What changed in this filing

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Item 1. Financial Statements

2024-07-24 compared with 2024-04-26 · 155 added, 61 removed, 434 unchanged (33% of the section changed)

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Net sales $ 1,024.3 $ 960.8 $ 2,003.1 $ 1,927.2

9 unchanged sentences

Basic Net Earnings Per Share of Common Stock (1)

$ 1.07 $ 1.04 $ 2.07 $ 1.88

Diluted Net Earnings Per Share of Common Stock (1)

$ 1.06 $ 1.04 $ 2.05 $ 1.87

Dividends Per Share of Common Stock $ 0.32 $ 0.30 $ 0.64 $ 0.60

(1) Earnings per share amounts are calculated discretely and, therefore, may not add up to the total due to rounding.

SMITH CORPORATION

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Net earnings $ 156.2 $ 157.0 $ 303.8 $ 283.9

1 unchanged sentence

Foreign currency translation adjustments ( 2.4 ) ( 1.0 ) ( 7.2 ) 1.5

Unrealized gains (losses) on cash flow derivative instruments, less related income tax (provision) benefit of $( 0.3 ) in 2024, and $ 0.0 in 2023

Adjustment to pension liability, less related income tax provision of $ 0.0 in 2024, and $ 0.0 in 2023

Unrealized losses on cash flow derivative instruments, less related income tax benefit of $ 0.5 and $ 0.2 in 2024, $ 0.5 and $ 0.5 in 2023

( 1.7 ) ( 1.5 ) ( 0.7 ) ( 1.6 )

Adjustment to pension liability, less related income tax provision of $ 0.0 and $ 0.1 in 2024, $ 0.1 and $ 0.1 in 2023

— 0.1 0.1 0.1

Comprehensive Earnings $ 152.1 $ 154.6 $ 296.0 $ 283.9

31 unchanged sentences

Stockholders’ Equity

Class A Common Stock (shares issued, 26,017,732 and 26,023,132 as of March 31, 2024 and December 31, 2023, respectively)

Common Stock (shares issued 164,689,862 and 164,684,460 as of March 31, 2024 and December 31, 2023, respectively)

Class A Common Stock (shares issued, 26,016,744 and 26,023,132 as of June 30, 2024 and December 31, 2023, respectively)

Common Stock (shares issued 164,690,848 and 164,684,460 as of June 30, 2024 and December 31, 2023, respectively)

Capital in excess of par value 593.1 578.2

8 unchanged sentences

(dollars in millions)

Three Months Ended

Six Months Ended

Operating Activities

5 unchanged sentences

Non-cash impairment — 15.6

Pension settlement income — ( 6.0 )

Pension settlement income non-cash taxes — 1.5

Net changes in operating assets and liabilities:

7 unchanged sentences

Net proceeds from sale of marketable securities 57.0 72.7

Cash Used in Investing Activities ( 71.2 ) ( 9.8 )

Cash (Used in) Provided by Investing Activities ( 60.1 ) 33.8

Financing Activities

Long-term debt repaid ( 6.8 ) ( 3.7 )

Long-term debt incurred (repaid) 14.3 ( 139.3 )

Common stock repurchases ( 153.2 ) ( 69.6 )

3 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents ( 4.0 ) ( 15.1 )

Net (decrease) increase in cash and cash equivalents ( 88.3 ) 15.0

Net decrease in cash and cash equivalents ( 123.8 ) ( 12.3 )

Cash and cash equivalents - beginning of period 339.9 391.2

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Class A Common Stock

22 unchanged sentences

Exercise of stock options 0.5 1.6 3.2 1.8

Stock incentives and directors’ compensation 0.2 0.3 0.2 0.3

Shares repurchased ( 78.7 ) ( 17.1 ) ( 153.2 ) ( 69.6 )

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

June 30, 2024

Basis of Presentation

2 unchanged sentences

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results expected for the full year.

Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results expected for the full year.

It is suggested the accompanying condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 13, 2024.

20 unchanged sentences

The Company’s payment terms for the majority of its customers are 30 to 90 days from shipment.

Additionally, certain customers in China pay the Company prior to the shipment of products resulting in a customer deposits liability of $ 62.9 million and $ 59.7 million at March 31, 2024 and December 31, 2023, respectively.

Additionally, certain customers in China pay the Company prior to the shipment of products resulting in a customer deposits liability of $ 47.6 million and $ 59.7 million at June 30, 2024 and December 31, 2023, respectively.

