectors and Accessories business has been moved to Utility Solutions to create synergies with the existing gas products already offered within the Utility Solutions segment and to better serve its utility customers. Comparable prior period segment results have been re-cast to reflect this change. The consolidation of business groups within the Electrical Solutions segment unites businesses with similar operating models, products, and go to market strategies under one operating banner and common leadership to drive synergies and long-term growth opportunities.

The Electrical Solutions segment comprises businesses that sell stock and custom products including standard and special application wiring device products, rough-in electrical products, connector and grounding products, lighting fixtures, ~~and controls,~~components and other electrical equipment. The products are typically used in and around industrial, commercial and institutional facilities by electrical contractors, maintenance personnel, electricians, utilities, and telecommunications companies. In addition, certain of our businesses design and manufacture industrial controls and communication systems used in the non-residential and industrial markets. Many of these products are designed such that they can also be used in harsh and hazardous locations where a potential for fire and explosion exists due to the presence of flammable gasses and vapors. Harsh and hazardous products are primarily used in the oil and gas (onshore and offshore) and mining industries. There are also a variety of wiring devices, lighting fixtures ~~wiring devices~~ and electrical products that have residential and utility applications, including residential products with Internet-of-Things ("IoT") enabled technologies. These products are primarily sold through electrical and industrial distributors, home centers, retail and hardware outlets, lighting showrooms and residential ~~product-oriented~~product oriented internet sites. Special application products are primarily sold through wholesale distributors to contractors, industrial customers and OEMs.

The Utility Solutions segment consists of businesses that design, manufacture, and ~~manufacture various~~sell a wide variety of electrical distribution, transmission, substation, and telecommunications ~~products primarily used by~~products. This includes utility transmission & distribution (T&D) components such as arresters, insulators, connectors, anchors, bushings, and enclosures. The Utility Solutions segment also offers solutions that serve the ~~electric,~~utility infrastructure, including smart meters, communications systems, and protection and control devices. Hubbell Utility Solutions supports the electrical distribution, electrical transmission, water, gas distribution, telecommunications, and ~~telecommunication utility industries. These offerings include advanced metering infrastructure, meter~~solar and edge devices, software and infrastructure services, which are primarily sold to the electric, water, and gas utility industries, as well as components and assemblies for the natural gas distribution market. In addition, certain of these products are used in the civil construction, water utility, and transportation industries.wind markets. Products are sold to distributors and directly to users such as utilities, telecommunication companies, industrial firms, construction and engineering firms.

The following table sets forth financial information by business segment (in millions):


		Net Sales				Operating Income				Operating Income as a % of Net Sales					Net Sales				Operating Income				Operating Income as a % of Net Sales
		2021		2020		2021		2020		2021		2020			2022		2021		2022		2021		2022		2021
Three Months Ended September 30,
Three Months Ended June 30,														Three Months Ended June 30,
Electrical Solutions	Electrical Solutions	$	611.9	$	551.0	$	72.0	$	65.9	11.8	%	12.0	%	Electrical Solutions	$	527.5	$	465.5	$	79.2	$	69.3	15.0	%	14.9	%
Utility Solutions	Utility Solutions	601.7		557.6		83.3		97.0		13.8	%	17.4	%	Utility Solutions	728.5		588.8		111.4		72.9		15.3	%	12.4	%
TOTAL	TOTAL	$	1,213.6	$	1,108.6	$	155.3	$	162.9	12.8	%	14.7	%	TOTAL	$	1,256.0	$	1,054.3	$	190.6	$	142.2	15.2	%	13.5	%
Nine Months Ended September 30,
Six Months Ended June 30,														Six Months Ended June 30,
Electrical Solutions	Electrical Solutions	$	1,761.0	$	1,584.1	$	201.3	$	171.1	11.4	%	10.8	%	Electrical Solutions	$	1,031.8	$	889.6	$	134.0	$	118.5	13.0	%	13.3	%
Utility Solutions	Utility Solutions	1,722.8		1,564.0		224.3		242.1		13.0	%	15.5	%	Utility Solutions	1,380.3		1,121.0		199.5		133.6		14.5	%	11.9	%
TOTAL	TOTAL	$	3,483.8	$	3,148.1	$	425.6	$	413.2	12.2	%	13.1	%	TOTAL	$	2,412.1	$	2,010.6	$	333.5	$	252.1	13.8	%	12.5	%

HUBBELL INCORPORATED-Form 10-Q 1011

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NOTE 45 Inventories, net

Inventories, net consists of the following (in millions):


		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
Raw material	Raw material	$	250.2	$	219.5	Raw material	$	277.0	$	241.0
Work-in-process	Work-in-process	126.2		108.3		Work-in-process	149.3		129.4
Finished goods	Finished goods	411.7		366.8		Finished goods	429.6		428.6
Subtotal	Subtotal	788.1		694.6		Subtotal	855.9		799.0
Excess of FIFO over LIFO cost basis	Excess of FIFO over LIFO cost basis	(87.4)		(87.3)		Excess of FIFO over LIFO cost basis	(136.4)		(136.9)
TOTAL	TOTAL	$	700.7	$	607.3	TOTAL	$	719.5	$	662.1

HUBBELL INCORPORATED-Form 10-Q 1112

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NOTE 56 Goodwill and Other Intangible Assets, net

Changes in the carrying values of goodwill for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, by segment, were as follows (in millions):

Segment
Electrical Solutions Utility Solutions Total
BALANCE DECEMBER 31, 2020 $ 663.9 $ 1,259.4 $ 1,923.3
Prior year acquisitions — 6.9 6.9
Current year dispositions — (1.9) (1.9)
Foreign currency translation (1.7) (4.0) (5.7)
BALANCE SEPTEMBER 30, 2021 $ 662.2 $ 1,260.4 $ 1,922.6

In June of 2021, the Company completed the sale of the Consumer Analytics Solutions business for $9.8 million. The Consumer Analytics Solutions business was part of Aclara and was previously included in the Utility Solutions segment. Upon disposition, the Consumer Analytics Solutions business had assets of $15.9 million, including definite-lived intangibles of $8.7 million (primarily customer relationships and developed technology), goodwill of $1.9 million and total liabilities of $1.5 million (primarily composed of deferred revenue). As a result of the sale of the Consumer Analytics Solutions business, we recognized a pre-tax loss of $6.9 million that is included in Total other expense in the Condensed Consolidated Statements of Income.


	Segment
	Electrical Solutions		Utility Solutions		Total
BALANCE DECEMBER 31, 2021	$	612.5	$	1,258.8	$	1,871.3


Foreign currency translation	(4.8)		(7.1)		(11.9)
BALANCE JUNE 30, 2022	$	607.7	$	1,251.7	$	1,859.4

The carrying value of other intangible assets included in Other intangible assets, net in the Condensed Consolidated Balance Sheets is as follows (in millions):


		September 30, 2021				December 31, 2020					June 30, 2022				December 31, 2021
		Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization			Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization
Definite-lived:	Definite-lived:									Definite-lived:
Patents, tradenames and trademarks	Patents, tradenames and trademarks	$	212.7	$	(80.7)	$	213.4	$	(73.8)	Patents, tradenames and trademarks	$	180.0	$	(71.4)	$	181.3	$	(67.6)
Customer relationships, developed technology and other	Customer relationships, developed technology and other	940.7		(388.3)		958.0		(340.6)		Customer relationships, developed technology and other	897.4		(402.4)		901.2		(374.0)
TOTAL DEFINITE-LIVED INTANGIBLES	TOTAL DEFINITE-LIVED INTANGIBLES	$	1,153.4	$	(469.0)	$	1,171.4	$	(414.4)	TOTAL DEFINITE-LIVED INTANGIBLES	$	1,077.4	$	(473.8)	$	1,082.5	$	(441.6)
Indefinite-lived:	Indefinite-lived:									Indefinite-lived:
Tradenames and other	Tradenames and other	53.6		—		53.6		—		Tradenames and other	40.5		—		40.6		—
TOTAL OTHER INTANGIBLE ASSETS	TOTAL OTHER INTANGIBLE ASSETS	$	1,207.0	$	(469.0)	$	1,225.0	$	(414.4)	TOTAL OTHER INTANGIBLE ASSETS	$	1,117.9	$	(473.8)	$	1,123.1	$	(441.6)

Amortization expense associated with definite-lived intangible assets was ~~$18.7~~$17.4 million and ~~$18.5~~$19.1 million during the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$59.4~~$34.9 million and ~~$56.2~~$39.0 million during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively. Future amortization expense associated with these intangible assets is estimated to be ~~$20.1~~$34.8 million for the remainder of ~~2021, $72.9 million in~~ 2022, ~~$68.2~~$65.3 million in 2023, ~~$63.3~~$61.3 million in 2024, ~~$58.8~~$57.2 million in 2025, ~~and $55.1~~$53.7 million in ~~2026.~~2026, and $48.6 million in 2027. The Company amortizes intangible assets with definite lives using either an accelerated method that reflects the pattern in which economic benefits of the intangible assets are consumed and results in higher amortization in the earlier years of the ~~assets~~asset's useful life, or using a straight line method. Approximately ~~76%~~80% of the gross value of definite-lived intangible assets follow an accelerated amortization method.

The Company completed its annual goodwill impairment test as of April 1, 2022. The Company applied the "Step-zero" test to 1 of its 4 reporting units, which allows the Company to first assess qualitative factors to determine whether it is more likely than not that a reporting unit's fair value is greater than its carrying amount. Based on the qualitative assessment, the Company concluded that it was more likely than not that the fair value of this reporting unit substantially exceeded its carrying value and, therefore, further quantitative analysis was not required. For the other 3 reporting units, the Company elected to utilize the quantitative goodwill impairment testing process, as permitted in the accounting guidance, by comparing the estimated fair value of the reporting units to their carrying values. If the estimated fair value exceeds its carrying value, 0 impairment exists.

Goodwill impairment testing requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units and determining the fair value of each reporting unit. Significant judgment is required to estimate the fair value of reporting units including estimating future cash flows, determining appropriate discount rates and other assumptions, including assumptions about secular economic and market conditions, such as the potential continuing effects of the COVID-19 pandemic, impacts to the supply chain and higher inflation. The Company uses internal discounted cash flow models to estimate fair value. These cash flow estimates are derived from historical experience, third party end market data, and future long-term business plans and include assumptions of future sales growth, gross margin, operating margin, terminal growth rate, and the application of an appropriate discount rate. Significant changes in these estimates and assumptions could affect the determination of fair value and/or goodwill impairment for each reporting unit. The Company believes that its estimated aggregate fair value of its reporting units is reasonable when compared to the Company's market capitalization on the valuation date.

As of April 1, 2022, the impairment testing resulted in implied fair values for each reporting unit that significantly exceeded such reporting unit's carrying value, including goodwill. The Company did not have any reporting units at risk of failing the quantitative impairment test as the excess of the implied fair value significantly exceeded the carrying value of each of the reporting units. Additionally, the Company did 0t have any reporting units with zero or negative carrying amounts.

HUBBELL INCORPORATED-Form 10-Q 1213

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The Company performs its impairment assessment of indefinite-lived intangible assets as of April 1st of each year, unless circumstances dictate the need for more frequent assessments. For the 2022 test, the Company elected to utilize the quantitative impairment testing process as permitted in the accounting guidance, by comparing the estimated fair value of the indefinite-lived intangible assets to their carrying values. If the estimated fair value of the indefinite-lived intangible assets exceeds their carrying value, 0 impairment exists. The estimated fair value was determined utilizing an income approach (relief from royalty method). Significant judgment is required to estimate the fair value of the indefinite-lived intangible assets including assumptions for future revenues, discount rates, royalty rates, and other assumptions, including assumptions about secular economic and market conditions, such as the potential continuing effects of the COVID-19 pandemic. Significant changes in these estimates and assumptions could affect the determination of fair value and/or impairment for each indefinite-lived intangible asset. As of April 1, 2022, the impairment testing resulted in estimated fair values for each indefinite-lived intangible asset that significantly exceeded the carrying values and there were no indefinite-lived intangible assets at risk of failing the quantitative impairment test.

HUBBELL INCORPORATED-Form 10-Q 14

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NOTE 67 Other Accrued Liabilities

Other accrued liabilities consists of the following (in millions):


		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
Customer program incentives	Customer program incentives	$	58.4	$	40.7	Customer program incentives	$	53.6	$	67.3
Accrued income taxes	Accrued income taxes	15.2		4.6		Accrued income taxes	11.0		4.8
Contract liabilities - deferred revenue	Contract liabilities - deferred revenue	19.3		30.9		Contract liabilities - deferred revenue	21.9		16.7
Customer refund liability	Customer refund liability	18.7		17.4		Customer refund liability	15.3		16.7
Accrued warranties(1)	Accrued warranties(1)	21.9		28.7		Accrued warranties(1)	36.0		36.7
Current operating lease liabilities	Current operating lease liabilities	29.2		32.1		Current operating lease liabilities	29.4		27.1
Other	Other	92.9		99.6		Other	114.5		94.1
TOTAL	TOTAL	$	255.6	$	254.0	TOTAL	$	281.7	$	263.4

(1) Refer to Note 2122 - Guarantees, in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 for additional information regarding warranties.

NOTE 78 Other Non-Current Liabilities

Other non-current liabilities consists of the following (in millions):


		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
Pensions	Pensions	$	185.9	$	199.0	Pensions	$	187.5	$	189.8
Other post-retirement benefits	Other post-retirement benefits	21.2		21.2		Other post-retirement benefits	17.0		17.0
Deferred tax liabilities	Deferred tax liabilities	143.3		135.3		Deferred tax liabilities	102.2		114.7
Accrued warranties long-term(1)	Accrued warranties long-term(1)	51.8		51.8		Accrued warranties long-term(1)	30.1		29.4
Non-current operating lease liabilities	Non-current operating lease liabilities	65.7		74.9		Non-current operating lease liabilities	82.6		58.3
Other	Other	125.4		132.4		Other	111.3		112.1
TOTAL	TOTAL	$	593.3	$	614.6	TOTAL	$	530.7	$	521.3

HUBBELL INCORPORATED-Form 10-Q 1315

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NOTE 89 Total Equity

A summary of changes in total equity for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 is provided below (in millions, except per share amounts):


		Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Hubbell Shareholders' Equity		Non- controlling interest			Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Hubbell Shareholders' Equity		Non- controlling interest
BALANCE AT DECEMBER 31, 2020		$	0.6	$	4.9	$	2,393.7	$	(329.2)	$	2,070.0	$	15.4
BALANCE AT DECEMBER 31, 2021														BALANCE AT DECEMBER 31, 2021	$	0.6	$	—	$	2,560.0	$	(330.8)	$	2,229.8	$	10.9
Net income	Net income	—		—		173.5		—		173.5		2.2		Net income	—		—		180.2		—		180.2		1.3
Other comprehensive (loss) income	Other comprehensive (loss) income	—		—		—		7.0		7.0		—		Other comprehensive (loss) income	—		—		—		5.4		5.4		—
Stock-based compensation	Stock-based compensation	—		13.4		—		—		13.4		—		Stock-based compensation	—		11.1		—		—		11.1		—

Acquisition/surrender of common shares(1)	Acquisition/surrender of common shares(1)	—		(18.5)		(13.2)		—		(31.7)		—		Acquisition/surrender of common shares(1)	—		(11.2)		(145.2)		—		(156.4)		—
Cash dividends declared ($0.98 per share)		—		—		(106.7)		—		(106.7)		—
Cash dividends declared ($1.05 per share)														Cash dividends declared ($1.05 per share)	—		—		(56.9)		—		(56.9)		—
Dividends to noncontrolling interest	Dividends to noncontrolling interest	—		—		—		—		—		(2.4)		Dividends to noncontrolling interest	—		—		—		—		—		(1.1)

Directors deferred compensation	Directors deferred compensation	—		0.2		—		—		0.2		—		Directors deferred compensation	—		0.1		—		—		0.1		—

