Company Quick10K Filing
HUBBELL INC
10-Q 2021-03-31 Filed 2021-04-28
10-Q 2020-09-30 Filed 2020-10-28
10-Q 2020-06-30 Filed 2020-07-31
10-Q 2020-03-31 Filed 2020-05-01
10-K 2019-12-31 Filed 2020-02-14
10-Q 2019-09-30 Filed 2019-10-30
10-Q 2019-06-30 Filed 2019-07-31
10-Q 2019-03-31 Filed 2019-05-01
10-K 2018-12-31 Filed 2019-02-15
10-Q 2018-09-30 Filed 2018-10-24
10-Q 2018-06-30 Filed 2018-07-25
10-Q 2018-03-31 Filed 2018-04-25
10-K 2017-12-31 Filed 2018-02-15
10-Q 2017-09-30 Filed 2017-10-25
10-Q 2017-06-30 Filed 2017-07-26
10-Q 2017-03-31 Filed 2017-04-26
10-K 2016-12-31 Filed 2017-02-16
10-Q 2016-09-30 Filed 2016-10-26
10-Q 2016-06-30 Filed 2016-07-27
10-Q 2016-03-31 Filed 2016-04-27
10-K 2015-12-31 Filed 2016-02-18
10-Q 2015-09-30 Filed 2015-10-23
10-Q 2015-06-30 Filed 2015-07-24
10-Q 2015-03-31 Filed 2015-04-24
10-K 2014-12-31 Filed 2015-02-19
10-Q 2014-09-30 Filed 2014-10-24
10-Q 2014-06-30 Filed 2014-07-22
10-Q 2014-03-31 Filed 2014-04-22
10-K 2013-12-31 Filed 2014-02-18
10-Q 2013-09-30 Filed 2013-10-18
10-Q 2013-06-30 Filed 2013-07-19
10-Q 2013-03-31 Filed 2013-04-19
10-K 2012-12-31 Filed 2013-02-13
10-Q 2012-09-30 Filed 2012-10-19
10-Q 2012-06-30 Filed 2012-07-20
10-Q 2012-03-31 Filed 2012-04-20
10-K 2011-12-31 Filed 2012-02-15
10-Q 2011-09-30 Filed 2011-10-21
10-Q 2011-06-30 Filed 2011-07-22
10-Q 2011-03-31 Filed 2011-04-22
10-K 2010-12-31 Filed 2011-02-16
10-Q 2010-09-30 Filed 2010-10-22
10-Q 2010-06-30 Filed 2010-07-23
10-Q 2010-03-31 Filed 2010-04-23
10-K 2009-12-31 Filed 2010-02-19
8-K 2020-10-27
8-K 2020-09-09
8-K 2020-08-21
8-K 2020-07-30
8-K 2020-05-05
8-K 2020-04-30
8-K 2020-04-15
8-K 2020-04-09
8-K 2020-03-12
8-K 2020-02-04
8-K 2019-10-29
8-K 2019-07-30
8-K 2019-06-05
8-K 2019-05-07
8-K 2019-04-30
8-K 2019-03-11
8-K 2019-02-05
8-K 2018-12-10
8-K 2018-10-23
8-K 2018-07-24
8-K 2018-05-01
8-K 2018-04-24
8-K 2018-04-12
8-K 2018-02-02
8-K 2018-01-31
8-K 2018-01-31
8-K 2018-01-31
8-K 2018-01-30
8-K 2018-01-10

HUBB 10Q Quarterly Report

Part I Financial Information
Item 1Financial Statements
Note 1 Basis of Presentation
Note 2 Revenue
Note 3 Segment Information
Note 4 Inventories, Net
Note 5 Goodwill and Other Intangible Assets, Net
Note 6 Other Accrued Liabilities
Note 7 Other Non - Current Liabilities
Note 8 Total Equity
Note 9 Accumulated Other Comprehensive Loss
Note 10 Earnings per Share
Note 11 Pension and Other Benefits
Note 12 Guarantees
Note 13 Fair Value Measurement
Note 14 Commitments and Contingencies
Note 15 Restructuring Costs and Other
Note 16 Debt and Financing Arrangements
Note 17 Stock - Based Compensation
Item 2Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3Quantitative and Qualitative Disclosures About Market Risk
Item 4Controls and Procedures
Part II Other Information
Item 1Arisk Factors
Item 2Unregistered Sales of Equity Securities and Use of Proceeds
Item 6Exhibits
EX-10.2 hubb20210331-ex102.htm
EX-31.1 hubb-20210331xex311.htm
EX-31.2 hubb-20210331xex312.htm
EX-32.1 hubb-20210331xex321.htm
EX-32.2 hubb-20210331xex322.htm

