HUBBELL INC - Annual Report: 2024 (Form 10-K)

) ) Equity Mutual Funds

Common Pooled Equity Funds (a)

Fixed Income Securities: U.S. Treasuries State and Local Municipal Bonds Sovereign Debt

Corporate Bonds (b)

Fixed Income Mutual Funds

Common Pooled Fixed Income Funds (c)

Alternative Investment Funds

Common Pooled Funds (d)

BALANCE AT DECEMBER 31, 2024$ $ $ $ $

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

Equity securities:

Equity Mutual Funds

Common Pooled Equity Funds (a)

Fixed Income Securities:

U.S. Treasuries

State and Local Municipal Bonds

Sovereign Debt

Corporate Bonds (b)

Fixed Income Mutual Funds

Common Pooled Fixed Income Funds (c)

Future grant of stock-based compensation

Shares reserved under other equity compensation plans

TOTAL


HUBBELL INCORPORATED - Form 10-K			83

NOTE 18

million shares of common stock to settle awards of restricted stock, performance shares, or SARs. The Company issues new shares to settle stock-based awards. In 2024, the Company’s grant of stock-based awards included restricted stock, SARs and performance shares.

Stock-based compensation expense recognized by the Company was $ million in 2024, $ million in 2023 and $ million in 2022. The total income tax benefit recognized was $ million in 2024, $ million in 2023, and $ million in 2022. The net tax windfall recorded as a result of exercise or vesting (depending on the type of award) was $ million, $ million, and $ million in 2024, 2023 and 2022, respectively. As of December 31, 2024, there was $ million, pretax, of total unrecognized compensation cost related to non-vested share-based compensation arrangements. This cost is expected to be primarily recognized through 2027.

Stock-based compensation expense is recorded in S&A expense as well as Cost of goods sold. Of the total 2024 expense, $ million was recorded to S&A expense and $ million was recorded to Cost of goods sold. In 2023 and 2022, $ million and $ million, respectively, was recorded to S&A expense and $ million and $ million, respectively, was recorded to Cost of goods sold. Stock-based compensation costs capitalized to inventory was $ million in 2024, $ million in 2023 and $ million in 2022.

Each of the compensation arrangements is discussed below.

Restricted Stock

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

Restricted Stock Awards Issued to Employees - Service Condition

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

Restricted Stock Awards Issued to Non-employee Directors

In 2024, 2023 and 2022, each non-employee director received a restricted stock award. These awards are made on the date of the annual meeting of shareholders and vest at the following year’s annual meeting of shareholders, or upon certain other events. The award is subject to forfeiture if the director’s service terminates prior to the date of the next regularly scheduled annual meeting of shareholders. During 2024, 2023 and 2022, the Company issued awards of shares, shares, and shares, respectively, to non-employee directors.


84			HUBBELL INCORPORATED - Form 10-K

$ Shares granted Shares vested() Shares forfeited() RESTRICTED STOCK AT DECEMBER 31, 2024 $

The weighted average fair value per share of restricted stock awards granted in 2024, 2023 and 2022 was $, $ and $, respectively. The total fair value of restricted stock awards vested in 2024, 2023 and 2022 was $ million, $ million and $ million, respectively.

Restricted Stock Units Issued to Employees - Service Condition

Restricted stock units that vest based upon a service condition are expensed on a straight-line basis over the requisite service period. These awards generally vest in three equal installments on each of the first three anniversaries of the grant date. The fair value of these awards is measured by the average of the high and low trading prices of the Company’s common stock on the measurement date reduced by the present value of dividends expected to be paid during the requisite service period.

In 2024, the Company granted restricted stock units with a weighted average fair value per share of $.

Stock Appreciation Rights

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

$ Granted Exercised() Forfeited() Canceled OUTSTANDING AT DECEMBER 31, 2024 $ years$ EXERCISABLE AT DECEMBER 31, 2024 $ years$

The aggregated intrinsic value of SARs exercised during 2024, 2023 and 2022 was $ million, $ million and $ million, respectively.

The fair value of each SAR award was measured using the Black-Scholes option pricing model.

%%% years$2023%%% years$2022%%% years$


HUBBELL INCORPORATED - Form 10-K			85

period. Partial vesting in these awards may occur after separation from the Company for retirement eligible employees. Shares are not vested until approved by the Company’s Compensation Committee.

Performance Shares - Market Condition

In February 2024, 2023, and 2022, the Company granted performance share awards with an aggregate target payout of , and shares, respectively, that will vest subject to a market condition and service condition through the performance period. The market condition associated with the awards is the Company’s total shareholder return (“TSR”) compared to the TSR generated by the companies that comprise the S&P Capital Goods 900 index over a performance period. Performance at target will result in vesting and issuance of the number of performance shares subject to the award, equal to % payout. Performance below or above target can result in issuance in the range of %-% of the number of shares subject to the award. Expense is recognized irrespective of the market condition being achieved.

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

%%% years$February 2023$%%% years$February 2022$%%% years$

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

Performance Shares - Performance Condition

In February 2024, 2023, and 2022, the Company granted performance share awards with a target payout of , and shares, respectively, that will vest subject to an internal Company-based performance condition and service requirement.

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

The fair value of the award is measured based upon the average of the high and low trading prices of the Company’s common stock on the measurement date reduced by the present value of dividends expected to be paid during the requisite service period. , $ and $ for the awards granted in 2024, 2023, and 2022, respectively.

Jan 2024 - Dec 2026

February 2023$Jan 2023 - Dec 2025

February 2022$Jan 2022 - Dec 2024


86			HUBBELL INCORPORATED - Form 10-K

NOTE 19

$ $ Less: Earnings allocated to participating securities()()()Net income from continuing operations available to common shareholders$ $ $ Net income from discontinued operations attributable to Hubbell Incorporated$ $ $ Less: Earnings allocated to participating securities ()Net income from discontinued operations available to common shareholders$ $ $ Net income attributable to Hubbell Incorporated$ $ $ Less: Earnings allocated to participating securities()()()Net income available to common shareholders$ $ $ Denominator:Average number of common shares outstanding Potential dilutive shares Average number of diluted shares outstanding Basic earnings per share:Basic earnings per share from continuing operations$ $ $ Basic earnings per share from discontinued operations Basic earnings per share$ $ $ Diluted earnings per share:Diluted earnings per share from continuing operations$ $ $ Diluted earnings per share from discontinued operations Diluted earnings per share$ $ $

The Company did not have any material anti-dilutive securities in 2024, 2023 or 2022.


HUBBELL INCORPORATED - Form 10-K			87

NOTE 20

$ $()$()$()Other comprehensive income (loss) before reclassifications ()()()()Amounts reclassified from accumulated other comprehensive loss() Current period other comprehensive income (loss) () ()()BALANCE AT DECEMBER 31, 2022$ $()$()$()$()Other comprehensive income (loss) before reclassifications() Amounts reclassified from accumulated other comprehensive loss() Current period other comprehensive income (loss)()


HUBBELL INCORPORATED - Form 10-K			103

HUBBELL INC - Annual Report: 2024 (Form 10-K)

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