BALANCE AT JUNE 30, 2021		$	0.6	$	—	$	2,447.3	$	(322.2)	$	2,125.7	$	15.2
BALANCE AT MARCH 31, 2022														BALANCE AT MARCH 31, 2022	$	0.6	$	—	$	2,538.1	$	(325.4)	$	2,213.3	$	11.1
Net income	Net income	—		—		108.5		—		108.5		2.1		Net income	—		—		122.0		—		122.0		1.5
Other comprehensive (loss) income	Other comprehensive (loss) income	—		—		—		(10.9)		(10.9)		—		Other comprehensive (loss) income	—		—		—		(25.8)		(25.8)		—
Stock-based compensation	Stock-based compensation	—		3.1		—		—		3.1		—		Stock-based compensation	—		5.6		—		—		5.6		—
Acquisition/surrender of common shares(1)	Acquisition/surrender of common shares(1)	—		(3.4)		(1.0)		—		(4.4)		—		Acquisition/surrender of common shares(1)	—		(1.9)		—		—		(1.9)		—
Cash dividends declared ($0.98 per share)		—		—		(53.5)		—		(53.5)		—
Cash dividends declared ($1.05 per share)														Cash dividends declared ($1.05 per share)	—		—		(56.5)		—		(56.5)		—
Dividends to noncontrolling interest	Dividends to noncontrolling interest	—		—		—		—		—		(8.0)		Dividends to noncontrolling interest	—		—		—		—		—		(1.6)
Directors deferred compensation	Directors deferred compensation	—		0.3		—		—		0.3		—		Directors deferred compensation	—		0.2		—		—		0.2		—

BALANCE AT SEPTEMBER 30, 2021		$	0.6	$	—	$	2,501.3	$	(333.1)	$	2,168.8	$	9.3
BALANCE AT JUNE 30, 2022														BALANCE AT JUNE 30, 2022	$	0.6	$	3.9	$	2,603.6	$	(351.2)	$	2,256.9	$	11.0

HUBBELL INCORPORATED-Form 10-Q 1416

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		Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Hubbell Shareholders' Equity		Non- controlling interest			Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Hubbell Shareholders' Equity		Non- controlling interest
BALANCE AT DECEMBER 31, 2019		$	0.6	$	—	$	2,279.4	$	(332.9)	$	1,947.1	$	13.4
BALANCE AT DECEMBER 31, 2020														BALANCE AT DECEMBER 31, 2020	$	0.6	$	4.9	$	2,393.7	$	(329.2)	$	2,070.0	$	15.4
Net income	Net income	—		—		163.2		—		163.2		1.6		Net income	—		—		77.7		—		77.7		1.4
Other comprehensive (loss) income	Other comprehensive (loss) income	—		—		—		(19.0)		(19.0)		—		Other comprehensive (loss) income	—		—		—		(4.6)		(4.6)		—
Stock-based compensation	Stock-based compensation	—		15.9		—		—		15.9		—		Stock-based compensation	—		9.5		—		—		9.5		—
Acquisition/surrender of common shares(1)	Acquisition/surrender of common shares(1)	—		(12.0)		(34.1)		—		(46.1)		—		Acquisition/surrender of common shares(1)	—		(14.0)		(2.7)		—		(16.7)		—
Cash dividends declared ($0.91 per share)		—		—		(99.1)		—		(99.1)		—
Cash dividends declared ($0.98 per share)														Cash dividends declared ($0.98 per share)	—		—		(53.3)		—		(53.3)		—
Dividends to noncontrolling interest	Dividends to noncontrolling interest	—		—		—		—		—		(1.4)		Dividends to noncontrolling interest	—		—		—		—		—		(1.5)
Directors deferred compensation	Directors deferred compensation	—		(1.1)		—		—		(1.1)		—		Directors deferred compensation	—		0.1		—		—		0.1		—
Cumulative effect from adoption of CECL accounting standard		—		—		(1.0)		—		(1.0)		—
BALANCE AT JUNE 30, 2020		$	0.6	$	2.8	$	2,308.4	$	(351.9)	$	1,959.9	$	13.6

BALANCE AT MARCH 31, 2021														BALANCE AT MARCH 31, 2021	$	0.6	$	0.5	$	2,415.4	$	(333.8)	$	2,082.7	$	15.3
Net income	Net income	—		—		107.1		—		107.1		1.5		Net income	—		—		95.8		—		95.8		0.8
Other comprehensive (loss) income	Other comprehensive (loss) income	—		—		—		(4.4)		(4.4)		—		Other comprehensive (loss) income	—		—		—		11.6		11.6		—
Stock-based compensation	Stock-based compensation	—		4.1		—		—		4.1		—		Stock-based compensation	—		3.9		—		—		3.9		—
Acquisition/surrender of common shares(1)	Acquisition/surrender of common shares(1)	—		(0.6)		—		—		(0.6)		—		Acquisition/surrender of common shares(1)	—		(4.5)		(10.5)		—		(15.0)		—
Cash dividends declared ($0.91 per share)		—		—		(49.5)		—		(49.5)		—
Cash dividends declared ($0.98 per share)														Cash dividends declared ($0.98 per share)	—		—		(53.4)		—		(53.4)		—
Dividends to noncontrolling interest	Dividends to noncontrolling interest	—		—		—		—		—		(0.9)		Dividends to noncontrolling interest	—		—		—		—		—		(0.9)
Directors deferred compensation	Directors deferred compensation	—		0.2		—		—		0.2		—		Directors deferred compensation	—		0.1		—		—		0.1		—
BALANCE AT SEPTEMBER 30, 2020		$	0.6	$	6.5	$	2,366.0	$	(356.3)	$	2,016.8	$	14.2
BALANCE AT JUNE 30, 2021														BALANCE AT JUNE 30, 2021	$	0.6	$	—	$	2,447.3	$	(322.2)	$	2,125.7	$	15.2

(1) For accounting purposes, the Company treats repurchased shares as constructively retired when acquired and accordingly charges the purchase price against common stock par value, Additional paid-in capital, to the extent available, and Retained earnings. The change in Retained earnings of ~~$14.2~~$145.2 million and ~~$34.1~~$13.2 million in the first ~~nine~~six months of ~~2021~~2022 and ~~2020,~~2021, respectively, reflects this accounting treatment.

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

HUBBELL INCORPORATED-Form 10-Q 1517

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NOTE 910 Accumulated Other Comprehensive Loss

A summary of the changes in Accumulated other comprehensive loss (net of tax) for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 is provided below (in millions):


(debit) credit	(debit) credit	Cash flow hedge (loss) gain		Unrealized gain (loss) on available-for- sale securities		Pension and post retirement benefit plan adjustment		Cumulative translation adjustment		Total		(debit) credit	Cash flow hedge (loss) gain		Unrealized gain (loss) on available-for- sale securities		Pension and post retirement benefit plan adjustment		Cumulative translation adjustment		Total
BALANCE AT DECEMBER 31, 2020		$	(0.7)	$	1.0	$	(212.0)	$	(117.5)	$	(329.2)
BALANCE AT DECEMBER 31, 2021												BALANCE AT DECEMBER 31, 2021	$	0.4	$	0.6	$	(202.8)	$	(129.0)	$	(330.8)
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	0.2		(0.3)		—		(10.8)		(10.9)		Other comprehensive income (loss) before reclassifications	0.1		(1.2)		(2.9)		(25.1)		(29.1)
Amounts reclassified from accumulated other comprehensive loss	Amounts reclassified from accumulated other comprehensive loss	0.9		—		6.1		—		7.0		Amounts reclassified from accumulated other comprehensive loss	(0.2)		—		8.4		0.5		8.7
Current period other comprehensive income (loss)	Current period other comprehensive income (loss)	1.1		(0.3)		6.1		(10.8)		(3.9)		Current period other comprehensive income (loss)	(0.1)		(1.2)		5.5		(24.6)		(20.4)
BALANCE AT SEPTEMBER 30, 2021		$	0.4	$	0.7	$	(205.9)	$	(128.3)	$	(333.1)
BALANCE AT JUNE 30, 2022												BALANCE AT JUNE 30, 2022	$	0.3	$	(0.6)	$	(197.3)	$	(153.6)	$	(351.2)

A summary of the gain (loss) reclassifications out of Accumulated other comprehensive loss for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 is provided below (in millions):


		Three Months Ended September 30,				Nine Months Ended September 30,						Three Months Ended June 30,				Six Months Ended June 30,
Details about Accumulated Other Comprehensive Loss Components	Details about Accumulated Other Comprehensive Loss Components	2021		2020		2021		2020		Location of Gain (Loss) Reclassified into Income	Details about Accumulated Other Comprehensive Loss Components	2022		2021		2022		2021		Location of Gain (Loss) Reclassified into Income
Cash flow hedges gain (loss):	Cash flow hedges gain (loss):										Cash flow hedges gain (loss):
Forward exchange contracts	Forward exchange contracts	$	—	$	—	$	(0.1)	$	0.3	Net sales	Forward exchange contracts	$	—	$	—	$	—	$	(0.1)	Net sales
		(0.1)		0.2		(0.9)		0.7		Cost of goods sold		0.2		(0.5)		0.2		(0.8)		Cost of goods sold
		—		—		(0.2)		—		Other expense, net		—		(0.2)		—		(0.2)		Other expense, net
		(0.1)		0.2		(1.2)		1.0		Total before tax		0.2		(0.7)		0.2		(1.1)		Total before tax
		—		(0.1)		0.3		(0.3)		Tax benefit (expense)		—		0.2		—		0.3		Tax benefit (expense)
		$	(0.1)	$	0.1	$	(0.9)	$	0.7	Gain (loss) net of tax		$	0.2	$	(0.5)	$	0.2	$	(0.8)	Gain (loss) net of tax
Amortization of defined benefit pension and post retirement benefit items:	Amortization of defined benefit pension and post retirement benefit items:										Amortization of defined benefit pension and post retirement benefit items:
Prior-service costs (a)	Prior-service costs (a)	$	—	$	0.1	$	(0.1)	$	0.2		Prior-service costs (a)	$	(0.1)	$	(0.1)	$	(0.2)	$	(0.1)
Actuarial gains/(losses) (a)	Actuarial gains/(losses) (a)	(2.7)		(2.4)		(8.1)		(7.1)			Actuarial gains/(losses) (a)	(2.5)		(2.7)		(5.0)		(5.4)
Settlement and curtailment losses (a)		—		(6.6)		—		(6.6)
Settlement losses (a)											Settlement losses (a)	(5.8)		—		(5.8)		—
		(2.7)		(8.9)		(8.2)		(13.5)		Total before tax		(8.4)		(2.8)		(11.0)		(5.5)		Total before tax
		0.7		2.3		2.1		3.4		Tax benefit (expense)		2.1		0.7		2.6		1.4		Tax benefit (expense)
		$	(2.0)	$	(6.6)	$	(6.1)	$	(10.1)	Gain (loss) net of tax		$	(6.3)	$	(2.1)	$	(8.4)	$	(4.1)	Gain (loss) net of tax

Reclassification of currency translation gain (loss):											Reclassification of currency translation gain (loss):
												$	—	$	—	$	(0.5)	$	—	Gain (loss) on disposition of business (Note 2)
												—		—		—		—		Tax benefit (expense)
												$	—	$	—	$	(0.5)	$	—	Gain (loss) net of tax

Gains (losses) reclassified into earnings	Gains (losses) reclassified into earnings	$	(2.1)	$	(6.5)	$	(7.0)	$	(9.4)		Gains (losses) reclassified into earnings	$	(6.1)	$	(2.6)	$	(8.7)	$	(4.9)	Gain (loss) net of tax

(a) These accumulated other comprehensive loss components are included in the computation of net periodic pension cost (see Note 1112 - Pension and Other Benefits in the Notes to Condensed Consolidated Financial Statements for additional details).

HUBBELL INCORPORATED-Form 10-Q 1618

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NOTE 1011 Earnings Per Share

The Company computes earnings per share using the two-class method, which is an earnings allocation formula that determines earnings per share for common stock and participating securities. Service-based and performance-based restricted stock awards granted by the Company are considered participating securities as these awards contain a non-forfeitable right to dividends.

The following table sets forth the computation of earnings per share for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 (in millions, except per share amounts):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Numerator:	Numerator:									Numerator:
Net income from continuing operations attributable to Hubbell Incorporated										Net income from continuing operations attributable to Hubbell Incorporated	$	135.6	$	88.8	$	238.1	$	162.1
Less: Earnings allocated to participating securities										Less: Earnings allocated to participating securities	(0.4)		(0.3)		(0.6)		(0.5)
Net income from continuing operations available to common shareholders										Net income from continuing operations available to common shareholders	$	135.2	$	88.5	$	237.5	$	161.6

Net (loss) income from discontinued operations attributable to Hubbell Incorporated										Net (loss) income from discontinued operations attributable to Hubbell Incorporated	$	(13.6)	$	7.0	$	64.1	$	11.4
Less: Earnings allocated to participating securities										Less: Earnings allocated to participating securities	—		—		(0.2)		—
Net (loss) income from discontinued operations available to common shareholders										Net (loss) income from discontinued operations available to common shareholders	$	(13.6)	$	7.0	$	63.9	$	11.4

Net income attributable to Hubbell Incorporated	Net income attributable to Hubbell Incorporated	$	108.5	$	107.1	$	282.0	$	270.3	Net income attributable to Hubbell Incorporated	$	122.0	$	95.8	$	302.2	$	173.5
Less: Earnings allocated to participating securities	Less: Earnings allocated to participating securities	(0.3)		(0.4)		(0.9)		(1.0)		Less: Earnings allocated to participating securities	(0.4)		(0.3)		(0.8)		(0.6)
Net income available to common shareholders	Net income available to common shareholders	$	108.2	$	106.7	$	281.1	$	269.3	Net income available to common shareholders	$	121.6	$	95.5	$	301.4	$	172.9

Denominator:	Denominator:									Denominator:
Average number of common shares outstanding	Average number of common shares outstanding	54.3		54.2		54.3		54.1		Average number of common shares outstanding	53.6		54.3		53.8		54.3
Potential dilutive common shares	Potential dilutive common shares	0.4		0.3		0.4		0.3		Potential dilutive common shares	0.3		0.4		0.3		0.4
Average number of diluted shares outstanding	Average number of diluted shares outstanding	54.7		54.5		54.7		54.4		Average number of diluted shares outstanding	53.9		54.7		54.1		54.7
Earnings per share:
Basic		$	1.99	$	1.97	$	5.18	$	4.97
Diluted		$	1.98	$	1.96	$	5.14	$	4.95

Basic earnings per share:										Basic earnings per share:
Basic earnings per share from continuing operations										Basic earnings per share from continuing operations	$	2.52	$	1.63	$	4.41	$	2.97
Basic earnings per share from discontinued operations										Basic earnings per share from discontinued operations	$	(0.25)	$	0.13	$	1.19	$	0.22
Basic earnings per share										Basic earnings per share	$	2.27	$	1.76	$	5.60	$	3.19

Diluted earnings per share:										Diluted earnings per share:
Diluted earnings per share from continuing operations										Diluted earnings per share from continuing operations	$	2.51	$	1.62	$	4.39	$	2.95
Diluted earnings per share from discontinued operations										Diluted earnings per share from discontinued operations	$	(0.25)	$	0.12	$	1.18	$	0.21
Diluted earnings per share										Diluted earnings per share	$	2.26	$	1.74	$	5.57	$	3.16

The Company did not have any significant anti-dilutive securities outstanding during the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020.~~2021.