HUBBELL INC Earnings 2021-03-31

Balance SheetIncome StatementCash Flow

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission File Number 1-2958

hubb-20210331_g1.jpg  
HUBBELL INCORPORATED
(Exact name of registrant as specified in its charter)
 
Connecticut06-0397030
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
40 Waterview Drive
Shelton,CT06484
(Address of principal executive offices)(Zip Code)
(475) 882-4000
(Registrant’s telephone number, including area code)
 
N/A
(Former name, former address and former fiscal year, if changed since last report.)
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock - par value $0.01 per shareHUBBNew York Stock Exchange
Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
YesNo
whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
YesNo
whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
Accelerated filer 
Non-accelerated filer Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standard provided pursuant to Section 13(a) of the Exchange Act.
whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YesNo
 The number of shares outstanding of Hubbell common stock as of April 26, 2021 was 54,316,306.
HUBBELL INCORPORATED-Form 10-Q    1

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Index
Table of contents
 
 
 
 
 
 
   
 

HUBBELL INCORPORATED-Form 10-Q    2

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PART I
FINANCIAL INFORMATION

ITEM 1Financial Statements

Condensed Consolidated Statements of Income (unaudited)
 Three Months Ended March 31,
(in millions, except per share amounts)20212020
Net sales$1,078.4 $1,090.3 
Cost of goods sold788.6 776.8 
Gross profit289.8 313.5 
Selling & administrative expenses172.2 194.7 
Operating income117.6 118.8 
Interest expense, net(15.2)(15.1)
Other expense, net(0.9)(3.8)
Total other expense(16.1)(18.9)
Income before income taxes101.5 99.9 
Provision for income taxes22.4 24.2 
Net income79.1 75.7 
Less: Net income attributable to noncontrolling interest1.4 0.7 
Net income attributable to Hubbell Incorporated$77.7 $75.0 
Earnings per share  
Basic$1.43 $1.38 
Diluted$1.42 $1.37 
Cash dividends per common share$0.98 $0.91 
See notes to unaudited Condensed Consolidated Financial Statements.
HUBBELL INCORPORATED-Form 10-Q    3

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Condensed Consolidated Statements of Comprehensive Income (unaudited)
 
 Three Months Ended March 31,
(in millions)20212020
Net income$79.1 $75.7 
Other comprehensive (loss) income:  
Foreign currency translation adjustments(6.6)(25.6)
Defined benefit pension and post-retirement plans, net of taxes of $(0.7) and $(0.6)
2.0 1.7 
Available-for-sale investments, net of taxes of $0.0 and $0.0
(0.1)(0.1)
Unrealized gain (loss) on cash flow hedges, net of taxes of $0.0 and $(0.6)
0.1 1.6 
Other comprehensive (loss) income(4.6)(22.4)
Total comprehensive income74.5 53.3 
Less: Comprehensive income attributable to noncontrolling interest1.4 0.7 
Comprehensive income attributable to Hubbell Incorporated$73.1 $52.6 
See notes to unaudited Condensed Consolidated Financial Statements.




