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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 2/14/20 Hubbell Inc 10-K 12/31/19 150:19M Workiva Inc Wde… FA01/FA |
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Document |
SECURITIES
REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: | ||
Title of each Class | Trading Symbol(s) | Name of Exchange on which Registered |
i Common Stock — par value $0.01 per share | i HUBB | i New
York Stock Exchange |
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: | ||
NONE |
Indicate by check mark | ||||||||
• | if
the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. | i Yes | ☑ | No | ☐ | |||
• | if the
registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. | Yes | ☐ | i No | ☑ | |||
• | if 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 report), and (2) has been subject to such filing requirements for the past 90 days. | i Yes | ☑ | No | ☐ | |||
• | whether
the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). | i Yes | ☑ | No | ☐ | |||
• | whether
the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one): | |||||||
i Large accelerated filer | ☑ | Accelerated
filer ☐ | Non-accelerated filer ☐ (Do not check if a smaller reporting company) | Smaller reporting company | i ☐ | |||
Emerging growth company | i ☐ | 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 | i ☐ | No | ☑ |
2 | HUBBELL
INCORPORATED - Form 10-K |
PART I |
HUBBELL INCORPORATED - Form 10-K | 3 |
Commercial
and Industrial | |||||
• | Wiring devices & accessories | • | Junction boxes, plugs & receptacles | • | Cable reels |
• | Switches & dimmers | • | Steel & plastic enclosures | • | Datacom
connectivity & enclosures |
• | Ground fault devices | • | Pin & sleeve devices | • | Electrical motor controls |
Lighting | |||||
• | Canopy lights | • | Parking
lot/parking garage fixtures | • | Decorative landscape fixtures |
• | Emergency lighting/exit signs | • | Bollards | • | Fluorescent fixtures |
• | Floodlights & poles | • | Bath/vanity fixtures & fans | • | Ceiling
fans |
• | LED components | • | Chandeliers & sconces | • | Site & area lighting |
• | Recessed, surface mounted & track fixtures | • | Athletic & recreational field fixtures | • | Occupancy, dimming &
daylight harvesting sensors |
Construction and Energy | |||||
• | Mechanical connectors | • | Gas connectors and assemblies | • | Specialty communications equipment |
• | Mechanical grounding devices | • | Installation
tooling | • | Mining communication & controls |
• | Compression connectors | • | Specialty lighting | • | Cable glands & fittings |
• | Safety equipment |
Commercial and Industrial | |||||||||
• | Hubbell® | • | Bell® | • | Raco® | • | Gleason
Reel® | • | ACME Electric® |
• | Kellems® | • | TayMac® | • | Hipotronics® | • | Powerohm™ | • | EC&M Design® |
• | Bryant® | • | Wiegmann® | • | iDevices® | ||||
Lighting | |||||||||
• | Kim
Lighting® | • | Beacon Products™ | • | Spaulding Lighting™ | • | Kurt Versen® | • | Litecontrol™ |
• | Sportsliter Solutions™ | • | Columbia Lighting® | • | Alera
Lighting® | • | Prescolite® | • | Dual-Lite® |
• | Security Lighting™ | • | Progress Lighting Design® | • | Hubbell® Outdoor Lighting™ | • | Architectural Area Lighting™ | ||
Construction
and Energy | |||||||||
• | Burndy® | • | Killark® | • | GAI-Tronics® | • | Gas Breaker® | • | R.W. Lyall™ |
• | CMC® | • | Hawke™ | • | Chalmit™ | • | Vantage
Technology® | • | Continental® |
• | Austdac™ | • | AEC™ |
4 | HUBBELL
INCORPORATED - Form 10-K |
• | Arresters | • | Bushings | • | Grounding & bonding equipment |
• | Cutouts
& fuse links | • | Insulators | • | Programmable reclosers |
• | Pole line hardware | • | Cable terminations & accessories | • | Sectionalizers |
• | Helical anchors & foundations | • | Formed
wire products | • | Lineman tools, hoses & gloves |
• | Overhead, pad mounted & capacitor switches | • | Splices, taps & connectors | • | Polymer concrete & fiberglass enclosures and equipment pads |
• | Advanced metering infrastructure | • | Meters
and edge devices | • | Meter installation services |
• | Utility asset protection equipment |
• | Aclara® | • | Chance® | • | Anderson® | • | PenCell® |
• | Fargo® | • | Hubbell® | • | Polycast® | • | Opti-loop
Design® |
• | Quazite® | • | Quadri*sil® | • | Trinetics® | • | Reuel™ |
• | Electro Composites™ | • | USCO™ | • | CDR™ | • | RFL
Design® |
• | Hot Box® | • | PCORE® | • | Delmar™ | • | Turner Electric® |
• | EMC™ | • | Longbow™ | • | Ohio
Brass® | • | Meramec® |
• | Reliaguard® | • | Greenjacket® |
HUBBELL INCORPORATED - Form 10-K | 5 |
6 | HUBBELL INCORPORATED - Form 10-K |
Name (1) | Age | Present Position | Business Experience | |
62 | Chairman of the Board and
Chief Executive Officer | Present position since June 6, 2019; previously, Chairman of the Board, President and Chief Executive Officer May 2014 to June 6, 2019; President and Chief Executive Officer January 2013 to May 2014; President and Chief Operating Officer from June 2012 to January 2013, and Senior Vice President and Chief Financial Officer from September 2005 to June 2012. Previously, various positions, including Vice President, Controller, of United Technologies and its subsidiaries, 2000-2005. | ||
57 | Executive Vice President, Chief Financial Officer and Treasurer | Present position since June 6, 2019; previously, Senior Vice President and Chief Financial Officer June 6, 2012 to June 6, 2019; Vice President, Corporate Strategy and Development August 15, 2008 to June 6, 2012; previously, Managing Director, Lehman Brothers August 2006 to April 2008, various positions, including Managing Director, of J.P. Morgan and its predecessor institutions, 1994-2006. | ||
Gerben
W. Bakker | 55 | President and Chief Operating Officer | Present position since June 6, 2019; previously, Group President, Power Systems February 1, 2014 to June 6, 2019; previously, Division Vice President, Hubbell Power Systems, Inc. (“HPS”) August 2009 - February 1, 2014; President, HPS Brazil June 2005 - July 2009; Vice President, Sourcing, HPS March 2004 - May 2005. | |
45 | Vice President, Controller | Present position since April 22, 2013; previously, Assistant Corporate Controller of Stanley Black & Decker, Inc. (“Stanley”) April 2011 to April 2013; Global Operations Controller at Stanley 2010-2011; Director of Cost Accounting at Stanley, 2006-2010. | ||
Allan J. Connolly | 52 | Group President, Power Systems | Present
position since July 1, 2019; previously, President, Aclara February 2018 to June 28, 2019; President and Chief Executive Officer of Aclara May 2014 to February 2018; Chief Operating Officer of Culligan International July 2012 to January 2014; Executive Vice President of Operations, Engineering and N.A. Industrial of Culligan International November 2006 to July 2012; Vice President of Research, Development & Engineering of Culligan International April 2006 to November 2006; General Manager Technology, GE Power & Water March 2003 to April 2006. | |
James M. Farrell | 52 | Acting
Group President, Lighting | Present position since October 2019; previously, Vice President of Finance, Hubbell Lighting, Inc. June 2015 to October 2019; Vice President, Strategic Planning and Investor Relations April 2012 to May 2015; Director of Financial Planning & Analysis June 2004 to May 2008. | |
Katherine A. Lane | 42 | Vice President, General Counsel and Secretary | Present
position since June 6, 2019; previously Vice President, Acting General Counsel and Secretary March 2019 to June 6, 2019; Vice President, Associate General Counsel June 2017 to March 2019; Vice President, Legal, Hubbell Commercial & Industrial September 2015 to June 2017; Senior Counsel, Hubbell Electrical Systems May 2014 to September 2015; Corporate General Attorney August 2010 to May 2014. Previously, various positions in private practice in law firms based in Massachusetts and Connecticut. | |
Stephen M. Mais | 55 | Senior
Vice President, Human Resources | Present position since May 3, 2016; previously Vice President, Human Resources, August 2005 - May 2016; Director, Staffing and Capability, Pepsi Bottling Group (“Pepsi”) 2001-2005; Director, Human Resources Southeastern U.S., Pepsi 1997-2001. | |
Rodd R. Ruland | 62 | Group President, Construction and Energy | Present position since June
1, 2015; previously, President, BURNDY LLC, Hubbell Canada (HCLP) & Hubbell de Mexico (HdM) 2012-2015; President, BURNDY LLC 2009-2012; Corporate Vice President & General Manager, Electrical Power Interconnect Division, FCI (BURNDY) 2003-2009, Director, Business Development 2001-2003; various positions in Sales & Marketing, Business Development, and General Management and TycoElectronics/AMP Incorporated 1979-2000. | |
Darrin S. Wegman | 52 | Group President, Commercial and Industrial | Present position since June 1, 2015; previously, Vice
President, General Manager, Wiring Device and Industrial Electrical business, 2013-2015; Vice President, Controller, Hubbell Incorporated, 2008-2013; Vice President and Controller, Hubbell Industrial Technology, 2002-2008; Controller, GAI-Tronics Corporation, 2000-2002. |
(1) | As of February 14, 2020, there are no family relationships among any of the above-named executive officers and any of our directors. For information related to our Board of Directors, refer to Item 10. Directors, Executive Officers and Corporate Governance. |
HUBBELL
INCORPORATED - Form 10-K | 7 |
8 | HUBBELL
INCORPORATED - Form 10-K |
HUBBELL INCORPORATED - Form 10-K | 9 |
10 | HUBBELL INCORPORATED - Form 10-K |
HUBBELL INCORPORATED - Form 10-K | 11 |
12 | HUBBELL INCORPORATED - Form 10-K |
HUBBELL INCORPORATED - Form
10-K | 13 |
Number
of Facilities | Total Approximate Floor Area in Square Feet | ||||||||
Segment | Location | Warehouses | Manufacturing | Owned | Leased | ||||
Electrical
segment | United States | 8 | 20 | 2,378,000 | 1,873,000 | ||||
Australia | — | 1 | — | 24,000 | |||||
Canada | 1 | 2 | 179,000 | 3,000 | |||||
Mexico | 1 | 4 | 829,000 | 174,000 | |||||
China | — | 1 | — | 350,000 | |||||
Puerto
Rico | — | 1 | 162,000 | — | |||||
Singapore | 1 | — | — | 12,000 | |||||
United
Kingdom | 2 | 3 | 134,000 | 58,000 | |||||
Power segment (1) | United States | 4 | 12 | 3,205,000 | 203,000 | ||||
Brazil | — | 1 | 188,000 | — | |||||
Canada | — | 2 | 84,000 | — | |||||
Mexico | 1 | 1 | 167,000 | 181,000 | |||||
China | — | 2 | — | 199,000 | |||||
Philippines | — | 1 | — | 19,000 | |||||
Spain | — | 1 | — | 11,000 | |||||
TOTAL | 18 | 52 | 7,326,000 | 3,107,000 |
14 | HUBBELL INCORPORATED - Form 10-K |
HUBBELL INCORPORATED - Form 10-K | 15 |
PART II |
16 | HUBBELL INCORPORATED - Form 10-K |
*Assumes $100 invested on 12/31/14 in stock or index, including reinvestment of dividends. Data points are the last day of each fiscal year ending December 31. Copyright© 2020 Standard & Poor's, a division of S&P Global. All rights reserved. Copyright© 2020 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. |
HUBBELL
INCORPORATED - Form 10-K | 17 |
OPERATIONS,
years ended December 31, | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||
Net sales | $ | 4,591.0 | $ | 4,481.7 | $ | 3,668.8 | $ | 3,505.2 | $ | 3,390.4 | |||||
Gross
profit | $ | 1,352.7 | $ | 1,300.4 | $ | 1,155.1 | $ | 1,105.1 | $ | 1,091.6 | |||||
Operating
income (4) | $ | 596.6 | $ | 556.9 | $ | 518.8 | $ | 489.8 | $ | 474.1 | |||||
Adjusted
operating income (1) | $ | 668.7 | $ | 642.3 | $ | 560.4 | $ | 522.1 | $ | 502.3 | |||||
Operating
income as a % of sales | 13.0 | % | 12.4 | % | 14.1 | % | 14.0 | % | 14.0 | % | |||||
Adjusted operating income as a % of sales (1) | 14.6 | % | 14.3 | % | 15.3 | % | 14.9 | % | 14.8 | % | |||||
Net
income attributable to Hubbell (2) | $ | 400.9 | $ | 360.2 | $ | 243.1 | $ | 293.0 | $ | 277.3 | |||||
Adjusted
net income attributable to Hubbell (1) | $ | 445.7 | $ | 428.0 | $ | 333.9 | $ | 315.4 | $ | 313.7 | |||||
Net
income attributable to Hubbell as a % of net sales | 8.7 | % | 8.0 | % | 6.6 | % | 8.4 | % | 8.2 | % | |||||
Adjusted net income attributable to Hubbell as a % of net sales (1) | 9.7 | % | 9.5 | % | 9.1 | % | 9.0 | % | 9.3 | % | |||||
Net
income attributable to Hubbell as a % of Hubbell shareholders’ average equity | 21.5 | % | 21.1 | % | 15.1 | % | 17.6 | % | 15.1 | % | |||||
Earnings per share — diluted | $ | 7.31 | $ | 6.54 | $ | 4.39 | $ | 5.24 | $ | 4.77 | |||||
Adjusted
earnings per share — diluted (1) | $ | 8.12 | $ | 7.77 | $ | 6.03 | $ | 5.64 | $ | 5.39 | |||||
Cash
dividends declared per common share | $ | 3.43 | $ | 3.15 | $ | 2.87 | $ | 2.59 | $ | 2.31 | |||||
Average
number of common shares outstanding — diluted | 54.7 | 54.9 | 55.1 | 55.7 | 58.0 | ||||||||||
Cost of acquisitions, net of cash acquired | $ | 70.8 | $ | 1,118.0 | $ | 184.1 | $ | 173.4 | $ | 163.4 | |||||
FINANCIAL
POSITION, AT YEAR-END | |||||||||||||||
Working capital (3) | $ | 729.3 | $ | 804.4 | $ | 898.0 | $ | 961.7 | $ | 784.7 | |||||
Total
assets | $ | 4,903.0 | $ | 4,872.1 | $ | 3,720.6 | $ | 3,525.0 | $ | 3,208.7 | |||||
Total
debt | $ | 1,571.4 | $ | 1,793.2 | $ | 1,055.2 | $ | 993.7 | $ | 644.1 | |||||
Total
Hubbell shareholders’ equity | $ | 1,947.1 | $ | 1,780.6 | $ | 1,634.2 | $ | 1,592.8 | $ | 1,740.6 | |||||
NUMBER
OF EMPLOYEES, AT YEAR-END | 18,800 | 19,700 | 17,700 | 17,400 | 16,200 |
18 | HUBBELL INCORPORATED - Form 10-K |
HUBBELL INCORPORATED - Form 10-K | 19 |
For the Year Ending December
31, | |||||||||||||||
2019 | % of Net sales | 2018 | % of Net sales | 2017 | % of Net sales | ||||||||||
Net sales | $ | 4,591.0 | $ | 4,481.7 | $ | 3,668.8 | |||||||||
Cost
of goods sold | 3,238.3 | 70.5 | % | 3,181.3 | 71.0 | % | 2,513.7 | 68.5 | % | ||||||
Gross profit | 1,352.7 | 29.5 | % | 1,300.4 | 29.0 | % | 1,155.1 | 31.5 | % | ||||||
Selling
& administrative expenses | 756.1 | 16.5 | % | 743.5 | 16.6 | % | 636.3 | 17.3 | % | ||||||
Operating income | 596.6 | 13.0 | % | 556.9 | 12.4 | % | 518.8 | 14.1 | % | ||||||
Net
income attributable to Hubbell | 400.9 | 8.7 | % | 360.2 | 8.0 | % | 243.1 | 6.6 | % | ||||||
Less: Earnings allocated
to participating securities | (1.5 | ) | (1.3 | ) | (0.8 | ) | |||||||||
Adjusted net income available to common shareholders | 399.4 | 358.9 | 242.3 | ||||||||||||
Average
number of diluted shares outstanding | 54.7 | 54.9 | 55.1 | ||||||||||||
EARNINGS PER SHARE - DILUTED | $ | 7.31 | $ | 6.54 | $ | 4.39 |
20 | HUBBELL
INCORPORATED - Form 10-K |
For the Year Ended December 31, | ||||||||||||
2019 | %
of Net sales | 2018 | % of Net sales | 2017 | % of Net sales | |||||||
Gross profit (GAAP measure) | $ | 1,352.7 | 29.5% | $ | 1,300.4 | 29.0% | $ | 1,155.1 | 31.5% | |||