HUBBELL INCORPORATED-Form 10-Q 1719

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NOTE 1112 Pension and Other Benefits

The following table sets forth the components of net pension and other benefit costs for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 (in millions):


		Pension Benefits				Other Benefits					Pension Benefits				Other Benefits
		2021		2020		2021		2020			2022		2021		2022		2021
Three Months Ended September 30,
Three Months Ended June 30,										Three Months Ended June 30,
Service cost	Service cost	$	0.2	$	0.3	$	—	$	—	Service cost	$	0.2	$	0.3	$	—	$	—
Interest cost	Interest cost	5.9		7.2		0.1		0.2		Interest cost	6.3		6.0		0.1		0.2
Expected return on plan assets	Expected return on plan assets	(9.1)		(8.5)		—		—		Expected return on plan assets	(8.2)		(9.2)		—		—
Amortization of prior service cost	Amortization of prior service cost	—		—		—		(0.1)		Amortization of prior service cost	0.1		0.1		—		—
Amortization of actuarial losses		2.7		2.4		—		—
Settlement and curtailment losses		—		6.6		—		—
Amortization of actuarial losses (gains)										Amortization of actuarial losses (gains)	2.6		2.7		(0.1)		—
Settlement losses										Settlement losses	5.8		—		—		—
NET PERIODIC BENEFIT COST	NET PERIODIC BENEFIT COST	$	(0.3)	$	8.0	$	0.1	$	0.1	NET PERIODIC BENEFIT COST	$	6.8	$	(0.1)	$	—	$	0.2
Nine Months Ended September 30,
Six Months Ended June 30,										Six Months Ended June 30,
Service cost	Service cost	$	0.7	$	0.8	$	—	$	—	Service cost	$	0.4	$	0.5	$	—	$	—
Interest cost	Interest cost	17.9		21.6		0.4		0.6		Interest cost	12.6		12.0		0.2		0.3
Expected return on plan assets	Expected return on plan assets	(27.4)		(25.4)		—		—		Expected return on plan assets	(16.4)		(18.3)		—		—
Amortization of prior service cost	Amortization of prior service cost	0.1		0.1		—		(0.3)		Amortization of prior service cost	0.2		0.1		—		—
Amortization of actuarial losses		8.1		7.1		—		—
Settlement and curtailment losses		—		6.6		—		—
Amortization of actuarial losses (gains)										Amortization of actuarial losses (gains)	5.2		5.4		(0.2)		—
Settlement losses										Settlement losses	5.8		—		—		—
NET PERIODIC BENEFIT COST	NET PERIODIC BENEFIT COST	$	(0.6)	$	10.8	$	0.4	$	0.3	NET PERIODIC BENEFIT COST	$	7.8	$	(0.3)	$	—	$	0.3

In the second quarter of 2022, the Company recorded $4.4 million of settlement losses in continuing operations and $1.4 million of settlement losses in discontinued operations relating to retirees that elected to receive lump-sum distributions from the Company's defined benefit pension plans. This charge was the result of lump-sum payments which exceeded the threshold for settlement accounting under U.S. GAAP for the year.

Employer Contributions

The Company ~~has contributed $0.1~~made $2.5 million in contributions to its foreign pension plans during ~~2021.~~the six months ended June 30, 2022. Although not required by ERISA and the Internal Revenue Code, the Company may elect to make ~~an additional~~a voluntary contribution to its qualified domestic defined benefit pension plan in ~~2021. Additionally, we anticipate making cash payments of $5.0 million due in 2021, related to the previously disclosed settlement agreement with a multi-employer pension plan.~~2022.

HUBBELL INCORPORATED-Form 10-Q 1820

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NOTE 1213 Guarantees

The Company records a liability equal to the fair value of guarantees in accordance with the accounting guidance for guarantees. When it is probable that a liability has been incurred and the amount can be reasonably estimated, the Company accrues for costs associated with guarantees. The most likely costs to be incurred are accrued based on an evaluation of currently available facts and, where no amount within a range of estimates is more likely, the minimum is accrued. As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the fair value and maximum potential payment related to the Company’s guarantees were not material.

The Company offers product warranties that cover defects on most of its products. These warranties primarily apply to products that are properly installed, maintained and used for their intended purpose. The Company accrues estimated warranty costs at the time of sale. Estimated warranty expenses, recorded in cost of goods sold, are based upon historical information such as past experience, product failure rates, or the estimated number of units to be repaired or replaced. Adjustments are made to the product warranty accrual as claims are incurred, additional information becomes known, or as historical experience indicates.

Changes in the accrual for product warranties during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 are set forth below (in millions):


		2021		2020			2022		2021
BALANCE AT JANUARY 1, (a)	BALANCE AT JANUARY 1, (a)	$	80.5	$	82.1	BALANCE AT JANUARY 1, (a)	$	66.1	$	72.7
Provision	Provision	8.2		10.0		Provision	7.3		4.4
Expenditures/payments/other	Expenditures/payments/other	(15.0)		(10.2)		Expenditures/payments/other	(7.3)		(9.4)
BALANCE AT SEPTEMBER 30, (a)		$	73.7	$	81.9
BALANCE AT June 30, (a)						BALANCE AT June 30, (a)	$	66.1	$	67.7

(a) Refer to Note 67 – Other Accrued Liabilities and Note 78 – Other Non-Current Liabilities for a breakout of short-term and long-term warranties.

HUBBELL INCORPORATED-Form 10-Q 1921

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NOTE 1314 Fair Value Measurement

Financial Instruments

Financial instruments which potentially subject the Company to significant concentrations of credit loss risk consist of trade receivables, cash equivalents and investments. The Company grants credit terms in the normal course of business to its customers. Due to the diversity of its product lines, the Company has an extensive customer base including electrical distributors and wholesalers, electric utilities, equipment manufacturers, electrical contractors, telecommunication companies and retail and hardware outlets. As part of its ongoing procedures, the Company monitors the credit worthiness of its customers. Bad debt write-offs have historically been minimal. The Company places its cash and cash equivalents with financial institutions and limits the amount of exposure in any one institution.

At ~~September~~June 30, ~~2021~~2022 our accounts receivable balance was ~~$798.3~~$780.5 million, net of allowances of ~~$11.6~~$13.9 million. During the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 our allowances ~~decreased~~increased approximately ~~$0.9~~$3.3 million. ~~The decrease is primarily the result of the improvement in general economic conditions.~~

Investments

At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company had ~~$58.1~~$65.6 million and ~~$57.7~~$54.0 million, respectively, of available-for-sale municipal debt securities. These investments had an amortized cost of ~~$57.2~~$66.6 million and ~~$56.4~~$53.3 million, respectively. No allowance for credit losses related to our available-for-sale debt securities was recorded for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 the unrealized losses attributable to our available-for-sale debt securities was $1.2 million and $0.1 ~~million.~~million, respectively. The fair value of available-for-sale debt securities with unrealized losses was ~~$11.4~~$49.6 million at ~~September~~June 30, ~~2021~~2022 and ~~$6.1~~$12.2 million at December 31, ~~2020.~~2021.

The Company also had trading securities of ~~$23.9~~$20.2 million at ~~September~~June 30, ~~2021~~2022 and ~~$22.7~~$24.5 million at December 31, ~~2020~~2021 that are carried on the balance sheet at fair value. Unrealized gains and losses associated with available-for-sale debt securities are reflected in Accumulated other comprehensive loss, net of tax, while unrealized gains and losses associated with trading securities are reflected in the results of operations.

Fair value measurements

Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The FASB fair value measurement guidance established a fair value hierarchy that prioritizes the inputs used to measure fair value. The three broad levels of the fair value hierarchy are as follows:

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 – Quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly.

Level 3 – Unobservable inputs for which little or no market data exists, therefore requiring a company to develop its own assumptions.

HUBBELL INCORPORATED-Form 10-Q 2022

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The following table shows, by level within the fair value hierarchy, our financial assets and liabilities that are accounted for at fair value on a recurring basis at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 (in millions):


Asset (Liability)	Asset (Liability)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Quoted Prices in Active Markets for Similar Assets (Level 2)		Unobservable inputs for which little or no market data exists (Level 3)		Total		Asset (Liability)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Quoted Prices in Active Markets for Similar Assets (Level 2)		Unobservable inputs for which little or no market data exists (Level 3)		Total
September 30, 2021
June 30, 2022										June 30, 2022
Money market funds(a)	Money market funds(a)	$	50.9	$	—	$	—	$	50.9	Money market funds(a)	$	232.3	$	—	$	—	$	232.3

Time Deposits(a)										Time Deposits(a)	—		4.8		—		4.8
Available for sale investments	Available for sale investments	—		58.1		—		58.1		Available for sale investments	—		65.6		—		65.6
Trading securities	Trading securities	23.9		—		—		23.9		Trading securities	20.2		—		—		20.2
Deferred compensation plan liabilities	Deferred compensation plan liabilities	(23.9)		—		—		(23.9)		Deferred compensation plan liabilities	(20.2)		—		—		(20.2)
Derivatives:	Derivatives:									Derivatives:
Forward exchange contracts-Assets(b)	Forward exchange contracts-Assets(b)	—		0.5		—		0.5		Forward exchange contracts-Assets(b)	—		0.3		—		0.3
Forward exchange contracts-(Liabilities)(c)	Forward exchange contracts-(Liabilities)(c)	—		(0.1)		—		(0.1)		Forward exchange contracts-(Liabilities)(c)	—		(0.1)		—		(0.1)
TOTAL	TOTAL	$	50.9	$	58.5	$	—	$	109.4	TOTAL	$	232.3	$	70.6	$	—	$	302.9

Asset (Liability)	Asset (Liability)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Quoted Prices in Active Markets for Similar Assets (Level 2)		Unobservable inputs for which little or no market data exists (Level 3)		Total		Asset (Liability)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Quoted Prices in Active Markets for Similar Assets (Level 2)		Unobservable inputs for which little or no market data exists (Level 3)		Total
December 31, 2020
December 31, 2021										December 31, 2021
Money market funds(a)	Money market funds(a)	$	26.6	$	—	$	—	$	26.6	Money market funds(a)	$	58.5	$	—	$	—	$	58.5

Available for sale investments	Available for sale investments	—		57.7		—		57.7		Available for sale investments	—		54.0		—		54.0
Trading securities	Trading securities	22.7		—		—		22.7		Trading securities	24.5		—		—		24.5
Deferred compensation plan liabilities	Deferred compensation plan liabilities	(22.7)		—		—		(22.7)		Deferred compensation plan liabilities	(24.5)		—		—		(24.5)
Derivatives:	Derivatives:									Derivatives:
Forward exchange contracts-Assets(b)										Forward exchange contracts-Assets(b)	—		0.5		—		0.5

Forward exchange contracts-(Liabilities)(c)		—		(0.8)		—		(0.8)
TOTAL	TOTAL	$	26.6	$	56.9	$	—	$	83.5	TOTAL	$	58.5	$	54.5	$	—	$	113.0

(a) Money market funds and time deposits are reflected in Cash and cash equivalents in the Condensed Consolidated Balance Sheets.

(b) Forward exchange contracts-Assets are reflected in Other current assets in the Condensed Consolidated Balance Sheets.

(c) Forward exchange contracts-(Liabilities) are reflected in Other accrued liabilities in the Condensed Consolidated Balance Sheets.

The methods and assumptions used to estimate the Level 2 fair values were as follows:

Forward exchange contracts – The fair value of forward exchange contracts was based on quoted forward foreign exchange prices at the reporting date.

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

Deferred compensation plans

The Company offers certain employees the opportunity to participate in non-qualified deferred compensation plans. A participant’s deferrals are invested in a variety of participant-directed debt and equity mutual funds that are classified as trading securities. The Company purchased ~~$2.5~~$1.9 million and ~~$2.7~~$2.3 million of trading securities related to these deferred compensation plans during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively. As a result of participant distributions, the Company sold ~~$3.0~~$2.4 million of these trading securities during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~$2.0~~$3.0 million during the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021. The unrealized gains and losses associated with these trading securities are directly offset by the changes in the fair value of the underlying deferred compensation plan obligation.

Long Term Debt

As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the carrying value of long-term debt, net of unamortized discount and debt issuance costs, was ~~$1,434.9~~$1,436.7 million and ~~$1,436.9~~$1,435.5 million, respectively. The estimated fair value of the long-term debt as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 was ~~$1,540.0~~$1,355.6 million and ~~$1,569.5~~$1,524.5 million, respectively, using quoted market prices in active markets for similar liabilities (Level 2).

HUBBELL INCORPORATED-Form 10-Q 2123

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NOTE 1415 Commitments and Contingencies

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

HUBBELL INCORPORATED-Form 10-Q 2224

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NOTE 1516 Restructuring Costs and Other

In the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, we incurred costs for restructuring actions initiated in ~~2021~~2022 as well as costs for restructuring actions initiated in the prior years. Our restructuring actions are associated with cost reduction efforts that include the consolidation of manufacturing and distribution facilities as well as workforce reductions. Restructuring costs include severance and employee benefits, asset impairments, accelerated depreciation, as well as facility closure, contract termination and certain pension costs that are directly related to restructuring actions. These costs are predominantly settled in cash from our operating activities and are generally settled within one year, with the exception of asset impairments, which are non-cash.

Pre-tax restructuring costs incurred in each of our reporting segments and the location of the costs in the Condensed Consolidated Statements of Income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 is as follows (in millions):


		Three Months Ended September 30,													Three Months Ended June 30,
		2021		2020		2021		2020		2021		2020			2022		2021		2022		2021		2022		2021
		Cost of goods sold				Selling & administrative expense				Total					Cost of goods sold				Selling & administrative expense				Total
Electrical Solutions	Electrical Solutions	$	1.0	$	1.7	$	0.2	$	0.1	$	1.2	$	1.8	Electrical Solutions	$	0.5	$	0.5	$	0.6	$	0.3	$	1.1	$	0.8
Utility Solutions	Utility Solutions	—		1.5		0.2		—		0.2		1.5		Utility Solutions	0.7		0.3		(0.2)		0.1		0.5		0.4
Total Pre-Tax Restructuring Costs	Total Pre-Tax Restructuring Costs	$	1.0	$	3.2	$	0.4	$	0.1	$	1.4	$	3.3	Total Pre-Tax Restructuring Costs	$	1.2	$	0.8	$	0.4	$	0.4	$	1.6	$	1.2


		Nine Months Ended September 30,													Six Months Ended June 30,
		2021		2020		2021		2020		2021		2020			2022		2021		2022		2021		2022		2021
		Cost of goods sold				Selling & administrative expense				Total					Cost of goods sold				Selling & administrative expense				Total
Electrical Solutions	Electrical Solutions	$	2.3	$	4.4	$	0.4	$	2.0	$	2.7	$	6.4	Electrical Solutions	$	0.6	$	0.7	$	0.7	$	0.1	$	1.3	$	0.8
Utility Solutions	Utility Solutions	0.6		5.8		0.2		0.3		0.8		6.1		Utility Solutions	1.7		0.6		0.2		0.1		1.9		0.7
Total Pre-Tax Restructuring Costs	Total Pre-Tax Restructuring Costs	$	2.9	$	10.2	$	0.6	$	2.3	$	3.5	$	12.5	Total Pre-Tax Restructuring Costs	$	2.3	$	1.3	$	0.9	$	0.2	$	3.2	$	1.5

The following table summarizes the accrued liabilities for our restructuring actions (in millions):


		Beginning Accrued Restructuring Balance 1/1/21		Pre-tax Restructuring Costs		Utilization and Foreign Exchange		Ending Accrued Restructuring Balance 9/30/2021			Beginning Accrued Restructuring Balance 1/1/22		Pre-tax Restructuring Costs		Utilization and Foreign Exchange		Ending Accrued Restructuring Balance 6/30/2022
2021 Restructuring Actions
2022 Restructuring Actions										2022 Restructuring Actions
Severance	Severance	$	—	$	0.6	$	(0.4)	$	0.2	Severance	$	—	$	2.0	$	(0.2)	$	1.8
Asset write-downs	Asset write-downs	—		—		—		—		Asset write-downs	—		—		—		—
Facility closure and other costs	Facility closure and other costs	—		0.1		(0.1)		—		Facility closure and other costs	—		0.8		(0.7)		0.1
Total 2021 Restructuring Actions		$	—	$	0.7	$	(0.5)	$	0.2
2020 and Prior Restructuring Actions
Total 2022 Restructuring Actions										Total 2022 Restructuring Actions	$	—	$	2.8	$	(0.9)	$	1.9
2021 and Prior Restructuring Actions										2021 and Prior Restructuring Actions
Severance	Severance	$	8.9	$	0.3	$	(5.2)	$	4.0	Severance	$	4.1	$	0.3	$	(0.6)	$	3.8
Asset write-downs	Asset write-downs	—		—		—		—		Asset write-downs	—		—		—		—
Facility closure and other costs	Facility closure and other costs	1.7		2.5		(2.7)		1.5		Facility closure and other costs	0.1		0.1		(0.2)		—
Total 2020 and Prior Restructuring Actions		$	10.6	$	2.8	$	(7.9)	$	5.5
Total 2021 and Prior Restructuring Actions										Total 2021 and Prior Restructuring Actions	$	4.2	$	0.4	$	(0.8)	$	3.8
Total Restructuring Actions	Total Restructuring Actions	$	10.6	$	3.5	$	(8.4)	$	5.7	Total Restructuring Actions	$	4.2	$	3.2	$	(1.7)	$	5.7

HUBBELL INCORPORATED-Form 10-Q 2325

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The actual costs incurred and total expected cost in each of our reporting segments of our on-going restructuring actions are as follows (in millions):