HUBBELL INCORPORATED-Form 10-Q    4

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Condensed Consolidated Balance Sheets (unaudited)
 
(in millions)
March 31, 2021December 31, 2020
ASSETS  
Current Assets  
Cash and cash equivalents
$433.8 $259.6 
Short-term investments
10.2 9.3 
Accounts receivable (net of allowances of $11.7 and $12.5)
703.1 634.7 
Inventories, net
616.4 607.3 
   Other current assets64.0 76.7 
Total Current Assets
1,827.5 1,587.6 
Property, Plant, and Equipment, net516.7 519.2 
Other Assets  
Investments
69.6 71.1 
Goodwill
1,924.4 1,923.3 
Other intangible assets, net
786.0 810.6 
Other long-term assets
168.7 173.3 
TOTAL ASSETS$5,292.9 $5,085.1 
LIABILITIES AND EQUITY  
Current Liabilities  
Short-term debt and current portion of long-term debt
$360.8 $153.1 
Accounts payable
421.3 378.0 
Accrued salaries, wages and employee benefits
63.9 91.5 
Accrued insurance
77.8 71.6 
Other accrued liabilities
224.9 254.0 
Total Current Liabilities
1,148.7 948.2 
Long-Term Debt1,433.7 1,436.9 
Other Non-Current Liabilities612.5 614.6 
TOTAL LIABILITIES3,194.9 2,999.7 
Hubbell Incorporated Shareholders’ Equity2,082.7 2,070.0 
Noncontrolling interest15.3 15.4 
Total Equity2,098.0 2,085.4 
TOTAL LIABILITIES AND EQUITY$5,292.9 $5,085.1 
See notes to unaudited Condensed Consolidated Financial Statements.
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Condensed Consolidated Statements of Cash Flows (unaudited)
 Three Months Ended March 31,
(in millions)20212020
Cash Flows from Operating Activities  
Net income$79.1 $75.7 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
42.6 38.9 
    Deferred income taxes1.7 1.6 
    Stock-based compensation9.5 11.6 
    Provision for bad debt expense(0.5)5.3 
Changes in assets and liabilities, excluding effects of acquisitions: 
    Decrease (increase) in accounts receivable, net(68.2)(36.8)
    Decrease (increase) in inventories, net(12.1)32.7 
    Increase in accounts payable45.2 15.2 
    Decrease in current liabilities(48.3)(48.8)
    Changes in other assets and liabilities, net13.8 7.5 
Contribution to qualified defined benefit pension plans(0.1)(0.1)
Other, net(3.8)5.6 
Net cash provided by operating activities58.9 108.4 
Cash Flows from Investing Activities  
Capital expenditures(19.6)(17.8)
Acquisition of businesses, net of cash acquired0.1 (2.1)
Purchases of available-for-sale investments(2.3)(4.7)
Proceeds from available-for-sale investments1.2 6.5 
Other, net5.3 2.5 
Net cash used in investing activities(15.3)(15.6)
Cash Flows from Financing Activities 
Long-term debt borrowings298.7 100.0 
Long-term debt repayments (6.3)
Short-term debt (repayments) borrowings, net(91.6)38.1 
Payment of dividends to shareholders(53.2)(49.5)
Payment of dividends to noncontrolling interest(1.4)(0.6)
Repurchase of common stock(10.0)(41.3)
Debt Issuance costs(3.2) 
Other, net(6.9)(4.7)
Net cash (used) provided by financing activities132.4 35.7 
Effect of exchange rate changes on cash and cash equivalents(1.8)(10.5)
Increase in cash and cash equivalents174.2 118.0 
Cash and cash equivalents
Beginning of period259.6 182.0 
End of period$433.8 $300.0 
See notes to unaudited Condensed Consolidated Financial Statements.

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Notes to Condensed Consolidated Financial Statements (unaudited)

NOTE 1 Basis of Presentation
 
The accompanying unaudited Condensed Consolidated Financial Statements of Hubbell Incorporated (“Hubbell”, the “Company”, “registrant”, “we”, “our” or “us”, which references include its divisions and subsidiaries) have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by United States of America (“U.S.”) GAAP for audited financial statements. In the opinion of management, all adjustments consisting only of normal recurring adjustments considered necessary for a fair statement of the results of the periods presented have been included. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2021.

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

Also effective January 1, 2021, the Company moved its Hubbell Gas Connectors and Accessories business from the Electrical Solutions segment to the Utility Solutions segment to create synergies with the existing gas products already offered within the Utility Solutions segment and to better serve its utility customers. The information provided in the Condensed Consolidated Financial Statements and the related notes reflects the impact of this change for all periods presented.
 