Amortization
of acquisition-related intangible assets | 24.0 | 29.5 | — | |||||||||
Adjusted gross profit | $ | 1,376.7 | 30.0% | $ | 1,329.9 | 29.7% | $ | 1,155.1 | 31.5% | |||
S&A
expenses (GAAP measure) | $ | 756.1 | 16.5% | $ | 743.5 | 16.6% | $ | 636.3 | 17.3% | |||
Amortization of acquisition-related intangible assets | 48.1 | 46.4 | 34.9 | |||||||||
Aclara
transaction costs | — | 9.5 | 6.7 | |||||||||
Adjusted S&A expenses | $ | 708.0 | 15.7% | $ | 687.6 | 15.3% | $ | 594.7 | 17.3% | |||
Operating
income (GAAP measure) | $ | 596.6 | 13.0% | $ | 556.9 | 12.4% | $ | 518.8 | 14.1% | |||
Amortization of acquisition-related intangible assets | 72.1 | 75.9 | 34.9 | |||||||||
Aclara
transaction costs | — | 9.5 | 6.7 | |||||||||
Adjusted operating income | $ | 668.7 | 14.6% | $ | 642.3 | 14.3% | $ | 560.4 | 15.3% | |||
Net
income attributable to Hubbell (GAAP measure) | $ | 400.9 | $ | 360.2 | $ | 243.1 | ||||||
Amortization of acquisition-related intangible
assets, net of tax | 53.9 | 57.5 | 22.0 | |||||||||
Gain on disposition of business, net of tax | (20.5 | ) | — | — | ||||||||
Multi-employer
pension expense, net of tax | 6.4 | — | — | |||||||||
Loss on investment, net of tax | 5.0 | — | — | |||||||||
Aclara
transaction costs, net of tax | — | 10.3 | 6.0 | |||||||||
Income tax expense associated with U.S. tax reform | — | — | 56.5 | |||||||||
Loss
on early extinguishment of debt, net of tax | — | — | 6.3 | |||||||||
Adjusted net income attributable to Hubbell | $ | 445.7 | $ | 428.0 | $ | 333.9 | ||||||
Less:
Earnings allocated to participating securities | (1.7 | ) | (1.5 | ) | (1.1 | ) | ||||||
Adjusted net income available to common shareholders | $ | 444.0 | $ | 426.5 | $ | 332.8 | ||||||
Average
number of diluted shares outstanding | 54.7 | 54.9 | 55.1 | |||||||||
ADJUSTED EARNINGS PER SHARE — DILUTED | $ | 8.12 | $ | 7.77 | $ | 6.03 |
HUBBELL
INCORPORATED - Form 10-K | 21 |
(in millions) | 2019 | 2018 | ||||
Net
sales | $ | 2,625.7 | $ | 2,660.6 | ||
Operating income (GAAP measure) | $ | 320.1 | $ | 320.8 | ||
Amortization
of acquisition-related intangible assets | 23.1 | 23.9 | ||||
Adjusted operating income | $ | 343.2 | $ | 344.7 | ||
Operating margin | 12.2 | % | 12.1 | % | ||
Adjusted
operating margin | 13.1 | % | 13.0 | % |
22 | HUBBELL INCORPORATED - Form 10-K |
(in
millions) | 2019 | 2018 | ||||
Net sales | $ | 1,965.3 | $ | 1,821.1 | ||
Operating income | $ | 276.5 | $ | 236.1 | ||
Amortization
of acquisition-related intangible assets | 49.0 | 52.0 | ||||
Aclara transaction costs | — | 9.5 | ||||
Adjusted operating income | $ | 325.5 | $ | 297.6 | ||
Operating
margin | 14.1 | % | 13.0 | % | ||
Adjusted operating margin | 16.6 | % | 16.3 | % |
HUBBELL INCORPORATED - Form 10-K | 23 |
(in
millions) | 2018 | 2017 | ||||
Net sales | $ | 2,660.6 | $ | 2,532.8 | ||
Operating income | $ | 320.8 | $ | 294.0 | ||
Amortization
of acquisition-related intangible assets | 23.9 | 24.8 | ||||
Adjusted operating income | $ | 344.7 | $ | 318.8 | ||
Operating margin | 12.1 | % | 11.6 | % | ||
Adjusted
operating margin | 13.0 | % | 12.6 | % |
24 | HUBBELL
INCORPORATED - Form 10-K |
(in millions) | 2018 | 2017 | ||||
Net sales | $ | 1,821.1 | $ | 1,136.0 | ||
Operating
income | $ | 236.1 | $ | 224.8 | ||
Amortization of acquisition-related intangible assets | 52.0 | 10.1 | ||||
Aclara transaction costs | 9.5 | 6.7 | ||||
Adjusted
operating income | $ | 297.6 | $ | 241.6 | ||
Operating margin | 13.0 | % | 19.8 | % | ||
Adjusted operating margin | 16.3 | % | 21.3 | % |
December 31, | |||||||||
(in millions) | 2019 | 2018 | 2017 | ||||||
Net
cash provided by (used in): | |||||||||
Operating activities | $ | 591.6 | $ | 517.1 | $ | 379.0 | |||
Investing
activities | (128.9 | ) | (1,201.4 | ) | (245.6 | ) | |||
Financing activities | (471.0 | ) | 506.5 | (214.3 | ) | ||||
Effect
of foreign currency exchange rate changes on cash and cash equivalents | 1.3 | (8.2 | ) | 18.3 | |||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | $ | (7.0 | ) | $ | (186.0 | ) | $ | (62.6 | ) |
December 31, | |||||||||
(in millions) | 2019 | 2018 | 2017 | ||||||
Net
cash provided by operating activities (GAAP measure) | $ | 591.6 | $ | 517.1 | $ | 379.0 | |||
Less: Capital expenditures | (93.9 | ) | (96.2 | ) | (79.7 | ) | |||
Free
cash flow | $ | 497.7 | $ | 420.9 | $ | 299.3 | |||
Free cash flow as a percent of net income attributable to Hubbell (1) | 124.1 | % | 116.9 | % | 123.1 | % |
HUBBELL
INCORPORATED - Form 10-K | 25 |
26 | HUBBELL INCORPORATED - Form 10-K |
Costs
Incurred in 2019 | Additional Expected Costs | Expected Completion Date | |||||
2019 Restructuring Actions | $ | 29.1 | $ | 13.1 | 2021 | ||
2018
and Prior Restructuring Actions | 2.9 | 1.7 | 2020 | ||||
Restructuring cost (GAAP measure) | $ | 32.0 | $ | 14.8 | |||
Restructuring-related
costs | 5.0 | 1.5 | |||||
Restructuring and related costs (Non-GAAP) | $ | 37.0 | $ | 16.3 |
◦ |
◦ | $34.4 million at December 31, 2019 and $25.0 million at December 31, 2018, respectively, of long-term debt classified as short-term within current liabilities in the Consolidated Balance Sheets, reflecting maturities within the next twelve months relating to our borrowing under the Term Loan Agreement. |
◦ | $5.0
million at December 31, 2019 and $5.1 million at December 31, 2018, respectively, of borrowings to support our international operations in China. |
HUBBELL
INCORPORATED - Form 10-K | 27 |
December
31, | ||||||
(in millions) | 2019 | 2018 | ||||
Total Debt | $ | 1,571.4 | $ | 1,793.2 | ||
Total Hubbell Shareholders’
Equity | 1,947.1 | 1,780.6 | ||||
TOTAL CAPITAL | $ | 3,518.5 | $ | 3,573.8 | ||
Debt to Total Capital | 45 | % | 50 | % | ||
Cash
and Investments | $ | 251.9 | $ | 254.5 | ||
NET DEBT | $ | 1,319.5 | $ | 1,538.7 | ||
Net
Debt to Total Capital | 38 | % | 43 | % |
◦ | Cash used for the acquisition of businesses in 2019, net of cash acquired was $70.8 million, including cash settlement of a deferred purchase price
obligation related to a previous acquisition. Further discussion of our acquisitions can be found in Note 3 — Business Acquisitions and Dispositions in the Notes to Consolidated Financial Statements. |
◦ | In 2019, cash used for share repurchases was $35.0 million. Dividends paid on our Common Stock in 2019 were $186.6 million. |
◦ | Cash
flows from operations and existing cash resources: We held $182.0 million of cash and cash equivalents at December 31, 2019, of which approximately 12% was held inside the United States and the remainder held internationally. The Company repatriated a portion of its foreign earnings in 2019. The consolidated financial statements reflect the income tax effects of the repatriation of these earnings as well as the income tax effects of certain anticipated future cash repatriations. |
◦ | On January
31, 2018, the Company entered into the Term Loan Agreement and a five-year revolving credit agreement (the "2018 Credit Facility") with a syndicate of lenders that provides a $750 million committed revolving credit facility and terminated all commitments under the Company's previous credit facility. Commitments under the 2018 Credit Facility may be increased (subject to certain conditions) to an aggregate amount not to exceed $1.250 billion. The interest rate applicable to borrowings under the 2018 Credit Facility is generally either the adjusted LIBOR plus an applicable margin (determined by a ratings based grid) or the alternate base rate. The single financial covenant in the 2018 Credit Facility requires that total debt not exceed 65% of total capitalization as of the last day of each fiscal
quarter of the Company. The 2018 Credit Facility expires in February 2023. As of December 31, 2019 the Company had not drawn against the 2018 Credit Facility. |
28 | HUBBELL INCORPORATED - Form 10-K |
◦ | The
interest rate applicable to borrowings under the Term Loan Agreement is generally either adjusted LIBOR plus an applicable margin (determined by a ratings based grid) or the alternate base rate. The sole financial covenant in the Term Loan Agreement requires that total debt not exceed 65% of total capitalization as of the last day of each fiscal quarter of the Company. |
◦ | 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. |
◦ | The
Company also maintains other lines of credit that are primarily used to support the issuance of letters of credit. Interest rates and other terms of borrowing under these lines of credit vary from country to country, depending on local market conditions. At December 31, 2019 and 2018, total availability under these lines was $23.0 million and $54.8 million, respectively, of which $15.7 million and $20.3 million was utilized to support letters of credit and the remaining amount was unused. The annual commitment fees associated with these lines of credit are not material. |
HUBBELL INCORPORATED - Form 10-K | 29 |
Pension Benefits | Other Benefits | ||||||||
2019 | 2018 | 2019 | 2018 | ||||||
Weighted-average
assumptions used to determine benefit obligations at December 31, | |||||||||
Discount rate | 3.17 | % | 4.24 | % | 3.30 | % | 4.40 | % | |
Rate
of compensation increase | 2.94 | % | 3.25 | % | 4.00 | % | 4.05 | % | |
Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31, | |||||||||
Discount
rate | 4.24 | % | 3.67 | % | 4.40 | % | 3.70 | % | |
Expected return on plan assets | 4.75 | % | 4.68 | % | N/A | N/A | |||
Rate
of compensation increase | 3.25 | % | 3.24 | % | 4.05 | % | 4.00 | % |
30 | HUBBELL INCORPORATED - Form 10-K |
Payments due by period | |||||||||||||||
Total | 2020 | 2021-2022 | 2023-2024 | 2025
and thereafter | |||||||||||
Debt obligations(a) | $ | 1,521.9 | $ | — | $ | 371.9 | $ | — | $ | 1,150.0 | |||||
Short-term
debt obligations(a) | 65.4 | 65.4 | — | — | — | ||||||||||
Expected interest payments | 318.7 | 52.3 | 99.5 | 77.2 | 89.7 | ||||||||||
Operating
lease obligations | 110.6 | 32.7 | 40.4 | 21.6 | 15.9 | ||||||||||
Retirement and other benefits(b) | 195.2 | 13.9 | 20.9 | 16.8 | 143.6 | ||||||||||
Purchase
obligations | 324.7 | 315.8 | 8.9 | — | — | ||||||||||
Obligations under customer incentive programs | 49.0 | 49.0 | — | — | — | ||||||||||
Income
tax payments(c) | 34.6 | 5.9 | 6.2 | 13.1 | 9.4 | ||||||||||
TOTAL | $ | 2,620.1 | $ | 535.0 | $ | 547.8 | $ | 128.7 | $ | 1,408.6 |
(a) | Amounts
exclude unamortized discount and capitalized debt issuance costs. |
(b) | Amounts above reflect projected funding related to the Company’s non-qualified defined benefit pension and OPEB plans as well as remaining payments under the multi-employer pension settlement agreement described in Note 15 – Commitments & Contingencies. Projected funding obligations of the Company’s qualified defined benefit pension plans are excluded from the table as there are significant factors, such as the future market value of plan assets and projected investment return rates, which could cause actual
funding requirements to differ materially from projected funding. |
(c) | Amount above includes future payments associated with the one-time transition tax under the TCJA. |
HUBBELL INCORPORATED - Form 10-K | 31 |
32 | HUBBELL
INCORPORATED - Form 10-K |
HUBBELL
INCORPORATED - Form 10-K | 33 |
• | Changes in demand for our products, market conditions, product quality, or product availability adversely
affecting sales levels. |
• | 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 initiative and strategic sourcing plans. |
• | The
expected benefits and the timing of other actions in connection with our Enterprise Resource Planning ("ERP") system. |
• | The ability to effectively implement ERP systems without disrupting operational and financial processes. |
• | Availability and costs of raw materials, purchased components, energy and freight. |
• | Changes
in expected or future levels of operating cash flow, indebtedness and capital spending. |
• | General economic and business conditions in particular industries, markets or geographic regions, as well as inflationary trends. |
• | Impacts of trade tariffs, import quotas or other trade restrictions or measures taken by the U.S., U.K., and other countries. |
• | Regulatory
issues, changes in tax laws including 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. |
34 | HUBBELL INCORPORATED - Form 10-K |
• | Anticipated future contributions and assumptions including changes in interest rates and plan assets with respect to pensions and
other retirement benefits. |
• | 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 and mergers. |
• | Unanticipated
difficulties integrating acquisitions as well as the realization of expected synergies and benefits anticipated when we first enter into a transaction. |
• | The ability of governments to meet their financial obligations. |
• | Political unrest in foreign countries. |
• | The impact of Brexit and other world
economic and political issues. |
• | Natural disasters. |
• | Failure of information technology systems or security breaches resulting in unauthorized disclosure of confidential information. |
• | Future revisions
to or clarifications of the TCJA. |
• | Future repurchases of common stock under our common stock repurchase program. |
• | Changes in accounting principles, interpretations, or estimates. |
• | The outcome of environmental, legal and tax contingencies or costs compared to amounts provided for such contingencies. |
• | 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 from LIBOR to a replacement alternative reference rate. |
• | Other factors described in our Securities and Exchange Commission filings, including the “Business”, “Risk Factors” and “Quantitative and Qualitative Disclosures about Market Risk” sections in this Company’s Annual Report on Form 10-K for the year
ended December 31, 2019. |
• | Political
or economic uncertainty in the source country |
• | Fluctuations in the rate of exchange between the U.S. dollar and the currencies of the source countries |
• | Changes in U.S. laws and policies governing foreign trade |
• | Increased logistical complexity including supply chain interruption or delay, port
of departure or entry disruption and overall time to market |
• | Loss of proprietary information |
• | Product quality issues outside the control of the Company |
HUBBELL INCORPORATED -
Form 10-K | 35 |
2020 | 2021 | 2022 | 2023 | 2024 | Thereafter | Total | Fair
Value 12/31/19 | |||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Available-for-sale
investments | $ | 14.2 | $ | 5.7 | $ | 5.9 | $ | 5.0 | $ | 6.6 | $ | 12.6 | $ | 50.0 | $ | 50.7 | ||||||||
Avg.
interest rate | 4.77 | % | 4.84 | % | 4.72 | % | 4.72 | % | 4.59 | % | 4.46 | % | ||||||||||||
LIABILITIES | ||||||||||||||||||||||||
Senior
Notes | $ | — | $ | — | $ | 300.0 | $ | — | $ | — | $ | 1,150.0 | $ | 1,450.0 | $ | 1,486.6 | ||||||||
Avg.
interest rate | — | — | 3.63 | % | — | — | 3.36 | % | ||||||||||||||||
Term
Loan | $ | 34.4 | $ | 46.9 | $ | 25.0 | $ | — | $ | — | $ | — | $ | 106.3 | $ | 105.6 | ||||||||
Avg.
interest rate | 2.75 | % | 2.75 | % | 2.75 | % | — | — | — |
36 | HUBBELL INCORPORATED - Form 10-K |
Financial Statement Schedule | |
HUBBELL INCORPORATED - Form 10-K | 37 |
/s/ DAVID G. NORD | ||
Chairman of the Board and Chief Executive Officer | Executive Vice President, Chief Financial Officer and Treasurer |
38 | HUBBELL
INCORPORATED - Form 10-K |
HUBBELL INCORPORATED -
Form 10-K | 39 |
40 | HUBBELL INCORPORATED - Form 10-K |
Year
Ended December 31, | |||||||||
(in millions, except per share amounts) | 2019 | 2018 | 2017 | ||||||
Net sales | $ | i 4,591.0 | $ | i 4,481.7 | $ | i 3,668.8 | |||
Cost
of goods sold | i 3,238.3 | i 3,181.3 | i 2,513.7 | ||||||
Gross
profit | i 1,352.7 | i 1,300.4 | i 1,155.1 | ||||||
Selling
& administrative expenses | i 756.1 | i 743.5 | i 636.3 | ||||||
Operating
income | i 596.6 | i 556.9 | i 518.8 | ||||||
Gain
on disposition of business (Note 3) | i 21.7 | i — | i — | ||||||
Multi-employer
pension charge (Note 15) | ( i 8.5 | ) | i — | i — | |||||
Interest
expense | ( i 69.4 | ) | ( i 72.4 | ) | ( i 44.9 | ) | |||
Investment
income | i 1.5 | i 0.1 | i 0.9 | ||||||
Loss
on extinguishment of debt | i — | i — | ( i 10.1 | ) | |||||
Other
expense, net | ( i 21.4 | ) | ( i 17.6 | ) | ( i 21.6 | ) | |||
Total
other expense | ( i 76.1 | ) | ( i 89.9 | ) | ( i 75.7 | ) | |||
Income
before income taxes | i 520.5 | i 467.0 | i 443.1 | ||||||
Provision
for income taxes | i 113.1 | i 100.9 | i 193.2 | ||||||
Net
income | i 407.4 | i 366.1 | i 249.9 | ||||||
Less:
Net income attributable to noncontrolling interest | i 6.5 | i 5.9 | i 6.8 | ||||||
NET
INCOME ATTRIBUTABLE TO HUBBELL | $ | i 400.9 | $ | i 360.2 | $ | i 243.1 | |||
Earnings
per share | |||||||||
Basic | $ | i 7.35 | $ | i 6.57 | $ | i 4.42 | |||
Diluted | $ | i 7.31 | $ | i 6.54 | $ | i 4.39 |
Year Ended December 31, | |||||||||
(in
millions) | 2019 | 2018 | 2017 | ||||||
Net income | $ | i 407.4 | $ | i 366.1 | $ | i 249.9 | |||
Other
comprehensive income (loss): | |||||||||
Currency translation adjustment: | |||||||||
Foreign currency translation adjustments | i 3.7 | ( i 33.9 | ) | i 28.9 | |||||
Reclassification
of currency translation gains included in net income | ( i 7.7 | ) | i — | i — | |||||
Defined
benefit pension and post-retirement plans, net of taxes of $5.3, ($6.3) and ($1.0) | ( i 14.5 | ) | i 17.8 | i 4.0 | |||||
Unrealized
gain (loss) on investments, net of taxes of ($0.2), $0.4 and ($0.2) | i 2.6 | ( i 1.4 | ) | i 0.6 | |||||
Unrealized
gains (losses) on cash flow hedges, net of taxes of $0.5, ($0.5) and $0.4 | ( i 1.3 | ) | i 1.6 | ( i 0.8 | ) | ||||
Other
comprehensive income (loss) | ( i 17.2 | ) | ( i 15.9 | ) | i 32.7 | ||||
Comprehensive
income | i 390.2 | i 350.2 | i 282.6 | ||||||
Less:
Comprehensive income attributable to noncontrolling interest | i 6.5 | i 5.9 | i 6.8 | ||||||
COMPREHENSIVE
INCOME ATTRIBUTABLE TO HUBBELL | $ | i 383.7 | $ | i 344.3 | $ | i 275.8 |
HUBBELL INCORPORATED - Form 10-K | 41 |
At
December 31, | ||||||
(in millions, except per share amounts) | 2019 | 2018 | ||||
ASSETS | ||||||
Current Assets | ||||||
Cash
and cash equivalents | $ | i 182.0 | $ | i 189.0 | ||
Short-term
investments | i 14.2 | i 9.2 | ||||
Accounts
receivable, net | i 683.0 | i 725.4 | ||||
Inventories,
net | i 633.0 | i 651.0 | ||||
Other
current assets | i 62.0 | i 69.1 | ||||
Total
Current Assets | i 1,574.2 | i 1,643.7 | ||||
Property,
Plant, and Equipment, net | i 505.2 | i 502.1 | ||||
Other
Assets | ||||||
Investments | i 55.7 | i 56.3 | ||||
Goodwill | i 1,811.8 | i 1,784.4 | ||||
Intangible
assets, net | i 781.5 | i 819.5 | ||||
Other
long-term assets | i 174.6 | i 66.1 | ||||
TOTAL
ASSETS | $ | i 4,903.0 | $ | i 4,872.1 | ||
LIABILITIES
AND EQUITY | ||||||
Current Liabilities | ||||||
Short-term debt and current portion of long-term debt | $ | i 65.4 | $ | i 56.1 | ||
Accounts
payable | i 347.7 | i 393.7 | ||||
Accrued
salaries, wages and employee benefits | i 101.5 | i 101.6 | ||||
Accrued
insurance | i 68.1 | i 61.3 | ||||
Other
accrued liabilities | i 262.2 | i 226.6 | ||||
Total
Current Liabilities | i 844.9 | i 839.3 | ||||
Long-term
Debt | i 1,506.0 | i 1,737.1 | ||||
Other
Non-Current Liabilities | i 591.6 | i 496.8 | ||||
TOTAL
LIABILITIES | i 2,942.5 | i 3,073.2 | ||||
Commitments
and Contingencies (see Note 15) | i | i | ||||
Hubbell
Shareholders’ Equity | ||||||
Common stock, par value $.01 | ||||||
Common Stock - Authorized 200,000,000 shares, outstanding 54,514,172 and 54,715,188 shares | $ | i 0.6 | $ | i 0.6 | ||
Additional
paid-in capital | i — | i 1.3 | ||||
Retained
earnings | i 2,279.4 | i 2,064.4 | ||||
Accumulated
other comprehensive loss | ( i 332.9 | ) | ( i 285.7 | ) | ||
Total
Hubbell Shareholders’ Equity | i 1,947.1 | i 1,780.6 | ||||
Noncontrolling
interest | i 13.4 | i 18.3 | ||||
TOTAL
EQUITY | i 1,960.5 | i 1,798.9 | ||||
TOTAL
LIABILITIES AND EQUITY | $ | i 4,903.0 | $ | i 4,872.1 |
42 | HUBBELL INCORPORATED - Form 10-K |
Year
Ended December 31, | |||||||||
(in millions) | 2019 | 2018 | 2017 | ||||||
Cash Flows from Operating Activities | |||||||||
Net
income | $ | i 407.4 | $ | i 366.1 | $ | i 249.9 | |||
Adjustments
to reconcile net income to net cash provided by operating activities, net of acquisitions: | |||||||||
Depreciation and amortization | i 151.0 | i 148.4 | i 98.2 | ||||||
Deferred
income taxes | i 6.1 | i 49.0 | ( i 14.3 | ) | |||||
Stock-based
compensation | i 16.4 | i 24.2 | i 22.3 | ||||||
Gain
on disposition of business | ( i 21.7 | ) | i — | i — | |||||
Multi-employer
pension charge | i 8.5 | i — | i — | ||||||
Loss
on extinguishment of debt | i — | i — | i 10.1 | ||||||
Gain
on sale of assets | ( i 0.4 | ) | ( i 4.0 | ) | ( i 11.6 | ) | |||
Changes
in assets and liabilities, net of acquisitions: | |||||||||
Decrease (increase) in accounts receivable | i 46.2 | ( i 75.4 | ) | i 3.9 | |||||
Decrease
(increase) in inventories | i 12.2 | i 34.2 | ( i 90.3 | ) | |||||
(Decrease)
increase in current liabilities | ( i 36.2 | ) | i 15.6 | i 57.4 | |||||
Changes
in other assets and liabilities, net | i 0.9 | ( i 20.4 | ) | i 50.7 | |||||
Contributions
to qualified defined benefit pension plans | ( i 10.4 | ) | ( i 27.9 | ) | ( i 1.7 | ) | |||
Other,
net | i 11.6 | i 7.3 | i 4.4 | ||||||
NET
CASH PROVIDED BY OPERATING ACTIVITIES | i 591.6 | i 517.1 | i 379.0 | ||||||
Cash
Flows from Investing Activities | |||||||||
Capital expenditures | ( i 93.9 | ) | ( i 96.2 | ) | ( i 79.7 | ) | |||
Acquisitions,
net of cash acquired | ( i 70.8 | ) | ( i 1,118.0 | ) | ( i 184.1 | ) | |||
Proceeds
from disposal of business, net of cash | i 33.4 | i — | i — | ||||||
Purchases
of available-for-sale investments | ( i 14.1 | ) | ( i 16.6 | ) | ( i 20.9 | ) | |||
Proceeds
from sales of available-for-sale investments | i 12.5 | i 20.5 | i 17.4 | ||||||
Proceeds
from disposition of assets | i 3.1 | i 6.8 | i 18.4 | ||||||
Other,
net | i 0.9 | i 2.1 | i 3.3 | ||||||
NET
CASH USED IN INVESTING ACTIVITIES | ( i 128.9 | ) | ( i 1,201.4 | ) | ( i 245.6 | ) | |||
Cash
Flows from Financing Activities | |||||||||
Issuance of long-term debt | i — | i 947.5 | i 297.6 | ||||||
Payment
of long-term debt | ( i 225.0 | ) | ( i 168.8 | ) | ( i 300.0 | ) | |||
Issuance
of short-term debt | i 0.7 | i 0.8 | i 66.3 | ||||||
Payment
of short-term debt | ( i 0.8 | ) | ( i 38.0 | ) | ( i 1.7 | ) | |||
Make
whole payment for extinguishment of long-term debt | i — | i — | ( i 9.9 | ) | |||||
Debt
issuance cost | i — | ( i 7.6 | ) | ( i 3.0 | ) | ||||
Payment
of dividends | ( i 186.6 | ) | ( i 172.3 | ) | ( i 157.6 | ) | |||
Payment
of dividends to noncontrolling interest | ( i 11.3 | ) | ( i 3.9 | ) | ( i 3.5 | ) | |||
Acquisition
of common shares | ( i 35.0 | ) | ( i 40.0 | ) | ( i 92.5 | ) | |||
Other
| ( i 13.0 | ) | ( i 11.2 | ) | ( i 10.0 | ) | |||
NET
CASH PROVIDED (USED) IN FINANCING ACTIVITIES | ( i 471.0 | ) | i 506.5 | ( i 214.3 | ) | ||||
Effect
of foreign currency exchange rate changes on cash and cash equivalents | i 1.3 | ( i 8.2 | ) | i 18.3 | |||||
Increase
(Decrease) in cash and cash equivalents | ( i 7.0 | ) | ( i 186.0 | ) | ( i 62.6 | ) | |||
Cash
and cash equivalents, beginning of year | i 189.0 | i 375.0 | i 437.6 | ||||||
Cash
and cash equivalents, end of year | $ | i 182.0 | $ | i 189.0 | $ | i 375.0 |
HUBBELL INCORPORATED - Form 10-K | 43 |
(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 | ||||||||||||
BALANCE