Customer deposit liabilities are short term in nature, recognized into revenue within one year of receipt.

2 unchanged sentences

In addition, the Company monitors other risk factors including forward-looking information when establishing adequate allowances for credit losses, which reflects the current estimate of credit losses expected to be incurred over the life of the receivables.

The Company’s allowance for credit losses was $ 11.4 million and $ 10.1 million at March 31, 2024 and December 31, 2023, respectively.

The Company’s allowance for credit losses was $ 12.9 million and $ 10.1 million at June 30, 2024 and December 31, 2023, respectively.

Revenue Recognition (continued)

34 unchanged sentences

(dollars in millions) Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

North America

16 unchanged sentences

As required under ASC 805 Business Combinations, results of operations have been included in the Company’s consolidated financial statements from the date of acquisition.

During the second quarter of 2024, the Company exited its operations in Vietnam.

During the second quarter of 2024, the Company continued the process of exiting its operations in Vietnam.

The restructuring expense associated with the exit was recorded in the fourth quarter of 2023 and did not have a material impact on the Company's consolidated financial statements.

During the second quarter of 2023, the Company sold its business in Turkey (disposal group), which was included in the Company's Rest of World segment, for an amount that approximated the carrying value of the net assets.

During the first quarter of 2023, the Company determined that the disposal group met the criteria to be classified as held for sale and that the fair value of the disposal group, less cost to sell, was lower than its carrying amount.

In the first quarter of 2023, the Company determined that the disposal group met the criteria to be classified as held for sale and that the fair value of the disposal group, less cost to sell, was lower than its carrying amount.

As a result, in the first quarter of 2023, the Company recorded an impairment expense of $ 15.6 million, of which $ 12.5 million was recorded in the Rest of World segment, and $ 3.1 million was recorded in Corporate Expense.

The impairment was recorded as a net reduction of $ 4.5 million to the assets and liabilities and $ 11.1 million for the anticipated liquidation of the cumulative foreign currency translation adjustment associated with the disposal group.

The remaining carrying value of the disposal group as of March 31, 2023, was $ 0.6 million and classified as held for sale.

The following table presents the components of the Company’s inventory balances:

(dollars in millions) March 31,

(dollars in millions) June 30,

2024 December 31, 2023

9 unchanged sentences

(dollars in millions) Three Months Ended

Balance at April 1, $ 185.0 $ 181.2

Expense 22.8 18.3

Claims settled ( 20.2 ) ( 18.8 )

Balance at June 30, $ 187.6 $ 180.7

(dollars in millions) Six Months Ended

Balance at January 1, $ 188.1 $ 182.5

1 unchanged sentence

Claims settled ( 43.0 ) ( 38.5 )

Balance at March 31, $ 185.0 $ 181.2

Balance at June 30, $ 187.6 $ 180.7

In 2021, the Company renewed and amended its $ 500 million multi-year multi-currency revolving credit agreement with a new expiration date of April 1, 2026.

1 unchanged sentence

Borrowings under the Company's bank credit lines and commercial paper borrowings are supported by a $ 500 million revolving credit agreement.

As a result of the long-term nature of this facility, the Company’s commercial paper and credit line borrowings are classified as long-term debt at March 31, 2024.

As a result of the long-term nature of this facility, the Company’s commercial paper and credit line borrowings are classified as long-term debt at June 30, 2024.

At its option, the Company either maintains cash balances or pays fees for bank credit and services.

The facility requires the Company to maintain two financial covenants, a leverage ratio test and an interest coverage test.

The Company was in compliance with the covenants as of March 31, 2024.

The Company was in compliance with the covenants as of June 30, 2024.

Earnings per Share of Common Stock

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Denominator for basic earnings per share - weighted average shares 146,465,276 150,475,003 146,822,116 150,684,986

6 unchanged sentences

Smith Combined Executive Incentive Compensation Plan which was originally approved by stockholders in 2002.

The number of shares available for granting of share units at March 31, 2024 was 2,293,586 .

Upon stock option exercise or share unit

Stock Based Compensation (continued)

vesting, shares are issued from treasury stock.

Total stock based compensation expense recognized in the three months ended March 31, 2024 and 2023 was $ 8.3 million and $ 7.0 million, respectively.

The number of shares available for granting of share units at June 30, 2024 was 2,288,859 .