		Total expected costs		Costs incurred during 2020		Costs incurred in the first nine months of 2021		Remaining costs at 9/30/2021			Total expected costs		Costs incurred during 2021		Costs incurred in the first six months of 2022		Remaining costs at 6/30/2022
2021 Restructuring Actions
2022 Restructuring Actions										2022 Restructuring Actions
Electrical Solutions	Electrical Solutions	$	2.5	$	—	$	0.7	$	1.8	Electrical Solutions	$	1.1	$	—	$	0.8	$	0.3
Utility Solutions	Utility Solutions	—		—		—		—		Utility Solutions	3.1		—		2.0		1.1
Total 2021 Restructuring Actions		$	2.5	$	—	$	0.7	$	1.8
2020 and Prior Restructuring Actions
Total 2022 Restructuring Actions										Total 2022 Restructuring Actions	$	4.2	$	—	$	2.8	$	1.4
2021 and Prior Restructuring Actions										2021 and Prior Restructuring Actions
Electrical Solutions	Electrical Solutions	$	20.0	$	16.0	$	2.0	$	2.0	Electrical Solutions	$	2.2	$	1.5	$	0.5	$	0.2
Utility Solutions	Utility Solutions	10.3		8.1		0.8		1.4		Utility Solutions	7.3		2.4		(0.1)		5.0
Total 2020 and Prior Restructuring Actions		$	30.3	$	24.1	$	2.8	$	3.4
Total 2021 and Prior Restructuring Actions										Total 2021 and Prior Restructuring Actions	$	9.5	$	3.9	$	0.4	$	5.2
Total Restructuring Actions	Total Restructuring Actions	$	32.8	$	24.1	$	3.5	$	5.2	Total Restructuring Actions	$	13.7	$	3.9	$	3.2	$	6.6

~~HUBBELL INCORPORATED~~-~~Form 10-Q~~ 24

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NOTE 1617 Debt and Financing Arrangements

Long-term debt consists of the following (in millions):


		Maturity	September 30, 2021		December 31, 2020			Maturity	June 30, 2022		December 31, 2021
Senior notes at 3.625%		2022	$	—	$	299.2
Senior notes at 3.35%	Senior notes at 3.35%	2026	397.0		396.5		Senior notes at 3.35%	2026	$	397.5	$	397.2
Senior notes at 3.15%	Senior notes at 3.15%	2027	296.9		296.4		Senior notes at 3.15%	2027	297.2		297.0
Senior notes at 3.50%	Senior notes at 3.50%	2028	445.3		444.8		Senior notes at 3.50%	2028	445.9		445.5
Senior notes at 2.300%	Senior notes at 2.300%	2031	295.7		—		Senior notes at 2.300%	2031	296.1		295.8

TOTAL LONG-TERM DEBT(a)	TOTAL LONG-TERM DEBT(a)		$	1,434.9	$	1,436.9	TOTAL LONG-TERM DEBT(a)		$	1,436.7	$	1,435.5

(a)Long-term debt is presented net of debt issuance costs and unamortized discounts.

~~2.300% Senior Notes due 2031~~

On March 12, 2021, the Company completed a public offering of $300 million aggregate principal amount of its 2.300% Senior Notes due 2031 (the “2031 Notes”). The net proceeds from the offering were approximately $295.5 million after deducting the underwriting discount and estimated offering expenses payable by the Company. The Company used the net proceeds from the offering of the 2031 Notes, together with cash on hand, to redeem in full all of the Company’s outstanding 3.625% Senior Notes due 2022 in an aggregate principal amount of $300 million, which had a stated maturity date of November 15, 2022 (the “2022 Notes”), and to pay any premium and accrued interest in respect thereof, which redemption was completed on April 2, 2021. The redemption resulted in a $16.8 million loss on extinguishment of indebtedness that was recognized in the second quarter of 2021. The loss on extinguishment includes a cash premium of $16.0 million paid upon redemption in accordance with the terms of the 2022 Notes.

The 2031 Notes bear interest at a rate of 2.300% per annum from March 12, 2021. Interest on the 2031 Notes is payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2021. The 2031 Notes will mature on March 15, 2031.

The 2031 Notes are callable at any time with a make whole premium and are only subject to accelerated payment prior to maturity in the event of a default (including as a result of the Company's failure to meet certain non-financial covenants) under the indenture governing the notes or upon a change in control triggering event as defined in such indenture. The Company was in compliance with all non-financial covenants as of September 30, 2021.

2021 Credit Facility

~~On March 12, 2021, the~~The Company ~~as borrower, and its subsidiaries Hubbell Power Holdings S.à r.l. and Harvey Hubbell Holdings S.à r.l., each as~~has a ~~subsidiary borrower (collectively, the “Subsidiary Borrowers”), entered into a new~~ five-year credit agreement with a syndicate of lenders and JPMorgan Chase, N.A., as administrative agent, that provides a $750 million committed revolving credit facility (the “2021 Credit Facility"). Commitments under the 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.

The interest rate applicable to borrowings under the 2021 Credit Facility is either (i) the alternate base rate (as defined in the Revolving Credit Agreement) or (ii) the adjusted LIBOR rate (as defined in the 2021 Credit Facility) plus, in the case of this clause (ii), 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 ~~September~~June 30, ~~2021.~~2022. As of ~~September~~June 30, ~~2021,~~2022, the 2021 Credit Facility was undrawn.

~~In connection with entry into the 2021 Credit Facility, the Company terminated all commitments under the existing credit facility dated as of January 31, 2018.~~

Short-Term Debt

The Company had ~~$128.9~~$5.8 million and ~~$153.1~~$9.7 million of short-term debt outstanding at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, which consisted primarily of ~~commercial paper borrowings.~~borrowings to support our international operations in China and other short term debt to support operations.

HUBBELL INCORPORATED-Form 10-Q 2526

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NOTE 1718 Stock-Based Compensation

As of ~~September~~June 30, ~~2021,~~2022, the Company had various stock-based awards outstanding which were issued to executives and other key employees. The Company recognizes the grant-date fair value of all stock-based awards to employees over their respective requisite service periods (generally equal to an award’s vesting period), net of estimated forfeitures. A stock-based award is considered vested for expense attribution purposes when the employee’s retention of the award is no longer contingent on providing subsequent service. For those awards that vest immediately upon retirement eligibility, the Company recognizes compensation cost immediately for retirement-eligible individuals or over the period from the grant date to the date retirement eligibility is achieved, if less than the stated vesting period.

The Company’s long-term incentive program for awarding stock-based compensation includes a combination of restricted stock, stock appreciation rights (“SARs”), and performance shares of the Company’s common stock pursuant to the Hubbell Incorporated 2005 Incentive Award Plan as amended and restated (the "Award Plan"). Under the Award Plan, the Company may authorize up to 9.7 million shares of common stock to settle awards of restricted stock, performance shares, or SARs. The Company issues new shares to settle stock-based awards. During the three months ended March 31, ~~2021,~~2022, the Company's grant of stock-based awards included restricted stock, SARs and performance shares. There were no0 material awards granted during the three months ended ~~September~~June 30, ~~2021.~~2022.

Each of the compensation arrangements is discussed below.

Restricted Stock

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

Restricted Stock Issued to Employees - Service Condition

Restricted stock awards that vest based upon a service condition are expensed on a straight-line basis over the requisite service period. These awards generally vest either in 3 equal installments on each of the first ~~three~~3 anniversaries of the grant ~~date; however starting in December 2018, the Company granted a certain number of these awards that generally vest~~date or on the third-year anniversary of the grant date. The fair value of these awards is measured by the average of the high and low trading prices of the Company’s common stock on the most recent trading day immediately preceding the grant date (“measurement date”).

In February ~~2021,~~2022, the Company granted ~~67,166~~55,457 restricted stock awards with a fair value per share of ~~$163.26.~~$185.87.

Stock Appreciation Rights

SARs grant the holder the right to receive, once vested, the value in shares of the Company's common stock equal to the positive difference between the grant price, as determined using the mean of the high and low trading prices of the Company’s common stock on the measurement date, and the fair market value of the Company’s common stock on the date of exercise. This amount is payable in shares of the Company’s common stock. SARs vest and become exercisable in 3 equal installments during the first three years following the grant date and expire ten years from the grant date.

In February ~~2021,~~2022, the Company granted ~~182,441~~137,099 SAR awards. The fair value of each SAR award was measured using the Black-Scholes option pricing model.

The following table summarizes the weighted-average assumptions used in estimating the fair value of the SARs granted during the first three months of ~~2021:~~2022:

Grant Date Expected Dividend Yield Expected Volatility Risk Free Interest Rate Expected Term Weighted Avg. Grant Date Fair Value of 1 SAR
February 2021 2.4% 26.5% 0.6% 5.5 years $29.43

Grant Date

Expected Dividend Yield

Expected Volatility

Risk Free Interest Rate

Expected Term

Weighted Avg. Grant Date Fair Value of 1 SAR

February 2022

2.1%

27.4%

1.8%

4.9 years

$39.25

The expected dividend yield was calculated by dividing the Company’s expected annual dividend by the average stock price for the past three months. Expected volatilities are based on historical volatilities of the Company’s stock for a period consistent with the expected term. The expected term of SARs granted was based upon historical exercise behavior of ~~stock options and~~ SARs.

~~HUBBELL INCORPORATED~~-~~Form 10-Q~~ 26

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The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the award.

HUBBELL INCORPORATED-Form 10-Q 27

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Performance Shares

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

Performance Shares - Market Condition

In February ~~2021,~~2022, the Company granted ~~15,741~~14,076 performance shares that will vest subject to a market condition and service condition through the performance period. The market condition associated with the awards is the Company's total shareholder return ("TSR") compared to the TSR generated by the companies that comprise the S&P Capital Goods 900 index over a three year performance period. Performance at target will result in vesting and issuance of the number of performance shares granted, equal to 100% payout. Performance below or above target can result in issuance in the range of 0%-200% of the number of shares granted. Expense is recognized irrespective of the market condition being achieved.

The fair value of the performance share awards with a market condition for the ~~2021~~2022 grant was determined based upon a lattice model.

The following table summarizes the related assumptions used to determine the fair values of the performance share awards with a market condition granted during February ~~2021:~~2022:

Grant Date

Stock Price on Measurement Date

Dividend Yield

Expected Volatility

Risk Free Interest Rate

Expected Term

Weighted Avg. Grant Date Fair Value

Grant Date

Stock Price on Measurement Date

Dividend Yield

Expected Volatility

Risk Free Interest Rate

Expected Term

Weighted Avg. Grant Date Fair Value

February 2021

$163.26

2.4%

40.6%

0.2%

3 years

$198.89

February 2022

$185.87

2.3%

39.7%

1.6%

2.9 years

$221.94

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

Performance Shares - Performance Condition

In February ~~2021,~~2022, the Company granted ~~31,543~~28,628 performance shares that will vest subject to an internal Company-based performance condition and service requirement.

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

The fair value of the award is measured based upon the average of the high and low trading prices of the Company's common stock on the measurement date reduced by the present value of dividends expected to be paid during the requisite service period. The Company expenses these awards on a straight-line basis over the requisite service period and including an assessment of the performance achieved to date. The weighted average fair value per share was ~~$151.92~~$174.48 for the awards granted in the first quarter of ~~2021.~~2022.

Grant Date

Fair Value

Performance Period

Payout Range

February ~~2021~~2022

$~~151.92~~174.48

Jan ~~2021~~2022 - Dec ~~2023~~2024

0-200%

HUBBELL INCORPORATED-Form 10-Q 2728

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NOTE 1819 Subsequent Events

On ~~October 26, 2021, Hubbell entered into a definitive agreement to sell its Commercial~~July 8, 2022, the Company acquired all of the issued and ~~Industrial Lighting business to GE Current, a Daintree company,~~outstanding membership interests of PCX Holdings LLC ("PCX") for a cash purchase price of ~~$350 million, subject to customary adjustments with respect to working capital~~approximately $128 million. PCX is a leading designer and ~~net indebtedness. The Commercial and Industrial Lighting~~manufacturer of factory built modular power solutions for applications in the data center market. This business ~~had sales of approximately $515 million~~will be reported in ~~2020 as part of~~ the Electrical Solutions segment and designs, manufactures, and sells LED lighting and control solutions for commercial and industrial customers. Hubbell expects the Commercial and Industrial Lighting business to be classified as held for sale in the fourth quarter of 2021. The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close in the first quarter of 2022.

On July 11, 2022, the Company acquired all of the issued and outstanding membership interests of Ripley Tools, LLC and Nooks Hill Road, LLC, collectively referred to as Ripley Tools, for a cash purchase price of approximately $50 million. Ripley Tools is a leading manufacturer of cable and fiber prep tools and test equipment that serves both the Electric and Utility and Communications market. This business will be reported in the Utility Solutions segment.

These acquisitions will be accounted for as business combinations whereby purchase accounting requires the assets acquired and liabilities assumed to be recognized at their fair value as of the acquisition date and goodwill and other intangible assets associated with tradenames and customer lists, among others, to be recognized. The preliminary purchase accounting for these acquisitions has not yet been completed.

HUBBELL INCORPORATED-Form 10-Q 2829

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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. ~~The Company's mission is to~~We provide utility and electrical solutions that enable ~~its~~our customers to operate critical infrastructure ~~safely,~~ reliably and ~~efficiently.~~efficiently, and we empower and energize communities through innovation 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 building 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 ~~United Kingdom,~~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 ~~19,400~~15,900 individuals worldwide as of ~~September~~June 30, ~~2021.~~2022.

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

Effective January 1, 2021, the Company consolidated the three business groups within its Electrical segment, and renamed the segment as Hubbell Electrical Solutions ("Electrical Solutions"). The Electrical Solutions segment unites businesses with similar operating models, products, and go to market strategies under one operating banner and common leadership to drive synergies and long-term growth opportunities.

Also effective January 1, 2021, the Company moved its Hubbell Gas Connectors and Accessories business, from the Electrical Solutions segment to the Utility Solutions segment to create synergies with the existing gas products offered within the Utility Solutions segment and to better serve its utility customers. The Hubbell Gas Connectors and Accessories business represented approximately $157.1 million of net sales and $19.4 million of operating profit in 2020. The Company began reporting its segment results under this revised reporting structure beginning with the filing of its Quarterly Report on Form 10-Q for the first quarter ended March 31, 2021.

Results for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 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~~two thirds of our cost of goods sold, volatility in this area can 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 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.

Productivity programs affect virtually all functional areas within the Company by reducing or eliminating waste and improving processes. We continue to expand our efforts ~~surrounding~~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 and have initiated pricing actions to cover the higher costs and protect our margin profile. 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 if inflation persists or accelerates. 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 that could reduce our customers’ demand for our products.

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Impact of the COVID-19 Pandemic

During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (COVID-19). U.S. federal, state, local, and foreign governments reacted to the public health crisis with mitigation measures, creating significant uncertainties in the U.S. and global economies, including the shutdown of large portions of, or imposition of restrictions on, the U.S. and global economies. Notwithstanding a general improvement in conditions and reduction of adverse effects from the pandemic, ~~effects,~~ as of ~~September~~June 30, ~~2021~~2022 there continues to be significant uncertainty around the scope, severity, and duration of the pandemic, as well as the breadth and duration of business disruptions related to it and the overall impact on the U.S., global economies, and our operating results in future periods.

The COVID-19 pandemic continues to pose the risk that our employees, contractors, suppliers, customers and other business partners may be prevented from conducting business activities, partially or completely, for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities or imposed by our management, or that the pandemic may otherwise interrupt or impair business activities. The Occupational Safety and Health Administration (OSHA) has been directed to develop a rule requiring each employer with 100 or more employees to ensure its workforce is fully vaccinated or require any workers who remain unvaccinated to produce a negative test result on at least a weekly basis before coming to work and President Biden has announced an executive order mandating COVID-19 vaccination of U.S. based employees of companies that work on, or in support for, federal contracts. We cannot currently predict the impact that the OSHA rule, if adopted, and executive order would have on our workforce, our ability to secure skilled labor in the future, or the cost of implementation and compliance with such rule and the executive order.

Additionally, as economies have re-opened, global supply chains have struggled to keep up with increasing demand, and the resulting supply chain disruptions have, in certain cases, affected our ability to ship finished products in a timely manner. These supply chain disruptions and the increase in demand have also led to increased freight, labor and commodity cost that ~~affected our operating margin in the third quarter of 2021, and those disruptions and increased cost~~ may persist through ~~the fourth quarter of 2021 and into~~ 2022.