The balance sheet at December 31, 2020 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.

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

Impact of the COVID-19 Pandemic

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

Recently Adopted Accounting Pronouncements

No accounting standards were adopted in the first quarter of 2021 that had a material impact on the Company's consolidated financial position, results of operations, or cash flows.

Recently Issued Accounting Pronouncements

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

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NOTE 2 Revenue
 
The Company recognizes revenue when performance obligations identified under the terms of contracts with its customers are satisfied, which generally occurs, for products, upon the transfer of control in accordance with the contractual terms and conditions of the sale. The majority of the Company’s revenue associated with products is recognized at a point in time when the product is shipped to the customer, with a relatively small amount of transactions primarily in the Utility Solutions segment recognized upon delivery of the product at the destination. Revenue from service contracts and post-shipment performance obligations are approximately three percent of total annual consolidated net revenue and those service contracts and post-shipment obligations are primarily within the Utility Solutions segment. Revenue from service contracts and post-shipment performance obligations is recognized when or as those obligations are satisfied. The Company primarily offers assurance-type standard warranties that do not represent separate performance obligations and on occasion will separately offer and price extended warranties that are separate performance obligations for which the associated revenue is recognized over-time based on the extended warranty period. The Company records amounts billed to customers for reimbursement of shipping and handling costs within revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment costs and are included in cost of goods sold. Sales taxes and other usage-based taxes are excluded from revenue.

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

The following table presents disaggregated revenue by business group. Prior period amounts have been reclassified to conform to our organizational changes as described in Note 1 - Basis of Presentation:
Three Months Ended March 31,
in millions20212020
Net sales
   Commercial and Industrial$378.4 $381.0 
   Heavy Industrial76.3 86.3 
   Residential and Retail91.5 96.4 
Total Electrical Solutions$546.2 $563.7 
   Utility T&D Components374.9 354.9 
   Utility Communications and Controls157.3 171.7 
Total Utility Solutions$532.2 $526.6 
TOTAL$1,078.4 $1,090.3 

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The following table presents disaggregated revenue by geographic location (on a geographic basis, the Company defines "international" as operations based outside of the United States and its possessions):
Three Months Ended March 31,
in millions20212020
Net sales
   United States$488.0 $507.3 
   International58.2 56.4 
Total Electrical Solutions$546.2 $563.7 
   United States501.4 497.9 
   International30.8 28.7 
Total Utility Solutions$532.2 $526.6 
TOTAL$1,078.4 $1,090.3 

Contract Balances

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

Contract liabilities were $22.2 million as of March 31, 2021 compared to $30.9 million as of December 31, 2020. The $8.7 million decrease in our contract liabilities balance was primarily due to the recognition of $16.2 million in revenue related to amounts that were recorded in contract liabilities at January 1, 2021 partially offset by a $7.5 million net increase in current year deferrals primarily due to timing of advance payments on certain orders. The Company has an immaterial amount of contract assets relating to performance obligations satisfied prior to payment that is recorded in Other long-term assets in the Condensed Consolidated Balance Sheets. Impairment losses recognized on our receivables and contract assets were immaterial for the three months ended March 31, 2021.

Unsatisfied Performance Obligations

As of March 31, 2021, the Company had approximately $380 million of unsatisfied performance obligations for contracts with an original expected length of greater than one year, primarily relating to long-term contracts of the Utility Solutions segment to deliver and install meters, metering communications and grid monitoring sensor technology. The Company expects that a majority of the unsatisfied performance obligations will be completed and recognized over the next three years.


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NOTE 3 Segment Information

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

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

The Utility Solutions segment consists of businesses that design and manufacture various distribution, transmission, substation and telecommunications products primarily used by the electric, water, gas, and telecommunication utility industries. These offerings include advanced metering infrastructure, meter and edge devices, software and infrastructure services, which are primarily sold to the electric, water, and gas utility industries, as well as components and assemblies for the natural gas distribution market. In addition, certain of these products are used in the civil construction, water utility, and transportation industries. Products are sold to distributors and directly to users such as utilities, telecommunication companies, industrial firms, construction and engineering firms.

The following table sets forth financial information by business segment (in millions):
 Net SalesOperating IncomeOperating Income as a % of Net Sales
 202120202021202020212020
Three Months Ended March 31,      
Electrical Solutions$546.2 $563.7 $53.0 $52.5 9.7 %9.3 %
Utility Solutions532.2 526.6 64.6 66.3 12.1 %12.6 %
TOTAL$1,078.4 $1,090.3 $117.6 $118.8 10.9 %10.9 %
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NOTE 4 Inventories, net
 
Inventories, net consists of the following (in millions):
 March 31, 2021December 31, 2020
Raw material$222.4 $219.5 
Work-in-process114.3 108.3 
Finished goods367.1 366.8 
Subtotal703.8 694.6 
Excess of FIFO over LIFO cost basis(87.4)(87.3)
TOTAL$616.4 $607.3 
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NOTE 5 Goodwill and Other Intangible Assets, net

Changes in the carrying values of goodwill for the three months ended March 31, 2021, were as follows (in millions):
 Segment 
 Electrical SolutionsUtility SolutionsTotal
BALANCE DECEMBER 31, 2020$663.9 $1,259.4 $1,923.3 
Prior year acquisitions 4.1 4.1 
Foreign currency translation 0.2 (3.2)(3.0)
BALANCE MARCH 31, 2021$664.1 $1,260.3 $1,924.4 

The carrying value of other intangible assets included in Other intangible assets, net in the Condensed Consolidated Balance Sheets is as follows (in millions):
 March 31, 2021December 31, 2020
 Gross AmountAccumulated
Amortization
Gross AmountAccumulated
Amortization
Definite-lived:    
Patents, tradenames and trademarks$213.1 $(76.2)$213.4 $(73.8)
Customer relationships, developed technology and other953.1 (357.6)958.0 (340.6)
TOTAL DEFINITE-LIVED INTANGIBLES$1,166.2 $(433.8)$1,171.4 $(414.4)
Indefinite-lived:  
Tradenames and other53.6 — 53.6 — 
TOTAL OTHER INTANGIBLE ASSETS$1,219.8 $(433.8)$1,225.0 $(414.4)
 
Amortization expense associated with definite-lived intangible assets was $20.7 million and $19.1 million during the three months ended March 31, 2021 and 2020, respectively. Future amortization expense associated with these intangible assets is estimated to be $59.4 million for the remainder of 2021, $73.9 million in 2022, $69.1 million in 2023, $64.2 million in 2024, $59.6 million in 2025, and $49.2 million in 2026. The Company amortizes intangible assets with definite lives using either an accelerated method that reflects the pattern in which economic benefits of the intangible assets are consumed and results in higher amortization in the earlier years of the assets useful life, or using a straight line method. Approximately 77% of the gross value of definite-lived intangible assets follow an accelerated amortization method.

The organizational changes described in Note 1 - Basis of Presentation resulted in a change in the Company's reporting units effective January 1, 2021. As a result of the change in reporting units, the Company performed an interim goodwill impairment assessment as of January 1, 2021.

The Company applied the "Step-zero" test to one of its five reporting units, which allows the Company to first assess qualitative factors to determine whether it is more likely than not that a reporting unit's fair value is greater than its carrying amount. Based on the qualitative assessment, the Company concluded that it was more likely than not that the fair value of this reporting unit substantially exceeded its carrying value and, therefore, further quantitative analysis was not required. For the other four reporting units, the Company elected to utilize the quantitative goodwill impairment testing process, as permitted in the accounting guidance, by comparing the estimated fair value of the reporting units to their carrying values. If the estimated fair value of a reporting unit exceeds its carrying value, no impairment exists.