Upon stock option exercise or share unit vesting, shares are issued from treasury stock.

Total stock based compensation expense recognized in the three months ended June 30, 2024 and 2023 was $ 2.1 million and $ 1.6 million, respectively.

Total stock based compensation expense recognized in the six months ended June 30, 2024 and 2023 was $ 10.4 million and $ 8.6 million, respectively.

Stock Options

4 unchanged sentences

The Company’s stock options are expensed ratably over the three year vesting period.

Stock based compensation expense attributable to stock options in the three months ended March 31, 2024 and 2023 was $ 0.2 million and $ 0.3 million, respectively.

Changes in options, all of which relate to the Company’s Common Stock, were as follows for the three months ended March 31, 2024:

Stock based compensation expense attributable to stock options in the three months ended June 30, 2024 and 2023 was $ 0.1 million and $ 0.3 million, respectively.

Stock based compensation expense attributable to stock options in the six months ended June 30, 2024 and 2023 was $ 0.3 million and $ 0.6 million, respectively.

Changes in options, all of which relate to the Company’s Common Stock, were as follows for the six months ended June 30, 2024:

Price Number of

4 unchanged sentences

Forfeited 74.27 ( 3,875 )

Outstanding at March 31, 2024 54.14 1,628,699 6 years $ 57.5

Exercisable at March 31, 2024 52.77 1,523,932 6 years $ 55.9

Outstanding at June 30, 2024 54.10 1,601,237 6 years $ 44.3

Exercisable at June 30, 2024 52.76 1,501,072 6 years $ 43.6

Stock Based Compensation (continued)

Participants in the Incentive Plan may be awarded share units.

Share units vest three years after the date of grant.

The Company granted 189,792 and 165,686 share units under the Incentive Plan in the three months ended March 31, 2024 and 2023, respectively.

The Company granted 194,668 and 168,044 share units under the Incentive Plan in the six months ended June 30, 2024 and 2023, respectively.

The share units were valued at $ 16.0 million and $ 11.3 million at the date of issuance in 2024 and 2023, respectively, based on the price of the Company’s Common Stock at the date of grant.

The share units are recognized as compensation expense ratably over the three-year vesting period;

however, included in share unit expense in the three months ended March 31, 2024 and 2023 was expense associated with accelerated vesting of share unit awards for certain employees who are retirement eligible or will become retirement eligible during the vesting period.

Stock based compensation expense attributable to share units of $ 7.8 million and $ 6.6 million was recognized in the three months ended March 31, 2024 and 2023, respectively.

however, included in share unit expense in the three and six months ended June 30, 2024 and 2023 was expense associated with accelerated vesting of share unit awards for certain employees who are retirement eligible or will become retirement eligible during the vesting period.

Stock based compensation expense attributable to share units of $ 1.4 million and $ 1.0 million was recognized in the three months ended June 30, 2024 and 2023, respectively.

Stock based compensation expense attributable to share units of $ 9.2 million and $ 7.6 million was recognized in the six months ended June 30, 2024 and 2023, respectively.

Certain non-U.S.-based employees receive the cash value of the share price at the vesting date in lieu of shares.

Unvested cash-settled awards are remeasured at each reporting period.

A summary of share unit activity under the Incentive Plan is as follows for the three months ended March 31, 2024:

A summary of share unit activity under the Incentive Plan is as follows for the six months ended June 30, 2024:

Number of Units Weighted-Average

4 unchanged sentences

Forfeited ( 9,266 ) 72.17

Issued and unvested at March 31, 2024 477,623 71.16

Stock Based Compensation (continued)

Issued and unvested at June 30, 2024 473,709 71.30

Performance Stock Units

3 unchanged sentences

Potential payouts range from zero to 150 % of the target awards and changes from target amounts are reflected as performance adjustments.

The Company granted 28,390 and 24,580 performance stock units under the Incentive Plan in the three months ended March 31, 2024 and 2023, respectively.

The Company granted 29,475 and 24,580 performance stock units under the Incentive Plan in the six months ended June 30, 2024 and 2023, respectively.

The performance stock units were valued at $ 2.4 million and $ 1.7 million at the date of issuance in 2024 and 2023, respectively, based on the price of the Company’s Common Stock at the date of grant.

The performance stock units are recognized as compensation expense ratably over the three-year vesting period.

Stock based compensation expense attributable to performance stock units of $ 0.3 million and $ 0.1 million was recognized in the three months ended March 31, 2024 and 2023, respectively.

