UL Solutions Inc. Reports Strong Second Quarter 2024 Results
Second Quarter 2024 (Comparisons to Second Quarter 2023 unless otherwise noted)1
-
Strong revenue growth of 6.0% to
$730 million , including 8.4% organic growth -
Net income of
$106 million or,$0.50 per diluted share -
Adjusted Net Income of
$94 million increased 5.6% -
Adjusted EBITDA of
$173 million increased 11.6%, Adjusted EBITDA margin of 23.7% expanded 120 basis points -
Net cash provided by operating activities of
$244 million and Free Cash Flow of$131 million for the first six months of 2024 -
Completed upsized initial public offering at the higher end of the price range and listed on
April 12th, 2024
“This is our second quarterly earnings report as a public company and I’m pleased to once again report strong results as all of our segments, regions and service lines performed well,” said President and CEO
Scanlon continued, “We are a global leader in the Testing, Inspection and Certification business, tracing our origins back 130 years around the advent of electricity. Today we operate in over 35 industries, we continue to expand our industry-leading capabilities both organically, thanks to outstanding execution from our dedicated safety science professionals, and through targeted acquisitions.”
Chief Financial Officer
1This press release includes references to non-GAAP financial measures. Please refer to “Non-GAAP Financial Measures” later in this release for the definitions of each non- GAAP financial measures presented, as well as reconciliations of these measures to their most directly comparable GAAP measures.
Second Quarter 2024 Financial Results
Revenue of
Net income of
Adjusted Net Income of
Adjusted EBITDA of
Second Quarter 2024 Segment Performance
Industrial Segment Results
Industrial revenue of
Consumer Segment Results
Consumer revenue of
Software and Advisory Segment Results
Software and Advisory revenue of
Liquidity and Capital Resources
For the first six months of 2024, the Company generated
The Company continues to make strategic capital investments in energy transition opportunities to meet increased demand, and capital expenditures were
The Company paid its first dividend as a public company of
As of
The Company ended the quarter with cash and cash-equivalents of
In
Full-Year 2024 Outlook
Our key points on 2024 outlook include:
- Reiterating mid-single digit constant currency, organic revenue growth
- Second half constant currency, organic revenue growth also expected to be in the mid-single digit range
- Reiterating Adjusted EBITDA margin improvement
- Capital expenditures expected to be 7.5 to 8.5% of revenue
- Continuing to pursue acquisitions and portfolio refinements
The Company’s 2024 outlook is based on a number of assumptions that are subject to change and many of which are outside the control of the Company. If actual results vary from these assumptions, the Company’s expectations may change. There can be no assurance that the Company will achieve the results expressed by this outlook.
Conference Call and Webcast
UL Solutions will host a conference call today at
About UL Solutions
A global leader in applied safety science,
Investors and others should note that UL Solutions intends to routinely announce material information to investors and the marketplace using
Forward-Looking Statements
Certain statements in this press release, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements regarding management’s objectives and the Company’s plans, strategy, outlook and future financial performance. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “seek,” “guidance,” “predict,” “potential,” “likely,” “believe,” “will,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “forecast,” “aim,” “objectives,” “target,” “outlook,” “guidance” and variations, or the negative, of these terms and similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while management considers reasonable, are inherently uncertain.