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

As of January 1, 2021, the impairment testing resulted in implied fair values for each reporting unit that significantly exceeded such reporting unit's carrying value, including goodwill. The Company did not have any reporting units at risk of failing the quantitative impairment test as the excess of the implied fair value significantly exceeded the carrying value of each of the reporting units. Additionally, the Company did not have any reporting units with zero or negative carrying amounts.
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NOTE 6 Other Accrued Liabilities

Other accrued liabilities consists of the following (in millions):
 March 31, 2021December 31, 2020
Customer program incentives$29.9 $40.7 
Accrued income taxes6.4 4.6 
Contract liabilities - deferred revenue22.2 30.9 
Customer refund liability 18.4 17.4 
Accrued warranties(1)
27.7 28.7 
Current operating lease liabilities31.4 32.1 
Other88.9 99.6 
TOTAL$224.9 $254.0 
(1) Refer to Note 21 - Guarantees, in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2020 for additional information regarding warranties.



NOTE 7 Other Non-Current Liabilities

Other non-current liabilities consists of the following (in millions):
 March 31, 2021December 31, 2020
Pensions$195.1 $199.0 
Other post-retirement benefits21.2 21.2 
Deferred tax liabilities137.3 135.3 
Accrued warranties long-term(1)
51.8 51.8 
Non-current operating lease liabilities71.6 74.9 
Other135.5 132.4 
TOTAL$612.5 $614.6 
(1) Refer to Note 21 - Guarantees, in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2020 for additional information regarding warranties.
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NOTE 8 Total Equity

A summary of changes in total equity for the three months ended March 31, 2021 and the three months ended March 31, 2020 is provided below (in millions, except per share amounts):
Common StockAdditional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total Hubbell
Shareholders'
Equity
Non-
controlling
interest
BALANCE AT DECEMBER 31, 2020$0.6 $4.9 $2,393.7 $(329.2)$2,070.0 $15.4 
Net income— — 77.7 — 77.7 1.4 
Other comprehensive (loss) income— — — (4.6)(4.6)— 
Stock-based compensation— 9.5 — — 9.5 — 
Acquisition/surrender of common shares(1)
— (14.0)(2.7)— (16.7)— 
Cash dividends declared ($0.98 per share)
— — (53.3)— (53.3)— 
Dividends to noncontrolling interest— — — — — (1.5)
Directors deferred compensation— 0.1 — — 0.1 — 
BALANCE AT MARCH 31, 2021$0.6 $0.5 $2,415.4 $(333.8)$2,082.7 $15.3 

Common StockAdditional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total Hubbell
Shareholders'
Equity
Non-
controlling
interest
BALANCE AT DECEMBER 31, 2019$0.6 $ $2,279.4 $(332.9)$1,947.1 $13.4 
Net income— — 75.0 — 75.0 0.7 
Other comprehensive (loss) income— — — (22.4)(22.4)— 
Stock-based compensation— 11.6 — — 11.6 — 
Acquisition/surrender of common shares(1)
— (10.4)(34.1)— (44.5)— 
Cash dividends declared ($0.91 per share)
— — (49.7)— (49.7)— 
Dividends to noncontrolling interest— — — — — (0.5)
Directors deferred compensation— (1.2)— — (1.2)— 
Cumulative effect from adoption of CECL accounting standard— — (1.0)— (1.0)— 
BALANCE AT MARCH 31, 2020$0.6 $ $2,269.6 $(355.3)$1,914.9 $13.6 
(1) For accounting purposes, the Company treats repurchased shares as constructively retired when acquired and accordingly charges the purchase price against common stock par value, Additional paid-in capital, to the extent available, and Retained earnings. The change in Retained earnings of $2.7 million and $34.1 million in the first three months of 2021 and 2020, respectively, reflects this accounting treatment.

The detailed components of total comprehensive income are presented in the Condensed Consolidated Statements of Comprehensive Income.
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NOTE 9 Accumulated Other Comprehensive Loss

A summary of the changes in Accumulated other comprehensive loss (net of tax) for the three months ended March 31, 2021 is provided below (in millions):
(debit) credit
Cash flow
hedge (loss)
gain
Unrealized
gain (loss) on
available-for-
sale securities
Pension
and post
retirement
benefit plan
adjustment
Cumulative
translation
adjustment
Total
BALANCE AT DECEMBER 31, 2020$(0.7)$1.0 $(212.0)$(117.5)$(329.2)
Other comprehensive income (loss) before reclassifications(0.2)(0.1) (6.6)(6.9)
Amounts reclassified from accumulated other comprehensive loss0.3  2.0  2.3 
Current period other comprehensive income (loss)0.1 (0.1)2.0 (6.6)(4.6)
BALANCE AT MARCH 31, 2021$(0.6)$0.9 $(210.0)$(124.1)$(333.8)

A summary of the gain (loss) reclassifications out of Accumulated other comprehensive loss for the three months ended March 31, 2021 and 2020 is provided below (in millions): 
Three Months Ended March 31,
Details about Accumulated Other
Comprehensive Loss Components
20212020Location of Gain (Loss) Reclassified into Income
Cash flow hedges gain (loss):   
Forward exchange contracts$(0.1)$0.1 Net sales
(0.3)0.2 Cost of goods sold
 (0.4)0.3 Total before tax
 0.1 (0.1)Tax benefit (expense)
 $(0.3)$0.2 Gain (loss) net of tax
Amortization of defined benefit pension and post retirement benefit items:   
Prior-service costs (a)$ $0.1  
Actuarial gains/(losses) (a)(2.7)(2.4) 
 (2.7)(2.3)Total before tax
 0.7 0.6 Tax benefit (expense)
 $(2.0)$(1.7)Gain (loss) net of tax
Gains (losses) reclassified into earnings$(2.3)$(1.5)

(a) These accumulated other comprehensive loss components are included in the computation of net periodic pension cost (see Note 11 - Pension and Other Benefits in the Notes to Condensed Consolidated Financial Statements for additional details).
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NOTE 10 Earnings Per Share

The Company computes earnings per share using the two-class method, which is an earnings allocation formula that determines earnings per share for common stock and participating securities. Service-based and performance-based restricted stock awards granted by the Company are considered participating securities as these awards contain a non-forfeitable right to dividends.
 
The following table sets forth the computation of earnings per share for the three months ended March 31, 2021 and 2020 (in millions, except per share amounts):
Three Months Ended March 31,
 20212020
Numerator:  
Net income attributable to Hubbell Incorporated$77.7 $75.0 
Less: Earnings allocated to participating securities(0.3)(0.3)
Net income available to common shareholders$77.4 $74.7 
Denominator:  
Average number of common shares outstanding54.2 54.3 
Potential dilutive common shares0.5 0.3 
Average number of diluted shares outstanding54.7 54.6 
Earnings per share:  
Basic$1.43 $1.38 
Diluted$1.42 $1.37 
 
The Company did not have any significant anti-dilutive securities outstanding during the three months ended March 31, 2021 and 2020.
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NOTE 11 Pension and Other Benefits
 
The following table sets forth the components of net pension and other benefit costs for the three months ended March 31, 2021 and 2020 (in millions):
 Pension BenefitsOther Benefits
 2021202020212020
Three Months Ended March 31,    
Service cost$0.2 $0.3 $ $ 
Interest cost6.0 7.2 0.1 0.2 
Expected return on plan assets(9.1)(8.5)  
Amortization of prior service cost   (0.1)
Amortization of actuarial losses2.7 2.4   
NET PERIODIC BENEFIT COST$(0.2)$1.4 $0.1 $0.1 

Employer Contributions
 
The Company has no material required contributions to it's foreign pension plans during 2021. As of March 31, 2021 the Company has contributed $0.1 million. Although not required by ERISA and the Internal Revenue Code, the Company may elect to make an additional voluntary contribution to its qualified domestic defined benefit pension plan in 2021. Additionally, we anticipate making cash payments of $5.0 million due in 2021, related to the previously disclosed settlement agreement with a multi-employer pension plan.
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NOTE 12 Guarantees

The Company records a liability equal to the fair value of guarantees in accordance with the accounting guidance for guarantees. When it is probable that a liability has been incurred and the amount can be reasonably estimated, the Company accrues for costs associated with guarantees. The most likely costs to be incurred are accrued based on an evaluation of currently available facts and, where no amount within a range of estimates is more likely, the minimum is accrued. As of March 31, 2021 and December 31, 2020, the fair value and maximum potential payment related to the Company’s guarantees were not material.
 
The Company offers product warranties that cover defects on most of its products. These warranties primarily apply to products that are properly installed, maintained and used for their intended purpose. The Company accrues estimated warranty costs at the time of sale. Estimated warranty expenses, recorded in cost of goods sold, are based upon historical information such as past experience, product failure rates, or the estimated number of units to be repaired or replaced. Adjustments are made to the product warranty accrual as claims are incurred, additional information becomes known, or as historical experience indicates.
 
Changes in the accrual for product warranties during the three months ended March 31, 2021 and 2020 are set forth below (in millions):
20212020
BALANCE AT JANUARY 1, (a)
$80.5 $82.1 
Provision2.2 4.6 
Expenditures/payments/other(3.2)(4.2)
BALANCE AT MARCH 31, (a)
$79.5 $82.5 
(a) Refer to Note 6 Other Accrued Liabilities and Note 7 Other Non-Current Liabilities for a breakout of short-term and long-term warranties.
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NOTE 13 Fair Value Measurement
 
Financial Instruments

Financial instruments which potentially subject the Company to significant concentrations of credit loss risk consist of trade receivables, cash equivalents and investments. The Company grants credit terms in the normal course of business to its customers. Due to the diversity of its product lines, the Company has an extensive customer base including electrical distributors and wholesalers, electric utilities, equipment manufacturers, electrical contractors, telecommunication companies and retail and hardware outlets. As part of its ongoing procedures, the Company monitors the credit worthiness of its customers. Bad debt write-offs have historically been minimal. The Company places its cash and cash equivalents with financial institutions and limits the amount of exposure in any one institution.
At March 31, 2021 our accounts receivable balance was $703.1 million, net of allowances of $11.7 million. During the three months ended March 31, 2021 our allowances decreased approximately $0.8 million. The decrease is primarily the result of the improvement in general economic conditions.
Investments
 
At March 31, 2021 and December 31, 2020, the Company had $56.5 million and $57.7 million, respectively, of available-for-sale municipal debt securities. These investments had an amortized cost of $55.5 million and $56.4 million, respectively. No allowance for credit losses related to our available-for-sale debt securities was recorded for the three months ended March 31, 2021. As of March 31, 2021 and December 31, 2020 the unrealized losses attributable to our available-for-sale debt securities was $0.1 million. The fair value of available-for-sale debt securities with unrealized losses was $8.8 million at March 31, 2021 and $6.1 million at December 31, 2020.

The Company also had trading securities of $23.3 million at March 31, 2021 and $22.7 million at December 31, 2020 that are carried on the balance sheet at fair value. Unrealized gains and losses associated with available-for-sale debt securities are reflected in Accumulated other comprehensive loss, net of tax, while unrealized gains and losses associated with trading securities are reflected in the results of operations.

Fair value measurements

Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The FASB fair value measurement guidance established a fair value hierarchy that prioritizes the inputs used to measure fair value. The three broad levels of the fair value hierarchy are as follows:
 
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.
 
Level 2 – Quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly.
 
Level 3 – Unobservable inputs for which little or no market data exists, therefore requiring a company to develop its own assumptions.

HUBBELL INCORPORATED-Form 10-Q    19

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The following table shows, by level within the fair value hierarchy, our financial assets and liabilities that are accounted for at fair value on a recurring basis at March 31, 2021 and December 31, 2020 (in millions):
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
March 31, 2021   
Money market funds(a)
$222.2 $ $ $222.2 
Available for sale investments 56.5  56.5 
Trading securities23.3   23.3 
Deferred compensation plan liabilities(23.3)  (23.3)
Derivatives:
Forward exchange contracts-(Liabilities)(b)
 (0.6) (0.6)
TOTAL$222.2 $55.9 $ $278.1 
Asset (Liability)Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Quoted Prices in
Active Markets for
Similar Assets
(Level 2)
Unobservable inputs
for which little or no
market data exists
(Level 3)
Total
December 31, 2020   
Money market funds(a)
$26.6 $ $ $26.6 
Available for sale investments 57.7  57.7 
Trading securities22.7   22.7 
Deferred compensation plan liabilities(22.7)  (22.7)
Derivatives:
Forward exchange contracts-(Liabilities)(b)
 (0.8) (0.8)
TOTAL$