Stock based compensation expense attributable to performance stock units of $ 0.6 million and $ 0.2 million was recognized in the three months ended June 30, 2024 and 2023, respectively.

Stock based compensation expense attributable to performance stock units of $ 0.9 million and $ 0.3 million was recognized in the six months ended June 30, 2024 and 2023, respectively.

Certain non-U.S.-based executives receive the cash value of the share price at the vesting date in lieu of shares.

Unvested cash-settled awards are remeasured at each reporting period.

A summary of performance stock unit activity under the Incentive Plan is as follows for the three months ended March 31, 2024:

A summary of performance stock unit activity under the Incentive Plan is as follows for the six months ended June 30, 2024:

Number of Units Weighted-Average

2 unchanged sentences

Granted 29,475 82.19

Forfeited ( 3,426 ) 75.33

Performance adjustments 16,289 80.76

Issued and unvested at March 31, 2024 64,698 73.68

Issued and unvested at June 30, 2024 77,096 75.41

The following table presents the components of the Company’s net pension expense:

(dollars in millions) Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Service cost $ 0.2 $ 0.2 $ 0.5 $ 0.5

2 unchanged sentences

Amortization of unrecognized loss — 0.1 0.1 0.1

Total pension expense $ 0.4 $ 0.3

Amortization of prior service cost 0.1 0.1 0.1 0.1

Defined benefit plan expense before settlement income 0.4 0.4 0.8 0.7

Settlement income — ( 6.0 ) — ( 6.0 )

Total pension expense (income) $ 0.4 $ ( 5.6 ) $ 0.8 $ ( 5.3 )

The service cost component of net periodic benefit cost is presented within cost of products sold and selling, general and administrative expenses within the condensed consolidated statements of earnings while the other components of pension expense are reflected in other (income) expense, net.

10 unchanged sentences

(dollars in millions) Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

North America $ 790.7 $ 722.3 $ 1,557.0 $ 1,475.0

4 unchanged sentences

North America (1)

$ 198.4 $ 199.1 $ 397.1 $ 387.7

Rest of World (2)

25.9 28.3 43.1 33.6

Inter-segment earnings elimination ( 0.1 ) — ( 0.4 ) —

224.2 227.4 439.8 421.3

Corporate expense (3)

6 unchanged sentences

(1) Adjustments:

North America

includes pension settlement income of:

$ — $ ( 5.0 ) $ — $ ( 5.0 )

(2) Adjustments:

Rest of World

2 unchanged sentences

Corporate expense

includes pension settlement income of:

— ( 1.0 ) — ( 1.0 )

includes impairment expense of:

9 unchanged sentences

Assets (liabilities) measured at fair value on a recurring basis are as follows (dollars in millions):

Fair Value Measurement Using Balance Sheet Location March 31,

Fair Value Measurement Using Balance Sheet Location June 30,

2024 December 31, 2023

1 unchanged sentence

Significant other observable inputs (Level 2) Other current assets / (Accrued liabilities) 3.2 ( 4.1 )

Fair Value Measurements (continued)

Items measured at fair value were comprised of the Company’s marketable securities (Level 1) and derivative instruments (Level 2).

There were no changes in the Company's valuation techniques used to measure fair values on a recurring basis during the three months ended March 31, 2024.

There were no changes in the Company's valuation techniques used to measure fair values on a recurring basis during the six months ended June 30, 2024.

Derivative Instruments

16 unchanged sentences

The majority of the amounts in accumulated other comprehensive loss for cash flow hedges are expected to be reclassified into earnings within one year .

The combined fair value of the foreign currency forward contracts was an asset balance of $ 2.3 million as of March 31, 2024 which was recorded in Other current assets within the consolidated balance sheet.

The combined fair value of the foreign currency forward contracts was an asset balance of $ 0.1 million as of June 30, 2024 which was recorded in Other current assets within the consolidated balance sheet.

The combined fair value of the foreign currency forward contracts was an asset balance of $ 0.9 million as of December 31, 2023 which was recorded in Other current assets within the consolidated balance sheet.