There are many risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements made in this press release, including, but not limited to, the following: falsification of or tampering with our reports or certificates; increases in self-certification of products in industries in which we provide services or corresponding decreases in third-party certifications; any conflict of interest or perceived conflict of interest between our testing, inspection and certification services and our enterprise and advisory services; increased competition in industries in which we participate; ineffectiveness of our portfolio management techniques and strategies; adverse market conditions or adverse changes in the political, social or legal condition in the markets in which we operate; failure to effectively implement our growth strategies and initiatives; increased government regulation of industries in which we operate; adverse government actions in respect of our operations, including enforcement actions related to environmental, health and safety matters; failure to retain and increase capacity at our existing facilities or build new facilities in a timely and cost-effective manner; failure to comply with applicable laws and regulations in each jurisdiction in which we operate, including environmental laws and regulations; fluctuations in foreign currency exchange rates; imposition of or increases in customs duties and other tariffs; deterioration of relations between
All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. We caution you not to place undue reliance on any forward-looking statements, which are made only as of the date of this press release. We do not undertake or assume any obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting such forward-looking statements, except to the extent required by law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
Non-GAAP Measures
In addition to financial measures based on accounting principles generally accepted in
|
||||||||||||
Three Months Ended
|
Six Months Ended
|
|||||||||||
(in millions, except per share data) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Revenue |
$ |
730 |
|
$ |
689 |
|
$ |
1,400 |
|
$ |
1,318 |
|
Cost of revenue |
|
364 |
|
|
352 |
|
|
715 |
|
|
687 |
|
Selling, general and administrative expenses |
|
240 |
|
|
220 |
|
|
468 |
|
|
439 |
|
Operating income |
|
126 |
|
|
117 |
|
|
217 |
|
|
192 |
|
Interest expense |
|
(13 |
) |
|
(8 |
) |
|
(28 |
) |
|
(16 |
) |
Other income, net |
|
21 |
|
|
11 |
|
|
18 |
|
|
16 |
|
Income before income taxes |
|
134 |
|
|
120 |
|
|
207 |
|
|
192 |
|
Income tax expense |
|
28 |
|
|
21 |
|
|
41 |
|
|
35 |
|
Net income |
|
106 |
|
|
99 |
|
|
166 |
|
|
157 |
|
Less: net income attributable to non-controlling interests |
|
5 |
|
|
5 |
|
|
9 |
|
|
8 |
|
Net income attributable to stockholders of UL Solutions |
$ |
101 |
|
$ |
94 |
|
$ |
157 |
|
$ |
149 |
|
|
|
|
|
|
||||||||
Earnings per common share: |
|
|
|
|
||||||||
Basic |
$ |
0.51 |
|
$ |
0.47 |
|
$ |
0.79 |
|
$ |
0.75 |
|
Diluted |
$ |
0.50 |
|
$ |
0.47 |
|
$ |
0.78 |
|
$ |
0.75 |
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding: |
|
|
|
|
||||||||
Basic |
|
200 |
|
|
200 |
|
|
200 |
|
|
200 |
|
Diluted |
|
201 |
|
|
200 |
|
|
201 |
|
200 |
||
|
||||
(in millions, except per share data) |
|
|
||
Assets |
|
|
||
Current assets: |
|
|
||
Cash and cash equivalents |
$ |
295 |
$ |
315 |
Accounts receivable, net |
|
381 |
|
362 |
Contract assets, net |
|
206 |
|
179 |
Other current assets |
|
75 |
|
97 |
Total current assets |
|
957 |
|
953 |
Property, plant and equipment, net |
|
554 |
|
555 |
|
|
628 |
|
623 |
Intangible assets, net |
|
63 |
|
72 |
Operating lease right-of-use assets |
|
145 |
|
151 |
Deferred income taxes |
|
118 |
|
110 |
Capitalized software, net |
|
135 |
|
139 |
Other assets |
|
142 |
|
133 |
Total Assets |
$ |
2,742 |
$ |
2,736 |
Liabilities and Stockholders’ Equity |
|
|
||
Current liabilities: |
||||
Accounts payable |
$ |
134 |
$ |
169 |
Accrued compensation and benefits |
|
171 |
|
281 |
Operating lease liabilities - current |
|
36 |
|
39 |
Contract liabilities |
|
317 |
|
162 |
Other current liabilities |
|
82 |
|
58 |
Total current liabilities |
|
740 |
|
709 |
Long-term debt |
|
785 |
|
904 |
Pension and postretirement benefit plans |
|
223 |
|
232 |
Operating lease liabilities |
|
117 |
|
120 |
Other liabilities |
|
91 |
|
93 |
Total Liabilities |
|
1,956 |
|
2,058 |
Total Stockholders’ Equity |
|
786 |