AT DECEMBER 31, 2016 | $ | i 0.6 | $ | i 15.4 | $ | i 1,879.3 | $ | ( i 302.5 | ) | $ | i 1,592.8 | $ | i 10.4 | |||||
Net
income | i 243.1 | i 243.1 | i 6.8 | |||||||||||||||
Other
comprehensive (loss) income | i 32.7 | i 32.7 | ||||||||||||||||
Stock-based
compensation | i 22.3 | i 22.3 | ||||||||||||||||
Acquisition/surrender
of common shares(1) | ( i 27.2 | ) | ( i 72.1 | ) | ( i 99.3 | ) | ||||||||||||
Cash
dividends declared ($2.87 per share) | ( i 157.9 | ) | ( i 157.9 | ) | ||||||||||||||
Dividends
to noncontrolling interest | ( i 3.5 | ) | ||||||||||||||||
Directors
deferred compensation | i 0.5 | i 0.5 | ||||||||||||||||
BALANCE
AT | $ | i 0.6 | $ | i 11.0 | $ | i 1,892.4 | $ | ( i 269.8 | ) | $ | i 1,634.2 | $ | i 13.7 | |||||
Net
income | i 360.2 | i 360.2 | i 5.9 | |||||||||||||||
Other
comprehensive (loss) income | ( i 15.9 | ) | ( i 15.9 | ) | ||||||||||||||
Stock-based
compensation | i 24.2 | i 24.2 | ||||||||||||||||
ASC
606 adoption to retained earnings | i 0.6 | i 0.6 | ||||||||||||||||
Acquisition/surrender
of common shares(1) | ( i 34.5 | ) | ( i 16.0 | ) | ( i 50.5 | ) | ||||||||||||
Cash
dividends declared ($3.15 per share) | ( i 172.8 | ) | ( i 172.8 | ) | ||||||||||||||
Dividends
to noncontrolling interest | ( i 3.9 | ) | ||||||||||||||||
Aclara
noncontrolling interest | i 2.6 | |||||||||||||||||
Directors
deferred compensation | i 0.6 | i 0.6 | ||||||||||||||||
BALANCE
AT | $ | i 0.6 | $ | i 1.3 | $ | i 2,064.4 | $ | ( i 285.7 | ) | $ | i 1,780.6 | $ | i 18.3 | |||||
Net
income | i 400.9 | i 400.9 | i 6.5 | |||||||||||||||
Other
comprehensive (loss) income | ( i 17.2 | ) | ( i 17.2 | ) | ||||||||||||||
Stock-based
compensation | i 16.4 | i 16.4 | ||||||||||||||||
Reclassification
of stranded tax effects | i 30.0 | ( i 30.0 | ) | |||||||||||||||
Acquisition/surrender
of common shares(1) | ( i 18.3 | ) | ( i 28.9 | ) | ( i 47.2 | ) | ||||||||||||
Cash
dividends declared ($3.43 per share) | ( i 187.0 | ) | ( i 187.0 | ) | ||||||||||||||
Dividends
to noncontrolling interest | ( i 11.4 | ) | ||||||||||||||||
Directors
deferred compensation | i 0.6 | i 0.6 | ||||||||||||||||
BALANCE
AT | $ | i 0.6 | $ | i — | $ | i 2,279.4 | $ | ( i 332.9 | ) | $ | i 1,947.1 | $ | i 13.4 |
44 | HUBBELL INCORPORATED - Form 10-K |
HUBBELL INCORPORATED -
Form 10-K | 45 |
46 | HUBBELL
INCORPORATED - Form 10-K |
HUBBELL INCORPORATED - Form 10-K | 47 |
48 | HUBBELL INCORPORATED -
Form 10-K |
HUBBELL INCORPORATED - Form 10-K | 49 |
Twelve Months Ended December 31, | |||||||||
2019 | 2018 | 2017 | |||||||
Net
sales | |||||||||
Hubbell Commercial and Industrial | $ | i 902.1 | $ | i 910.8 | $ | i 864.5 | |||
Hubbell
Construction and Energy | i 808.7 | i 799.7 | i 732.6 | ||||||
Hubbell
Lighting | i 914.9 | i 950.1 | i 935.7 | ||||||
Hubbell
Power Systems | i 1,965.3 | i 1,821.1 | i 1,136.0 | ||||||
Total
net sales | $ | i 4,591.0 | $ | i 4,481.7 | $ | i 3,668.8 |
Twelve
Months Ended December 31, 2019 | Twelve Months Ended December 31, 2018 | Twelve Months Ended December 31, 2017 | |||||||||||||||||||||||||||
Electrical | Power | Total | Electrical | Power | Total | Electrical | Power | Total | |||||||||||||||||||||
Net
sales | |||||||||||||||||||||||||||||
United States | $ | i 2,358.2 | $ | i 1,832.3 | $ | i 4,190.5 | $ | i 2,365.4 | $ | i 1,675.2 | $ | i 4,040.6 | $ | i 2,229.3 | $ | i 1,051.6 | $ | i 3,280.9 | |||||||||||
International | i 267.5 | i 133.0 | i 400.5 | i 295.2 | i 145.9 | i 441.1 | i 303.5 | i 84.4 | i 387.9 | ||||||||||||||||||||
Total
net sales | $ | i 2,625.7 | $ | i 1,965.3 | $ | i 4,591.0 | $ | i 2,660.6 | $ | i 1,821.1 | $ | i 4,481.7 | $ | i 2,532.8 | $ | i 1,136.0 | $ | i 3,668.8 |
50 | HUBBELL
INCORPORATED - Form 10-K |
HUBBELL INCORPORATED - Form 10-K | 51 |
Tangible assets acquired | $ | i 21.7 | |
Intangible
assets | i 33.2 | ||
Goodwill | i 29.4 | ||
Net
deferred taxes | ( i 5.7 | ) | |
Other liabilities assumed | ( i 9.3 | ) | |
Total
Estimate of Consideration Transferred, Net of Cash Acquired | $ | i 69.3 |
HUBBELL
INCORPORATED - Form 10-K | 52 |
Accounts
receivable | $ | i 118.1 | |
Inventories | i 73.5 | ||
Other
current assets | i 8.5 | ||
Property, plant and equipment | i 30.9 | ||
Intangible
assets | i 434.0 | ||
Accounts payable | ( i 51.8 | ) | |
Other
accrued liabilities | ( i 93.3 | ) | |
Deferred tax liabilities, net | ( i 42.1 | ) | |
Other
non-current liabilities | ( i 67.7 | ) | |
Noncontrolling interest | ( i 2.5 | ) | |
Goodwill | i 708.7 | ||
Total
Estimate of Consideration Transferred, Net of Cash Acquired | $ | i 1,116.3 |
Estimated
Fair Value | Weighted Average Estimated Useful Life | ||||
Patents, tradenames and trademarks | $ | i 55.0 | i 20.0 | ||
Customer
relationships | i 194.0 | i 18.0 | |||
Developed
technology | i 185.0 | i 13.0 | |||
Total | $ | i 434.0 |
Twelve Months Ended December 31, | |||||||
2018 | 2017 | ||||||
Selling &
administrative expense | $ | i 9.5 | $ | i 6.7 | |||
Interest
expense | i 3.3 | i 0.4 | |||||
Total
Aclara Transaction Costs | $ | i 12.8 | $ | i 7.1 |
HUBBELL
INCORPORATED - Form 10-K | 53 |
(in
millions, except per share amounts) | Twelve Months Ended December 31, | ||||||
2018 | 2017 | ||||||
Net sales | $ | i 4,531.2 | $ | i 4,180.9 | |||
Net
income attributable to Hubbell | $ | i 376.4 | $ | i 209.8 | |||
Earnings
Per Share: | |||||||
Basic | $ | i 6.86 | $ | i 3.82 | |||
Diluted | $ | i 6.83 | $ | i 3.81 |
2019 | 2018 | |||||
Trade
accounts receivable | $ | i 696.8 | $ | i 739.1 | ||
Non-trade
receivables | i 29.9 | i 26.2 | ||||
Accounts
receivable, gross | i 726.7 | i 765.3 | ||||
Allowance
for credit memos, returns and cash discounts | ( i 36.0 | ) | ( i 35.1 | ) | ||
Allowance
for doubtful accounts | ( i 7.7 | ) | ( i 4.8 | ) | ||
Total
allowances | ( i 43.7 | ) | ( i 39.9 | ) | ||
ACCOUNTS
RECEIVABLE, NET | $ | i 683.0 | $ | i 725.4 |
HUBBELL
INCORPORATED - Form 10-K | 54 |
2019 | 2018 | |||||
Raw material | $ | i 217.4 | $ | i 220.2 | ||
Work-in-process | i 101.8 | i 110.3 | ||||
Finished
goods | i 403.6 | i 402.3 | ||||
i 722.8 | i 732.8 | |||||
Excess
of FIFO over LIFO cost basis | ( i 89.8 | ) | ( i 81.8 | ) | ||
INVENTORIES,
NET | $ | i 633.0 | $ | i 651.0 |
Segment | |||||||||
Electrical | Power | Total | |||||||
BALANCE
AT DECEMBER 31, 2017 | $ | i 717.6 | $ | i 371.4 | $ | i 1,089.0 | |||
Current
year acquisitions | i — | i 708.7 | i 708.7 | ||||||
Foreign
currency translation and prior year acquisitions | ( i 3.5 | ) | ( i 9.8 | ) | ( i 13.3 | ) | |||
BALANCE
AT DECEMBER 31, 2018 | $ | i 714.1 | $ | i 1,070.3 | $ | i 1,784.4 | |||
Current
year acquisitions(1) | i 15.2 | i 14.2 | i 29.4 | ||||||
Dispositions(1) | ( i 3.1 | ) | i — | ( i 3.1 | ) | ||||
Foreign
currency translation | i 1.5 | ( i 0.4 | ) | i 1.1 | |||||
BALANCE
AT DECEMBER 31, 2019 | $ | i 727.7 | $ | i 1,084.1 | $ | i 1,811.8 |
Gross Amount | Accumulated Amortization | Gross Amount | Accumulated Amortization | ||||||||||
Definite-lived: | |||||||||||||
Patents,
tradenames and trademarks | $ | i 202.7 | $ | ( i 65.0 | ) | $ | i 204.4 | $ | ( i 58.6 | ) | |||
Customer
relationships, developed technology and other | i 861.0 | ( i 270.8 | ) | i 833.0 | ( i 212.6 | ) | |||||||
TOTAL
DEFINITE-LIVED INTANGIBLES | i 1,063.7 | ( i 335.8 | ) | i 1,037.4 | ( i 271.2 | ) | |||||||
Indefinite-lived: | |||||||||||||
Tradenames
and other | i 53.6 | — | i 53.3 | — | |||||||||
TOTAL
INTANGIBLE ASSETS | $ | i 1,117.3 | $ | ( i 335.8 | ) | $ | i 1,090.7 | $ | ( i 271.2 | ) |
HUBBELL INCORPORATED -
Form 10-K | 55 |
2019 | 2018 | ||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Carrying Value | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Carrying Value | ||
Available-for-sale
securities | $ i 50.0 | $ i 0.8 | $( i 0.1) | $ i 50.7 | $ i 50.7 | $ i 54.0 | $ i 1.1 | $( i 3.9) | $ i 51.2 | $ i 51.2 | |
Trading
securities | i 12.0 | i 7.2 | i — | i 19.2 | i 19.2 | i 10.1 | i 4.2 | i — | i 14.3 | i 14.3 | |
TOTAL
INVESTMENTS | $ i 62.0 | $ i 8.0 | $( i 0.1) | $ i 69.9 | $ i 69.9 | $ i 64.1 | $ i 5.3 | $( i 3.9) | $ i 65.5 | $ i 65.5 |
Amortized Cost | Fair Value | |||||
Available-for-sale securities | ||||||
Due
within 1 year | $ | i 14.2 | $ | i 14.2 | ||
After
1 year but within 5 years | i 23.1 | i 23.6 | ||||
After
5 years but within 10 years | i 4.9 | i 5.1 | ||||
Due
after 10 years | i 7.8 | i 7.8 | ||||
TOTAL | $ | i 50.0 | $ | i 50.7 |
2019 | 2018 | |||||
Land | $ | i 37.7 | $ | i 42.2 | ||
Buildings
and improvements | i 285.3 | i 277.3 | ||||
Machinery,
tools, and equipment | i 896.0 | i 863.5 | ||||
Construction-in-progress | i 35.3 | i 46.2 | ||||
Gross
property, plant, and equipment | i 1,254.3 | i 1,229.2 | ||||
Less
accumulated depreciation | ( i 749.1 | ) | ( i 727.1 | ) | ||
PROPERTY,
PLANT, AND EQUIPMENT, NET | $ | i 505.2 | $ | i 502.1 |
56 | HUBBELL
INCORPORATED - Form 10-K |
2019 | 2018 | |||||
Customer program incentives | $ | i 49.0 | $ | i 52.4 | ||
Accrued
income taxes | i 6.0 | i 3.4 | ||||
Contract
liabilities - deferred revenue | i 31.0 | i 27.7 | ||||
Customer
refund liability | i 19.0 | i 15.3 | ||||
Accrued
warranties(1) | i 24.0 | i 33.5 | ||||
Current
operating lease liabilities(2) | i 29.6 | — | ||||
Other | i 103.6 | i 94.3 | ||||
TOTAL | $ | i 262.2 | $ | i 226.6 |
2019 | 2018 | |||||
Pensions | $ | i 198.5 | $ | i 177.0 | ||
Other
post-employment benefits | i 21.5 | i 23.7 | ||||
Deferred
tax liabilities | i 126.8 | i 120.0 | ||||
Accrued
warranties long-term(1) | i 58.1 | i 59.2 | ||||
Non-current
operating lease liabilities(2) | i 71.7 | — | ||||
Other | i 115.0 | i 116.9 | ||||
TOTAL | $ | i 591.6 | $ | i 496.8 |
HUBBELL
INCORPORATED - Form 10-K | 57 |
58 | HUBBELL INCORPORATED - Form 10-K |
Pension Benefits | Other
Benefits | ||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||
Change in benefit obligation | |||||||||||||
Benefit
obligation at beginning of year | $ | i 844.3 | $ | i 956.1 | $ | i 26.1 | $ | i 27.0 | |||||
Acquisitions | i — | i 1.3 | i — | i — | |||||||||
Service
cost | i 2.2 | i 3.8 | i 0.1 | i 0.1 | |||||||||
Interest
cost | i 34.6 | i 34.3 | i 1.1 | i 1.0 | |||||||||
Plan
participants’ contributions | i 0.4 | i 0.4 | i — | i — | |||||||||
Amendments | i — | i 3.6 | i — | i — | |||||||||
Actuarial
loss/(gain) | i 107.0 | ( i 72.4 | ) | ( i 2.0 | ) | ( i 0.5 | ) | ||||||
Curtailment
gain | i — | ( i 5.7 | ) | i — | i — | ||||||||
Currency
impact | i 3.6 | ( i 5.7 | ) | i — | i — | ||||||||
Other | i 0.1 | ( i 0.5 | ) | i — | i — | ||||||||
Benefits
paid | ( i 53.5 | ) | ( i 70.9 | ) | ( i 1.5 | ) | ( i 1.5 | ) | |||||
Benefit
obligation at end of year | $ | i 938.7 | $ | i 844.3 | $ | i 23.8 | $ | i 26.1 | |||||
Change
in plan assets | |||||||||||||
Fair value of plan assets at beginning of year | $ | i 670.1 | $ | i 738.8 | $ | i — | $ | i — | |||||
Acquisitions | i — | i 1.2 | i — | i — | |||||||||
Actual
return on plan assets | i 106.2 | ( i 27.5 | ) | i — | i — | ||||||||
Employer
contributions | i 16.4 | i 34.0 | i 1.5 | i 1.5 | |||||||||
Plan
participants’ contributions | i 0.4 | i 0.4 | i — | i — | |||||||||
Currency
impact | i 3.8 | ( i 5.9 | ) | i — | i — | ||||||||
Benefits
paid | ( i 53.5 | ) | ( i 70.9 | ) | ( i 1.5 | ) | ( i 1.5 | ) | |||||
Fair
value of plan assets at end of year | $ | i 743.4 | $ | i 670.1 | $ | i — | $ | i — | |||||
FUNDED
STATUS | $ | ( i 195.3 | ) | $ | ( i 174.2 | ) | $ | ( i 23.8 | ) | $ | ( i 26.1 | ) | |
Amounts
recognized in the consolidated balance sheet consist of: | |||||||||||||
Prepaid pensions (included in Other long-term assets) | $ | i 8.6 | $ | i 8.0 | $ | i — | $ | i — | |||||
Accrued
benefit liability (short-term and long-term) | ( i 203.9 | ) | ( i 182.2 | ) | ( i 23.8 | ) | ( i 26.1 | ) | |||||
NET
AMOUNT RECOGNIZED IN THE CONSOLIDATED BALANCE SHEET | $ | ( i 195.3 | ) | $ | ( i 174.2 | ) | $ | ( i 23.8 | ) | $ | ( i 26.1 | ) | |
Amounts
recognized in Accumulated other comprehensive loss (income) consist of: | |||||||||||||
Net actuarial loss | $ | i 263.4 | $ | i 240.8 | $ | i 0.3 | $ | i 2.4 | |||||
Prior
service cost (credit) | i 3.6 | i 4.1 | ( i 0.4 | ) | ( i 1.3 | ) | |||||||
NET
AMOUNT RECOGNIZED IN ACCUMULATED OTHER COMPREHENSIVE LOSS | $ | i 267.0 | $ | i 244.9 | $ | ( i 0.1 | ) | $ | i 1.1 |
2019 | 2018 | |||||
Projected
benefit obligation | $ | i 823.8 | $ | i 744.0 | ||
Accumulated
benefit obligation | $ | i 819.0 | $ | i 735.4 | ||
Fair
value of plan assets | $ | i 620.0 | $ | i 561.7 |
HUBBELL
INCORPORATED - Form 10-K | 59 |
Pension
Benefits | Other Benefits | ||||||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||
Components
of net periodic benefit cost: | |||||||||||||||||||
Service
cost | $ | i 2.2 | $ | i 3.8 | $ | i 5.9 | $ | i 0.1 | $ | i 0.1 | $ | i 0.1 | |||||||
Interest
cost | i 34.6 | i 34.3 | i 37.2 | i 1.1 | i 1.0 | i 1.0 | |||||||||||||
Expected
return on plan assets | ( i 30.7 | ) | ( i 33.5 | ) | ( i 34.1 | ) | i — | i — | i — | ||||||||||
Amortization
of prior service cost (credit) | i 0.2 | i 0.1 | i 0.1 | ( i 0.9 | ) | ( i 0.8 | ) | ( i 1.0 | ) | ||||||||||
Amortization
of actuarial losses (gains) | i 9.6 | i 10.5 | i 11.4 | i 0.1 | i — | i — | |||||||||||||
Curtailment
and settlement losses | i 0.3 | i — | i 0.4 | i — | i — | i — | |||||||||||||
Net
periodic benefit cost | $ | i 16.2 | $ | i 15.2 | $ | i 20.9 | $ | i 0.4 | $ | i 0.3 | $ | i 0.1 | |||||||
Changes
recognized in other comprehensive loss (income), before tax: | |||||||||||||||||||
Current year net actuarial loss (gain) | $ | i 31.5 | $ | ( i 15.8 | ) | $ | i 4.2 | $ | ( i 2.0 | ) | $ | ( i 0.4 | ) | $ | i 1.4 | ||||
Current
year prior service credit | i — | i 2.0 | i 0.3 | i — | i — | i — | |||||||||||||
Amortization
of prior service (cost) credit | ( i 0.2 | ) | ( i 0.1 | ) | ( i 0.1 | ) | i 0.9 | i 1.0 | i 1.0 | ||||||||||
Amortization
of net actuarial (losses) gains | ( i 9.6 | ) | ( i 10.5 | ) | ( i 11.4 | ) | ( i 0.1 | ) | ( i 0.2 | ) | i — | ||||||||
Currency
impact | i 0.7 | ( i 1.3 | ) | i 3.5 | i — | i — | i — | ||||||||||||
Other
adjustments | ( i 0.3 | ) | i — | ( i 0.4 | ) | i — | i — | i — | |||||||||||
Total
recognized in other comprehensive loss | i 22.1 | ( i 25.7 | ) | ( i 3.9 | ) | ( i 1.2 | ) | i 0.4 | i 2.4 | ||||||||||
TOTAL
RECOGNIZED IN NET PERIODIC PENSION COST AND OTHER COMPREHENSIVE LOSS | $ | i 38.3 | $ | ( i 10.5 | ) | $ | i 17.0 | $ | ( i 0.8 | ) | $ | i 0.7 | $ | i 2.5 |
60 | HUBBELL INCORPORATED - Form 10-K |
Pension Benefits | Other Benefits | ||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||
Weighted-average
assumptions used to determine benefit obligations at December 31, | |||||||||||||
Discount rate | i 3.17 | % | i 4.24 | % | i 3.67 | % | i 3.30 | % | i 4.40 | % | i 3.70 | % | |
Rate
of compensation increase | i 2.94 | % | i 3.25 | % | i 3.24 | % | i 4.00 | % | i 4.05 | % | i 4.00 | % | |
Weighted-average
assumptions used to determine net periodic benefit cost for years ended December 31, | |||||||||||||
Discount rate | i 4.24 | % | i 3.67 | % | i 4.12 | % | i 4.40 | % | i 3.70 | % | i 4.10 | % | |
Expected
return on plan assets | i 4.75 | % | i 4.68 | % | i 4.94 | % | N/A | N/A | N/A | ||||
Rate
of compensation increase | i 3.25 | % | i 3.24 | % | i 3.55 | % | i 4.05 | % | i 4.00 | % | i 3.93 | % |
Other Benefits | ||||||
2019 | 2018 | 2017 | ||||
Assumed
health care cost trend rates at December 31, | ||||||
Health care cost trend assumed for next year | i 6.6 | % | i 6.8 | % | i 7.0 | % |
Rate
to which the cost trend is assumed to decline | i 5.0 | % | i 5.0 | % | i 5.0 | % |
Year
that the rate reaches the ultimate trend rate | i 2028 | i 2028 | i 2028 |
HUBBELL
INCORPORATED - Form 10-K | 61 |
Percentage of Plan Assets | ||||||
Target | Actual | |||||
Asset
Category | 2020 | 2019 | 2018 | |||
Equity securities | i 22 | % | i 25 | % | i 19 | % |
Debt
securities & Cash | i 76 | % | i 73 | % | i 67 | % |
Alternative
Investments | i 2 | % | i 2 | % | i 14 | % |
TOTAL | i 100 | % | i 100 | % | i 100 | % |
62 | HUBBELL INCORPORATED - Form 10-K |
Quoted
Prices in Active Markets for Identical Assets | Quoted Prices in Active Market for Similar Asset | Significant Unobservable Inputs | Investments Priced Using Net Asset Value | ||||||||||||
Asset Category | Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Cash
and cash equivalents | $ | i 16.6 | $ | i 16.6 | $ | i — | $ | i — | $ | — | |||||
Equity
securities: | |||||||||||||||
Equity Mutual Funds | i 31.6 | i 31.6 | i — | i — | — | ||||||||||
Common
Pooled Equity Funds (b) | i 144.0 | i — | i 144.0 | i — | — | ||||||||||
Fixed
Income Securities: | |||||||||||||||
U.S. Treasuries | i 64.5 | i — | i 64.5 | i — | — | ||||||||||
State
and Local Municipal Bonds | i 9.4 | i — | i 9.4 | i — | — | ||||||||||
Sovereign
Debt | i 7.6 | i — | i 7.6 | i — | — | ||||||||||
Corporate
Bonds (c) | i 122.9 | i 0.1 | i 122.8 | i — | — | ||||||||||
Fixed
Income Mutual Funds | i 54.2 | i 54.2 | i — | i — | — | ||||||||||
Common
Pooled Fixed Income Funds (d) | i 252.3 | i — | i 252.3 | i — | — | ||||||||||
Alternative
Investment Funds (e) | i 18.1 | i — | i 0.9 | i — | i 17.2 | ||||||||||
Common
Pooled Funds (f) | i 22.2 | i 0.5 | i 21.7 | i — | — | ||||||||||
BALANCE
AT DECEMBER 31, 2019 | $ | i 743.4 | $ | i 103.0 | $ | i 623.2 | $ | i — | $ | i 17.2 |
Quoted
Prices in Active Markets for Identical Assets | Quoted Prices in Active Market for Similar Asset | Significant Unobservable Inputs | Investments Priced Using Net Asset Value | ||||||||||||
Asset Category | Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Cash
and cash equivalents | $ | i 47.0 | $ | i 47.0 | $ | i — | $ | i — | $ | — | |||||
Equity
securities: | |||||||||||||||
U.S. Large-cap (g) | i 8.2 | i 8.2 | i — | i — | — | ||||||||||
U.S.
Mid-cap and Small-cap Growth (h) | i 3.1 | i 3.1 | i — | i — | — | ||||||||||
International
Large-cap | i 8.6 | i 8.6 | i — | i — | — | ||||||||||
Emerging
Markets (a) | i 13.3 | i 8.1 | i 5.2 | i — | — | ||||||||||
Common
Pooled Equity Funds (b) | i 12.7 | i — | i 12.7 | i — | — | ||||||||||
Fixed
Income Securities: | |||||||||||||||
U.S. Treasuries | i 378.0 | i — | i 378.0 | i — | — | ||||||||||
Corporate
Bonds (c) | i 0.3 | i 0.3 | i — | i — | — | ||||||||||
Asset
Backed Securities and Other | i 22.8 | i — | i 22.8 | i — | — | ||||||||||
Common
Pooled Fixed Income Funds (d) | i 61.8 | i — | i 57.6 | i — | i 4.2 | ||||||||||
Derivatives: | |||||||||||||||
Assets
(i) | i 8.2 | i 8.0 | i 0.2 | i — | — | ||||||||||
(Liabilities)
(i) | ( i 7.9 | ) | ( i 6.9 | ) | ( i 1.0 | ) | i — | — | |||||||
Alternative
Investment Funds (e) | i 96.8 | i 11.6 | i 3.3 | i — | i 81.9 | ||||||||||
Common
Pooled Funds (f) | i 17.7 | i 0.9 | i 16.8 | i — | — | ||||||||||
BALANCE
AT DECEMBER 31, 2018 | $ | i 670.6 | $ | i 88.9 | $ | i 495.6 | $ | i — | $ | i 86.1 |
(a) | Includes
open ended emerging markets mutual funds. |
(b) | Investments in Common Pooled Equity Funds, including funds and fund products investing in various equity securities |
(c) | Includes primarily investment grade bonds from diverse industries |
(d) | Investments in Common Pooled Fixed Income Funds, including funds
and fund products investing in various fixed income investments |
(e) | Includes investments in hedge funds, including fund of funds products and open end mutual funds |
(f) | Investments in Common Pooled Funds, consisting of equities and fixed income securities |
(g) | Includes an actively managed portfolio
of large-cap U.S. stocks. |
(h) | Includes an investment in a small cap open ended mutual fund. |
(i) | Includes primarily U.S. and foreign equity futures as well as foreign fixed income futures and positions in U.S. Treasury futures to adjust the duration of the portfolio. |
HUBBELL
INCORPORATED - Form 10-K | 63 |
Pension Benefits | Other
Benefits | |||||
2020 | $ | i 53.9 | $ | i 2.2 | ||
2021 | $ | i 53.2 | $ | i 2.1 | ||
2022 | $ | i 54.8 | $ | i 2.0 | ||
2023 | $ | i 55.3 | $ | i 1.9 | ||
2024 | $ | i 55.2 | $ | i 1.8 | ||
2025-2028 | $ | i 270.3 | $ | i 7.5 |
Maturity | 2019 | 2018 | |||||
Senior notes at 3.625% | 2022 | $ | i 298.8 | $ | i 298.3 | ||
Senior
notes at 3.35% | 2026 | i 395.7 | i 395.1 | ||||
Senior
notes at 3.15% | 2027 | i 295.9 | i 295.4 | ||||
Senior
notes at 3.50% | 2028 | i 444.0 | i 443.3 | ||||
Term
loan, net of current portion of $34.4 and $25 million, respectively | 2023 | i 71.6 | i 305.0 | ||||
TOTAL
LONG-TERM DEBT(a) | $ | i 1,506.0 | $ | i 1,737.1 |
64 | HUBBELL INCORPORATED - Form 10-K |
◦ |
◦ | $ i 34.4
million at December 31, 2019 and $ i 25.0 million at December 31, 2018, respectively, of long-term debt classified as short-term within current liabilities in the Consolidated Balance Sheets, reflecting maturities within the next twelve months relating to our borrowing under the Term Loan. |
◦ | $ i 5.0
million at December 31, 2019 and $ i 5.1 million at December 31, 2018, respectively, of borrowings to support our international operations in China. |
2019 | 2018 | |||
Interest rate on short-term debt: | ||||
At year end | i 2.59 | % | i 3.21 | % |
HUBBELL INCORPORATED - Form 10-K | 65 |
2019 | 2018 | 2017 | |||||||
Income before income taxes: | |||||||||
United
States | $ | i 406.7 | $ | i 360.8 | $ | i 354.7 | |||
International | i 113.8 | i 106.2 | i 88.4 | ||||||
TOTAL
INCOME BEFORE INCOME TAXES | $ | i 520.5 | $ | i 467.0 | $ | i 443.1 | |||
Provision
for income taxes — current: | |||||||||
Federal | $ | i 65.0 | $ | i 12.3 | $ | i 164.1 | |||
State | i 16.6 | i 21.8 | i 15.3 | ||||||
International | i 25.4 | i 17.8 | i 28.1 | ||||||
Total
provision — current | i 107.0 | i 51.9 | i 207.5 | ||||||
Provision
for income taxes — deferred: | |||||||||
Federal | i 8.6 | i 35.0 | ( i 10.4 | ) | |||||
State | i 0.5 | i 9.4 | ( i 0.9 | ) | |||||
International | ( i 3.0 | ) | i 4.6 | ( i 3.0 | ) | ||||
Total
provision — deferred | i 6.1 | i 49.0 | ( i 14.3 | ) | |||||
TOTAL
PROVISION FOR INCOME TAXES | $ | i 113.1 | $ | i 100.9 | $ | i 193.2 |
66 | HUBBELL
INCORPORATED - Form 10-K |
2019 | 2018 | |||||
Deferred
tax assets: | ||||||
Inventories | $ | i 10.1 | $ | i 6.2 | ||
Right-of-use
assets | i 24.8 | — | ||||
Income tax credits | i 26.9 | i 24.5 | ||||
Accrued
liabilities | i 37.8 | i 35.9 | ||||
Pension | i 53.4 | i 49.6 | ||||
Post
retirement and post employment benefits | i 6.0 | i 6.6 | ||||
Stock-based
compensation | i 9.7 | i 13.1 | ||||
Loss
Carryforwards | i 21.3 | i 22.2 | ||||
Miscellaneous
other | i 11.9 | i 8.8 | ||||
Gross
deferred tax assets | i 201.9 | i 166.9 | ||||
Valuation
allowance | ( i 29.0 | ) | ( i 21.8 | ) | ||
Total
deferred tax assets, net of valuation allowance | i 172.9 | i 145.1 | ||||
Deferred
tax liabilities: | ||||||
Liability on undistributed foreign earnings | ( i 8.6 | ) | ( i 10.9 | ) | ||
Goodwill
and Intangibles | ( i 212.3 | ) | ( i 206.4 | ) | ||
Lease
liabilities | ( i 24.2 | ) | — | |||
Property, plant, and equipment | ( i 48.4 | ) | ( i 41.4 | ) | ||
Total
deferred tax liabilities | ( i 293.5 | ) | ( i 258.7 | ) | ||
TOTAL
NET DEFERRED TAX LIABILITY | $ | ( i 120.6 | ) | $ | ( i 113.6 | ) |
Deferred
taxes are reflected in the Consolidated Balance Sheet as follows: | ||||||
Non-current tax assets (included in Other long-term assets) | i 6.2 | i 6.4 | ||||
Non-current
tax liabilities (included in Other Non-Current Liabilities) | ( i 126.8 | ) | ( i 120.0 | ) | ||
TOTAL
NET DEFERRED TAX LIABILITY | $ | ( i 120.6 | ) | $ | ( i 113.6 | ) |
HUBBELL INCORPORATED - Form 10-K | 67 |
Jurisdiction | Open Years |
United States | 2016-2019 |
UK | 2018-2019 |
Puerto Rico | 2015-2019 |
Canada | 2015-2019 |
2019 | 2018 | 2017 | |||||||
Unrecognized
tax benefits at beginning of year | $ | i 38.9 | $ | i 29.5 | $ | i 20.2 | |||
Additions
based on tax positions relating to the current year | i 7.0 | i 3.8 | i 13.6 | ||||||
Reductions
based on expiration of statute of limitations | ( i 5.2 | ) | ( i 1.7 | ) | ( i 1.4 | ) | |||
Additions
to tax positions relating to previous years | i 1.6 | i 7.4 | i 1.0 | ||||||
Settlements | ( i 0.4 | ) | ( i 0.1 | ) | ( i 3.9 | ) | |||
TOTAL
UNRECOGNIZED TAX BENEFITS | $ | i 41.9 | $ | i 38.9 | $ | i 29.5 |
2019 | 2018 | 2017 | ||||
Federal statutory income
tax rate | i 21.0 | % | i 21.0 | % | i 35.0 | % |
State
income taxes, net of federal benefit | i 2.8 | i 4.5 | i 1.2 | |||
Foreign
income taxes | ( i 0.7 | ) | ( i 1.1 | ) | ( i 3.1 | ) |
Federal
R&D Credit | ( i 1.2 | ) | ( i 1.0 | ) | ( i 1.0 | ) |
TCJA
and related | i — | ( i 1.3 | ) | i 12.8 | ||
Other,
net | ( i 0.2 | ) | ( i 0.5 | ) | ( i 1.3 | ) |
CONSOLIDATED
EFFECTIVE INCOME TAX RATE | i 21.7 | % | i 21.6 | % | i 43.6 | % |
68 | HUBBELL INCORPORATED - Form 10-K |
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-K | 69 |
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 | ||||||||
Money market funds (a) | $ | i 27.5 | $ | i — | $ | i — | $ | i 27.5 | ||||
Available
for sale investments | i — | i 50.7 | i — | i 50.7 | ||||||||
Trading
securities | i 19.2 | i — | i — | i 19.2 | ||||||||
Deferred
compensation plan liabilities | ( i 19.2 | ) | i — | i — | ( i 19.2 | ) | ||||||
Derivatives: | ||||||||||||
Forward
exchange contracts-Assets (b) | i — | i — | i — | i — | ||||||||
Forward
exchange contracts-(Liabilities) (c) | i — | ( i 0.3 | ) | i — | ( i 0.3 | ) | ||||||
BALANCE
AT DECEMBER 31, 2019 | $ | i 27.5 | $ | i 50.4 | $ | i — | $ | i 77.9 |
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 | ||||||||
Money market funds (a) | $ | i 15.1 | $ | i — | $ | i — | $ | i 15.1 | ||||
Time
Deposits (a) | i — | i 20.9 | i — | i 20.9 | ||||||||
Available-for-sale
investments | i — | i 48.9 | i 2.3 | i 51.2 | ||||||||
Trading
securities | i 14.3 | i — | i — | i 14.3 | ||||||||
Deferred
compensation plan liabilities | ( i 14.3 | ) | i — | i — | ( i 14.3 | ) | ||||||
Derivatives: | ||||||||||||
Forward
exchange contracts-Assets (b) | i — | i 1.6 | i — | i 1.6 | ||||||||
Forward
exchange contracts-(Liabilities) (c) | i — | i — | i — | i — | ||||||||
BALANCE
AT DECEMBER 31, 2018 | $ | i 15.1 | $ | i 71.4 | $ | i 2.3 | $ | i 88.8 |
(a) | Money
market funds and time deposits are included in Cash and cash equivalents in the Consolidated Balance Sheet. |
(b) | Forward exchange contracts-Assets are reflected in Other current assets in the Consolidated Balance Sheet. |
(c) | Forward exchange contracts-(Liabilities)
are reflected in Other accrued liabilities in the Consolidated Balance Sheet. |
70 | HUBBELL INCORPORATED - Form 10-K |
Derivative Gain/(Loss) Recognized in Accumulated Other Comprehensive Loss, net of tax | Location of Gain/(Loss) when reclassified | Gain/(Loss) Reclassified into Earnings (Effective Portion), net of tax | |||||||||||
Derivative
Instrument | 2019 | 2018 | (Effective Portion) | 2019 | 2018 | ||||||||
Forward exchange contract | $ | ( i 0.8 | ) | $ | i 1.9 | Net
sales | $ | i 0.2 | $ | i 0.1 | |||
Cost
of goods sold | $ | i 0.3 | $ | i 0.2 |
HUBBELL INCORPORATED - Form 10-K | 71 |
72 | HUBBELL
INCORPORATED - Form 10-K |
Common Stock | ||
OUTSTANDING AT DECEMBER 31, 2016 | i 55,532 | |
Exercise
of stock options/stock appreciation rights | i 53 | |
Director compensation arrangements, net | i 10 | |
Restricted/performance
shares activity, net of forfeitures | i 89 | |
Acquisition/surrender of shares | ( i 802 | ) |
OUTSTANDING
AT DECEMBER 31, 2017 | i 54,882 | |
Exercise of stock appreciation rights | i 66 | |
Director
compensation arrangements, net | i 11 | |
Restricted/performance shares activity, net of forfeitures | i 165 | |
Acquisition/surrender
of shares | ( i 409 | ) |
OUTSTANDING AT DECEMBER 31, 2018 | i 54,715 | |
Exercise
of stock appreciation rights | i 84 | |
Director compensation arrangements, net | i 10 | |
Restricted/performance
shares activity, net of forfeitures | i 39 | |
Acquisition/surrender of shares | ( i 334 | ) |
OUTSTANDING
AT DECEMBER 31, 2019 | i 54,514 |
Common Stock | ||
Future grant of stock-based compensation | i 2,333 | |
Shares
reserved under other equity compensation plans | i 152 | |
TOTAL | i 2,485 |
HUBBELL
INCORPORATED - Form 10-K | 73 |
74 | HUBBELL INCORPORATED - Form 10-K |
Grant Date | Stock Price on Measurement Date | Expected Volatility | Risk Free Interest Rate | Expected Term | Weighted
Avg. Grant Date Fair Value | ||||||
2017 | $ | i 127.51 | i 24.7 | % | i 1.9 | % | i 3
Years | $ | i 119.88 |
Shares | Weighted
Average Grant Date Fair Value/Share | ||||
RESTRICTED STOCK AT DECEMBER 31, 2018 | i 284 | $ | i 108.40 | ||
Shares
granted | i 18 | i 127.89 | |||
Shares
vested | ( i 84 | ) | i 105.70 | ||
Shares
forfeited | ( i 20 | ) | i 110.71 | ||
RESTRICTED
STOCK AT DECEMBER 31, 2019 | i 198 | $ | i 110.89 |
Number of Rights | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||
OUTSTANDING
AT DECEMBER 31, 2018 | i 2,111 | $ | i 107.01 | ||||||
Granted | i 40 | i 129.28 | |||||||
Exercised | ( i 474 | ) | i 94.72 | ||||||
Forfeited | ( i 93 | ) | i 115.63 | ||||||
Canceled | ( i 12 | ) | i 128.32 | ||||||
OUTSTANDING
AT DECEMBER 31, 2019 | i 1,572 | $ | i 110.66 | i 6.8
Years | $ | i 58,410 | |||
EXERCISABLE AT DECEMBER
31, 2019 | i 1,198 | $ | i 109.01 | i 6.2
Years | $ | i 46,497 |
HUBBELL
INCORPORATED - Form 10-K | 75 |
Grant
Date | Expected Dividend Yield | Expected Volatility | Risk Free Interest Rate | Expected Term | Weighted Avg. Grant Date Fair Value of 1 SAR | |||||
2019 | i 2.7 | % | i 22.7 | % | i 1.8 | % | i 5.5
Years | $ | i 21.25 | |
2018 | i 2.9 | % | i 21.7 | % | i 2.8 | % | i 5.5
Years | $ | i 18.23 | |
2017 | i 2.6 | % | i 18.0 | % | i 2.2 | % | i 5.5
Years | $ | i 17.45 |
Grant Date | Shares Outstanding at 12/31/2019 | Fair Value | Performance Period | Payout Range | ||||
2018 | i 51,062 | $ | i 98.80 | Jan
2019-Dec 2021 | 0-200% +/- 20% |
76 | HUBBELL INCORPORATED - Form 10-K |
Grant Date | Stock Price on Measurement Date | Dividend Yield | Expected Volatility | Risk
Free Interest Rate | Expected Term | Weighted Avg. Grant Date Fair Value | |||||||
2017 | $ | i 127.51 | i 2.4 | % | i 24.7 | % | i 1.9 | % | i 3
Years | $ | i 142.89 |
Grant Date | Shares Outstanding at 12/31/2019 | Fair Value | Performance Period | Payout Range | ||||
2017 | i 19,389 | $ | i 118.55 | Jan
2018 - Dec 2020 | 0-250% | |||
2016 | i 23,276 | $ | i 105.48 | Jan
2017 - Dec 2019 | 0-250% |
HUBBELL INCORPORATED - Form 10-K | 77 |
2019 | 2018 | 2017 | |||||||
Numerator: | |||||||||
Net
income attributable to Hubbell | $ | i 400.9 | $ | i 360.2 | $ | i 243.1 | |||
Less:
Earnings allocated to participating securities | ( i 1.5 | ) | ( i 1.3 | ) | ( i 0.8 | ) | |||
Net
income available to common shareholders | $ | i 399.4 | $ | i 358.9 | $ | i 242.3 | |||
Denominator: | |||||||||
Average
number of common shares outstanding | i 54.4 | i 54.6 | i 54.8 | ||||||
Potential
dilutive shares | i 0.3 | i 0.3 | i 0.3 | ||||||
Average
number of diluted shares outstanding | i 54.7 | i 54.9 | i 55.1 | ||||||
Earnings
per share: | |||||||||
Basic | $ | i 7.35 | $ | i 6.57 | $ | i 4.42 | |||
Diluted | $ | i 7.31 | $ | i 6.54 | $ | i 4.39 |
78 | HUBBELL INCORPORATED - Form 10-K |
(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, 2016 | $ | i — | $ | ( i 1.2 | ) | $ | ( i 180.5 | ) | $ | ( i 120.8 | ) | $ | ( i 302.5 | ) | |
Other
comprehensive income (loss) before Reclassifications | ( i 1.7 | ) | i 0.6 | ( i 3.4 | ) | i 28.9 | i 24.4 | ||||||||
Amounts
reclassified from accumulated other comprehensive loss | i 0.9 | i — | i 7.4 | i — | i 8.3 | ||||||||||
Current
period other comprehensive income (loss) | ( i 0.8 | ) | i 0.6 | i 4.0 | i 28.9 | i 32.7 | |||||||||
BALANCE
AT DECEMBER 31, 2017 | $ | ( i 0.8 | ) | $ | ( i 0.6 | ) | $ | ( i 176.5 | ) | $ | ( i 91.9 | ) | $ | ( i 269.8 | ) |
Other
comprehensive income (loss) before Reclassifications | i 1.9 | ( i 1.4 | ) | i 10.4 | ( i 33.9 | ) | ( i 23.0 | ) | |||||||
Amounts
reclassified from accumulated other comprehensive loss | ( i 0.3 | ) | i — | i 7.4 | i — | i 7.1 | |||||||||
Current
period other comprehensive income (loss) | i 1.6 | ( i 1.4 | ) | i 17.8 | ( i 33.9 | ) | ( i 15.9 | ) | |||||||
BALANCE
AT DECEMBER 31, 2018 | $ | i 0.8 | $ | ( i 2.0 | ) | $ | ( i 158.7 | ) | $ | ( i 125.8 | ) | $ | ( i 285.7 | ) | |
Other
comprehensive income (loss) before Reclassifications | ( i 0.8 | ) | i 0.8 | ( i 21.5 | ) | i 3.7 | ( i 17.8 | ) | |||||||
Amounts
reclassified from accumulated other comprehensive loss | ( i 0.5 | ) | i 1.8 | i 7.0 | ( i 7.7 | ) | i 0.6 | ||||||||
Current
period other comprehensive income (loss) | ( i 1.3 | ) | i 2.6 | ( i 14.5 | ) | ( i 4.0 | ) | ( i 17.2 | ) | ||||||
Reclassification
of stranded tax effects | i — | i — | ( i 30.0 | ) | i — | ( i 30.0 | ) | ||||||||
BALANCE
AT DECEMBER 31, 2019 | $ | ( i 0.5 | ) | $ | i 0.6 | $ | ( i 203.2 | ) | $ | ( i 129.8 | ) | $ | ( i 332.9 | ) |
HUBBELL
INCORPORATED - Form 10-K | 79 |
Details
about Accumulated Other Comprehensive Loss Components | 2019 | 2018 | Location of Gain (Loss) Reclassified into Income | ||||||
Cash flow hedges gain (loss): | |||||||||
Forward
exchange contracts | $ | i 0.3 | $ | i 0.1 | Net
Sales | ||||
i 0.4 | i 0.3 | Cost
of goods sold | |||||||
i 0.7 | i 0.4 | Total
before tax | |||||||
( i 0.2 | ) | ( i 0.1 | ) | Tax
(expense) benefit | |||||
$ | i 0.5 | $ | i 0.3 | Gain
(loss) net of tax | |||||
Amortization of defined benefit pension and post retirement benefit items: | |||||||||
Prior-service costs | $ | i 0.7 | (a) | $ | i 0.9 | (a) | |||
Actuarial
gains/(losses) | ( i 9.7 | ) | (a) | ( i 10.7 | ) | (a) | |||
Settlement
and curtailment losses | ( i 0.3 | ) | (a) | i — | (a) | ||||
( i 9.3 | ) | ( i 9.8 | ) | Total
before tax | |||||
i 2.3 | i 2.4 | Tax
benefit (expense) | |||||||
$ | ( i 7.0 | ) | $ | ( i 7.4 | ) | (Loss)
gain net of tax | |||
Reclassification of gains (losses) on available-for-sale securities | $ | ( i 1.8 | ) | $ | i — | Other
expense, net | |||
i — | i — | Tax
benefit (expense) | |||||||
$ | ( i 1.8 | ) | $ | i — | (Loss)
gain net of tax | ||||
Reclassification of currency translation gain | $ | i 7.7 | $ | i — | Gain
on disposition of business (Note 3) | ||||
i — | i — | Tax
benefit (expense) | |||||||
$ | i 7.7 | $ | i — | Gain
(loss) net of tax | |||||
Gains (losses) reclassified into earnings | $ | ( i 0.6 | ) | $ | ( i 7.1 | ) | (Loss)
gain net of tax |
(a) | These accumulated other comprehensive loss components are included in the computation of net periodic pension cost (see Note 11 — Retirement Benefits for additional details). |
80 | HUBBELL
INCORPORATED - Form 10-K |
• | Net sales comprise sales to unaffiliated customers — inter-segment and inter-area sales are not significant. |
• | Segment operating income consists of net sales less operating expenses, including total corporate expenses, which are generally allocated to each segment
on the basis of the segment’s percentage of consolidated net sales. Interest expense and investment income and other expense, net have not been allocated to segments as these items are centrally managed by the Company. |
• | General corporate assets not allocated to segments are principally cash, prepaid pensions, investments and deferred taxes. These assets have not been allocated as they are centrally managed by the Company. |
HUBBELL
INCORPORATED - Form 10-K | 81 |
2019 | 2018 | 2017 | |||||||
Net
Sales: | |||||||||
Electrical | $ | i 2,625.7 | $ | i 2,660.6 | $ | i 2,532.8 | |||
Power | i 1,965.3 | i 1,821.1 | i 1,136.0 | ||||||
TOTAL
NET SALES | $ | i 4,591.0 | $ | i 4,481.7 | $ | i 3,668.8 | |||
Operating
Income: | |||||||||
Electrical | $ | i 320.1 | $ | i 320.8 | $ | i 294.0 | |||
Power | i 276.5 | i 236.1 | i 224.8 | ||||||
Operating
Income | $ | i 596.6 | $ | i 556.9 | $ | i 518.8 | |||
Gain
on disposition of business (Note 3) | i 21.7 | i — | i — | ||||||
Multi-employer
pension charge (Note 15) | ( i 8.5 | ) | i — | i — | |||||
Interest
expense | ( i 69.4 | ) | ( i 72.4 | ) | ( i 44.9 | ) | |||
Loss
on extinguishment of debt | i — | i — | ( i 10.1 | ) | |||||
Investment
income and other expense, net | ( i 19.9 | ) | ( i 17.5 | ) | ( i 20.7 | ) | |||
INCOME
BEFORE INCOME TAXES | $ | i 520.5 | $ | i 467.0 | $ | i 443.1 | |||
Assets: | |||||||||
Electrical | $ | i 2,197.8 | $ | i 2,228.5 | $ | i 2,344.7 | |||
Power | i 2,401.3 | i 2,395.8 | i 1,102.2 | ||||||
General
Corporate | i 303.9 | i 247.8 | i 273.7 | ||||||
TOTAL
ASSETS | $ | i 4,903.0 | $ | i 4,872.1 | $ | i 3,720.6 | |||
Capital
Expenditures: | |||||||||
Electrical | $ | i 45.8 | $ | i 53.0 | $ | i 48.0 | |||
Power | i 45.4 | i 36.8 | i 29.0 | ||||||
General
Corporate | i 2.7 | i 6.4 | i 2.7 | ||||||
TOTAL
CAPITAL EXPENDITURES | $ | i 93.9 | $ | i 96.2 | $ | i 79.7 | |||
Depreciation
and Amortization: | |||||||||
Electrical | $ | i 65.0 | $ | i 61.4 | $ | i 64.7 | |||
Power | i 86.0 | i 87.0 | i 33.5 | ||||||
TOTAL
DEPRECIATION AND AMORTIZATION | $ | i 151.0 | $ | i 148.4 | $ | i 98.2 |
2019 | 2018 | 2017 | |||||||
Net Sales: | |||||||||
United
States | $ | i 4,190.5 | $ | i 4,040.6 | $ | i 3,280.9 | |||
International | i 400.5 | i 441.1 | i 387.9 | ||||||
TOTAL
NET SALES | $ | i 4,591.0 | $ | i 4,481.7 | $ | i 3,668.8 | |||
Operating
Income: | |||||||||
United States | $ | i 529.7 | $ | i 478.0 | $ | i 435.8 | |||
International | i 66.9 | i 78.9 | i 83.0 | ||||||
TOTAL
OPERATING INCOME | $ | i 596.6 | $ | i 556.9 | $ | i 518.8 | |||
Long-lived
Assets: | |||||||||
United States | $ | i 2,950.4 | $ | i 2,972.4 | $ | i 1,877.4 | |||
International | i 372.2 | i 245.0 | i 232.8 | ||||||
TOTAL
LONG-LIVED ASSETS | $ | i 3,322.6 | $ | i 3,217.4 | $ | i 2,110.2 |
82 | HUBBELL
INCORPORATED - Form 10-K |
BALANCE AT DECEMBER 31, 2017 | $ | i 14.0 | |
Provision | i 12.0 | ||
Expenditures/other | ( i 22.7 | ) | |
Acquisitions(a) | i 89.4 | ||
BALANCE
AT DECEMBER 31, 2018 | $ | i 92.7 | |
Provision | i 15.8 | ||
Expenditures/other | ( i 26.4 | ) | |
BALANCE
AT DECEMBER 31, 2019(b) | $ | i 82.1 |
HUBBELL INCORPORATED - Form 10-K | 83 |
Twelve
Months Ended December 31, 2019 | Twelve Months Ended December 31, 2018 | Twelve Months Ended December 31, 2017 | |||||||||||||||||||||||||||
Electrical | Power | Total | Electrical | Power | Total | Electrical | Power | Total | |||||||||||||||||||||
Restructuring
costs | |||||||||||||||||||||||||||||
Cost of goods sold | $ | i 12.5 | $ | i 9.8 | $ | i 22.3 | $ | i 4.9 | $ | i 3.3 | $ | i 8.2 | $ | i 11.5 | $ | i 2.2 | $ | i 13.7 | |||||||||||
S&A
expense | i 8.0 | i 1.7 | i 9.7 | i 3.4 | i 0.4 | i 3.8 | i 5.4 | i 1.2 | i 6.6 | ||||||||||||||||||||
Total
restructuring costs | $ | i 20.5 | $ | i 11.5 | $ | i 32.0 | $ | i 8.3 | $ | i 3.7 | $ | i 12.0 | $ | i 16.9 | $ | i 3.4 | $ | i 20.3 |
Beginning Accrued Restructuring Balance 1/1/19 | Pre-tax Restructuring Costs | Utilization and Foreign Exchange | Ending
Accrued Restructuring Balance 12/31/19 | |||||||||
2019 Restructuring Actions | ||||||||||||
Severance | $ | i — | $ | i 16.6 | $ | ( i 8.3 | ) | $ | i 8.3 | |||
Asset
write-downs | i — | i 4.8 | ( i 4.8 | ) | i — | |||||||
Facility
closure and other costs | i — | i 7.7 | ( i 7.6 | ) | i 0.1 | |||||||
Total
2019 Restructuring Actions | $ | i — | $ | i 29.1 | $ | ( i 20.7 | ) | $ | i 8.4 | |||
2018
and Prior Restructuring Actions | ||||||||||||
Severance | $ | i 7.7 | $ | i 0.3 | $ | ( i 5.0 | ) | $ | i 3.0 | |||
Asset
write-downs | i — | i 0.3 | ( i 0.3 | ) | i — | |||||||
Facility
closure and other costs | i 13.3 | i 2.3 | ( i 9.6 | ) | i 6.0 | |||||||
Total
2018 and Prior Restructuring Actions | $ | i 21.0 | $ | i 2.9 | $ | ( i 14.9 | ) | $ | i 9.0 | |||
Total
Restructuring Actions | $ | i 21.0 | $ | i 32.0 | $ | ( i 35.6 | ) | $ | i 17.4 |
Expected Costs | Costs incurred in 2017 | Costs incurred in 2018 | Costs incurred in 2019 | Remaining
costs at 12/31/19 | |||||||||||
2019 Restructuring Actions | |||||||||||||||
Electrical Segment | $ | i 21.2 | $ | i — | $ | i — | $ | i 18.3 | $ | i 2.9 | |||||
Power
Segment | i 21.0 | i — | i — | i 10.8 | i 10.2 | ||||||||||
Total
2019 Restructuring Actions | $ | i 42.2 | $ | i — | $ | i — | $ | i 29.1 | $ | i 13.1 | |||||
2018
Restructuring Actions | |||||||||||||||
Electrical Segment | $ | i 12.5 | $ | i — | $ | i 8.6 | $ | i 2.2 | $ | i 1.7 | |||||
Power
Segment | i 4.8 | i — | i 4.1 | i 0.7 | i — | ||||||||||
Total
2018 Restructuring Actions | $ | i 17.3 | $ | i — | $ | i 12.7 | $ | i 2.9 | $ | i 1.7 | |||||
2017
and Prior Restructuring Actions | |||||||||||||||
Electrical Segment | $ | i 16.6 | $ | i 16.9 | $ | ( i 0.3 | ) | $ | i — | $ | i — | ||||
Power
Segment | i 3.0 | i 3.4 | ( i 0.4 | ) | i — | i — | |||||||||
Total
2017 and Prior Restructuring Actions | $ | i 19.6 | $ | i 20.3 | $ | ( i 0.7 | ) | $ | i — | $ | i — | ||||
Total
Restructuring Actions | $ | i 79.1 | $ | i 20.3 | $ | i 12.0 | $ | i 32.0 | $ | i 14.8 |
84 | HUBBELL
INCORPORATED - Form 10-K |
Operating
lease right-of-use assets | $ | i 96.8 | |
TOTAL ASSETS | $ | i 96.8 | |
Other
accrued liabilities | $ | i 29.6 | |
Other non-current liabilities | i 71.7 | ||
TOTAL
LIABILITIES | $ | i 101.3 |
2020 | 2021 | 2022 | 2023 | 2024 | Thereafter | Total
Payments | Imputed Interest | Total | |
Operating Leases | i 32.7 | i 24.6 | i 15.8 | i 13.2 | i 8.4 | i 15.9 | i 110.6 | ( i 9.3) | $ i 101.3 |
HUBBELL INCORPORATED - Form 10-K | 85 |
Reported First Quarter | Reported Second Quarter | Reported
Third Quarter | Fourth Quarter | |||||||||
2019 | ||||||||||||
Net
sales | $ | i 1,087.3 | $ | i 1,196.4 | $ | i 1,204.0 | $ | i 1,103.3 | ||||
Cost
of goods sold | $ | i 780.0 | $ | i 839.0 | $ | i 842.0 | $ | i 777.3 | ||||
Gross
profit | $ | i 307.3 | $ | i 357.4 | $ | i 362.0 | $ | i 326.0 | ||||
Selling
& administrative expenses | $ | i 186.4 | $ | i 190.5 | $ | i 189.1 | $ | i 190.1 | ||||
Net
income | $ | i 73.8 | $ | i 97.9 | $ | i 132.6 | $ | i 103.1 | ||||
Net
Income attributable to Hubbell | $ | i 72.3 | $ | i 96.0 | $ | i 130.7 | $ | i 101.9 | ||||
Earnings
per share — Basic | $ | i 1.32 | $ | i 1.76 | $ | i 2.40 | $ | i 1.87 | ||||
Earnings
per share — Diluted | $ | i 1.32 | $ | i 1.75 | $ | i 2.38 | $ | i 1.85 | ||||
Reported
First Quarter | Reported Second Quarter | Reported Third Quarter | Fourth Quarter | |||||||||
2018 | ||||||||||||
Net
sales | $ | i 991.2 | $ | i 1,166.7 | $ | i 1,179.7 | $ | i 1,144.1 | ||||
Cost
of goods sold | $ | i 708.3 | $ | i 818.8 | $ | i 830.7 | $ | i 823.5 | ||||
Gross
profit | $ | i 282.9 | $ | i 347.9 | $ | i 349.0 | $ | i 320.6 | ||||
Selling
& administrative expenses | $ | i 183.3 | $ | i 191.0 | $ | i 185.2 | $ | i 184.0 | ||||
Net
income | $ | i 59.8 | $ | i 102.4 | $ | i 114.7 | $ | i 89.2 | ||||
Net
Income attributable to Hubbell | $ | i 58.3 | $ | i 100.3 | $ | i 113.6 | $ | i 88.0 | ||||
Earnings
per share — Basic | $ | i 1.06 | $ | i 1.83 | $ | i 2.07 | $ | i 1.61 | ||||
Earnings
per share — Diluted | $ | i 1.05 | $ | i 1.82 | $ | i 2.06 | $ | i 1.60 |
86 | HUBBELL
INCORPORATED - Form 10-K |
HUBBELL INCORPORATED - Form 10-K | 87 |
PART III |
A | B | C | ||||||||
Plan
Category | Number of Securities to be Issued upon Exercise of Outstanding Options,Warrants and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column A) | |||||||
Equity Compensation Plans Approved by Shareholders(a) | 1,833 | (c)(e) | $ | 110.66 | (f) | 2,333 | (c) | |||
Equity
Compensation Plans Not Requiring Shareholder Approval(b) | 72 | (c)(d) | — | 152 | (c) | |||||
TOTAL | 1,905 | $ | 110.66 | 2,485 |
(a) | The
Company’s (1) Stock Option Plan for Key Employees and (2) 2005 Incentive Award Plan as amended and restated. |
(b) | The Company’s Deferred Compensation Plan for Directors as amended and restated. |
(c) | Hubbell Common Stock. |
(d) | Represents
amount of shares currently deferred under this plan. These shares are not included in the total weighted average exercise price included in column B. |
(e) | Includes 210,000 performance share awards assuming a maximum payout target. The Company does not anticipate that the maximum payout target will be achieved for all of these awards. |
(f) | Weighted average exercise price excludes performance share awards included in column A. |
(1) | Certain
of the information required by this item regarding executive officers is included under the subheading “Executive Officers of the Registrant” at the end of Part I of this Form 10-K and the remaining required information is incorporated by reference from our definitive proxy statement to be filed in connection with the Company’s annual meeting of shareholders scheduled to be held on May 5, 2020. |
(2) | The information required by this
item is incorporated by reference from our definitive proxy statement to be filed in connection with the Company’s annual meeting of shareholders scheduled to be held on May 5, 2020. |
88 | HUBBELL INCORPORATED - Form 10-K |
(3) | The information required by this item is incorporated by reference from our definitive proxy statement to be filed in connection with the
Company’s annual meeting of shareholders scheduled to be held on May 5, 2020. |
(4) | The information required by this item is incorporated by reference from our definitive proxy statement to be filed in connection with the Company’s annual meeting of shareholders scheduled to be held on May 5, 2020. |
HUBBELL
INCORPORATED - Form 10-K | 89 |
PART IV |
Number | Description | Form | File No. | Exhibit | Filing Date | Filed/ Furnished Herewith |
2.1†† | 8-K | 2.1 | 12/26/2017 | |||
3.1 | 8-A12B | 3.1 | 12/23/2015 | |||
3.2 | 8-K | 3.1 | 5/10/2013 | |||
4.1 | S-4 | 4a | 6/18/2002 | |||
4.2 | 8-K | 4.2 | 6/2/2008 | |||
4.3 | 8-K | 4.2 | 11/17/2010 | |||
4.4 | 8-K | 4.2 | 3/1/2016 | |||
4.5 | 8-K | 4.3 | 3/1/2016 |
90 | HUBBELL INCORPORATED - Form 10-K |
Number | Description | Form | File No. | Exhibit | Filing Date | Filed/ Furnished Herewith |
4.6 | 8-K | 4.2 | 8/3/2017 | |||
4.7 | 8-K | 4.3 | 8/3/2017 | |||
4.8 | 8-K | 4.2 | 2/2/2018 | |||
4.9 | 8-K | 4.3 | 2/2/2018 | |||
4.10 | * | |||||
10.1† | 10-Q | 10a | 10/26/2007 | |||
10.1(a)† | 10-K | 10.nn | 2/25/2008 | |||
10.1(b)† | 10-K | 10a(1) | 2/16/2011 | |||
10.1(c)† | 10-K | 10.1(c) | 2/16/2017 | |||
10.2† | 10-Q | 10i | 10/26/2007 | |||
10.3† | S-8POS | 4.4 | 12/24/2015 | |||
10.4† | 10-K | 10.5 | 2/18/2016 | |||
10.4(a)† | * | |||||
10.5† | 10-Q | 10w | 10/26/2007 | |||
10.5(a)† | 10-K | 10w(1) | 2/16/2011 | |||
10.5(b)† | 10-K | 10.5(b) | 2/16/2017 | |||
10.5(c)† | * | |||||
10.6† | 10-K | 10z | 3/20/2002 | |||
10.6(a)† | * | |||||
10.7† | * | |||||
10.8† | 10-Q | 10.8 | 7/19/2013 | |||
10.9† | 10-K | 10.10 | 2/16/2017 | |||
10.10† | 10-K | 10.11 | 2/16/2017 |
HUBBELL INCORPORATED - Form 10-K | 91 |
Number | Description | Form | File No. | Exhibit | Filing Date | Filed/ Furnished Herewith |
10.11† | 10-K | 10.12 | 2/16/2017 | |||
10.12† | 10-K | 10.13 | 2/16/2017 | |||
10.12(b)† | * | |||||
10.13† | 10-K | 10.16 | 2/18/2016 | |||
10.13(a)† | 10-K | 10.14(a) | 2/16/2017 | |||
10.14† | * | |||||
10.15† | 10-K | 10.18 | 2/18/2016 | |||
10.16† | 10-K | 10.19 | 2/18/2016 | |||
10.17† | 10-K | 10.20 | 2/18/2016 | |||
10.18† | 8-K | 10.2 | 1/5/2011 | |||
10.18(a)† | 8-K | 10.1 | 12/6/2012 | |||
10.19† | 8-K | 99.1 | 9/6/2005 | |||
10.20† | 8-K | 10.1 | 9/17/2012 | |||
10.20(a)† | 8-K | 10.2 | 9/17/2012 | |||
10.21† | 10-K | 10.36 | 2/18/2014 | |||
10.22† | * | |||||
10.22(a)† | * | |||||
10.23† | * | |||||
10.24 | 8-K | 99.1 | 1/31/2018 | |||
10.25 | 8-K | 99.2 | 1/31/2018 | |||
10.26 | 8-K | 10.1 | 1/11/2018 | |||
21.1 | * | |||||
23.1 | * | |||||
31.1 | * |
92 | HUBBELL
INCORPORATED - Form 10-K |
Number | Description | Form | File
No. | Exhibit | Filing Date | Filed/ Furnished Herewith |
31.2 | * | |||||
32.1 | ** | |||||
32.2 | ** | |||||
101.INS | Inline
XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document | |||||
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 Annual Report on Form 10-K for the year end Dcember 31, 2019, formatted in Inline XBRL (included within the Exhibit 101 attachments) | * |
† | A management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant
to Item 15(a)(3) of Form 10-K. |
†† | Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplemental copies of such omitted schedules and exhibits to the Securities and Exchange Commission upon request. |
* | |
** | Furnished herewith. |
HUBBELL
INCORPORATED - Form 10-K | 93 |
HUBBELL
INCORPORATED | ||||
By | By | |||
Vice President, Controller | Executive Vice President, Chief Financial | |||
Officer
and Treasurer | ||||
Date: |
Title | Date | ||
By | /s/
D. G. NORD | Chairman of the Board and Chief Executive Officer | 2/14/2020 |
By | /s/ W. R. SPERRY | Executive Vice President, Chief Financial Officer and Treasurer | 2/14/2020 |
By | /s/
J. A. CAPOZZOLI | Vice President, Controller (Principal Accounting Officer) | 2/14/2020 |
By | /s/ C. M. CARDOSO | Director | 2/14/2020 |
By | /s/
A. J. GUZZI | Director | 2/14/2020 |
By | /s/ N. J. KEATING | Director | 2/14/2020 |
By | /s/
B. C. LIND | Director | 2/14/2020 |
By | /s/ J. F. MALLOY | Director | 2/14/2020 |
By | /s/
J. F. MARKS | Director | 2/14/2020 |
By | /s/ J. G. RUSSELL | Director | 2/14/2020 |
By | /s/
S. R. SHAWLEY | Director | 2/14/2020 |
(1) |
94 | HUBBELL
INCORPORATED - Form 10-K |
Balance at Beginning of Year | Additions
/ (Reversals) Charged to Costs and Expenses | Deductions | Acquisitions | Balance at End of Year | ||||||||||||||||
Allowances for doubtful accounts receivable: | ||||||||||||||||||||
Year
2017 | $ | i 4.7 | $ | i 1.5 | $ | ( i 3.5 | ) | $ | i 1.9 | $ | i 4.6 | |||||||||
Year
2018 | $ | i 4.6 | $ | i — | $ | ( i 1.4 | ) | $ | i 1.6 | $ | i 4.8 | |||||||||
Year
2019 | $ | i 4.8 | $ | i 3.4 | $ | ( i 0.5 | ) | $ | i — | $ | i 7.7 | |||||||||
Allowance
for credit memos, returns and cash discounts: | ||||||||||||||||||||
Year 2017 | $ | i 45.9 | $ | i 260.8 | $ | ( i 256.3 | ) | $ | i 0.1 | $ | i 50.5 | |||||||||
Year
2018 | $ | i 50.5 | $ | i 278.0 | $ | ( i 293.5 | ) | $ | i 0.1 | $ | i 35.1 | |||||||||
Year
2019 | $ | i 35.1 | $ | i 299.1 | $ | ( i 298.2 | ) | $ | i — | $ | i 36.0 | |||||||||
Valuation
allowance on deferred tax assets: | ||||||||||||||||||||
Year 2017 | $ | i 22.6 | $ | ( i 3.2 | ) | $ | i — | $ | i — | $ | i 19.4 | |||||||||
Year
2018 | $ | i 19.4 | $ | i 0.7 | $ | i — | $ | i 1.7 | $ | i 21.8 | ||||||||||
Year
2019 | $ | i 21.8 | $ | i 7.2 | $ | i — | $ | i — | $ | i 29.0 |
HUBBELL
INCORPORATED - Form 10-K | 95 |
This ‘10-K’ Filing | Date | Other Filings | ||
---|---|---|---|---|
12/15/20 | ||||
10/20/20 | ||||
5/5/20 | 4, 8-K | |||
Filed on: | 2/14/20 | 4, SC 13G/A | ||
2/12/20 | 4, SC 13G/A | |||
1/31/20 | ||||
1/1/20 | ||||
For Period end: | 12/31/19 | SD | ||
12/16/19 | 4 | |||
12/15/19 | ||||
11/29/19 | ||||
7/1/19 | 3, 4 | |||
6/30/19 | 10-Q | |||
6/28/19 | ||||
6/6/19 | ||||
4/1/19 | ||||
1/1/19 | 3 | |||
12/31/18 | 10-K, SD | |||
12/15/18 | ||||
8/31/18 | ||||
2/2/18 | 8-K, 8-K/A | |||
1/31/18 | 424B2, 8-K, FWP | |||
1/1/18 | ||||
12/31/17 | 10-K, SD | |||
12/22/17 | 8-K | |||
10/20/17 | 8-K | |||
1/1/17 | ||||
12/31/16 | 10-K, SD | |||
5/3/16 | 4, 8-K | |||
1/1/16 | ||||
6/1/15 | SD | |||
12/31/14 | 10-K, SD | |||
2/1/14 | 4 | |||
4/22/13 | ||||
6/6/12 | 3, 4, 8-K | |||
8/15/08 | 4 | |||
1/1/99 | ||||
List all Filings |
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 2/08/24 Hubbell Inc. 10-K 12/31/23 150:17M Workiva Inc Wde… FA01/FA 2/09/23 Hubbell Inc. 10-K 12/31/22 145:18M Workiva Inc Wde… FA01/FA 2/11/22 Hubbell Inc. 10-K 12/31/21 147:19M Workiva Inc Wde… FA01/FA 3/05/21 Hubbell Inc. 424B2 1:602K Donnelley … Solutions/FA 3/03/21 Hubbell Inc. 424B2 1:594K Donnelley … Solutions/FA 2/11/21 Hubbell Inc. 10-K 12/31/20 143:18M Workiva Inc Wde… FA01/FA 8/27/20 SEC UPLOAD¶ 9/25/20 2:39K Hubbell Inc. 7/16/20 SEC UPLOAD¶ 9/25/20 2:44K Hubbell Inc. |