~~Refer~~Discontinued Operations

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, 2022 and 2021. This discussion and analysis should be read in conjunction with our Condensed Consolidated Financial Statements and notes thereto in Item ~~1A, Risk Factors in~~1 of this Quarterly Report on Form 10-Q, and ~~item 1A, Risk Factors on~~the audited consolidated financial statements, accompanying notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our ~~2020~~ Annual Report on Form 10-K for ~~additional discussion of risks associated with~~ the ~~COVID-19 pandemic.~~

fiscal year ended December 31, 2021.

Results of Operations – ~~Third~~Second Quarter of ~~2021~~2022 compared to the ~~Third~~Second Quarter of ~~2020~~2021

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


		Three Months Ended September 30,									Three Months Ended June 30,
		2021		% of Net sales		2020		% of Net sales			2022		% of Net sales		2021		% of Net sales
Net sales	Net sales	$	1,213.6			$	1,108.6			Net sales	$	1,256.0			$	1,054.3
Cost of goods sold	Cost of goods sold	883.3		72.8	%	779.0		70.3	%	Cost of goods sold	872.8		69.5	%	756.0		71.7	%
Gross profit	Gross profit	330.3		27.2	%	329.6		29.7	%	Gross profit	383.2		30.5	%	298.3		28.3	%
Selling & administrative ("S&A") expense	Selling & administrative ("S&A") expense	175.0		14.4	%	166.7		15.0	%	Selling & administrative ("S&A") expense	192.6		15.3	%	156.1		14.8	%
Operating income	Operating income	155.3		12.8	%	162.9		14.7	%	Operating income	190.6		15.2	%	142.2		13.5	%
Net income attributable to Hubbell Incorporated		108.5		8.9	%	107.1		9.7	%
EARNINGS PER SHARE – DILUTED		$	1.98			$	1.96
Net income from continuing operations										Net income from continuing operations	137.1		10.9	%	89.6		8.5	%
Less: Net income from continuing operations attributable to non-controlling interest										Less: Net income from continuing operations attributable to non-controlling interest	(1.5)		(0.1)	%	(0.8)		(0.1)	%
Net income from continuing operations attributable to Hubbell Incorporated										Net income from continuing operations attributable to Hubbell Incorporated	135.6		10.8	%	88.8		8.4	%
(Loss) income from discontinued operations, net of tax										(Loss) income from discontinued operations, net of tax	(13.6)				7.0
Net income attributable to Hubbell incorporated										Net income attributable to Hubbell incorporated	122.0				95.8
Less: Earnings allocated to participating securities										Less: Earnings allocated to participating securities	(0.4)				(0.3)
Net income available to common shareholders										Net income available to common shareholders	$	121.6			$	95.5
Average number of diluted shares outstanding										Average number of diluted shares outstanding	53.9				54.7
DILUTED EARNINGS PER SHARE - CONTINUING OPERATIONS										DILUTED EARNINGS PER SHARE - CONTINUING OPERATIONS	$	2.51			$	1.62
DILUTED EARNINGS PER SHARE - DISCONTINUED OPERATIONS										DILUTED EARNINGS PER SHARE - DISCONTINUED OPERATIONS	$	(0.25)			$	0.12

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.

HUBBELL INCORPORATED-Form 10-Q 31

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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 67 – 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 ~~Fiscal Year Ended~~fiscal year ended December 31, ~~2020.~~2021.

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.

~~HUBBELL INCORPORATED~~-~~Form 10-Q~~ 30

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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 ~~net income in~~operating measurers also exclude the following:

• 2022 - A pension settlement charge of $4.4 million.

• 2021 ~~also excludes a~~- A $16.8 million pre-tax loss on the early extinguishment of long-term debt from the redemption of all of the Company's outstanding 3.625% Senior Notes due 2022 in the aggregate principal amount of $300 million and a ~~$6.9~~$6.8 million loss on the disposal of a business, the sale of which closed during the second quarter of 2021. Adjusted net income in 2020 also excludes a pension settlement charge of $6.6 million that was recorded during the third quarter of 2020. Thosebusiness.

These items are reported in Total other expense (below Operating income) in the Condensed Consolidated ~~Statement~~Statements of Income. Refer to the reconciliation of non-GAAP measurers presented below, Note 5 - Goodwill and Other Intangible Assets, net, Note 11 - Pension and Other Benefits, and Note 16 - Debt and Financing Arrangements in the Notes to the Condensed Consolidated Financial Statements, for additional information. The Company excludes these ~~losses~~non-core items 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. Refer to the reconciliation of non-GAAP measures presented below, Note 12 – Pension and Other Benefits and Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations – Financial Condition, Liquidity and Capital Resources – Debt to Capital - Unsecured Senior Notes, for additional information.

Organic net sales (or organic net sales growth), a non-GAAP measure, ~~represent~~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 3132

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The following table reconciles each of our adjusted financial measures to the directly comparable GAAP financial measure (in millions, except per share amounts):


		Three Months Ended September 30,									Three Months Ended June 30,
		2021		% of Net sales		2020		% of Net sales			2022		% of Net sales		2021		% of Net sales
Gross profit (GAAP measure)	Gross profit (GAAP measure)	$	330.3	27.2	%	$	329.6	29.7	%	Gross profit (GAAP measure)	$	383.2	30.5	%	$	298.3	28.3	%
Amortization of acquisition-related intangible assets	Amortization of acquisition-related intangible assets	5.7		0.5	%	6.1		0.6	%	Amortization of acquisition-related intangible assets	5.6		0.5	%	6.9		0.6	%

Adjusted gross profit	Adjusted gross profit	$	336.0	27.7	%	$	335.7	30.3	%	Adjusted gross profit	$	388.8	31.0	%	$	305.2	28.9	%

S&A expenses (GAAP measure)	S&A expenses (GAAP measure)	$	175.0	14.4	%	$	166.7	15.0	%	S&A expenses (GAAP measure)	$	192.6	15.3	%	$	156.1	14.8	%
Amortization of acquisition-related intangible assets	Amortization of acquisition-related intangible assets	13.0		1.1	%	12.4		1.1	%	Amortization of acquisition-related intangible assets	11.8		0.9	%	12.7		1.2	%

Adjusted S&A expenses	Adjusted S&A expenses	$	162.0	13.3	%	$	154.3	13.9	%	Adjusted S&A expenses	$	180.8	14.4	%	$	143.4	13.6	%

Operating income (GAAP measure)	Operating income (GAAP measure)	$	155.3	12.8	%	$	162.9	14.7	%	Operating income (GAAP measure)	$	190.6	15.2	%	$	142.2	13.5	%
Amortization of acquisition-related intangible assets	Amortization of acquisition-related intangible assets	18.7		1.5	%	18.5		1.7	%	Amortization of acquisition-related intangible assets	17.4		1.4	%	19.6		1.8	%

Adjusted operating income	Adjusted operating income	$	174.0	14.3	%	$	181.4	16.4	%	Adjusted operating income	$	208.0	16.6	%	$	161.8	15.3	%

Net income attributable to Hubbell Incorporated (GAAP measure)		$	108.5			$	107.1
Net income from continuing operations attributable to Hubbell Incorporated (GAAP measure)										Net income from continuing operations attributable to Hubbell Incorporated (GAAP measure)	$	135.6			$	88.8
Amortization of acquisition-related intangible assets	Amortization of acquisition-related intangible assets	18.7				18.5				Amortization of acquisition-related intangible assets	17.4				19.6
Loss on disposition of business	Loss on disposition of business	0.1				—				Loss on disposition of business	—				6.8

Loss on extinguishment of debt										Loss on extinguishment of debt	—				16.8
Pension charge	Pension charge	—				6.6				Pension charge	4.4				—
Subtotal	Subtotal	$	18.8			$	25.1			Subtotal	$	21.8			$	43.2
Income tax effects(1)	Income tax effects(1)	4.6				6.3				Income tax effects(1)	5.4				10.3
Adjusted net income attributable to Hubbell Incorporated		$	122.7			$	125.9
Adjusted net income from continuing operations attributable to Hubbell Incorporated										Adjusted net income from continuing operations attributable to Hubbell Incorporated	$	152.0			$	121.7
Less: Earnings allocated to participating securities	Less: Earnings allocated to participating securities	(0.4)				(0.5)				Less: Earnings allocated to participating securities	(0.4)				(0.4)
Adjusted net income available to common shareholders		$	122.3			$	125.4
Adjusted net income from continuing operations available to common shareholders										Adjusted net income from continuing operations available to common shareholders	$	151.6			$	121.3
Average number of diluted shares outstanding	Average number of diluted shares outstanding	54.7				54.5				Average number of diluted shares outstanding	53.9				54.7
ADJUSTED EARNINGS PER SHARE – DILUTED		$	2.24			$	2.30
ADJUSTED EARNINGS PER SHARE – DILUTED FROM CONTINUING OPERATIONS										ADJUSTED EARNINGS PER SHARE – DILUTED FROM CONTINUING OPERATIONS	$	2.81			$	2.22

(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):~~

For the Three Months Ended September 30,
2021 Inc/(Dec) % 2020 Inc/(Dec) %
Net sales growth (GAAP measure) $ 105.0 9.5 $ (95.4) (7.9)
Impact of acquisitions 40.7 3.7 11.3 0.9
Impact of divestitures (2.2) (0.2) (4.5) (0.4)
Foreign currency exchange 6.2 0.6 (3.4) (0.2)
Organic net sales growth (non-GAAP measure) $ 60.3 5.4 $ (98.8) (8.2)

~~Net Sales~~

~~Net sales of $1.21 billion in the third quarter of 2021 increased by $105.0 million compared to the third quarter of 2020.~~ Organic net sales increased by 5.4% primarily due to favorable price realization, partially offset by lower volume, along with an increase in Net Sales of 3.5% from acquisitions net of dispositions and a 0.6% increase from foreign exchange. Net Sales volume includes the effect of supply chain disruptions, which limited our ability to ship all of our customer demand.

~~Cost of Goods Sold~~

~~As a percentage of Net sales, cost of goods sold increased by 250 basis points to 72.8% in the third quarter of 2021, as compared to 70.3% in the third quarter of 2020.~~ The increase was primarily driven by material cost inflation that exceeded favorable price realization, and higher freight, logistics and manufacturing costs, partially offset by savings from our restructuring and related actions and productivity initiatives.

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~~Gross Profit~~

The gross profit margin in the third quarter of 2021 decreased by 250 basis points to 27.2% as compared to 29.7% in the third quarter of 2020. Excluding amortization of acquisition-related intangible assets, the adjusted gross profit margin was 27.7% in the third quarter of 2021 as compared to 30.3% in the same period of the prior year. The decrease in the adjusted gross profit margin primarily reflects material cost inflation that exceeded favorable price realization, and higher freight, logistics and manufacturing costs, partially offset by savings from our restructuring and related actions and productivity initiatives.

~~Selling & Administrative Expenses~~

S&A expense in the third quarter of 2021 was $175.0 million and increased by $8.3 million compared to the prior year period. S&A expense as a percentage of Net sales decreased by 60 basis points to 14.4% in the third quarter of 2021. Excluding amortization of acquisition-related intangible assets, adjusted S&A expense as a percentage of Net sales decreased by 60 basis points to 13.3% in the third quarter of 2021. ~~The decrease in adjusted S&A expense as a percentage of Net sales is primarily due to higher organic sales.~~

~~Total Other Expense~~

Total other expense decreased by $9.1 million in the third quarter of 2021 to $14.8 million, primarily due to a $6.6 million charge associated with pension settlement losses recognized in the third quarter of 2020, and $1.5 million of lower interest expense in the third quarter of 2021.

~~Income Taxes~~

The effective tax rate in the third quarter of 2021 decreased to 21.3% as compared to 21.9% in the third quarter of 2020 primarily due to changes to certain tax reserves and unfavorable provision to return adjustments as compared to the same period of the prior year.

~~Net Income Attributable to Hubbell Incorporated and Earnings Per Diluted Share~~

Net income attributable to Hubbell Incorporated was $108.5 million in the third quarter of 2021 and increased 1.3% as compared to the same period of the prior year. As a result, earnings per diluted share in the third quarter of 2021 increased 1.0% as compared to the third quarter of 2020. Adjusted net income attributable to Hubbell Incorporated, which excludes amortization of acquisition-related intangibles from both periods, a loss on disposition of business in 2021, and a pension settlement charge in 2020, was $122.7 million in the third quarter of 2021 and decreased by 2.5% as compared to the third quarter of 2020. Adjusted earnings per diluted share in the third quarter of 2021 decreased by 2.6% as compared to the third quarter of 2020.

~~Segment Results~~

~~ELECTRICAL SOLUTIONS~~

Three Months Ended September 30,
(In millions) 2021 2020
Net sales $ 611.9 $ 551.0
Operating income (GAAP measure) 72.0 65.9
Amortization of acquisition-related intangible assets 4.1 4.2
Adjusted operating income $ 76.1 $ 70.1
Operating margin (GAAP measure) 11.8 % 12.0 %
Adjusted operating margin 12.4 % 12.7 %

~~HUBBELL INCORPORATED~~-~~Form 10-Q~~ 33

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


		For the Three Months Ended September 30,							Three Months Ended June 30,
Electrical Solutions		2021		Inc/(Dec) %	2020		Inc/(Dec) %
									2022		Inc/(Dec) %	2021		Inc/(Dec) %
Net sales growth (GAAP measure)	Net sales growth (GAAP measure)	$	60.9	11.0	$	(86.0)	(13.5)	Net sales growth (GAAP measure)	$	201.7	19.1	$	216.8	25.9
Impact of acquisitions	Impact of acquisitions	7.4		1.3	4.4		0.7	Impact of acquisitions	—		—	35.8		4.3
Impact of divestitures	Impact of divestitures	—		—	(4.5)		(0.7)	Impact of divestitures	(1.3)		(0.1)	(0.6)		(0.1)
Foreign currency exchange	Foreign currency exchange	4.0		0.7	(0.8)		(0.1)	Foreign currency exchange	(3.2)		(0.4)	8.1		1.0
Organic net sales growth (non-GAAP measure)	Organic net sales growth (non-GAAP measure)	$	49.5	9.0	$	(85.1)	(13.4)	Organic net sales growth (non-GAAP measure)	$	206.2	19.6	$	173.5	20.7

Net Sales

Net sales of $1,256.0 million in the ~~Electrical Solutions segment in the third~~second quarter of ~~2021 were $611.9 million and~~2022 increased by ~~$60.9~~$201.7 million ~~or 11.0%, as~~ compared to the ~~third~~second quarter of ~~2020. The increase resulted from a 9.0% increase in organic~~2021. Organic net sales ~~in the third quarter of 2021 as compared to the same prior year period,~~increased by 19.6% primarily due to favorable price realization, and higher unit volume, ~~a 1.3% increase in Net sales from acquisitions,~~which was partially offset by 0.4% due to foreign exchange and ~~0.7% increase from foreign exchange.~~0.1% due to the impact of divestitures.

HUBBELL INCORPORATED-Form 10-Q 33

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Cost of Goods Sold

~~Operating income in the Electrical Solutions segment for the third quarter~~As a percentage of ~~2021 was $72.0 million and increased approximately 9.3% compared to the third quarter~~Net sales, cost of ~~2020, while operating margin in the third quarter of 2021~~goods sold decreased by 20220 basis points to ~~11.8%. Excluding amortization~~69.5% in the second quarter of ~~acquisition-related intangibles, adjusted operating margin decreased by 30 basis points to 12.4%,~~2022, as compared to 71.7% in the ~~same prior year period.~~second quarter of 2021. The decrease was primarily driven by favorable price realization that was in ~~the adjusted operating margin in the third quarter~~excess of ~~2021 is primarily due to~~ material cost inflation, ~~that was greater than price realization~~ and higher unit volume, partially offset by higher freight, logistics and manufacturing costs, and cost increases in excess of productivity.

Gross Profit

The gross profit margin in the second quarter of 2022 increased by 220 basis points to 30.5% as compared to 28.3% in the second quarter of 2021. Excluding amortization of acquisition-related intangible assets, the adjusted gross profit margin was 31.0% in the second quarter of 2022 as compared to 28.9% in the same period of the prior year. The increase in the adjusted gross profit margin primarily reflects favorable price realization that was in excess of material cost inflation, and higher unit volume, partially offset by higher freight, logistics and manufacturing costs, and cost increases in excess of productivity.