|
678 |
Total Liabilities and Stockholders’ Equity |
$ |
2,742 |
$ |
2,736 |
|
||||||
Six Months Ended |
||||||
(in millions) |
|
2024 |
|
|
2023 |
|
Operating activities |
||||||
Net cash flows provided by operating activities |
$ |
244 |
|
$ |
220 |
|
|
|
|
||||
Investing activities |
|
|
||||
Capital expenditures |
|
(113 |
) |
|
(113 |
) |
Acquisitions, net of cash acquired |
|
(10 |
) |
|
(1 |
) |
Proceeds from divestitures |
|
30 |
|
|
4 |
|
Other investing activities, net |
|
— |
|
|
25 |
|
Net cash flows used in investing activities |
|
(93 |
) |
|
(85 |
) |
Financing activities |
|
|||||
Repayments of long-term debt, net |
|
(95 |
) |
|
— |
|
Dividends to stockholders of UL Solutions |
|
(50 |
) |
|
(40 |
) |
Dividend to non-controlling interest |
|
(15 |
) |
|
— |
|
Other financing activities, net |
|
1 |
|
|
1 |
|
Net cash flows used in financing activities |
|
(159 |
) |
|
(39 |
) |
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents |
|
(12 |
) |
|
(5 |
) |
Net (decrease) increase in cash and cash equivalents |
|
(20 |
) |
|
91 |
|
Cash and cash equivalents |
||||||
Beginning of period |
|
315 |
|
|
322 |
|
End of period |
$ |
295 |
|
$ |
413 |
|
|
||||||||
Revenue by Major Service Category |
Three Months
|
Six Months Ended
|
||||||
(in millions) |
2024 |
2023 |
2024 |
2023 |
||||
Certification Testing |
$ |
203 |
$ |
188 |
$ |
379 |
$ |
349 |
Ongoing Certification Services |
|
234 |
|
217 |
|
467 |
|
436 |
Non-certification Testing and Other Services |
|
225 |
|
216 |
|
419 |
|
398 |
Software |
|
68 |
|
68 |
|
135 |
|
135 |
Total |
$ |
730 |
$ |
689 |
$ |
1,400 |
$ |
1,318 |
Revenue Change Components |
Three Months Ended |
|
|
|||||||||||
(in millions) |
Organic1 |
Acquisition2 |
FX3 |
Total |
Organic %
|
Total %
|
||||||||
Revenue change |
|
|
|
|
|
|||||||||
Industrial |
$ |
34 |
$ |
(7 |
) |
$ |
(5 |
) |
$ |
22 |
11.6 |
% |
7.5 |
% |
Consumer |
|
19 |
|
— |
|
|
(6 |
) |
|
13 |
6.1 |
% |
4.2 |
% |
Software and Advisory |
|
5 |
|
1 |
|
|
— |
|
|
6 |
5.7 |
% |
6.8 |
% |
Total |
$ |
58 |
$ |
(6 |
) |
$ |
(11 |
) |
$ |
41 |
8.4 |
% |
6.0 |
% |
Revenue Change Components |
Six Months Ended |
|||||||||||||
(in millions) |
Organic1 |
Acquisition2 |
FX3 |
Total |
Organic %
|
Total %
|
||||||||
Revenue change |
|
|
|
|
|
|
||||||||
Industrial |
$ |
61 |
$ |
(6 |
) |
$ |
(8 |
) |
$ |
47 |
10.9 |
% |
8.4 |
% |
Consumer |
|
35 |
|
(1 |
) |
|
(10 |
) |
|
24 |
6.0 |
% |
4.1 |
% |
Software and Advisory |
|
9 |
|
2 |
|
|
— |
|
|
11 |
5.2 |
% |
6.4 |
% |
Total |
$ |
105 |
$ |
(5 |
) |
$ |
(18 |
) |
$ |
82 |
8.0 |
% |
6.2 |
% |
__________ | ||
1. |
Organic reflects revenue change in a given period excluding Acquisition and FX in that same period, expressed in dollars or as a percentage of revenue in the prior period. |
|
2. |
Acquisition is calculated as revenue change in a given period related to acquisitions or disposals of businesses using prior period exchange rates, expressed in dollars or as a percentage of revenue in the prior period. Revenues from an acquisition or disposal are measured as Acquisition for the initial twelve month period following the acquisition or disposal date. Subsequently, the revenue impact from the acquired or disposed business is measured as Organic. |
|
3. |
FX reflects the impact that foreign currency exchange rates have on revenue in a given period, expressed in dollars or as a percentage of revenue in the prior period. The Company uses constant currency to calculate the FX impact on revenue in a given period by translating current period revenues at prior period exchange rates, expressed as a percentage of revenue in the prior period. |
|
|
Supplemental Financial Information |
Non-GAAP Measures |
(Unaudited) |
Non-GAAP Financial Measures
In addition to financial measures determined in accordance with GAAP, the Company considers a variety of financial and operating measures in assessing the performance of its business. The key non-GAAP measures the Company uses are Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Net Income margin, Adjusted Diluted Earnings Per Share and Free Cash Flow, which management believes provide useful information to investors. These measures are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for net income, operating income, diluted earnings per share, net cash provided by operating activities or any other measure calculated in accordance with GAAP, and may not be comparable to similarly titled measures reported by other companies.
The Company uses Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Net Income margin and Adjusted Diluted Earnings Per Share to measure the operational strength and performance of its business and believes these measures provide additional information to investors about certain non-cash items and unusual items that the Company does not expect to continue at the same level in the future. Further, management believes these non-GAAP financial measures provide a meaningful measure of business performance and provide a basis for comparing the Company’s performance to that of other peer companies using similar measures. The Company uses Free Cash Flow as an additional liquidity measure and believes it provides useful information to investors about the cash generated from the Company’s core operations that may be available to repay debt, make other investments and return cash to stockholders.
There are material limitations to using these non-GAAP financial measures. Adjusted EBITDA does not take into account certain significant items, including depreciation and amortization, interest expense, other expense (income), income tax expense, stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses which directly affect the Company’s net income, as applicable. Adjusted Net Income and Adjusted Diluted Earnings Per Share do not take into account certain significant items, including other expense (income), stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses which directly affect the Company’s net income and diluted earnings per share, as applicable. Free Cash Flow adjusts for cash items that are ultimately within management’s discretion to direct and therefore may imply that there is less or more cash that is available than the most comparable GAAP measure. Free Cash Flow is not intended to represent residual cash flow for discretionary expenditures since debt repayment requirements and other non-discretionary expenditures are not deducted. These limitations are best addressed by considering the economic effects of the excluded items independently, and by considering these non- GAAP financial measures in conjunction with net income, operating income, diluted earnings per share and net cash provided by operating activities as calculated in accordance with GAAP.
See additional information below regarding the definitions of these non-GAAP financial measures and reconciliations of each non-GAAP financial measure to its most directly comparable GAAP measure.
The table below reconciles net income to Adjusted EBITDA for the periods presented.
Three Months Ended
|
Six Months Ended
|
|||||||||||
(in millions, unless otherwise stated) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Net income |
$ |
106 |
|
$ |
99 |
|
$ |
166 |
|
$ |
157 |
|
Depreciation and amortization expense |
|
41 |
|
|
38 |
|
|
82 |
|
|
74 |
|
Interest expense |
|
13 |
|
|
8 |
|
|
28 |
|
|
16 |
|
Other income, net |
|
(21 |
) |
|
(11 |
) |
|
(18 |
) |
|
(16 |
) |
Income tax expense |
|
28 |
|
|
21 |
|
|
41 |
|
|
35 |
|
Stock-based compensation |
|
6 |
|
|
— |
|
|
6 |
|
|
— |
|
Restructuring |
|
— |
|
|
— |
|
|
(1 |
) |
|
— |
|
Adjusted EBITDA1 |
$ |
173 |
|
$ |
155 |
|
$ |
304 |
|
$ |
266 |
|
Revenue |
$ |
730 |
|
$ |
689 |
|
$ |
1,400 |
|
$ |
1,318 |
|
Net income margin |
|
14.5 |
% |
|
14.4 |
% |
|
11.9 |
% |
|
11.9 |
% |
Adjusted EBITDA margin2 |
|
23.7 |
% |
|
22.5 |
% |
|
21.7 |
% |
|
20.2 |
% |
___________ | ||
1. |
The Company defines Adjusted EBITDA as net income adjusted for depreciation and amortization expense, interest expense, other income, income tax expense, as well as stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses, as applicable. The Company believes that the presentation of Adjusted EBITDA provides additional information to investors about certain non-cash items and unusual items that are not expected to continue at the same level in the future. Further, the Company believes Adjusted EBITDA provides a meaningful measure of business performance and provides a basis for comparing its performance to that of other peer companies using similar measures. There are material limitations to using Adjusted EBITDA. Adjusted EBITDA does not take into account certain significant items, including depreciation and amortization, interest expense, income tax expense, stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses which directly affects the Company's net income, as applicable. These limitations are best addressed by considering the economic effects of the excluded items independently, and by considering Adjusted EBITDA in conjunction with net income as calculated in accordance with GAAP. |
|
2. |
Adjusted EBITDA margin is calculated as Adjusted EBITDA as a percentage of revenue. |
|
The table below reconciles segment operating income to segment Adjusted EBITDA for the periods presented.
Three Months Ended
|
Six Months Ended
|
|||||||||||
(in millions, unless otherwise stated) |
2024 |
2023 |
2024 |
2023 |
||||||||
Industrial | ||||||||||||
Segment operating income |
$ |
85 |
|
$ |
82 |
|
$ |
160 |
|
$ |
154 |
|
Depreciation and amortization expense |
|
10 |
|
|
9 |
|
|
21 |
|
|
17 |
|
Stock-based compensation |
|
2 |
|
|
- |
|
|
2 |
|
|
- |
|
Adjusted EBITDA1 |
$ |
97 |
|
$ |
91 |
|
$ |
183 |
|
$ |
171 |
|
Revenue |
$ |
314 |
|
$ |
292 |
|
$ |
609 |
|
$ |
562 |
|
Operating income margin |
|
27.1 |
% |
|
28.1 |
% |
|
26.3 |
% |
|
27.4 |
% |
Adjusted EBITDA margin2 |
|
30.9 |
% |
|
31.2 |
% |
|
30.0 |
% |
|
30.4 |
% |
Consumer | ||||||||||||
Segment operating income |
$ |
38 |
|
$ |
33 |
|
$ |
55 |
|
$ |
36 |
|
Depreciation and amortization expense |
|
20 |
|
|
19 |
|
|
39 |
|
|
37 |
|
Stock-based compensation |
|
3 |
|
|
- |
|
|
3 |
|
|
- |
|
Restructuring |
|
- |
|
|
- |
|
|
(1 |
) |
|
- |
|
Adjusted EBITDA1 |
$ |
61 |
|
$ |
52 |
|
$ |
96 |
|
$ |
73 |
|
Revenue |
$ |
322 |
|
$ |
309 |
|
$ |
608 |
|
$ |
584 |
|
Operating income margin |
|
11.8 |
% |
|
10.7 |
% |
|
9.0 |
% |
|
6.2 |
% |
Adjusted EBITDA margin2 |
|
18.9 |
% |
|
16.8 |
% |
|
15.8 |
% |
|
12.5 |
% |
Software and Advisory | ||||||||||||
Segment operating income |
$ |
3 |
|
$ |
2 |
|
$ |
2 |
|
$ |
2 |
|
Depreciation and amortization expense |
|
11 |
|
|
10 |
|
|
22 |
|
|
20 |
|
Stock-based compensation |
|
1 |
|
|
- |
|
|
1 |
|
|
- |
|
Adjusted EBITDA1 |
$ |
15 |
|
$ |
12 |
|
$ |
25 |
|
$ |
22 |
|
Revenue |
$ |
94 |
|
$ |
88 |
|
$ |
183 |
|
$ |
172 |
|
Operating income margin |
|
3.2 |
% |
|
2.3 |
% |
|
1.1 |
% |
|
1.2 |
% |
Adjusted EBITDA margin2 |
|
16.0 |
% |
|
13.6 |
% |
|
13.7 |
% |
|
12.8 |
% |
Adjusted EBITDA1 |
$ |
173 |
|
$ |
155 |
|
$ |
304 |
|
$ |
266 |
|
__________ | ||
1. |
See definition on previous page. |
|
2. |
See definition on previous page. |
|
The table below reconciles net income to Adjusted Net Income.
Three Months Ended
|
Six Months Ended
|
|||||||||||
(in millions, unless otherwise stated) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Net income |
$ |
106 |
|
$ |
99 |
|
$ |
166 |
|
$ |
157 |
|
Other income, net |
|
(21 |
) |
|
(11 |
) |
|
(18 |
) |
|
(16 |
) |
Stock-based compensation |
|
6 |
|
|
— |
|
|
6 |
|
|
— |
|
Restructuring |
|
— |
|
|
— |
|
|
(1 |
) |
|
— |
|
Tax effect of adjustments2 |
|
3 |
|
|
1 |
|
|
2 |
|
|
2 |
|
Adjusted Net Income1 |
$ |
94 |
|
$ |
89 |
|
$ |
155 |
|
$ |
143 |
|
Revenue |
$ |
730 |
|
$ |
689 |
|
$ |
1,400 |
|
$ |
1,318 |
|
Net income margin |
|
14.5 |
% |
|
14.4 |
% |
|
11.9 |
% |
|
11.9 |
% |
Adjusted Net Income margin3 |
|
12.9 |
% |
|
12.9 |
% |
|
11.1 |
% |
|
10.8 |
% |
__________ | ||
1. |
The Company defines Adjusted Net Income as net income adjusted for other income, stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses, as applicable, each net of tax. The Company believes that the presentation of Adjusted Net Income provides additional information to investors about certain non-cash items and unusual items that are expected to continue at the same level in the future. Further, the Company believes Adjusted Net Income provides a meaningful measure of business performance and provides a basis for comparing its performance to that of other peer companies using similar measures. There are material limitations to using Adjusted Net Income. Adjusted Net Income does not take into account certain significant items, including other expense (income), stock- based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses which directly affect the Company's net income, as applicable. These limitations are best addressed by considering the economic effects of the excluded items independently, and by considering Adjusted Net Income in conjunction with net income as calculated in accordance with GAAP. |
|
2. |
The Company computed the tax effect of adjustments to net earnings by applying the statutory tax rate in the relevant jurisdictions to the income or expense items that are adjusted in the period presented. If a valuation allowance exists, the rate applied is zero. |
|
3. |
Adjusted Net Income margin is calculated as Adjusted Net Income as a percentage of revenue. |
|
The table below reconciles diluted earnings per share to Adjusted Diluted Earnings Per Share.
Three Months Ended
|
Six Months Ended
|
|||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Diluted earnings per share2 |
$ |
0.50 |
|
$ |
0.47 |
|
$ |
0.78 |
|
$ |
0.75 |
|
Other income, net |
|
(0.11 |
) |
|
(0.06 |
) |
|
(0.09 |
) |
|
(0.08 |
) |
Stock-based compensation |
|
0.03 |
|
|
— |
|
|
0.03 |
|
|
— |
|
Tax effect of adjustments3 |
|
0.02 |
|
|
0.01 |
|
|
0.01 |
|
|
0.01 |
|
Adjusted Diluted Earnings Per Share12 |
$ |
0.44 |
|
$ |
0.42 |
|
$ |
0.73 |
|
$ |
0.68 |
|
____________ | ||
1. |
The Company defines Adjusted Diluted Earnings Per Share as diluted earnings per share attributable to stockholder of UL Solutions adjusted for other income, stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses, as applicable. The Company believes that the presentation of Adjusted Diluted Earnings Per Share provides additional information to investors about certain non-cash items and unusual items that are expected to continue at the same level in the future. Further, the Company believes Adjusted Diluted Earnings Per Share provides a meaningful measure of business performance and provides a basis for comparing its performance to that of other peer companies using similar measures. There are material limitations to using Adjusted Diluted Earnings Per Share. Adjusted Diluted Earnings Per Share does not take into account certain significant items, including other expense (income), stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses which directly affect the Company's diluted earnings per share, as applicable. These limitations are best addressed by considering the economic effects of the excluded items independently, and by considering Adjusted Diluted Earnings Per Share in conjunction with diluted earnings per share as calculated in accordance with GAAP. |
|
2. |
Diluted earnings per share and Adjusted Diluted Earnings Per Share have been adjusted for the period ended |
|
3. |
See definition on previous page. |
|
The table below reconciles net cash provided by operating activities to Free Cash Flow for the periods presented.
Six Months Ended
|
||||||
(in millions) |
|
2024 |
|
|
2023 |
|
Net cash provided by operating activities |
$ |
244 |
|
$ |
220 |
|
Capital expenditures |
|
(113 |
) |
|
(113 |
) |
Free Cash Flow1 |
$ |
131 |
|
$ |
107 |
|
___________ | ||
1. |
The Company defines Free Cash Flow as cash from operating activities less cash outlays related to capital expenditures. The Company defines capital expenditures to include purchases of property, plant and equipment and capitalized software. These items are subtracted from cash from operating activities because they represent long-term investments that are required for normal business activities. The Company uses Free Cash Flow as an additional liquidity measure and believes it provides useful information to investors about the cash generated from its core operations that may be available to repay debt, make other investments and return cash to stockholders. There are material limitations to using Free Cash Flow. Free Cash Flow adjusts for cash items that are ultimately within management’s discretion to direct, and therefore, may imply that there is less or more cash that is available than the most comparable GAAP measure. Free Cash Flow is not intended to represent residual cash flow for discretionary expenditures since debt repayment requirements and other non-discretionary expenditures are not deducted. These limitations are best addressed by considering the economic effects of the excluded items independently, and by considering Free Cash Flow in conjunction with net cash provided by operating activities as calculated in accordance with GAAP. |
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Media:
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Kathy.Fieweger@ul.com
+1 312-852-5156
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