Derivative Instruments (continued)

The following table summarizes, by currency, the contractual amounts of the Company’s foreign currency forward contracts as of the dates indicated that were designated as cash flow hedges:

(dollars in millions) March 31, 2024 December 31, 2023

(dollars in millions) June 30, 2024 December 31, 2023

Buy Sell Buy Sell

3 unchanged sentences

Total $ 52.7 $ 40.1 $ 38.3 $ 80.5

Derivative Instruments (continued)

Net Investment Hedges

5 unchanged sentences

The Company recognized $ 1.4 million and $ 0.8 million of after-tax gains associated with hedges of net investments in non-U.S.

subsidiaries in currency translation adjustment in other comprehensive loss in the three months ended March 31, 2024 and March 31, 2023, respectively.

The contractual amount of the Company's foreign currency forward contracts that are designated as net investment hedges was $ 204.0 million as of March 31, 2024.

The combined fair value of the net investment hedges was an asset balance of $ 1.1 million as of March 31, 2024 which was recorded in Other current assets within the consolidated balance sheet.

subsidiaries in currency translation adjustment in other comprehensive loss in the three months ended June 30, 2024 and June 30, 2023, respectively.

The Company recognized $ 5.4 million and $( 1.3 ) million of after-tax gains (losses) associated with hedges of net investments in non-U.S.

subsidiaries in currency translation adjustment in other comprehensive loss in the six months ended June 30, 2024 and June 30, 2023, respectively.

The contractual amount of the Company's foreign currency forward contracts that are designated as net investment hedges was $ 204.0 million as of June 30, 2024.

The combined fair value of the net investment hedges was an asset balance of $ 2.9 million as of June 30, 2024 which was recorded in Other current assets within the consolidated balance sheet.

The combined fair value of the net investment hedges was a liability balance of $( 4.2 ) million as of December 31, 2023 which was recorded in Accrued liabilities within the consolidated balance sheet.

The effect of cash flow hedges on the condensed consolidated statement of earnings:

Three Months Ended March 31 (dollars in millions):

Three Months Ended June 30 (dollars in millions):

Derivatives in ASC 815 cash flow hedging relationships Amount of (loss) gain recognized in other

comprehensive

loss on derivatives Location of (loss) gain

reclassified from

accumulated other

comprehensive loss

into earnings Amount of gain

reclassified from

accumulated other

comprehensive

loss into earnings

2024 2023 2024 2023

Foreign currency contracts $ ( 1.3 ) $ 0.4 Cost of products sold $ 0.8 $ 2.3

Six Months Ended June 30 (dollars in millions):

Derivatives in ASC 815 cash flow hedging relationships Amount of gain recognized in other

15 unchanged sentences

These foreign exchange contracts did not qualify for hedge accounting in accordance with ASC 815 and as such were marked to market through earnings.

The fair value of the foreign exchange contracts was a liability balance of $( 0.3 ) million as of March 31, 2024 which was recorded in Accrued liabilities within the consolidated balance sheet.

The fair value of the foreign exchange contracts was a liability balance of $( 0.8 ) million as of December 31, 2023 which was recorded in Accrued liabilities within the consolidated balance sheet.

The fair value of the foreign exchange contracts was an asset balance of $ 0.2 million as of June 30, 2024 which was recorded in Other current assets within the consolidated balance sheet.

The fair value of

Derivative Instruments (continued)

the foreign exchange contracts was a liability balance of $( 0.8 ) million as of December 31, 2023 which was recorded in Accrued liabilities within the consolidated balance sheet.

The following table summarizes the contractual amounts of the Company's foreign exchange contracts that are designated as balance sheet hedges:

(dollars in millions) March 31, 2024 December 31, 2023

(dollars in millions) June 30, 2024 December 31, 2023

Buy Sell Buy Sell

3 unchanged sentences

The amounts recognized within the consolidated statements of earnings related to the Company's foreign exchange contracts are set forth below.

Three Months Ended March 31 (dollars in millions):

Three Months Ended June 30 (dollars in millions):

Derivatives not designated as hedging instruments:

Location within the consolidated statements of earnings

Location of expense within the consolidated statements of earnings

Foreign exchange contracts Other income - net $ 1.7 $ 0.1

The Company’s effective income tax rate for the three months ended March 31, 2024 was 23.4 percent.

The Company estimates that its annual effective income tax rate for the full year 2024 will be approximately between 24 and 24.5 percent.

The effective income tax rate for the three months ended March 31, 2023 was 25.9 percent.

The change in the effective income tax rate for the three months ended March 31, 2024 compared to the effective income tax rate for the three months ended March 31, 2023 was primarily due to a $ 15.6 million impairment expense recorded in the prior year period with no associated tax benefit.