Selling & Administrative Expenses

S&A expense in the second quarter of 2022 was $192.6 million and increased by $36.5 million compared to the prior year period. S&A expense as a percentage of Net sales ~~volume, and savings from restructuring and related actions and productivity initiatives. Acquisitions contributed 30~~increased by 50 basis points to 15.3% in the second quarter of 2022. Excluding amortization of acquisition-related intangible assets, adjusted ~~operating margin~~S&A expense as a percentage of Net sales was 14.4% in the second quarter of 2022 which increased by 80 basis points compared to the same period of the prior year, primarily as a result of the impact of higher T&E cost and other cost inflation, partially offset by a benefit from an increase in Net sales volume.

Total Other Expense

Total other expense decreased by $21.1 million in the second quarter of 2022 to $14.6 million, primarily due to a $16.8 million loss on extinguishment of debt and $6.8 million loss on the disposition of a business recorded during the second quarter of 2021, partially offset by a pension settlement charge of $4.4 million recorded during the second quarter of 2022.

Income Taxes

The effective tax rate in the second quarter of 2022 increased to 22.1% as compared to 15.9% in the second quarter of 2021, primarily due to more favorable tax effects in the second quarter of 2021 from stock based compensation and statute of limitation expirations on certain tax reserves. On July 21, 2022 the Company closed an IRS examination of the 2017 period and as a result will recognize a related benefit in income tax expense in the third quarter of ~~2021~~2022.

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 $135.6 million in the second quarter of 2022 and increased 52.7% as compared to the same period of the prior year. As a result, earnings per diluted share from continuing operations in the second quarter of 2022 increased 54.9% as compared to the second quarter of 2021. Adjusted net income from continuing operations attributable to Hubbell Incorporated, which excludes amortization of acquisition-related intangibles from both periods, a pension settlement charge in 2022 and a loss on the extinguishment of debt and loss on the disposition of business in 2021, was $152.0 million in the second quarter of 2022 and increased by 24.9% as compared to the second quarter of 2021. Adjusted earnings per diluted share from continuing operations in the second quarter of 2022 increased by 26.6% as compared to the second quarter of 2021.

(Loss) Income From Discontinued Operations, Net of Tax

Loss from discontinued operations, net of tax was $13.6 million in the second quarter of 2022 as compared to income of $7.0 million in the same prior year period. The results in the second quarter of 2022 included $4.5 million of pre-tax transaction and separation costs.

HUBBELL INCORPORATED-Form 10-Q 34

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~~UTILITY~~

Segment Results

ELECTRICAL SOLUTIONS


		Three Months Ended September 30,							Three Months Ended June 30,
(In millions)	(In millions)	2021			2020			(In millions)	2022			2021
Net sales	Net sales	$	601.7		$	557.6		Net sales	$	527.5		$	465.5
Operating income (GAAP measure)	Operating income (GAAP measure)	83.3			97.0			Operating income (GAAP measure)	79.2			69.3
Amortization of acquisition-related intangible assets	Amortization of acquisition-related intangible assets	14.6			14.3			Amortization of acquisition-related intangible assets	3.5			3.3
Adjusted operating income	Adjusted operating income	$	97.9		$	111.3		Adjusted operating income	$	82.7		$	72.6
Operating margin (GAAP measure)	Operating margin (GAAP measure)	13.8		%	17.4		%	Operating margin (GAAP measure)	15.0		%	14.9		%
Adjusted operating margin	Adjusted operating margin	16.3		%	20.0		%	Adjusted operating margin	15.7		%	15.6		%

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


		For the Three Months Ended September 30,							Three Months Ended June 30,
Utility Solutions		2021		Inc/(Dec) %	2020		Inc/(Dec) %
Electrical Solutions								Electrical Solutions	2022		Inc/(Dec) %	2021		Inc/(Dec) %
Net sales growth (GAAP measure)	Net sales growth (GAAP measure)	$	44.1	7.9	$	(9.4)	(1.7)	Net sales growth (GAAP measure)	$	62.0	13.3	$	107.8	30.1
Impact of acquisitions	Impact of acquisitions	33.3		6.0	6.9		1.2	Impact of acquisitions	—		—	5.5		1.5
Impact of divestitures	Impact of divestitures	(2.2)		(0.4)	—		—	Impact of divestitures	—		—	—		—
Foreign currency exchange	Foreign currency exchange	2.2		0.4	(2.6)		(0.4)	Foreign currency exchange	(3.7)		(0.8)	6.4		1.8
Organic net sales growth (non-GAAP measure)	Organic net sales growth (non-GAAP measure)	$	10.8	1.9	$	(13.7)	(2.5)	Organic net sales growth (non-GAAP measure)	$	65.7	14.1	$	95.9	26.8

Net sales in the ~~Utility~~Electrical Solutions segment in the ~~third~~second quarter of ~~2021~~2022 were ~~$601.7~~$527.5 million ~~an increase of $44.1~~and increased by $62.0 million, or ~~7.9%~~13.3%, as compared to the ~~third~~second quarter of ~~2020. This~~2021. The increase ~~was~~ ~~due to~~resulted from a ~~1.9%~~14.1% increase in organic net sales driven by favorable price realization, partially offset by lower unit volumes, as well as net acquisitions which contributed 5.6% to Net sales growth, and a 0.4% increase in Net sales from foreign exchange. Net Sales volume includes the effect of supply chain disruptions, which limited our ability to ship all of our customer demand.

~~Within the Utility Solutions segment, Net sales of our Utility T&D components businesses increased by 9.7%~~ in the ~~third~~second quarter of ~~2021~~2022 as compared to the prior year, primarily driven by 4.0% organic net sales growth, a 5.3% increase in Net sales growth from acquisitions and 0.4% favorable impact of foreign exchange. Net sales of our Utility communications and controls businesses increased by 3.5% in the third quarter of 2021 as compared to thesame prior year period, primarily ~~from an increase in Net sales of 6.3%~~ due to ~~the impact of acquisitions net of dispositions,~~favorable price realization and ~~an increase of 0.4% from foreign exchange,~~higher unit volume, partially offset by a ~~3.2%~~0.8% decrease ~~in organic net sales, due to global component constraints that limited our ability to service customer demand.~~from foreign exchange.

Operating income in the ~~Utility~~Electrical Solutions segment for the ~~third~~second quarter of 2022 was $79.2 million and increased approximately 14.3% compared to the second quarter of 2021, ~~was $83.3 million, down 14.1% compared to~~while operating margin in the ~~third~~second quarter of ~~2020. Operating margin decreased~~2022 increased by 10 basis points to ~~13.8% as compared to 17.4% in the same period of 2020.~~15.0%. Excluding amortization of acquisition-related intangibles, adjusted operating margin increased by 10 basis points to 15.7%, as compared to the same prior year period. The increase in the adjusted operating margin ~~decreased~~in the second quarter of 2022 is primarily due to ~~16.3%,~~ ~~primarily driven by increased materials costs~~favorable price realization that was in excess of ~~price realization,~~higher material costs, and higher unit volume, partially offset by higher freight, logistics and manufacturing costs ~~as well as lower volumes, partially offset by savings from restructuring~~ and ~~related actions and productivity initiatives. Adjusted operating income from acquisitions was modest, but contributed 90 basis points to the decline~~cost increases in ~~adjusted operating margin, due to higher manufacturing costs.~~excess of productivity.

HUBBELL INCORPORATED-Form 10-Q 35

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~~Results of Operations – Nine Months Ended September 30, 2021 compared to the Nine Months Ended September 30, 2020~~

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

Nine Months Ended September 30,
2021 % of Net sales 2020 % of Net sales
Net sales $ 3,483.8 $ 3,148.1
Cost of goods sold 2,532.9 72.7 % 2,224.5 70.7 %
Gross profit 950.9 27.3 % 923.6 29.3 %
Selling & administrative ("S&A") expense 525.3 15.1 % 510.4 16.2 %
Operating income 425.6 12.2 % 413.2 13.1 %
Net income attributable to Hubbell Incorporated 282.0 8.1 % 270.3 8.6 %
EARNINGS PER SHARE – DILUTED $ 5.14 $ 4.95

~~The following table reconciles each of our adjusted financial measures to the directly comparable GAAP financial measure (in millions, except per share amounts):~~

Nine Months Ended September 30,
2021 % of Net sales 2020 % of Net sales
Gross profit (GAAP measure) $ 950.9 27.3 % $ 923.6 29.3 %
Amortization of acquisition-related intangible assets 21.3 0.6 % 19.4 0.7 %
Adjusted gross profit $ 972.2 27.9 % $ 943.0 30.0 %
S&A expenses (GAAP measure) $ 525.3 15.1 % $ 510.4 16.2 %
Amortization of acquisition-related intangible assets 40.1 1.2 % 37.2 1.2 %
Adjusted S&A expenses $ 485.2 13.9 % $ 473.2 15.0 %
Operating income (GAAP measure) $ 425.6 12.2 % $ 413.2 13.1 %
Amortization of acquisition-related intangible assets 61.4 1.8 % 56.6 1.8 %
Adjusted operating income $ 487.0 14.0 % $ 469.8 14.9 %
Net income attributable to Hubbell Incorporated (GAAP measure) $ 282.0 $ 270.3
Amortization of acquisition-related intangible assets 61.4 56.6
Loss on disposition of business 6.9 —
Loss on extinguishment of debt 16.8 —
Pension charge — 6.6
Subtotal $ 85.1 $ 63.2
Income tax effects(1)
20.6 15.9
Adjusted net income attributable to Hubbell Incorporated $ 346.5 $ 317.6
Less: Earnings allocated to participating securities (1.1) (1.1)
Adjusted net income available to common shareholders $ 345.4 $ 316.5
Average number of diluted shares outstanding 54.7 54.4
ADJUSTED EARNINGS PER SHARE – DILUTED $ 6.31 $ 5.81

~~(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.~~

~~HUBBELL INCORPORATED~~-~~Form 10-Q~~ 36

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

For the Nine Months Ended September 30,
2021 Inc/(Dec) % 2020 Inc/(Dec) %
Net sales growth (GAAP measure) $ 335.7 10.7 $ (339.6) (9.7)
Impact of acquisitions 109.4 3.5 33.2 1.0
Impact of divestitures (2.8) (0.1) (20.3) (0.6)
Foreign currency exchange 15.3 0.5 (11.3) (0.3)
Organic net sales growth (non-GAAP measure) $ 213.8 6.8 $ (341.2) (9.8)

~~Net Sales~~

~~Net sales of $3.5 billion in the first nine months of 2021 increased by $335.7 million compared to the first nine months of 2020.~~ ~~Organic net sales increased by 6.8% primarily due to favorable price realization along with higher volume, an increase in Net sales of 3.5% from acquisitions and a 0.5% increase from foreign exchange.~~

~~Cost of Goods Sold~~

~~As a percentage of Net sales, cost of goods sold increased by 200 basis points to 72.7% in the first nine months of 2021, as compared to 70.7% in the first nine months of 2020.~~ The increase was primarily driven by material cost inflation that exceeded favorable price realization, and higher freight, logistics and manufacturing costs, partially offset by higher volumes, savings from our restructuring and related actions and productivity initiatives.

~~Gross Profit~~

~~The gross profit margin in the first nine months of 2021 decreased by 200 basis points to 27.3% as compared to 29.3% in the first nine months of 2020.~~ Excluding amortization of acquisition-related intangible assets, the adjusted gross profit margin was 27.9% in the first nine months of 2021 as compared to 30.0% in the same period of the prior year. The decrease in the adjusted gross profit margin primarily reflects material cost inflation that exceeded favorable price realization, and higher freight, logistics and manufacturing costs, partially offset by higher volumes, savings from our restructuring and related actions and productivity initiatives.

~~Selling & Administrative Expenses~~

S&A expense in the first nine months of 2021 was $525.3 million and increased by $14.9 million compared to the prior year period. S&A expense as a percentage of Net sales decreased by 110 basis points to 15.1% in the first nine months of 2021. Excluding amortization of acquisition-related intangible assets, adjusted S&A expense as a percentage of Net sales decreased by 110 basis points to 13.9% in the first nine months of 2021. The decrease in adjusted S&A expense as a percentage of Net sales is primarily due to higher organic sales and a reduction of bad debt expense in the 2021 nine month period compared to the same period in 2020, partially offset by the impact of compensation actions and other cost reductions in the second quarter of 2020 due to the COVID-19 pandemic that did not repeat in 2021 as operations normalized.

~~Total Other Expense~~

Total other expense increased by $6.9 million in the first nine months of 2021 to $68.2 million primarily due to a $16.8 million pre-tax loss on the early extinguishment of long-term debt recognized in the second quarter of 2021 from the redemption of the Company's $300 million long-term notes, which were scheduled to mature in 2022, and a $6.9 million loss on the disposal of a business, partially offset by a $6.6 million charge associated with pension settlement losses recognized in the third quarter of 2020, and $4.4 million decrease in interest expense and lower non-service pension costs.

~~HUBBELL INCORPORATED~~-~~Form 10-Q~~ 37

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~~Income Taxes~~

~~The effective tax rate in the first nine months of 2021 decreased to 19.9% as compared to 22.3% in t~~he first nine months of 2020 primarily due to favorable tax effects from stock based compensation and statute of limitation expirations on certain tax reserves as compared to the same period of the prior year.

~~Net Income Attributable to Hubbell Incorporated and Earnings Per Diluted Share~~

Net income attributable to Hubbell Incorporated was $282.0 million for the first nine months of 2021 and increased 4.3% as compared to the same period of the prior year. As a result, earnings per diluted share in the first nine months of 2021 increased 3.8% as compared to the first nine months of 2020. Adjusted net income attributable to Hubbell Incorporated, which excludes amortization of acquisition-related intangibles for both periods, the loss on extinguishment of debt and loss on the disposition of business in the 2021 period, and the loss on a pension charge in 2020, was $346.5 million in the first nine months of 2021 and increased by 9.1% as compared to the first nine months of 2020. Adjusted earnings per diluted share in the first nine months of 2021 increased by 8.6% as compared to the first nine months of 2020.

~~Segment Results~~

~~ELECTRICAL~~UTILITY SOLUTIONS


		Nine Months Ended September 30,							Three Months Ended June 30,
(In millions)	(In millions)	2021			2020			(In millions)	2022			2021
Net sales	Net sales	$	1,761.0		$	1,584.1		Net sales	$	728.5		$	588.8
Operating income (GAAP measure)	Operating income (GAAP measure)	201.3			171.1			Operating income (GAAP measure)	111.4			72.9
Amortization of acquisition-related intangible assets	Amortization of acquisition-related intangible assets	12.5			13.2			Amortization of acquisition-related intangible assets	13.9			16.3
Adjusted operating income	Adjusted operating income	$	213.8		$	184.3		Adjusted operating income	$	125.3		$	89.2
Operating margin (GAAP measure)	Operating margin (GAAP measure)	11.4		%	10.8		%	Operating margin (GAAP measure)	15.3		%	12.4		%
Adjusted operating margin	Adjusted operating margin	12.1		%	11.6		%	Adjusted operating margin	17.2		%	15.1		%

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


		For the Nine Months Ended September 30,							Three Months Ended June 30,
Electrical Solutions		2021		Inc/(Dec) %	2020		Inc/(Dec) %
Utility Solutions								Utility Solutions	2022		Inc/(Dec) %	2021		Inc/(Dec) %
Net sales growth (GAAP measure)	Net sales growth (GAAP measure)	$	176.9	11.2	$	(267.8)	(14.3)	Net sales growth (GAAP measure)	$	139.7	23.7	$	109.0	22.7
Impact of acquisitions	Impact of acquisitions	18.6		1.2	12.4		0.7	Impact of acquisitions	—		—	30.3		6.3
Impact of divestitures	Impact of divestitures	—		—	(20.3)		(1.0)	Impact of divestitures	(1.3)		(0.3)	(0.6)		(0.1)
Foreign currency exchange	Foreign currency exchange	12.4		0.8	(4.2)		(0.2)	Foreign currency exchange	0.5		0.1	1.7		0.3
Organic net sales growth (non-GAAP measure)	Organic net sales growth (non-GAAP measure)	$	145.9	9.2	$	(255.7)	(13.8)	Organic net sales growth (non-GAAP measure)	$	140.5	23.9	$	77.6	16.2

Net sales in the Electrical Solutions segment in the first nine months of 2021 were $1,761.0 million and increased by $176.9 million, or 11.2%, as compared to the first nine months of 2020. The increase resulted from a 9.2% increase in organic net sales in the first nine months of 2021 as compared to the same prior year period, primarily due to higher unit volume, favorable price realization, a 1.2% increase in Net sales from acquisitions and 0.8% increase from foreign exchange. Higher unit volume was primarily driven by strong growth in the industrial markets during the 2021 period.

Operating income in the Electrical Solutions segment for the first nine months of 2021 was $201.3 million and increased approximately 17.7% compared to the first nine months of 2020, while the segment operating margin in the first nine months of 2021 increased by 60 basis points to 11.4%. Excluding amortization of acquisition-related intangibles, adjusted operating margin increased 50 basis points to 12.1%, as compared to the same prior year period. The increase in the adjusted operating margin in the first nine months of 2021 is primarily due to higher Net sales volume and higher savings from restructuring and related actions in 2021, including a gain on the sale of a facility, and productivity initiatives, partially offset by material cost inflation that was greater than favorable price realization, and higher freight, logistics and manufacturing costs. Acquisitions contributed 30 basis points to adjusted operating margin in the first nine months of 2021 as compared to the same period of the prior year.

~~HUBBELL INCORPORATED~~-~~Form 10-Q~~ 38

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~~UTILITY SOLUTIONS~~

Nine Months Ended September 30,
(In millions) 2021 2020
Net sales $ 1,722.8 $ 1,564.0
Operating income (GAAP measure) 224.3 242.1
Amortization of acquisition-related intangible assets 48.9 43.4
Adjusted operating income $ 273.2 $ 285.5
Operating margin (GAAP measure) 13.0 % 15.5 %
Adjusted operating margin 15.9 % 18.3 %

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

For the Nine Months Ended September 30,
Utility Solutions 2021 Inc/(Dec) % 2020 Inc/(Dec) %
Net sales growth (GAAP measure) $ 158.8 10.1 $ (71.8) (4.2)
Impact of acquisitions 90.8 5.8 20.8 1.3
Impact of divestitures (2.8) (0.2) — —
Foreign currency exchange 2.9 0.2 (7.1) (0.3)
Organic net sales growth (non-GAAP measure) $ 67.9 4.3 $ (85.5) (5.2)

Net sales in the Utility Solutions segment in the ~~first Nine months~~second quarter of ~~2021~~2022 were ~~$1,722.8~~$728.5 million, ~~up $158.8~~an increase of $139.7 million, or ~~10.1%~~23.7%, as compared to the ~~first nine months~~second quarter of ~~2020. The~~2021. This increase was ~~primarily~~ due to ~~acquisitions net of divestitures, which contributed 5.6% to Net sales growth, and by~~ a ~~4.3%~~23.9% increase in organic net sales ~~due~~in the second quarter of 2022 as compared to the same prior year period, driven by favorable price realization, and higher unit ~~volume.~~

Within the Utility Solutions segment, Net sales of our Utility T&D components businesses increased by 13.1% in the first nine months of 2021 as compared to the prior year period, primarily driven by 7.8% organic net sales growth, and 5.3% Net sales growth from acquisitions. Net sales of our Utility communications and controls businesses increased by 3.5% in the first nine months of 2021 as compared to the prior year period primarily due to Net sales growth from acquisitions net of divestitures of 6.7% and a 0.4% increase in Net sales from foreign exchange,volumes, partially offset by ~~a 3.6% decline in organic net sales.~~0.3% due to the impact of divestitures.

Operating income in the Utility Solutions segment for the ~~first nine months~~second quarter of ~~2021~~2022 was ~~$224.3~~$111.4 million, ~~and decreased by 7.4%~~increasing 52.8% compared to the ~~first nine months~~second quarter of ~~2020.~~2021. Operating margin ~~in the first nine months of 2021 decreased~~increased to ~~13.0%~~15.3% as compared to ~~15.5%~~12.4% in the same period of ~~2020.~~2021. Excluding amortization of acquisition-related intangibles, the adjusted operating margin ~~for~~increasedto 17.2% in the ~~2021~~second quarter of 2022 compared to 15.1% in the prior year period, ~~decreased by 240~~ ~~basis points~~ ~~to 15.9%,~~ primarily driven by ~~increased~~price realization that exceeded material cost ~~in excess of price realization,~~inflation, higher unit volume, partially offset by higher freight, logistics and manufacturing costs,, ~~partially offset by savings from restructuring~~ costs increases in excess of productivity and ~~related actions and productivity initiatives.~~ ~~Adjusted operating income increased from acquisitions, but contributed 70 basis points to the decline in adjusted operating margin, due to~~ higher ~~manufacturing costs.~~investments.

HUBBELL INCORPORATED-Form 10-Q 36

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Results of Operations – Six months ended June 30, 2022 compared to the Six months ended June 30, 2021

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


	Six Months Ended June 30,
	2022		% of Net sales		2021		% of Net sales
Net sales	$	2,412.1			$	2,010.6
Cost of goods sold	1,705.8		70.7	%	1,450.1		72.1	%
Gross profit	706.3		29.3	%	560.5		27.9	%
Selling & administrative ("S&A") expense	372.8		15.5	%	308.4		15.4	%
Operating income	333.5		13.8	%	252.1		12.5	%
Net income from continuing operations	240.9		10.0	%	164.3		8.2	%
Less: Net income from continuing operations attributable to non-controlling interest	(2.8)		(0.1)	%	(2.2)		(0.1)	%
Net income from continuing operations attributable to Hubbell Incorporated	238.1		9.9	%	162.1		8.1	%
Income from discontinued operations, net of tax	64.1				11.4
Net income attributable to Hubbell incorporated	302.2				173.5
Less: Earnings allocated to participating securities	(0.8)				(0.6)
Net income available to common shareholders	$	301.4			$	172.9
Average number of diluted shares outstanding	54.1				54.7
DILUTED EARNINGS PER SHARE - CONTINUING OPERATIONS	$	4.39			$	2.95
DILUTED EARNINGS PER SHARE - DISCONTINUED OPERATIONS	$	1.18			$	0.21

The following table reconciles each of our adjusted financial measures to the directly comparable GAAP financial measure (in millions, except per share amounts):

HUBBELL INCORPORATED-Form 10-Q 37

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	Six Months Ended June 30,
	2022		% of Net sales		2021		% of Net sales
Gross profit (GAAP measure)	$	706.3	29.3	%	$	560.5	27.9	%
Amortization of acquisition-related intangible assets	11.1		0.4	%	15.5		0.7	%

Adjusted gross profit	$	717.4	29.7	%	$	576.0	28.6	%

S&A expenses (GAAP measure)	$	372.8	15.5	%	$	308.4	15.3	%
Amortization of acquisition-related intangible assets	23.8		1.0	%	25.5		1.2	%

Adjusted S&A expenses	$	349.0	14.5	%	$	282.9	14.1	%

Operating income (GAAP measure)	$	333.5	13.8	%	$	252.1	12.5	%
Amortization of acquisition-related intangible assets	34.9		1.5	%	41.0		2.1	%

Adjusted operating income	$	368.4	15.3	%	$	293.1	14.6	%





Net income from continuing operations attributable to Hubbell Incorporated (GAAP measure)	$	238.1			$	162.1
Amortization of acquisition-related intangible assets	34.9				41.0
Loss on disposition of business	—				6.8
Loss on extinguishment of debt	—				16.8
Pension charge	4.4				—
Subtotal	$	39.3			$	64.6
Income tax effects(1)	9.8				15.6
Adjusted net income from continuing operations attributable to Hubbell Incorporated	$	267.6			$	211.1
Less: Earnings allocated to participating securities	(0.7)				(0.7)
Adjusted net income from continuing operations available to common shareholders	$	266.9			$	210.4
Average number of diluted shares outstanding	54.1				54.7
ADJUSTED EARNINGS PER SHARE – DILUTED FROM CONTINUING OPERATIONS	$	4.93			$	3.85

(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,
	2022		Inc/(Dec) %	2021		Inc/(Dec) %
Net sales growth (GAAP measure)	$	401.5	20.0	$	215.5	12.0
Impact of acquisitions	—		—	68.7		3.8
Impact of divestitures	(4.0)		(0.2)	(0.6)		(0.1)
Foreign currency exchange	(3.5)		(0.1)	9.0		0.6
Organic net sales growth (non-GAAP measure)	$	409.0	20.3	$	138.4	7.7

Net Sales

Net sales of $2,412.1 million in the first six months of 2022 increased by $401.5 million compared to the first six months of 2021. Organic net sales increased by 20.3% primarily due to favorable price realization, and higher unit volume, which was partially offset by 0.2% due to the impact of divestitures.

Cost of Goods Sold

As a percentage of Net sales, cost of goods sold decreased by 140 basis points to 70.7% in the first six months of 2022, as compared to 72.1% in the first six months of 2021. The decrease was primarily driven by favorable price realization that was in excess of material cost inflation, and higher unit volume, and lower intangible amortization, partially offset by higher freight, logistics and manufacturing costs and cost increases in excess of productivity.

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Gross Profit

The gross profit margin in the first six months of 2022 increased by 140 basis points to 29.3% as compared to 27.9% in the first six months of 2021. Excluding amortization of acquisition-related intangible assets, the adjusted gross profit margin was 29.7% in the first six months of 2022 as compared to 28.6% in the same period of the prior year. The increase in the adjusted gross profit margin primarily reflects favorable price realization that was in excess of material cost inflation and higher unit volume, partially offset by higher freight, logistics and manufacturing costs and cost increases in excess of productivity.

Selling & Administrative Expenses

S&A expense in the first six months of 2022 was $372.8 million and increased by $64.4 million compared to the prior year period. S&A expense as a percentage of Net sales increased by 20 basis points to 15.5% in the first six months of 2022. Excluding amortization of acquisition-related intangible assets, adjusted S&A expense as a percentage of Net sales was 14.5% in the first six months of 2022 which was increased by 40 basis points from 14.1% in the same period of the prior year, as the impact of higher T&E cost and other cost inflation was partially offset by a benefit from an increase in Net sales volume.

Total Other Expense

Total other expense decreased by $25.6 million in the first six months of 2022 to $24.1 million, primarily due to a $16.8 million loss on extinguishment of debt and $6.8 million loss on the disposition of a business recorded during the second quarter of 2021, and $7.9 million of income from transition services related to the C&I Lighting business disposition recorded in 2022, partially offset by a pension settlement charge of $4.4 million recorded in the second quarter of 2022.

Income Taxes

The effective tax rate in the first six months of 2022 increased to 22.1% as compared to 18.8% in the first six months of 2021, primarily due to favorable tax effects in 2021 from stock based compensation and statute of limitation expirations on certain tax reserves.

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 $238.1 million in the first six months of 2022 and increased 46.9% as compared to the same period of the prior year. As a result, earnings per diluted share from continuing operations in the first six months of 2022 increased 48.8% as compared to the first six months of 2021. Adjusted net income from continuing operations attributable to Hubbell Incorporated, which excludes amortization of acquisition-related intangibles from both periods, a pension settlement charge in 2022, and the loss on extinguishment of debt and loss on the disposition of business in 2021, was $267.6 million in the first six months of 2022 and increased by 26.8% as compared to the same period of the prior year. Adjusted earnings per diluted share from continuing operations in the first six months of 2022 increased by 28.1% as compared to the first six months of 2021.

Income From Discontinued Operations, Net of Tax

Income from discontinued operations, net of tax was $64.1 million in the first six months of 2022, as compared to income of $11.4 million in the same prior year period. The results in the first six months 2022 included a $80.7 million gain on disposal as a result of the disposition of the C&I Lighting business, partially offset by $6.6 million of transaction and separation costs.

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Segment Results

ELECTRICAL SOLUTIONS


	Six Months Ended June 30,
(In millions)	2022			2021
Net sales	$	1,031.8		$	889.6
Operating income (GAAP measure)	134.0			118.5
Amortization of acquisition-related intangible assets	7.0			6.7
Adjusted operating income	$	141.0		$	125.2
Operating margin (GAAP measure)	13.0		%	13.3		%
Adjusted operating margin	13.7		%	14.1		%

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,
Electrical Solutions	2022		Inc/(Dec) %	2021		Inc/(Dec) %
Net sales growth (GAAP measure)	$	142.2	16.0	$	101.0	12.8
Impact of acquisitions	—		—	11.2		1.4
Impact of divestitures	—		—	—		—
Foreign currency exchange	(4.5)		(0.5)	8.4		1.1
Organic net sales growth (non-GAAP measure)	$	146.7	16.5	$	81.4	10.3

Net sales in the Electrical Solutions segment in the first six months of 2022 were $1,031.8 million and increased by $142.2 million, or 16.0%, as compared to the first six months of 2021. The increase resulted from a 16.5% increase in organic net sales in the first six months of 2022 as compared to the same prior year period, primarily due to favorable price realization and higher unit volume, partially offset by a 0.5% decrease from foreign exchange.

Operating income in the Electrical Solutions segment for the first six months of 2022 was $134.0 million and increased approximately 13.1% compared to the first six months of 2021, while operating margin in the first six months of 2022 decreased by 30 basis points to 13.0%. Excluding amortization of acquisition-related intangibles, adjusted operating margin decreased by 40 basis points to 13.7%, as compared to the same prior year period. The decrease in the adjusted operating margin in the first six months of 2022 is primarily due to higher freight, logistics and manufacturing costs, costs increases in excess of productivity, partially offset by price realization, that exceeded material cost inflation and higher Net sales volume.

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UTILITY SOLUTIONS


	Six Months Ended June 30,
(In millions)	2022			2021
Net sales	$	1,380.3		$	1,121.0
Operating income (GAAP measure)	199.5			133.6
Amortization of acquisition-related intangible assets	27.9			34.3
Adjusted operating income	$	227.4		$	167.9
Operating margin (GAAP measure)	14.5		%	11.9		%
Adjusted operating margin	16.5		%	15.0		%

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,
Utility Solutions	2022		Inc/(Dec) %	2021		Inc/(Dec) %
Net sales growth (GAAP measure)	$	259.3	23.1	$	114.5	11.4
Impact of acquisitions	—		—	57.5		5.7
Impact of divestitures	(4.0)		(0.4)	(0.6)		(0.1)
Foreign currency exchange	1.0		0.1	0.6		0.1
Organic net sales growth (non-GAAP measure)	$	262.3	23.4	$	57.0	5.7

Net sales in the Utility Solutions segment in the first six months of 2022 were $1,380.3 million, an increase of $259.3 million, or 23.1%, as compared to the first six months of 2021. This increase was due to a 23.4% increase in organic net sales driven by favorable price realization and higher unit volumes, partially offset by 0.4% due to the impact of divestitures.

Operating income in the Utility Solutions segment for the first six months of 2022 was $199.5 million, increasing 49.3% compared to the first six months of 2021. Operating margin increased to 14.5% as compared to 11.9% in the same period of 2021. Excluding amortization of acquisition-related intangibles, the adjusted operating margin increasedto 16.5% in the first six months of 2022 compared to 15.0% in the prior year period, primarily driven by price realization that exceeded material cost inflation, higher unit volume, partially offset by, higher freight, logistics and manufacturing costs, costs increase in excess of productivity and increased investment.

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Financial Condition, Liquidity and Capital Resources

Cash Flow


		Nine Months Ended September 30,					Six months ended June 30,
(In millions)	(In millions)	2021		2020		(In millions)	2022		2021
Net cash provided by (used in):	Net cash provided by (used in):					Net cash provided by (used in):
Operating activities		$	306.8	$	455.6
Investing activities		(53.5)		(46.4)
Financing activities		(252.4)		(316.1)
Operating activities from continuing operations						Operating activities from continuing operations	$	174.2	$	189.8
Investing activities from continuing operations						Investing activities from continuing operations	293.8		(24.6)
Financing activities from continuing operations						Financing activities from continuing operations	(278.2)		(178.3)
Cash from discontinued operations						Cash from discontinued operations	(46.4)		17.3
Effect of foreign currency exchange rate changes on cash and cash equivalents	Effect of foreign currency exchange rate changes on cash and cash equivalents	(2.6)		(5.9)		Effect of foreign currency exchange rate changes on cash and cash equivalents	(6.0)		1.7
NET CHANGE IN CASH AND CASH EQUIVALENTS	NET CHANGE IN CASH AND CASH EQUIVALENTS	$	(1.7)	$	87.2	NET CHANGE IN CASH AND CASH EQUIVALENTS	$	137.4	$	5.9

Cash provided by operating activities from continuing operations for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 was ~~$306.8~~$174.2 million compared to cash provided by operating activities from continuing operations of ~~$455.6~~$189.8 million for the same period in ~~2020 and decreased~~2021. The decrease was primarily due to changes in the components of working capital, ~~including accounts receivable and inventories~~ as we invested in working capital to serve customer demand and growth in our order backlog, partially offset by ~~increases in accounts payable and other current liabilities in~~higher net income during the first ~~nine~~six months of ~~2021 as~~2022 compared to the same period in the prior ~~year period.~~year.

Cash ~~used for~~provided by investing activities from continuing operations was ~~$53.5~~$293.8 million in the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 compared to cash used of ~~$46.4~~$24.6 million during the comparable period in ~~2020~~2021 and this increase was driven by ~~a $14.8~~$348.6 million ~~increase~~ in ~~capital expenditures, partially offset by the~~net proceeds ~~received in conjunction with~~from the disposal of the ~~Consumer Analytics Solutions business.~~C&I Lighting business, partially offset by higher net purchases of available for sale investments, as well as higher cash used for capital expenditures in the first six months of 2022 compared to the first six months of 2021.

Cash used byin financing activities from continuing operations was ~~$252.4~~$278.2 million in the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 as compared to cash used of ~~$316.1~~$178.3 million in the comparable period of ~~2020.~~ 2021. The change in cash flows from financing activities of continuing operations primarily reflects ~~a decrease~~an increase of $138.8 million from ~~net repayments~~the Company's share repurchases in the first six months of ~~debt in 2021 compared to 2020, as well as a lower use of cash in 2021 due to a decrease of $30.1 million in share repurchases~~2022 compared to the same prior year period, ~~in 2020. These factors were~~ partially offset by change in net borrowings.

Cash from discontinued operations was a use of cash of $46.4 million in the ~~$16.0~~six months ended June 30, 2022 as compared to cash provided by discontinued operations of $17.3 million ~~make whole premium incurred~~ in ~~2021 due to~~ the ~~redemption~~comparable period of ~~the 2022 Notes (as defined below).~~2021.

The unfavorable impact of foreign currency exchange rates on cash was ~~$2.6~~$6.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and is primarily related to weakening of the British Pound, Canadian dollar and Australian Dollar ~~Mexican Peso and British Pound~~ versus the U.S. Dollar.

Investments in the Business

Investments in our business include cash outlays for the acquisition of businesses as well as expenditures to maintain the operation of our equipment and facilities and invest in restructuring activities.

In July 2022, the Company acquired all of the issued and outstanding membership interests of PCX Holdings LLC ("PCX") for a cash purchase price of approximately $128 million. PCX is a leading designer and manufacturer of factory built modular power solutions for applications in the data center market. This business will be reported in the Electrical Solutions segment. In July 2022, the Company also acquired all of the issued and outstanding membership interests of Ripley Tools, LLC and Nooks Hill Road, LLC, collectively referred to as Ripley Tools, for a cash purchase price of approximately $50 million. Ripley Tools is a leading manufacturer of cable and fiber prep tools and test equipment that serves both the Electric and Utility and Communications market. This business will be reported in the Utility Solutions segment.

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 ~~2021~~2022 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.

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The table below presents the restructuring and related costs incurred in the first ~~nine~~six months of ~~2021,~~2022, additional expected costs, and the expected completion date of restructuring actions that have been initiated as of ~~September~~June 30, ~~2021~~2022 and in prior years (in millions):


		Costs incurred in the nine months ended September 30, 2021		Additional expected costs		Expected completion date		Costs incurred in the six months ended June 30, 2022		Additional expected costs		Expected completion date
2021 Restructuring Actions		$	0.7	$	1.8	2022
2020 and Prior Restructuring Actions		2.8		3.4		2022
2022 Restructuring Actions							2022 Restructuring Actions	$	2.8	$	1.4	2022
2021 and Prior Restructuring Actions							2021 and Prior Restructuring Actions	0.4		5.2		2022
Total Restructuring cost (GAAP measure)	Total Restructuring cost (GAAP measure)	$	3.5	$	5.2		Total Restructuring cost (GAAP measure)	$	3.2	$	6.6
Restructuring-related costs	Restructuring-related costs	3.0		0.7			Restructuring-related costs	4.1		0.3
Restructuring and related costs (Non-GAAP)	Restructuring and related costs (Non-GAAP)	$	6.5	$	5.9		Restructuring and related costs (Non-GAAP)	$	7.3	$	6.9

During the first ~~nine~~six months of ~~2021,~~2022, we invested ~~$66.5~~$41.9 million in capital expenditures, an increase of ~~$14.8~~$5.0 million from the comparable period of ~~2020~~2021 as we ~~were selective with our 2020 capital expenditures as a result of the general slowdown~~continue to invest in ~~economic activity associated with the COVID-19 pandemic.~~automation and productivity initiatives.

Stock Repurchase Program

On October 23, 2020, 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 2023 (the "October 2020 program"). In the first ~~nine~~six months of ~~2021,~~2022, the Company repurchased ~~$11.2~~$150.0 million of shares of common stock authorized under the October 2020 program. At ~~September~~June 30, ~~2021,~~2022, our remaining share repurchase authorization under the October 2020 program is ~~$288.8~~$138.8 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 ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company had ~~$1,434.9~~$1,436.7 million and ~~$1,436.9~~$1,435.5 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 ~~September~~June 30, ~~2021.~~2022.

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 LIBOR 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.

In connection with entry into the 2021 Credit Facility, the Company terminated all commitments under the existing credit facility dated as of January 31, 2018 (the "2018 Credit Facility"). In March 2020, the Company borrowed $100.0 million under the 2018 Credit Facility and subsequently repaid those borrowings in the second quarter of 2020.

~~Term Loan Agreement~~

The Company was also party to a Term Loan Agreement (the “Term Loan Agreement”) with a syndicate of lenders under which the Company borrowed $500 million on an unsecured basis to partially finance the Aclara acquisition on February 2, 2018. During the third quarter of 2020, the Company repaid in full the remaining principal outstanding under the Term Loan Agreement.

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Unsecured Senior Notes

On March 12, 2021, the Company completed a public offering of $300 million aggregate principal amount of its 2.300% Senior Notes due 2031 (the “2031 Notes” and collectively with those described below, the "Notes"). The net proceeds from the offering were approximately $295.5 million after deducting the underwriting discount and estimated offering expenses payable by the Company. The 2031 Notes bear interest at a rate of 2.300% per annum from March 12, 2021. Interest on the 2031 Notes is payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2021. The 2031 Notes will mature on March 15, 2031.

The Company used the net proceeds from the offering of the 2031 Notes, together with cash on hand, on April 2, 2021 to redeem in full all of the Company’s outstanding 3.625% Senior Notes due in 2022 for an aggregate principal amount of $300 million, which had a stated maturity date of November 15, 2022, and to pay the premium and accrued interest in respect thereof. The redemption of the 2022 Notes resulted in a $16.8 million loss on extinguishment that was recognized in the second quarter of 2021.

At June 30, 2022 and December 31, ~~2020,~~2021, the Company had outstanding unsecured, senior notes in principal amounts of ~~$300 million due in 2022 (the "2022 Notes"),~~ $400 million due in 2026, $300 million due in 2027, ~~and~~ $450 million due in ~~2028. At September 30, 2021 the 2026, 2027~~2028 and ~~2028 notes were still outstanding~~$300 million due in ~~addition to the principal amounts of the 2031 Notes of $300 million.~~2031.

The carrying value of the Notes, net of unamortized discount and the unamortized balance of capitalized debt issuance costs, was ~~$1,434.9~~$1,436.7 million and ~~$1,436.9~~$1,435.5 million at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, 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 ~~September~~June 30, ~~2021.~~2022.

Short-term Debt

At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 the Company had ~~$128.9~~$5.8 million and ~~$153.1~~$9.7 million, respectively, of short-term debt outstanding, ~~composed of:~~

◦~~$127.0 million of commercial paper borrowings outstanding at September 30, 2021 and $150.0 million of commercial paper borrowings outstanding at December 31, 2020.~~

◦~~$1.9 million at September 30, 2021 and $3.1 million at December 31, 2020, respectively,~~which consisted primarily of borrowings to support our international operations in ~~China.~~China, as well as $2.6 million of other short term debt at June 30, 2022 to support operations.

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)	(In millions)	September 30, 2021			December 31, 2020			(In millions)	June 30, 2022			December 31, 2021
Total Debt	Total Debt	$	1,563.8		$	1,590.0		Total Debt	$	1,442.5		$	1,445.2
Total Hubbell Incorporated Shareholders’ Equity		2,168.8			2,070.0
Hubbell Incorporated Shareholders’ Equity								Hubbell Incorporated Shareholders’ Equity	2,256.9			2,229.8
TOTAL CAPITAL	TOTAL CAPITAL	$	3,732.6		$	3,660.0		TOTAL CAPITAL	$	3,699.4		$	3,675.0
Total Debt to Total Capital	Total Debt to Total Capital	42		%	43		%	Total Debt to Total Capital	39		%	39		%
Cash and Investments	Cash and Investments	339.9			340.0			Cash and Investments	510.0			364.7
Net Debt	Net Debt	$	1,223.9		$	1,250.0		Net Debt	$	932.5		$	1,080.5
Net Debt to Total Capital	Net Debt to Total Capital	33		%	34		%	Net Debt to Total Capital	25		%	29		%

Liquidity

We measure liquidity on the basis of our ability to meet short-term and long-term operational funding needs, to fund additional investments, 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 ~~nine~~six months of ~~2021,~~2022, we returned capital to our shareholders by paying ~~$159.8~~$113.3 million of dividends on our common stock and using ~~$11.2~~$150.0 million of cash for share repurchases.

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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 ~~table of Contractual Obligations~~Financial Condition, Liquidity and Capital Resources section in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. As a result of the Tax Cuts and Jobs Acts 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 ~~$257.9~~$424.2 million of cash and cash equivalents at ~~September~~June 30, ~~2021,~~2022, of which approximately ~~10%~~53% 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 ~~September~~June 30, ~~2021.~~2022.

◦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, ~~2020.~~2021. 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 ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, 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, the anticipated effects of the COVID-19 pandemic and the responses thereto, including the pandemic’s impact on general economic and market conditions, as well as on our business, customers, end markets, results of operations and financial condition and anticipated actions to be taken by management in response to the pandemic and related governmental and business actions, 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 repurchase shares of common stock, and changes in operating results, anticipated market conditions and productivity initiatives, including those regarding the adverse impact of the COVID-19 pandemic on the Company's end markets, 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 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:

•Availability, costs and quantity of raw materials, purchased components, energy and freight, particularly as global economic activity recovers from the effects of the COVID-19 pandemic.

•The scope, duration, or resurgence of the COVID-19 pandemic and its impact on global economic systems, our employees, sites, operations, customers, and supply chain.

•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.

•Failure to achieve projected levels of efficiencies, 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.

•General economic and business conditions in particular industries, markets or geographic regions, as well as inflationary trends.

•Regulatory issues, changes in tax laws, including revisions or clarifications of the TCJA, 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 changes in interest rates and 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, 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 ~~execute,~~ manage and integrate key acquisitions, mergers, and other transactions, such as the recent acquisitions of PCX and Ripley Tools, as well as the failure to realize expected synergies and benefits anticipated when we make an acquisition.

•~~Unanticipated difficulties integrating acquisitions as well as~~The impact of certain divestitures, including the ~~realization~~benefits and costs of ~~expected synergies and benefits anticipated when we make an acquisition.~~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 in foreign countries.

•~~The impact of Brexit and other world economic and political issues.~~

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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 ~~such as the COVID-19 global pandemic,~~ 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 ~~damage~~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.

•~~Transitioning~~Completion of the transition from LIBOR to a replacement alternative reference rate.

•Other factors described in our Securities and Exchange Commission filings, including the “Business”, “Risk ~~Factors”~~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, ~~2020~~2021 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.


ITEM 3			Quantitative and Qualitative Disclosures About Market Risk

In the operation of its business, the Company has exposures to fluctuating foreign currency exchange rates, availability of purchased finished goods and raw materials, changes in material prices, foreign sourcing issues, and changes in interest rates. There have been no significant changes in our exposure to these market risks during the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. For a complete discussion of the Company’s exposure to market risk, refer to Item 7A, “Quantitative and Qualitative Disclosures about Market Risk”, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

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ITEM 4			Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

Our management carried out an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures as defined in Exchange Act Rules 13a-15(e) and 15d-15(e), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, each of the Chief Executive Officer and Chief Financial Officer concluded that, as of ~~September~~June 30, ~~2021,~~2022, the Company’s disclosure controls and procedures were effective at the reasonable assurance level.

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

HUBBELL INCORPORATED-Form 10-Q 4648

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PART II			OTHER INFORMATION


ITEM 1A			Risk Factors

~~Except as set forth below, there~~There have been no material changes in the Company’s risk factors from those disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

~~COVID-19 Pandemic Risks~~

~~New regulations on employers concerning COVID-19 vaccination mandates or testing of U.S.-based employees could have an adverse impact on our business and results of operations.~~

On September 9, 2021, President Biden announced that he has directed the Occupational Safety and Health Administration (OSHA) to develop a rule that will require each employer with 100 or more employees to ensure its workforce is fully vaccinated or require any workers who remain unvaccinated to produce a negative test result on at least a weekly basis before coming to work. OSHA has not yet issued the rule, nor has it provided any additional information on its contents or requirements. On September 9, 2021 President Biden also issued an executive order requiring all employers with U.S. Government contracts to ensure their U.S. based employees, contractors, and subcontractors, that work on U.S. Government contracts, are fully vaccinated by December 8, 2021. We cannot currently predict the impact the OSHA rule, if adopted, and executive order would have on our workforce, and additional vaccine mandates may be announced within the jurisdictions in which our businesses operate. However, the implementation of these requirements may result in an increase in attrition rates or absenteeism within our skilled labor force, challenges securing future labor needs, inefficiencies connected to employee turnover, and costs associated with implementation and on-going compliance, which could have a material adverse effect on our business, financial condition, and results of operations.

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ITEM 2			Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

On October 23, 2020 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 2023. Our remaining share repurchase authorization under the ~~October~~ 2020 program is ~~$288.8~~$138.8 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.

There were no share repurchases during the quarter ended ~~September~~June 30, ~~2021.~~2022.

HUBBELL INCORPORATED-Form 10-Q 4850

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ITEM 6			Exhibits

Incorporated by Reference

Exhibit
Number

Exhibit Description

Form

File No.

Exhibit

Filing
Date

Filed/
Furnished
Herewith

31.1

Certification of Chief Executive Officer Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of Chief Financial Officer Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2

Certification of Chief Financial Officer Pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

~~101.INS~~101

The following materials from Hubbell Incorporated's Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 formatted in Inline ~~XBRL Instance Document - The instance document does not appear in~~Extensible Business Reporting Language (iXBRL): (i) the ~~interactive data file because its XBRL tags are embedded within~~Condensed Consolidated Statements of Income, (ii) the ~~inline XBRL document~~Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to the Condensed Consolidated Financial Statements.

~~101.SCH~~

~~Inline XBRL Taxonomy Extension Schema Document~~

~~101.CAL~~

~~Inline XBRL Taxonomy Extension Calculation Linkbase Document~~

~~101.DEF~~

~~Inline XBRL Taxonomy Extension Definition Linkbase Document~~

~~101.LAB~~

~~Inline XBRL Taxonomy Extension Label Linkbase Document~~

~~101.PRE~~

~~Inline XBRL Taxonomy Extension Presentation Linkbase Document~~

104

The cover page of this Quarterly Report on Form 10-Q for the quarter ended ~~September~~June 30, ~~2021,~~2022, formatted in Inline XBRL (included within the Exhibit 101 attachments)


*			Filed herewith
**			Furnished herewith

HUBBELL INCORPORATED-Form 10-Q 4951

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: ~~October~~July 27, ~~2021~~2022

HUBBELL INCORPORATED

/s/ William R. Sperry

/s/ Jonathan M. Del Nero

William R. Sperry

Jonathan M. Del Nero

Executive Vice President and Chief Financial Officer

Vice President, Controller (Principal Accounting Officer)

HUBBELL INCORPORATED-Form 10-Q 5052


Table of ~~contents~~Contents

PART I		3

ITEM 1	Financial Statements (unaudited)
	Condensed Consolidated Statements of Income	3
	Condensed Consolidated Statements of Comprehensive Income	4
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	7
ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2930
ITEM 3	Quantitative and Qualitative Disclosures About Market Risk	4547
ITEM 4	Controls and Procedures	4648

PART II		4749

ITEM 1A	Risk Factors	4749
ITEM 2	Unregistered Sales of Equity Securities and Use of Proceeds	4850
ITEM 6	Exhibits	4951
	Signatures	5052