Six Months Ended June 30 (dollars in millions):

Derivatives not designated as hedging instruments:

Location of expense within the consolidated statements of earnings

Foreign exchange contracts Other income - net $ 5.7 $ —

The Company’s effective income tax rate for the three and six months ended June 30, 2024 was 24.4 percent and 23.9 percent, respectively.

The Company estimates that its annual effective income tax rate for the full year 2024 will be approximately 24 percent.

The effective income tax rate for the three and six months ended June 30, 2023 was 24.8 percent and 25.3 percent, respectively.

The change in the effective income tax rate for the three months ended June 30, 2024 compared to the effective income tax rate for the three months ended June 30, 2023 was primarily due to geographical earnings mix.

The change in the effective income tax rate for the six months ended June 30, 2024 compared to the effective income tax rate for the six months ended June 30, 2023 was primarily due to geographical earnings mix and a $ 15.6 million impairment expense recorded in the prior year period with no associated tax benefit.

Refer to Note 3 - Acquisition and Dispositions for additional information regarding the impairment expense.

As of March 31, 2024, the Company had $ 17.2 million of unrecognized tax benefits of which $ 3.5 million would affect its effective income tax rate if recognized.

As of June 30, 2024, the Company had $ 17.2 million of unrecognized tax benefits of which $ 3.5 million would affect its effective income tax rate if recognized.

The Company recognizes potential interest and penalties related to unrecognized tax benefits as a component of income tax expense.

9 unchanged sentences

The Provider is required to indemnify the Company for any losses the Company would incur in the event of an inventory repurchase under these arrangements.

Potential losses under the repurchase arrangements represent the difference between the repurchase price and net proceeds from the resale of the product plus costs incurred in the process, less related distributor rebates.

The Company’s reserves for estimated losses under these repurchase arrangements were immaterial as of March 31, 2024 and December 31, 2023.

Commitments and Contingencies (continued)

The Company’s reserves for estimated losses under these repurchase arrangements were immaterial as of June 30, 2024 and December 31, 2023.

Changes in Accumulated Other Comprehensive Loss by Component

7 unchanged sentences

Balance at beginning of period 1.7 4.8

Other comprehensive (loss) gain before reclassifications ( 1.0 ) 0.3

Realized gains on derivatives reclassified to cost of products sold (net of income tax provision of $ 0.2 and $ 0.5 in 2024 and 2023, respectively)

( 0.7 ) ( 1.8 )

Balance at end of period — 3.3

Pension liability

Balance at beginning of period ( 4.5 ) ( 3.2 )

Amounts reclassified from accumulated other comprehensive loss:

Balance at end of period ( 4.5 ) ( 3.1 )

Accumulated other comprehensive loss, end of period $ ( 92.0 ) $ ( 82.4 )

(1) Amortization of pension items:

Actuarial losses $ — $ 0.1 (2)

Prior year service cost 0.1 0.1 (2)

Income tax benefit ( 0.1 ) ( 0.1 )

Reclassification net of income tax benefit $ — $ 0.1

(2) These accumulated other comprehensive loss components are included in the computation of net periodic pension cost.

See Note 9 - Pensions for additional details.

Changes in Accumulated Other Comprehensive Loss by Component (continued)

Changes to accumulated other comprehensive loss by component are as follows:

(dollars in millions) Six Months Ended

Cumulative foreign currency translation

Balance at beginning of period $ ( 80.3 ) $ ( 84.1 )

Other comprehensive (loss) gain before reclassifications ( 7.2 ) 1.5

Balance at end of period ( 87.5 ) ( 82.6 )

Unrealized net gain on cash flow derivatives

Balance at beginning of period 0.7 4.9

Other comprehensive gain before reclassifications 0.4 1.6

9 unchanged sentences

Actuarial losses $ 0.1 $ 0.1 (2)

Prior year service cost 0.1 0.1 (2)

Income tax benefit ( 0.1 ) ( 0.1 )

Reclassification net of income tax benefit $ 0.1 $ 0.1

1 unchanged sentence

See Note 9 - Pensions for additional details.

Subsequent Event

On July 15, 2024, the Company signed an agreement to acquire Pureit, a residential water purification business in South Asia, from Unilever for approximately $ 120 million, subject to customary adjustments.

The Company expects to complete the acquisition of Pureit by the end of 2024 and does not expect the acquisition to have a material impact on earnings in the first year.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements