What changed in this filing

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Item 1. Financial Statements

2024-05-02 compared with 2023-11-02 · 238 added, 443 removed, 659 unchanged (51% of the section changed)

3 unchanged sentences

(In millions, except share and per share data)

September 30,

2024 December 31,

1 unchanged sentence

Cash and cash equivalents $ 247 $ 479

Accounts receivable, net of allowances of $ 4 and $ 3 at September 30, 2023 and December 31, 2022, respectively

Accounts receivable, net of allowances of $ 5 and $ 5 at March 31, 2024 and December 31, 2023, respectively

Inventories 148 150

28 unchanged sentences

Commitments and contingencies (Note 14)

5.5 % Series B Redeemable Convertible Preferred Stock, $ 0.0001 par value, 800,000 authorized shares, 800,000 shares issued and outstanding at September 30, 2023 and December 31, 2022;

aggregate liquidation preference of $ 840

5.5 % Series B Redeemable Convertible Preferred Stock, $ 0.0001 par value, 800,000 authorized shares, 0 and 800,000 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

Shareholders’ equity:

1 unchanged sentence

7,000,000 authorized shares;

4,000,000 shares issued and outstanding at September 30, 2023 and December 31, 2022

4,000,000 shares issued and outstanding at March 31, 2024 and December 31, 2023

Common stock;

$ 0.0001 par value, 500,000,000 authorized shares, 235,146,035 shares and 233,403,912 shares issued at September 30, 2023 and December 31, 2022, respectively (excluding 413,135 and 584,584 shares declared for stock dividend at September 30, 2023 and December 31, 2022, respectively)

$ 0.0001 par value, 500,000,000 authorized shares, 261,636,951 shares and 235,575,316 shares issued at March 31, 2024 and December 31, 2023, respectively (excluding 8,281,148 shares declared for stock dividend at December 31, 2023)

Additional paid-in capital 2,814 2,572

Accumulated deficit ( 36 ) ( 164 )

Retained earnings (accumulated deficit) 10 ( 11 )

Accumulated other comprehensive loss ( 523 ) ( 490 )

5 unchanged sentences

(In millions, except per share amounts)

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Net revenues $ 1,601 $ 1,614

4 unchanged sentences

Interest expense, net 34 37

(Gain) loss on extinguishment of debt, net — ( 5 ) 3 ( 5 )

Non-service pension benefit ( 3 ) ( 10 ) ( 9 ) ( 32 )

Investment income and other, net ( 4 ) ( 3 ) ( 9 ) ( 5 )

Loss on extinguishment of debt, net — 3

Investment expense (income) and other, net 3 ( 5 )

Other expense, net 37 35

2 unchanged sentences

Net income $ 45 $ 26

Net income attributable to common shareholders:

Net (loss) income attributable to common shareholders:

Stock dividend on Series B Preferred Stock $ ( 7 ) $ ( 11 )

Net income attributable to common shareholders $ 43 $ 17 $ 95 $ 18

Net income per common share:

Conversion of Series B Preferred Stock ( 372 ) —

Net (loss) income attributable to common shareholders $ ( 334 ) $ 15

Net (loss) income per common share:

Basic $ ( 1.34 ) $ 0.05

5 unchanged sentences

APi Group Corporation

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(In millions)

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Net income $ 45 $ 26

Other comprehensive income (loss):

Fair value change - derivatives, net of tax benefit (expense) of $ — , $( 16 ), $( 2 ), and $( 27 ), respectively

Other comprehensive income:

Fair value change - derivatives, net of tax (expense) benefit of $( 5 ), and $ 3 , respectively

Foreign currency translation adjustment ( 42 ) 14

Comprehensive income (loss) $ ( 8 ) $ ( 7 ) $ 113 $ ( 178 )

Comprehensive income $ 16 $ 27

See notes to condensed consolidated financial statements.

6 unchanged sentences

Capital (Accumulated

Deficit Accumulated

Deficit) Retained Earnings Accumulated

Comprehensive

6 unchanged sentences

Gain on dedesignated derivatives amortized from AOCI into income — — — — — — ( 4 ) ( 4 )

Series A Preferred Stock dividend — — 7,944,104 — — — — —

Series B Preferred Stock dividend — — 620,240 — 7 ( 7 ) — —

Share repurchases — — ( 541,316 ) — ( 12 ) — — ( 12 )

Conversion of Series B Preferred Stock, net — — 16,260,163 — 214 ( 17 ) — 197

Profit sharing plan contributions — — 510,319 — 18 — — 18

1 unchanged sentence

Balance, March 31, 2024 4,000,000 $ — 261,636,951 $ — $ 2,814 $ 10 $ ( 523 ) $ 2,301

Net income — — — — — 48 — 48

Fair value change - derivatives — — — — — — 15 15

Foreign currency translation adjustment — — — — — — 27 27

Gain on dedesignated derivatives amortized from AOCI into income — — — — — — ( 4 ) ( 4 )

Series B Preferred Stock dividend — — 436,992 — — — — —

Share repurchases — — ( 428,688 ) — ( 11 ) — — ( 11 )

Share-based compensation and other, net — — 49,201 — 7 — — 7

Balance, June 30, 2023 4,000,000 $ — 235,270,405 $ — $ 2,565 $ ( 90 ) $ ( 228 ) $ 2,247

Net income — — — — — 54 — 54

Fair value change - derivatives — — — — — — 1 1

Foreign currency translation adjustment — — — — — — ( 63 ) ( 63 )

Gain on dedesignated derivatives amortized from AOCI into income — — — — — — ( 4 ) ( 4 )

Share repurchases — — ( 656,489 ) — ( 18 ) — — ( 18 )

Share-based compensation and other, net — — 532,119 — 15 — — 15

Balance, September 30, 2023 4,000,000 $ — 235,146,035 $ — $ 2,562 $ ( 36 ) $ ( 294 ) $ 2,232

Preferred Stock Issued

7 unchanged sentences

Balance, December 31, 2022 4,000,000 $ — 233,403,912 $ — $ 2,558 $ ( 164 ) $ ( 267 ) $ 2,127

Net loss — — — — — ( 7 ) — ( 7 )

Net income — — — — — 26 — 26

Fair value change - derivatives — — — — — — ( 13 ) ( 13 )

Foreign currency translation adjustment — — — — — — 14 14

Series A Preferred Stock dividend — — 7,539,697 — — — — —

Series B Preferred Stock dividend — — 1,082,877 — — — — —

3 unchanged sentences

Balance, March 31, 2023 4,000,000 $ — 235,212,900 $ — $ 2,569 $ ( 138 ) $ ( 266 ) $ 2,165

Net income — — — — — 30 — 30

Fair value change - derivatives — — — — — — 22 22

Foreign currency translation adjustment — — — — — — ( 166 ) ( 166 )

Series B Preferred Stock dividend — — 686,455 — — — — —

Share repurchases — — ( 681,329 ) — ( 11 ) — — ( 11 )

Share-based compensation and other, net — — 24,584 — 3 — — 3

Balance, June 30, 2022 4,000,000 — 233,218,322 — 2,564 ( 214 ) ( 194 ) 2,156

Net income — — — — — 28 — 28

Fair value change - derivatives — — — — — — 51 51

Foreign currency translation adjustment — — — — — — ( 86 ) ( 86 )

Series B Preferred Stock dividend — — 739,015 — — — — —

Share repurchases — — ( 738,572 ) — ( 11 ) — — ( 11 )

Share-based compensation and other, net — — 567,370 — 12 — — 12

Balance, September 30, 2022 4,000,000 $ — 233,786,135 $ — $ 2,565 $ ( 186 ) $ ( 229 ) $ 2,150

See notes to condensed consolidated financial statements.

2 unchanged sentences

(In millions)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

4 unchanged sentences

Restructuring charges, net of cash paid ( 8 ) —

Deferred taxes 5 ( 9 )

Share-based compensation expense 8 5

1 unchanged sentence

Non-cash lease expense 26 18

Net periodic pension benefit ( 9 ) ( 32 )

Loss (gain) on extinguishment of debt, net 3 ( 5 )

Net periodic pension cost (benefit) 4 ( 3 )

Loss on extinguishment of debt, net — 3

Other, net ( 13 ) ( 5 )

Pension contributions ( 3 ) ( 27 )

Changes in operating assets and liabilities, net of effects of acquisitions:

1 unchanged sentence

Contract assets ( 26 ) ( 30 )

Inventories 2 ( 25 )

Prepaid expenses and other current assets ( 7 ) ( 15 )

3 unchanged sentences

Other assets and liabilities ( 30 ) ( 21 )

Net cash provided by operating activities 217 82

Net cash provided by (used in) operating activities 7 ( 1 )

Cash flows from investing activities:

4 unchanged sentences

Cash flows from financing activities:

Net short-term debt 100 —

Proceeds from long-term borrowings 300 —

Payments on long-term borrowings ( 2 ) ( 202 )

Repurchases of long-term borrowings — ( 30 )

Payments of debt issuance costs — ( 25 )

Repurchases of common stock — ( 12 )

Proceeds from equity issuances — 797

Payments of acquisition-related consideration ( 4 ) ( 6 )

Conversion of Series B Preferred Stock ( 600 ) —

Restricted shares tendered for taxes ( 11 ) ( 2 )

Net cash (used in) provided by financing activities ( 253 ) 1,773

Net cash used in financing activities ( 213 ) ( 216 )

Effect of foreign currency exchange rate change on cash, cash equivalents, and restricted cash ( 4 ) 2

3 unchanged sentences

Supplemental cash flow disclosures:

Cash paid for interest $ 119 $ 81

Cash paid for interest, net of interest income $ 36 $ 27

Cash paid for income taxes, net of refunds 35 19

1 unchanged sentence

Shares of common stock issued to profit sharing plan 18 14

Shares of common stock issued for conversion of Series B Preferred Stock 569 —

See notes to condensed consolidated financial statements.

4 unchanged sentences

Nature of business

APi Group Corporation (the “Company” or “APG”) is a global, market-leading business services provider of safety and specialty services in over 500 locations worldwide.

APi Group Corporation (the “Company” or “APG”) is a global, market-leading business services provider of life safety, security and specialty services with a substantial recurring revenue base and over 500 locations worldwide.

Principles of consolidation

14 unchanged sentences

The Company holds investments in joint ventures, the majority of which are accounted for under the equity method of accounting as the Company does not exercise control over the joint ventures.

The Company exercises control over one joint venture that is consolidated into the Company's financial statements and the results for that joint venture for the three and nine months ended September 30, 2023 were immaterial.

The Company’s share of earnings from the non-consolidated joint ventures was $ 1 and $ 2 during the three months ended September 30, 2023 and 2022, respectively, and $ 5 and $ 3 during the nine months ended September 30, 2023 and 2022, respectively.

The earnings are recorded within investment income and other, net in the condensed consolidated statements of operations.

The investment balances were $ 6 and $ 4 as of September 30, 2023 and December 31, 2022, respectively, and are recorded within other assets in the condensed consolidated balance sheets.

The Company exercises control over one joint venture that is consolidated into the Company's financial statements and the results for that joint venture for the three months ended March 31, 2024 were immaterial.

The Company’s share of earnings from the non-consolidated joint ventures was $ 2 and $ 2 during the three months ended March 31, 2024 and 2023, respectively.

The earnings are recorded within investment expense (income) and other, net in the condensed consolidated statements of operations.

The investment balances were $ 5 and $ 4 as of March 31, 2024 and December 31, 2023, respectively, and are recorded within other assets in the condensed consolidated balance sheets.

RECENT ACCOUNTING PRONOUNCEMENTS

See the discussion below for information pertaining to the effects of recent accounting pronouncements as updated from the discussion in the Company’s 2022 audited consolidated financial statements included in the Company’s Annual Report on Form 10-K filed on March 1, 2023.

In August 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-05, Business Combinations— Joint Venture Formations (Subtopic 805-60):

Recognition and Initial Measurement , which requires that a joint venture apply a new basis of accounting upon formation.

As a result, a newly formed joint venture would initially measure its assets and liabilities at fair value.

ASU 2023-05 is effective for joint ventures with a formation date on or after January 1, 2025, with early

adoption permitted.

The Company is currently evaluating the potential effect of this ASU on its consolidated financial statements, but does not expect the impact to be material.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements:

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, which incorporates certain SEC disclosure requirements into the FASB Accounting Standards Codification.

This update will improve disclosure and presentation requirements of a variety of topics and align the requirements in the FASB codification with the SEC’s regulations.

The Company is currently evaluating the potential effect of this ASU on its consolidated financial statements, but does not expect the impact to be material.

See the discussion below for information pertaining to the effects of recent accounting pronouncements as updated from the discussion in the Company’s 2023 audited consolidated financial statements included in the Company’s Annual Report on Form 10-K filed on February 28, 2024.

In March 2024, the SEC adopted final rules on the enhancement and standardization of climate-related disclosures, which requires disclosure of material climate-related risks, material Scope 1 and Scope 2 greenhouse gas emissions, and other matters.

As it pertains to the financial statements, subject to certain materiality thresholds, the final rules require the financial statement footnotes to include certain disclosures regarding the amounts of expenses (or capitalized costs) incurred that relate to severe weather events and other natural conditions, as well as other disclosures regarding the material impact on financial estimates and assumptions of severe weather events and other natural conditions or disclosed targets or transition plans, and

amounts related to carbon offsets and renewable energy credits.

The disclosures will be required at the earliest in the annual financial statements for the year ended December 31, 2025.

The company is currently evaluating the impact of this on its consolidated financial statements.

BUSINESS COMBINATIONS

1 unchanged sentence

Acquisitions are accounted for as business combinations using the acquisition method of accounting.

As such, the Company makes a preliminary allocation of the purchase price to the tangible assets, identifiable intangible assets acquired, and liabilities assumed.

As such, the Company makes a preliminary allocation of the purchase price to the tangible assets and identifiable intangible assets acquired and liabilities assumed.

In the months after closing, as the Company obtains additional information about the acquired assets and liabilities and learns more about the newly acquired business, it is able to refine the estimates of fair value and more accurately allocate the purchase price.

The purchase price is allocated to acquired assets and liabilities assumed based upon their estimated fair values, with limited exceptions as permitted pursuant to U.S.

Purchase price is allocated to acquired assets and liabilities assumed based upon their estimated fair values, with limited exceptions as permitted pursuant to U.S.

GAAP, as determined based on estimates and assumptions deemed reasonable by the Company.

The Company engages third-party valuation specialists to assist with the preparation of critical assumptions and calculations of the fair value of acquired tangible and intangible assets in connection with significant acquisitions.

The Company engages third-party valuation specialists to assist with preparation of critical assumptions and calculations of the fair value of acquired tangible and intangible assets in connection with significant acquisitions.

The excess of the purchase price over the tangible and intangible assets acquired and liabilities assumed is recorded as goodwill.

1 unchanged sentence

2024 Acquisitions

The Company completed an acquisition included within the Safety Services segment on June 30, 2023 ("Acquisition A23").

During the three months ended March 31, 2024, the Company completed three individually immaterial acquisitions for aggregate consideration transferred of $ 28 , made up of cash paid at closing of $ 23 and accrued consideration of $ 5 .

The results of operations of these acquisitions are included in the Company’s condensed consolidated statements of operations from their respective dates of acquisition and were not material.

2023 Acquisitions

During 2023, the Company completed an acquisition included within the Safety Services segment ("Acquisition A23").

The results of the A23 business are reported within the Company's Safety Services segment.

Consideration for Acquisition A23 included cash paid at closing of $ 30 , cash deposited into escrow for future deferred payments of $ 5 , and accrued consideration of $ 3 .

The results of operations of this acquisition are included in the Company’s condensed consolidated statements of operations from the date of acquisition.

During the nine months ended September 30, 2023, the Company completed four individually immaterial acquisitions for aggregate consideration transferred of $ 24 , made up of cash paid at closing of $ 22 and accrued consideration of $ 2 .

During 2023, the Company completed an acquisition included within the Safety Services segment ("Acquisition B23").

The results of the B23 business are reported within the Company's Safety Services segment.

Consideration for Acquisition B23 included cash paid at closing of $ 27 and accrued consideration of $ 5 .

During 2023, the Company completed five individually immaterial acquisitions for aggregate consideration transferred of $ 24 , made up of cash paid at closing of $ 22 and accrued consideration of $ 2 .

The results of operations of these acquisitions are included in the Company’s condensed consolidated statement of operations from their respective dates of acquisition and were not material.

1 unchanged sentence

Based on preliminary estimates, the total amount of goodwill from acquisitions expected to be deductible for tax purposes is $ 47 .

See Note 6 - "Goodwill and Intangibles" for the provisional goodwill assigned to each segment.

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the dates of acquisition:

Acquisition A23 Other 2023 acquisitions

Acquisition A23 Acquisition B23 Other 2023 acquisitions

Cash paid at closing $ 30 $ 27 $ 22

2 unchanged sentences

Total net consideration $ 38 $ 32 $ 24

Accounts receivable $ 8 $ —

Contract assets 1 —

Intangible assets 13 5

Goodwill 20 19

Accounts payable ( 1 ) —

Contract liabilities ( 3 ) —

Net assets acquired $ 38 $ 24

2022 Chubb Acquisition

During 2022, the Company completed its acquisition of the Chubb fire and security business (the "Chubb Acquisition").

The Chubb fire and security business (the "Chubb business" or "Chubb") is a globally recognized fire safety and security services provider, offering customers complete and reliable services from design and installation to monitoring and on-going maintenance and recurring services.

The Chubb business is headquartered in the United Kingdom, and has operations in 17 countries, expanding the Company's geographic footprint to a total of over 20 countries.

The results of the Chubb business are reported within the Company's Safety Services segment.

Based on U.S.

income tax principles related to acquisitions of non-U.S.

entities, none of the total amount of goodwill is deductible for U.S.

income tax purposes.

The following table summarizes the final fair values of the assets acquired and liabilities assumed at the date of the Chubb Acquisition:

Cash paid at closing $ 2,935

Working capital and net indebtedness adjustment ( 42 )

Total net consideration $ 2,893

Cash and cash equivalents — 1 —

Accounts receivable 6 7 —

Inventories 68

Contract assets 1 2 —

Other current assets — — 1

Property and equipment 73

Operating lease right of use assets 146

Pension and post-retirement assets 626

Other noncurrent assets 8

Intangible assets 13 11 9

Goodwill 21 15 16

Accounts payable ( 192 )

Other accrued liabilities — ( 2 ) —

Contract liabilities ( 3 ) ( 2 ) ( 2 )

Accrued expenses ( 255 )

Finance and operating lease liabilities ( 148 )

Pension and post-retirement obligations ( 56 )

Deferred tax liabilities ( 383 )

Other noncurrent liabilities ( 93 )

Net assets acquired $ 38 $ 32 $ 24

6 unchanged sentences

Deferred payments are not contingent on any future performance or employment obligations and can be offset for working capital true-ups, and representations and warranty items.

The total contingent compensation arrangement liability was $ 7 and $ 19 at September 30, 2023, and December 31, 2022, respectively.

The maximum payout of these arrangements upon completion of the future performance periods was $ 15 and $ 25 , inclusive of the $ 7 and $ 19 , accrued as of September 30, 2023, and December 31, 2022, respectively.

The total contingent compensation arrangement liability was $ 11 and $ 9 as of March 31, 2024 and December 31, 2023, respectively.

The maximum payout of these arrangements upon completion of the future performance periods was $ 15 and $ 15 , inclusive of the $ 11 and $ 9 , accrued as of March 31, 2024 and December 31, 2023, respectively.

The contingent compensation liability is included in contingent consideration and compensation liabilities in the condensed consolidated balance sheets for all periods presented.

3 unchanged sentences

For additional considerations regarding the fair value of the Company's contingent consideration liabilities, see Note 7 - "Fair Value of Financial Instruments."

The total liability for deferred payments was $ 14 and $ 9 at September 30, 2023 and December 31, 2022, respectively, and is included in contingent consideration and compensation liabilities in the condensed consolidated balance sheets for all periods presented.

ASSETS HELD FOR SALE

During the three months ended September 30, 2023, the Company determined its intent to sell an infrastructure/utility operating company in its Specialty Services segment (the "Operating Company"), and classified the net book value of the Operating Company as held for sale in the condensed consolidated balance sheets.

As of September 30, 2023, the Operating Company remains classified as held for sale.

Pursuant to the authoritative literature, the Company evaluated the recoverability of the carrying value of the assets and liabilities held for sale.

During the three months ended September 30, 2023, the Company recorded an impairment charge of $ 13 in selling, general, and administrative expenses in the condensed consolidated statements of operations related to impairment of goodwill, intangible assets, and other assets.

The following table presents information related to the major classes of assets recorded in prepaid expenses and other current assets and liabilities recorded in other accrued liabilities that were classified as held for sale in the condensed consolidated balance sheets:

September 30, 2023

Accounts receivable $ 14

Inventories 2

Contract assets 6

Property and equipment, net 27

Operating lease right of use assets 2

Accounts payable ( 8 )

Other current liabilities ( 3 )

Noncurrent operating and finance leases ( 3 )

Total assets and liabilities held for sale $ 37

On October 3, 2023, the Company entered into a definitive agreement to sell the Operating Company for $ 37 .

The sale is expected to close before December 31, 2023.

The total liability for deferred payments was $ 21 and $ 17 as of March 31, 2024 and December 31, 2023, respectively, and is included in contingent consideration and compensation liabilities in the condensed consolidated balance sheets for all periods presented.

RESTRUCTURING

1 unchanged sentence

The Chubb restructuring program includes expenses related to workforce reductions, lease termination costs, and other facility rationalization costs through fiscal year 2025.

During the nine months ended September 30, 2023, the Company incurred pre-tax restructuring costs within the Safety Services segment of $ 21 in connection with the Chubb restructuring program.

During the three months ended March 31, 2024, the Company incurred pre-tax restructuring costs within the Safety Services segment of $ 1 in connection with the Chubb restructuring program.

Since the Chubb Acquisition, the Company has incurred aggregate restructuring costs of $ 68 .

As of September 30, 2023, the Company had $ 23 in restructuring liabilities recorded in other accrued liabilities on the condensed consolidated balance sheets for this plan.

In total, the Company estimates that it will recognize approximately $ 105 of restructuring costs related to the Chubb restructuring program by the end of fiscal year 2024.

As of March 31, 2024, the Company had $ 24 in restructuring liabilities recorded in other accrued liabilities on the condensed consolidated balance sheets for this plan.

In addition, the Company has incurred $ 4 of related costs which include lease impairment charges, asset write-downs, and consulting fees.

In total, the Company estimates that it will recognize approximately $ 125 of restructuring and other costs related to the Chubb restructuring program by the end of fiscal year 2025.

For the restructuring program, employee-related costs consist of termination benefits provided to employees who have been involuntarily terminated and voluntary early retirement benefits.

Program related costs include costs incurred as a direct result of the restructuring program such as consulting fees and facility relocation costs.

The following table summarizes the Company's restructuring program for the nine months ended September 30, 2023 and 2022:

The following table summarizes the Company's restructuring program for the three months ended March 31, 2024 and 2023:

Employee termination benefits Program related costs Asset write-downs Total

2 unchanged sentences

Payments ( 8 ) ( 4 ) — ( 12 )

Reversals ( 1 ) — — ( 1 )

Currency translation adjustment ( 1 ) — — ( 1 )

September 30, 2023 $ 23 $ 1 $ 4 $ 28

March 31, 2024 $ 24 $ — $ 6 $ 30

Employee termination benefits Program related costs Asset write-downs Total

2 unchanged sentences

Payments ( 5 ) — — ( 5 )

Currency translation adjustment ( 1 ) — — ( 1 )

September 30, 2022 $ 11 $ — $ — $ 11

March 31, 2023 $ 17 $ — $ — $ 17

Contracts with customers

4 unchanged sentences

The Company disaggregates its net revenues primarily by segment, service type, and country from which revenues are invoiced, as the nature, timing, and uncertainty of cash flows are relatively consistent within each of these categories.

The following tables provide disclosure of disaggregated net revenues by segment for the three and nine months ended September 30, 2023, and 2022.

During 2023, the Company moved an immaterial business component within the Safety

Services segment from the HVAC to the Life Safety reporting unit, and prior period amounts in this table have been recast to reflect the current period presentation.

The following tables provide disclosure of disaggregated net revenues by segment for the three months ended March 31, 2024 and 2023.

Disaggregated net revenues information is as follows:

Three Months Ended September 30, 2023

Three Months Ended March 31, 2024

Services Specialty

7 unchanged sentences

Net revenues $ 1,214 $ 389 $ 1,601

Three Months Ended September 30, 2022

Services Specialty

Services Consolidated

Life Safety $ 1,021 $ — $ 1,021

HVAC 133 — 133

Infrastructure/Utility — 341 341

Fabrication — 87 87

Specialty Contracting — 162 162

Corporate and Eliminations — — ( 9 )

Net revenues $ 1,154 $ 590 $ 1,735

Nine Months Ended September 30, 2023

Services Specialty

Services Consolidated

Life Safety $ 3,250 $ — $ 3,250

HVAC 383 — 383

Infrastructure/Utility — 907 907

Fabrication — 155 155

Specialty Contracting — 492 492

Corporate and Eliminations — — ( 18 )

Net revenues $ 3,633 $ 1,554 $ 5,169

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

Services Specialty

7 unchanged sentences

Net revenues $ 1,191 $ 430 $ 1,614

Three Months Ended September 30, 2023

Services Specialty

Services Corporate and

Eliminations Consolidated

United States $ 595 $ 559 $ ( 2 ) $ 1,152

France 140 — — 140

Other 482 10 — 492

Net revenues $ 1,217 $ 569 $ ( 2 ) $ 1,784

Three Months Ended September 30, 2022

Services Specialty

Services Corporate and

Eliminations Consolidated

United States $ 568 $ 565 $ ( 9 ) $ 1,124

France 125 — — 125

Other 461 25 — 486

Net revenues $ 1,154 $ 590 $ ( 9 ) $ 1,735

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Services Specialty

5 unchanged sentences

Net revenues $ 1,214 $ 389 $ ( 2 ) $ 1,601

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

Services Specialty

5 unchanged sentences

Net revenues $ 1,191 $ 430 $ ( 7 ) $ 1,614

For in-process contracts, the aggregate amount of transaction price allocated to the unsatisfied performance obligations at September 30, 2023 was $ 2,732 .

For in-process contracts, the aggregate amount of transaction price allocated to the unsatisfied performance obligations at March 31, 2024 was $ 2,894 .

The Company expects to recognize revenue on approximately 86 % of the remaining performance obligations over the next twelve months .

1 unchanged sentence

Contract assets and contract liabilities are classified as current in the condensed consolidated balance sheets as all amounts are expected to be relieved within one year.

The balances of accounts receivable, net of allowances, contract assets, and contract liabilities from contracts with customers as of September 30, 2023 and December 31, 2022 are as follows:

The balances of accounts receivable, net of allowances, contract assets, and contract liabilities from contracts with customers as of March 31, 2024 and December 31, 2023 are as follows:

allowances Contract

assets Contract

Balance at September 30, 2023 $ 1,280 $ 530 $ 474

Balance at March 31, 2024 $ 1,256 $ 458 $ 542

Balance at December 31, 2023 1,395 436 526

1 unchanged sentence

In accordance with industry practice, accounts receivable includes retentions receivable, a portion of which may not be received within one year.

At September 30, 2023 and December 31, 2022, retentions receivable were $ 159 and $ 150 , respectively, while the portions that may not be received within one year were $ 27 and $ 35 , respectively.

At March 31, 2024 and December 31, 2023, retentions receivable were $ 146 and $ 156 , respectively, while the portions that may not be received within one year were $ 30 and $ 25 , respectively.

GOODWILL AND INTANGIBLES

The following table provides disclosure of goodwill by segment as of September 30, 2023 and December 31, 2022.

The changes in the carrying amount of goodwill by reportable segment for the nine months ended September 30, 2023 are as follows:

The following table provides disclosure of goodwill by segment as of March 31, 2024 and December 31, 2023.

The changes in the carrying amount of goodwill by reportable segment for the three months ended March 31, 2024 are as follows:

Services Specialty

2 unchanged sentences

Acquisitions 21 7 28

Impairment of goodwill (1)

Foreign currency translation and other, net (1)

( 28 ) — ( 28 )

Foreign currency translation ( 13 ) — ( 13 )

Goodwill as of September 30, 2023 $ 2,227 $ 177 $ 2,404

(1) During the three months ended September 30, 2023, the Company determined its intent to sell the Operating Company (see Note 4 – “Assets Held for Sale”).

Pursuant to the authoritative literature, the Company evaluated the recoverability of the carrying value of the assets and liabilities held for sale and recorded a goodwill impairment charge of $ 4 .

The Company’s identifiable intangible assets are comprised of the following as of September 30, 2023 and December 31, 2022:

September 30, 2023

Goodwill as of March 31, 2024 $ 2,287 $ 184 $ 2,471

(1) Other includes measurement period adjustments recorded during the three months ended March 31, 2024 related to acquisitions for which the measurement period ended during the three months ended March 31, 2024 (see Note 3 - "Business Combinations").

The Company’s identifiable intangible assets are comprised of the following as of March 31, 2024 and December 31, 2023:

March 31, 2024

Weighted Average Remaining

18 unchanged sentences

Amortization expense recognized on identifiable intangible assets is as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Cost of revenues $ — $ 7

15 unchanged sentences

The Company’s financial assets and liabilities (adjusted to fair value at least quarterly) are derivative instruments and contingent consideration obligations.

In the condensed consolidated balance sheets, derivative instruments are primarily included in other noncurrent assets and other noncurrent liabilities, and contingent consideration obligations are primarily included in contingent consideration and compensation liabilities.

The following tables summarize the fair values and levels within the fair value hierarchy in which the measurements fall for assets and liabilities measured on a recurring basis as of September 30, 2023 and December 31, 2022:

Fair Value Measurements at September 30, 2023

In the condensed consolidated balance sheets, derivative instruments are primarily included in other assets and other noncurrent liabilities, and contingent consideration obligations are primarily included in contingent consideration and compensation liabilities.

Fair Value Measurements at March 31, 2024

Financial assets:

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Cash flow hedges - cross currency contracts — 10 — 10

Cash flow hedges - foreign currency forward contracts — — — —

Net investment hedges - cross currency contracts — 20 — 20

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This fair value measurement is based on unobservable inputs in the market and thus represents a Level 3 measurement within the fair value hierarchy.

This analysis reflects the contractual terms of the purchase agreements (e.g.,

potential payment amounts, length of measurement periods, manner of calculating any amounts due) and utilizes assumptions with regard to future cash flows, probabilities of achieving such future cash flows, and a discount rate.

Depending on the contractual terms of the purchase agreement, the probabilities of achieving future cash flows or earnings generally represent the only significant unobservable inputs.

This analysis reflects the contractual terms of the purchase agreements (e.g., potential payment amounts, length of measurement periods, manner of calculating any amounts due) and utilizes assumptions with regard to future cash flows, probabilities of achieving such future cash flows, and a discount rate.

Depending on the

contractual terms of the purchase agreement, the probabilities of achieving future cash flows or earnings generally represent the only significant unobservable inputs.

The contingent consideration obligations are measured at fair value each reporting period and changes in estimates of fair value are recognized in earnings.

The table below presents a reconciliation of the fair value of the Company’s contingent consideration obligations that use unobservable inputs (Level 3), as well as other information about the contingent consideration obligations:

Nine Months Ended,

September 30, 2023

Three Months Ended

March 31, 2024

Balance as of December 31, 2023 $ 6

Settlements —

Adjustments to fair value —

Balance as of September 30, 2023 $ 6

Balance as of March 31, 2024 $ 6

Number of open contingent consideration arrangements at the end of the period 2

Maximum potential payout at the end of the period $ 6

At September 30, 2023, the remaining open contingent consideration arrangements are set to expire at various dates through 2025.

At March 31, 2024, the remaining open contingent consideration arrangements are set to expire at various dates through 2025.

Level 3 unobservable inputs were used to calculate the fair value adjustments shown in the table above.

The fair value adjustments and the related unobservable inputs were not considered significant for the three and nine months ended September 30, 2023.

The fair value adjustments and the related unobservable inputs were not considered significant for the three months ended March 31, 2024.

Fair value estimates

The following table presents the carrying amount and fair value of the Company’s term loans and senior notes (instruments defined in Note 11 – “Debt”), including current portions and excluding unamortized debt issuance costs.

The fair values are estimated by discounting future cash flows at current interest rates for borrowing arrangements with similar terms and conditions.

The inputs used to calculated fair value are considered to be Level 2 inputs under the fair value hierarchy.

During the first quarter of 2023, the Company repaid an aggregate amount of $ 200 , $ 100 to each of the 2019 Term Loan and 2021 Term Loan.

September 30, 2023 December 31, 2022

The following table presents the carrying amount and fair value of the Company’s variable and non-variable interest rate debt (instruments defined in Note 10 – “Debt”), including current portions and excluding unamortized debt issuance costs.

Fair value is estimated by discounting future cash flows at currently available rates for borrowing arrangements with similar terms and conditions, which are considered to be Level 2 inputs under the fair value hierarchy.

The interest rates of the variable interest rate long-term debt instruments are generally reset monthly.

During the three months ended March 31, 2024, the Company upsized the 2021 Term Loan by an aggregate principal amount equal to $ 300 .

March 31, 2024 December 31, 2023

Carrying Value Fair Value Carrying Value Fair Value

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277 254 277 257

See Note 19 - "Subsequent Events” for a discussion of the October 2023 repricing of the 2019 Term Loan and 2021 Term Loan, extension of the 2019 Term Loan, and partial repayment of the 2019 Term Loan.

The Company uses foreign currency forward contracts, cross-currency swaps, and interest rate swap agreements to manage risks associated with foreign currency exchange rates, net investments in foreign operations, and interest rates.

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Certain of the Company’s derivative transactions are subject to master netting arrangements that allow the Company to net settle contracts with the same counterparties.

These arrangements do not call for collateral, and no cash collateral had been received or pledged related to the underlying derivatives as of September 30, 2023.

These arrangements do not call for collateral and no cash collateral had been received or pledged related to the underlying derivatives as of March 31, 2024.

The following table presents the fair value of derivative instruments:

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Outstanding Gross

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Amount of income (expense) recognized in income

Derivatives Location of income (expense)

recognized in income Three Months Ended September 30,

Cash flow hedging relationships:

Interest rate swaps Interest expense, net $ 8 $ 1

Cross currency contracts Investment income and other, net 3 7

Cross currency contracts Interest expense, net 1 1

Foreign currency forward contracts Investment income and other, net — —

Fair value hedging relationships:

Cross currency contracts Investment income and other, net 22 49

Cross currency contracts Interest expense, net 1 1

Net investment hedging relationships:

Cross currency contracts Interest expense, net 1 1

Not designated as hedging instruments:

Foreign currency forward contracts Investment income and other, net — 2

Amount of income (expense) recognized in income

Derivatives Location of income (expense)

recognized in income Nine Months Ended September 30,

Derivatives Location of income (expense) recognized in the condensed consolidated statements of operations Three Months Ended March 31,

Cash flow hedging relationships:

Interest rate swaps Interest expense, net $ 9 $ 2

Cross currency contracts Investment income and other, net 1 15

Cross currency contracts Investment expense (income) and other, net 2 ( 1 )

Cross currency contracts Interest expense, net 1 1

Foreign currency forward contracts Investment income and other, net — —

Foreign currency forward contracts Investment expense (income) and other, net — —

Fair value hedging relationships:

Cross currency contracts Investment income and other, net 1 92

Cross currency contracts Investment expense (income) and other, net 12 ( 8 )

Cross currency contracts Interest expense, net 1 1

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Not designated as hedging instruments:

Foreign currency forward contracts Investment income and other, net — 5

Foreign currency forward contracts Investment expense (income) and other, net — —

Currency Effects

The income (expense) from derivatives designed to offset foreign currency exposure and recorded in investment income and other, net were offset by foreign currency transaction gains and losses resulting in a net gain (loss) of $ 0 for both the three months ended September 30, 2023 and 2022, and $ 0 and $( 2 ) for the nine months ended September 30, 2023 and 2022, respectively.

The income (expense) from derivatives designed to offset foreign currency exposure and recorded in investment expense (income) and other, net were offset by foreign currency transaction gains and losses resulting in a net (loss) gain of $( 1 ) and $ 0 for the three months ended March 31, 2024 and 2023, respectively.

The following table presents the effect of cash flow and fair value hedge accounting on accumulated other comprehensive income (loss) ("AOCI"):

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AOCI into income

Three Months Ended September 30, Three Months Ended September 30,

Derivatives 2023 2022 2023 2022

Cash flow hedging relationships:

Interest rate swaps $ 8 $ 35 Interest expense, net $ 4 $ 1

Cross currency contracts ( 2 ) — Investment income and other, net 3 7

Forward currency forward contracts — — Investment income and other, net — —

Fair value hedging relationships:

Cross currency contracts ( 7 ) 6 Investment income and other, net 23 51

Net investment hedging relationships:

Cross currency contracts 2 10 Interest expense, net ( 1 ) ( 1 )

Amount of gain (loss)

recognized in other

comprehensive income Location of gain (loss) reclassified from

AOCI into income Amount of gain (loss)

reclassified from

AOCI into income

Nine Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31, Three Months Ended March 31,

Derivatives 2024 2023 2024 2023

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Interest rate swaps $ 11 $ ( 13 ) Interest expense, net $ 4 $ ( 4 )

Cross currency contracts ( 3 ) 3 Investment income and other, net 1 15

Forward currency forward contracts — — Investment income and other, net — —

Cross currency contracts ( 1 ) 1 Investment expense (income) and other, net 2 1

Forward currency forward contracts — — Investment expense (income) and other, net — —

Fair value hedging relationships:

Cross currency contracts ( 3 ) 1 Investment income and other, net 1 94

Cross currency contracts — — Investment expense (income) and other, net 13 7

Net investment hedging relationships:

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The fair value previously recognized in AOCI related to interest rate movements of the 2024 Interest Rate Swap is being amortized to interest expense on a straight-line basis through October 2024.

As of September 30, 2023, approximately $ 18 of unrealized pre-tax gains remained in AOCI.

During 2022, the Company entered into an aggregate $ 720 notional amount interest rate swap ("2026 Interest Rate Swap"), as amended on May 19, 2023 in connection with the transition to the Secured Overnight Financing Rate ("SOFR").

As of March 31, 2024, approximately $ 10 of unrealized pre-tax gains remained in AOCI.

The Company has an aggregate $ 720 notional amount interest rate swap ("2026 Interest Rate Swap") and aggregate $ 400 notional swaps ("2028 Interest Rate Swap"), each amended on May 19, 2023 in connection with the transition to the Secured Overnight Financing Rate ("SOFR").

Refer to Note 10 - "Debt" for additional information.

The 2026 Interest Rate Swap exchanges a variable rate of interest (SOFR) for an average fixed rate of interest of approximately 3.59 % over the term of the agreement, which matures in October 2026.

During the first quarter of 2023, the aggregate $ 400 notional forward-starting swaps became effective ("2028 Interest Rate Swap"), as amended on May 19, 2023 in connection with the transition to SOFR.

Refer to Note 11 - "Debt" for additional information.

These interest rate swaps exchange a variable rate of interest (SOFR) for an average fixed rate of interest of approximately 3.41 % over the term of the agreements, which mature in January 2028.

As of September 30, 2023, the Company had $ 1,120 notional amount outstanding in swap agreements, which includes the aggregate $ 400 notional 2028 Interest Rate Swap, and the $ 720 notional 2026 Interest Rate Swap.

The 2028 Interest Rate Swap exchanges a variable rate of interest (SOFR) for an average fixed rate of interest of approximately 3.41 % over the term of the agreements, which mature in January 2028.

As of March 31, 2024, the Company had $ 1,120 notional amount outstanding in the 2028 Interest Rate Swap and the 2026 Interest Rate Swap.

The Company has designated these swaps as cash flow hedges of the interest rate risk attributable to forecasted variable interest (SOFR) payments for its SOFR based term loans of $ 2,037 .

As of September 30, 2023, the weighted average fixed rate of interest on these swaps was approximately 3.52 %.

As of March 31, 2024, the weighted average fixed rate of interest on these swaps was approximately 3.52 %.

Variations in the assets and liability balances are primarily driven by changes in the applicable forward yield curves related to SOFR.

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The Company has certain intercompany loans subject to changes in foreign currency exchange rates.

To hedge these exposures, during 2022, the Company entered into three cross-currency swaps each with maturity dates of January 2027.

These contracts are designated as fair value hedges with gross notional U.S.

In 2022, to hedge these exposures, the Company entered into three cross-currency swaps each with maturity dates of January 2027 and are designated

as fair value hedges with gross notional U.S.

dollar equivalents of $ 271 , $ 241 , and $ 209 in GBP, CAD, and EUR, respectively.

The Company measures the effectiveness of fair value hedges of anticipated transactions on a spot-to-spot basis.

The Company measures the effectiveness of fair value hedges on a spot-to-spot basis.

Accordingly, the spot-to-spot change in the derivative fair values are recorded in the condensed consolidated statements of operations and perfectly offset the spot-to-spot change in the underlying intercompany loans, and as such, these hedges are deemed highly effective.

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Gains and losses resulting from a change in fair value of the net investment hedge are offset by gains and losses on the underlying foreign currency exposure and are included in AOCI in the condensed consolidated balance sheets.

During 2021, the Company amended the critical terms of the foreign currency swap by extending the maturity date and modifying the U.S.

During 2021, the Company amended the critical terms of the foreign currency swap by extending the maturity date to July 2029 and modifying the U.S.

dollar and Euro coupons.

The amended swap was redesignated as a net investment hedge as a result of the amendment, recorded at fair value with changes recorded in AOCI, and the initial net investment hedge was dedesignated.

The amended net investment hedge reduces the Company’s interest expense by approximately $ 3 annually and reduces its overall effective interest rate by approximately 24 basis points and will mature in July 2029.

The amended swap was redesignated as a net investment hedge and is recorded at fair value with changes recorded in AOCI.

The initial net investment hedge was dedesignated.

The amended net investment hedge reduces the Company’s interest expense by approximately $ 3 annually and reduces its overall effective interest rate by approximately 24 basis points.

The fair value previously recognized in AOCI related to interest rate movements of the dedesignated swap is being amortized to interest expense on a straight-line basis through the third quarter of 2029.

Foreign currency contracts

The Company uses foreign currency forward contracts to mitigate the foreign currency exposure of certain foreign currency transactions.

Fair market value gains or losses on foreign currency forward contracts not designated as hedging instruments were included in the results of operations and are classified in investment income and other, net in the condensed consolidated statements of operations.

The Company utilizes foreign currency forward contracts to hedge the effect of foreign currency exchange rate fluctuations on confirmed foreign currency transactions, including inventory purchases and intercompany charges and other payments.

These forward contracts are undesignated for hedge accounting purposes.

The changes in fair value of these contracts are recorded in investment expense (income) and other, net.

PROPERTY AND EQUIPMENT, NET

The components of property and equipment as of September 30, 2023, and December 31, 2022 are as follows:

(In Years) September 30,

The components of property and equipment as of March 31, 2024 and December 31, 2023 are as follows:

(In Years) March 31,

2024 December 31,

1 unchanged sentence

Building 39 101 105

Machinery and equipment 1 - 20

Machinery, equipment, and office equipment 1 - 20

Autos and trucks 4 - 10

Office equipment 5 - 7

Leasehold improvements 1 - 15

2 unchanged sentences

Property and equipment, net $ 375 $ 385

Depreciation expense related to property and equipment, including finance leases, was $ 21 and $ 22 during the three months ended September 30, 2023 and 2022, and $ 59 and $ 60 during the nine months ended September 30, 2023 and 2022, respectively.

Depreciation expense related to property and equipment, including finance leases, was $ 19 and $ 19 during the three months ended March 31, 2024 and 2023, respectively.

Depreciation expense is included within cost of revenues and selling, general, and administrative expenses in the condensed consolidated statements of operations.

Debt obligations consist of the following:

Maturity Date September 30,

Maturity Date March 31,

2024 December 31,

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Term loan facility

The Company amended its credit agreement during the second quarter of 2023, which provided for amended interest rates applicable to the Company's existing term loans and future borrowings under the revolving credit facility.

In May 2023, the Company entered into an amendment to the credit agreement to replace the London Inter-Bank Offered Rate ("LIBOR") index with Term SOFR.

As of September 30, 2023, the Company had $ 1,027 of principal outstanding under the $ 1,200 term loan (the "2019 Term Loan") with a maturity date of October 1, 2026.

During the nine months ended September 30, 2023, the Company made a payment of $ 100 on the 2019 Term Loan.

During the three months ended March 31, 2024, the Company completed its Fifth Amendment to its credit agreement, upsizing its 2021 Term Loan by an aggregate principal amount equal to $ 300 .

The loan proceeds were directed as consideration for a portion of the purchase price for the Series B Preferred Stock Conversion.

For additional information regarding the Series B Preferred Stock Conversion, see Note 15 - "Shareholders' Equity and Redeemable Convertible Preferred Stock."

As of March 31, 2024, the Company had $ 330 of principal outstanding under the $ 1,200 term loan (the "2019 Term Loan") with a maturity date of October 1, 2026.

The interest rate applicable to the 2019 Term Loan is, at the Company's option, either (a) a base rate plus an applicable margin equal to 1.25 % or (b) Term SOFR rate (adjusted for statutory reserves) plus an applicable margin equal to 2.25 % plus a credit spread adjustment ("CSA").

As of September 30, 2023, the Company had $ 985 of principal outstanding under the $ 1,100 term loan (the "2021 Term Loan") with a maturity date of January 3, 2029.

During the nine months ended September 30, 2023, the Company made a payment of $ 100 on the 2021 Term Loan.

As of March 31, 2024, the Company had $ 1,707 of principal outstanding under the incremental term loan used to finance the Chubb acquisition (the "2021 Term Loan") with a maturity date of January 3, 2029.

The interest rate applicable to the 2021 Term Loan is, at the Company's option, either (1) a base rate plus an applicable margin equal to 1.50 % or (2) Term SOFR rate (adjusted for statutory reserves) plus an applicable margin equal to 2.50 % plus a CSA.

The interest rate applicable to borrowings under the $ 500 five-year senior secured revolving credit facility (the “Revolving Credit Facility”) is, at the Company’s option, either (1) a base rate plus an applicable margin equal to 1.25 %, or (2) a Term SOFR rate (adjusted for statutory reserves) plus an applicable margin equal to 2.25 % plus a CSA.

As of March 31, 2024, the Company had $ 100 outstanding under the $ 500 five-year senior secured revolving credit facility (the “Revolving Credit Facility”).

The interest rate applicable to the Revolving Credit Facility is, at the Company’s option, either (1) a base rate plus an applicable margin equal to 1.25 %, or (2) a Term SOFR rate (adjusted for statutory reserves) plus an applicable margin equal to 2.25 % plus a CSA.

Swap activity

In the three months ended September 30, 2023, the Company amended its existing interest rate swaps in connection with the transition to SOFR for the term loans.

As of September 30, 2023, the Company had a four-year interest rate swap with respect to $ 720 of notional value, exchanging one-month SOFR for a fixed rate of 3.59 % per annum, and a five-year interest rate swap, which started in the first quarter of 2023, exchanging one-month SOFR for a rate of 3.41 %.

Accordingly, the Company's fixed interest rate per annum on the first swapped $ 400 notional value of the term loans is 3.41 % and the second swapped $ 720 notional value of

the term loans is 3.59 % through their maturity.

As of March 31, 2024, the Company had the 2026 Interest Rate Swap with $ 720 of notional value, exchanging one-month SOFR for a fixed rate of 3.59 % per annum, and the 2028 Interest Rate Swap with aggregate $ 400 notional value, exchanging one-month SOFR for a rate of 3.41 %.

Accordingly, the Company's fixed interest rate per annum on the first swapped $ 400 notional value of the term loans is 3.41 % and the second swapped $ 720 notional value of the term loans is 3.59 % through their maturity.

The remaining $ 917 of the term loans balance will bear interest based on one month SOFR plus CSA plus 225 basis points or SOFR plus CSA plus 250 basis points, but the rate will fluctuate as SOFR fluctuates.

Refer to Note 8 - "Derivatives" for additional information.

As of September 30, 2023 and December 31, 2022, the Company had no amounts outstanding under the Revolving Credit Facility, and $ 484 and $ 446 was available at September 30, 2023 and December 31, 2022, respectively, after giving effect to $ 16 and $ 54 of outstanding letters of credit, respectively.

As of September 30, 2023 and December 31, 2022, the Company was in compliance with all applicable debt covenants.

As of March 31, 2024 and December 31, 2023, the Company had $ 100 and $ 0 outstanding under the Revolving Credit Facility, respectively, and $ 396 and $ 495 was available at March 31, 2024 and December 31, 2023, respectively, after giving effect to $ 4 and $ 5 of outstanding letters of credit, respectively.

As of March 31, 2024 and December 31, 2023, the Company was in compliance with all applicable debt covenants.

4.125 % Senior Notes

1 unchanged sentence

The 4.125 % Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Company and certain of the Company’s subsidiaries.

The Company repurchased $ 13 of the 4.125 % Senior Notes in September 2022 and the balance as of September 30, 2023 was $ 337 .

The balance as of March 31, 2024 was $ 337 .

4.750 % Senior Notes

1 unchanged sentence

The 4.750 % Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Company and certain of the Company's subsidiaries.

The Company repurchased $ 23 of the 4.750 % Senior Notes in September 2022 and the balance as of September 30, 2023 was $ 277 .

The Company was in compliance with all covenants contained in the indentures for the 4.125 % Senior Notes and 4.750 % Senior Notes as of September 30, 2023, and December 31, 2022.

The balance as of March 31, 2024 was $ 277 .

The Company was in compliance with all covenants contained in the indentures for the 4.125 % Senior Notes and 4.750 % Senior Notes as of March 31, 2024, and December 31, 2023.

Other obligations

As of each of September 30, 2023 and December 31, 2022, the Company had $ 6 in notes outstanding for working capital purposes and the acquisition of equipment and vehicles.

As of March 31, 2024 and December 31, 2023, the Company had $ 5 and $ 5 in notes outstanding, respectively, for working capital purposes and the acquisition of equipment and vehicles.

The Company’s quarterly income tax provision is measured using an estimate of its consolidated annual effective tax rate, adjusted in the current period for discrete income tax items, within the periods presented.

The comparison of the Company’s income tax provision between periods may be impacted by the level and mix of earnings and losses by tax jurisdiction, foreign income tax rate differentials, and discrete items.

The Company’s effective tax rate was 25.5 % and 40.5 % for the three months ended September 30, 2023 and 2022, and 31.3 % and 24.2 % for the nine months ended September 30, 2023, and 2022, respectively.

The Company’s effective tax rate was 28.0 % and 30.6 % for the three months ended March 31, 2024 and 2023, respectively.

The difference between the effective tax rate and the statutory U.S.

federal income tax rate of 21.0 % for the three and nine months ended September 30, 2023 and 2022 is due to nondeductible permanent items, state taxes, taxes on foreign earnings in jurisdictions that have higher tax rates, and the reversal of the Company’s indefinite reinvestment assertion.

As of September 30, 2023, the Company’s deferred tax assets included a valuation allowance of $ 105 primarily related to certain net operating loss, capital loss, and tax credit carryforwards of the Company’s foreign subsidiaries.

federal income tax rate of 21.0 % for the three months ended March 31, 2024 and 2023 is due to nondeductible permanent items, taxes on foreign earnings in jurisdictions that have higher tax rates, and state taxes.

As of March 31, 2024, the Company’s deferred tax assets included a valuation allowance of $ 110 primarily related to certain net operating loss, capital loss, and tax credit carryforwards of the Company’s foreign subsidiaries.

The factors used to assess the likelihood of realization were the past performance of the related entities, forecasts of future taxable income, future reversals of existing taxable temporary differences, and available tax planning strategies that could be implemented to realize the deferred tax assets.

The ability or failure to achieve the forecasted taxable income in these entities could affect the ultimate realization of deferred tax assets.

As of September 30, 2023, the Company had gross federal, state, and foreign net operating loss carryforwards of approximately $ 0 , $ 21 , and $ 104 , respectively.

The state net operating losses have carryforward periods of five to twenty

years and begin to expire in 2027.

As of March 31, 2024, the Company had gross federal, state, and foreign net operating loss carryforwards of approximately $ 0 , $ 19 , and $ 112 , respectively.

The state net operating losses have carryforward periods of five to twenty years and begin to expire in 2027.

The foreign net operating losses have carryback periods of three years , carryforward periods of twenty years , or are indefinite, and begin to expire in 2036.

The Company’s liability for unrecognized tax benefits is recorded within other noncurrent liabilities in the condensed consolidated balance sheets and recognizes interest and penalties accrued related to unrecognized tax benefits in the provision for income taxes in the condensed consolidated statements of operations.

As of September 30, 2023, and December 31, 2022, the total gross unrecognized tax benefits were $ 6 and $ 8 , respectively.

The Company had accrued gross interest and penalties as of each of September 30, 2023 and December 31, 2022 of $ 2 .

During the three and nine months ended September 30, 2023 and 2022, the Company did not recognize net interest expense.

If all of the Company’s unrecognized tax benefits as of September 30, 2023, were recognized, $ 8 would impact the Company’s effective tax rate.

As of March 31, 2024, and December 31, 2023, the total gross unrecognized tax benefits were $ 8 and $ 7 , respectively.

The Company had accrued gross interest and penalties as of each of March 31, 2024 and December 31, 2023 of $ 3 and $ 2 .

During the three months ended March 31, 2024 and 2023, the Company did not recognize net interest expense.

If all of the Company’s unrecognized tax benefits as of March 31, 2024, were recognized, $ 10 would impact the Company’s effective tax rate.

The Company does not expect any unrecognized tax benefits to expire in the next twelve months.

1 unchanged sentence

federal jurisdiction, and various state, local, and foreign jurisdictions.

As of September 30, 2023, with few exceptions, neither the Company nor its subsidiaries are subject to examination prior to tax year 2014.

As of March 31, 2024, with few exceptions, neither the Company nor its subsidiaries are subject to examination prior to tax year 2014.

There are various other audits in state and foreign jurisdictions, including an ongoing IRS exam related to the 2019 final S Corporation return.

No adjustments have been proposed and the Company does not expect the results of the audits to have a material impact on the Interim Statements.

On August 16, 2022, the U.S.

government enacted the Inflation Reduction Act of 2022, which includes changes to the U.S.

corporate income tax system, including a 15% minimum tax based on “adjusted financial statement income” for certain large corporations which is effective for taxable years beginning after December 31, 2022, and a 1% excise tax on share repurchases after December 31, 2022.

While these tax law changes are not expected to have a material adverse effect on the Company's results of operations going forward, it is unclear how this legislation will be implemented by the U.S.

Department of Treasury and what, if any, impact it will have on the Company's effective tax rate.

The Company will continue to evaluate the impact of the Inflation Reduction Act as further information becomes available.

EMPLOYEE BENEFIT PLANS

1 unchanged sentence

The Company sponsors both funded and unfunded foreign defined benefit pension plans that cover a portion of the Company's employees, and the largest plans are closed to new participants and frozen for accrual of future service.

During the second quarter of 2023, an annuity purchase transaction, commonly known as a “buy-in”, was executed for the two pension plans in the United Kingdom.

Under the terms of the contract, which is issued by a third-party insurance company with no affiliation to the Company, all pension obligations will be funded by the insurer’s annuity payments, but the plans still retain full legal responsibility to pay the benefits to plan participants using the insurance payments.

As the plans maintain full legal responsibility, with the annuity contracts being assets of the plans, settlement accounting has not been applied and the contracts represent a change in investment strategy and not a significant change in the plan structure requiring a remeasurement at the interim date.

Given the funded status of the plans, the Company does not expect any future contributions to be required.

The components of the net periodic pension benefit for the defined benefit pension plans are as follows:

Three Months Ended September 30,

Service cost $ 1 $ 3

Interest cost 16 7

Expected return on plan assets ( 19 ) ( 18 )

Net periodic pension benefit $ ( 2 ) $ ( 8 )

Nine Months Ended September 30,

The components of the net periodic pension cost (benefit) for the defined benefit pension plans are as follows:

Three Months Ended March 31,

Service cost $ 1 $ 1

1 unchanged sentence

Expected return on plan assets ( 10 ) ( 18 )

Net periodic pension benefit $ ( 6 ) $ ( 23 )

Net periodic pension cost (benefit) $ 6 $ ( 2 )

Multiemployer pension plans

Certain subsidiaries of the Company contribute amounts to multiemployer pension plans and other multiemployer benefit plans and trusts, which are recorded as a component of employee wages and salaries within costs of revenues on the condensed consolidated statements of operations.

Certain subsidiaries of the Company contribute amounts to multiemployer pension plans and other multiemployer benefit plans and trusts, which are recorded as a component of employee wages and salaries within cost of revenues on the condensed consolidated statements of operations.

Contributions are generally based on fixed amounts per hour per employee for employees covered under these plans.

1 unchanged sentence

Union payrolls cannot be determined for future periods because the number of union employees employed at a given time and the plans in which they participate vary depending upon the location, the number of ongoing projects, and the need for union resources in connection with those projects.

Total consolidated contributions to multiemployer plans were $ 25 and $ 26 during the three months ended September 30, 2023 and 2022, respectively, and $ 75 and $ 77 during the nine months ended September 30, 2023 and 2022, respectively.

Total consolidated contributions to multiemployer plans were $ 19 and $ 23 during the three months ended March 31, 2024 and 2023, respectively.

Profit sharing plans

2 unchanged sentences

The Profit Sharing Plans provide for annual discretionary contributions in amounts based on a performance grid as determined by the Company’s directors, which may be settled in shares of the Company's common stock or in cash.

In connection with these plans, the Company recognized $ 4 and $ 4 in expense during the three months ended September 30, 2023 and 2022, respectively, and $ 14 and $ 10 in expense during the nine months ended September 30, 2023 and 2022, respectively.

In connection with these plans, the Company recognized $ 6 and $ 5 in expense for shares distributed to eligible employees during the three months ended March 31, 2024 and 2023, respectively.

Employee stock purchase plan

4 unchanged sentences

Participants are subject to eligibility requirements and may not purchase more than 500 shares in any offering period or more than ten thousand dollars of common stock in a year under the ESPP.

The Company recognized $ 1 of expense during each of the three months ended September 30, 2023 and 2022 and $ 4 and $ 3 of expense during the nine months ended September 30, 2023 and 2022, respectively.

The Company recognized $ 1 and $ 2 of expense during the three months ended March 31, 2024 and 2023, respectively.

RELATED-PARTY TRANSACTIONS

The Company incurred advisory fees of $ 1 during each of the three months ended September 30, 2023 and 2022 and $ 3 during each of the nine months ended September 30, 2023 and 2022, in each case payable to Mariposa Capital, LLC, an entity owned by a co-chair of the Company’s Board of Directors.

In addition, dividends for Series A Preferred Stock were declared as of December 31, 2021 and settled in shares during January 2022.

The Company issued 7,539,697 shares in January 2022 to Mariposa Acquisition IV, LLC, a related entity that is controlled by a co-chair of the Company's Board of Directors.

The Company incurred advisory fees of $ 1 during both the three months ended March 31, 2024 and 2023, in each case payable to Mariposa Capital, LLC, an entity owned by a co-chair of the Company’s Board of Directors.

In addition, dividends for Series A Preferred Stock were declared as of December 31, 2023 and settled in 7,944,104 shares issued during January 2024.

The shares were issued to Mariposa Acquisition IV, LLC, a related entity that is controlled by a co-chair of the Company's Board of Directors.

During 2022, the Company issued and sold 800,000 shares of the Company’s 5.5 % Series B Redeemable Convertible Preferred Stock, par value $ 0.0001 per share (the “Series B Preferred Stock”) for an aggregate purchase price of $ 800 .

Of the 800,000 shares issued and sold, 200,000 shares were sold to Viking Global Equities Master Ltd.

and Viking Global Equities II LP ("Viking Purchasers"), which is the aggregate owner of more than 5 % of the Company's outstanding stock.

The Company declared dividends of 103,283 and 184,754 shares of common stock on the Series B Preferred Stock held by the Viking Purchasers during the three months ended September 30, 2023, and 2022, respectively.

The Company declared

dividends of 337,103 and 486,234 shares of common stock on the Series B Preferred Stock held by the Viking Purchasers during the nine months ended September 30, 2023, and 2022, respectively.

The Company has entered into sales contracts with Royal Oak Enterprises, an entity controlled by a co-chair of the Company's Board of Directors, and recorded $ 1 and $ 3 in net revenues for the three and nine months ended September 30, 2023, respectively.

and Viking Global Equities II LP ("Viking Purchasers"), which is the aggregate owner of more than 5 % of the Company's outstanding stock, for an aggregate purchase price of $ 200 .

During the three months ended March 31, 2024, the Company issued dividends of 155,059 shares of common stock on the Series B Preferred Stock held by Viking Purchasers, with 70,798 shares declared in February 2024 and 84,261 shares declared in December 2023.

The Company declared and issued dividends of 124,573 shares of common stock on the Series B Preferred Stock held by the Viking Purchasers during the three months ended March 31, 2023.

During the three months ended March 31, 2024, the Company executed an agreement with the Viking Purchasers which allowed the exercise of their right to convert all of their Series B Preferred Stock into common stock.

For additional information regarding the Series B Preferred Stock Conversion, see Note 15 - "Shareholders' Equity and Redeemable Convertible Preferred Stock."

From time to time, the Company also enters other immaterial related-party transactions.

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Management believes that the likelihood of incurring losses materially in excess of the amounts accrued is remote.

The outstanding liability for these obligations was $ 17 and $ 16 , and was included in other noncurrent liabilities on the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively.

The outstanding liability for these obligations was $ 16 and $ 17 , and was included in other noncurrent liabilities on the condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023, respectively.

SHAREHOLDERS’ EQUITY AND REDEEMABLE CONVERTIBLE PREFERRED STOCK

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Series A Preferred Stock

The Company had 4,000,000 shares of Series A Preferred Stock issued and outstanding as of September 30, 2023 ("Series A Preferred Stock").

The Series A Preferred Stock will be automatically converted into shares of common stock on a one -for-one basis on the last day of 2026.

The holders of the Series A Preferred Stock are entitled to receive an annual dividend in the form of common stock or cash, at the Company’s sole option, based on the increase in the market price of the Company’s common stock.

The Company had 4,000,000 shares of Series A Preferred Stock issued and outstanding as of March 31, 2024 ("Series A Preferred Stock").

The Series A Preferred Stock will be automatically converted into shares of common stock on a one -for- one basis on December 31, 2026.

Stock Repurchases

The Company is authorized to purchase up to an aggregate of $ 250 of shares of the Company’s common stock pursuant to the stock repurchase program ("SRP"), which will expire on February 29, 2024, unless otherwise modified or terminated by the Company's Board of Directors.

During the three months ended March 31, 2024, the Company's Board of Directors authorized a stock repurchase program ("SRP") to purchase up to an aggregate of $ 1,000 of shares of the Company's common stock.

This stock repurchase program is indefinite, unless otherwise modified or terminated by the Board of Directors at any time in its sole discretion.

The SRP authorizes open market, private, and accelerated share repurchase transactions.

During the three months ended September 30, 2023, and 2022, the Company repurchased 656,489 and 738,572 shares of common stock for aggregate payments of approximately $ 18 and $ 11 , respectively.

During the nine months ended September 30, 2023 and 2022, the Company repurchased 1,626,493 and 1,951,332 shares of common stock for approximately $ 41 and $ 33 , respectively.

As of September 30, 2023, the Company had approximately $ 166 of authorized repurchases remaining under the SRP.

During the three months ended March 31, 2024, and 2023, the Company repurchased 16,260,160 and 541,316 shares of common stock for aggregate payments of approximately $ 600 and $ 12 , respectively.

The repurchases during the three months ended March 31, 2024 were related to the Series B Preferred Stock Conversion, see below for more information.

As of March 31, 2024, the Company had approximately $ 400 of authorized repurchases remaining under the SRP.

During 2022, the Board of Directors authorized the Company to purchase up to an aggregate of $ 250 of shares of the Company’s common stock pursuant to the stock repurchase program ("2022 SRP").

The 2022 SRP expired on February 29, 2024.

Redeemable Convertible Preferred Stock

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During 2022, the Company authorized, issued, and sold, for an aggregate purchase price of $ 800 , 800,000 shares of the Company’s 5.5 % Series B Preferred Stock, par value $ 0.0001 per share.

The holders of the Series B Preferred Stock are entitled to dividends at the rate of 5.5 % per annum, payable in cash or the Company’s common stock, at the Company's election.

The Series B Preferred Stock ranks senior to the Company's common stock and Series A Preferred Stock with

respect to dividend rights and rights upon voluntary or involuntary liquidation, dissolution, or winding up of the affairs of the Company.

The Series B Preferred Stock is classified as redeemable convertible preferred stock on the condensed consolidated balance sheets due to a provision that a change in control or de-listing of the Company could require the Company to redeem the Series B Preferred Stock for cash at the election of the holder.

The Series B Preferred Stock is convertible, at the holder’s option, into shares of the Company’s common stock at a conversion price equal to $ 24.60 per share, subject to certain customary adjustments.

The holders of Series B Preferred Stock have certain other rights including voting rights on an as converted basis, certain pre-emptive rights on private equity offerings by the Company, certain registration rights, and, in the case of certain holders, certain director designation rights, as provided in the certificate of designation governing the Series B Preferred Stock.

The Company may, at its option, effect conversion of the outstanding shares of Series B Preferred Stock to common stock, but only if the volume-weighted average price of the Company's common stock exceeds $ 36.90 per share for 15 consecutive trading days.

The holders of Series B Preferred Stock are entitled to receive cumulative dividends at a rate of 5.5 % as and when declared by the Board of Directors, prior and in preference to any declaration or payment of any dividend on the Company's common stock and Series A Preferred Stock.

Series B Preferred Stock dividends are cumulative and accrued quarterly, in cash or in common stock, based on an annual 5.5 % dividend rate.

The Company declared a Series B Preferred Stock dividend of $ 11 , or 584,584 shares of common stock, in December 2022 and issued the shares in January 2023.

The Company declared a Series B Preferred Stock dividend of $ 11 , or 413,135 shares of common stock, and $ 11 , or 739,015 shares of common stock, during the three months ended September 30, 2023, and 2022, respectively.

The Company declared and issued a Series B Preferred Stock dividend of $ 11 , or 739,015 shares of common stock, during the three months ended September 30, 2022.

The Company declared and issued a Series B Preferred Stock dividend of $ 22 , or 935,285 shares of common stock, and $ 33 , or 1,944,939 shares of common stock, during the nine months ended September 30, 2023, and 2022, respectively.

If regular dividends are to be paid in shares of common stock, then each holder shall be entitled to receive such number of whole shares of common stock as is determined by dividing the pro rata amount of regular dividends to which a holder is entitled by the average price per share of common stock over the dividend determination period from dividend notice until the payment date.

On February 28, 2024, the Company entered into a Conversion and Repurchase Agreement with Juno Lower Holdings L.P.

("Juno Lower Holdings"), FD Juno Holdings L.P.

("FD Juno Holdings", and together with Juno Lower Holdings, "Blackstone"), Viking Global Equities Master Ltd.

("VGEM") and Viking Global Equities II L.P.

(VGE II, and collectively with VGEM, "Viking" and collectively with the Blackstone, the "Series B Holders") pursuant to which Blackstone and Viking agreed to convert all of the outstanding shares of the Series B Preferred Stock that they hold, which represents all of the Series B Preferred Stock outstanding.

The transactions contemplated by the agreement (the "Series B Preferred Stock Conversion") were also consummated on February 28, 2024.

Under the terms of the agreement, (i) the Series B Holders each agreed to exercise their respective right to convert all of their Series B Preferred Stock into common stock, resulting in a total of 800,000 shares of Series B Preferred Stock being converted into approximately 32,803,519 shares of common stock of the Company (inclusive of approximately 283,196 shares attributable to accrued and unpaid dividends thereon (the "Conversion Shares") and (ii) upon issuance of the Conversion Shares, the Company agreed to immediately repurchase one-half of the Conversion Shares, on a pro rata basis, from the Series B Holders for an aggregate purchase price of $ 600 .

The fair value of the issued one-half of the remaining Conversion Shares was $ 569 .

The repurchase price was financed by (i) an incremental term facility of $ 300 funded exclusively by Blackstone in the amount of $ 225 and Viking in the amount of $ 75 and (ii) cash and available credit from the balance sheet.

Following the Series B Preferred Stock Conversion there are no Series B Preferred Shares issued or outstanding and the holders of Series B Preferred Stock are no longer entitled to receive cumulative dividends.

The Company declared a pro rata Series B Preferred Stock dividend of $ 7 , or 283,196 shares of common stock, during the three months ended March 31, 2024 for the Series B Preferred Stock outstanding through February 28, 2024.

The Company declared and issued a Series B Preferred Stock dividend of $ 11 , or 498,293 shares of common stock, during the three months ended March 31, 2023.

The Company declared a Series B Preferred Stock dividend of $ 11 or 337,044 shares of common stock in December 2023 and $ 11 or 584,584 shares of common stock in December 2022 and issued the shares in January 2024 and January 2023, respectively.

EARNINGS PER SHARE

Net income is allocated between the Company’s common shares and other participating securities based on their participation rights.

The Series A Preferred Stock and Series B Preferred Stock represent participating securities.

Earnings attributable to Series A Preferred Stock and Series B Preferred Stock are not included in earnings attributable to common shares in calculating earnings per common share (the two-class method).

For periods of net loss, there is no impact from the two-class method on earnings per common share (“EPS”) as net loss is allocated to common shares because Series A Preferred Stock and Series B Preferred Stock shares are not contractually obligated to share the loss.

The following table sets forth the computation of EPS using the two-class method.

The dilutive effect of outstanding Series A Preferred Stock, Series B Preferred Stock, the Series A Preferred Stock dividend, and the Series B Preferred Stock dividend is reflected in diluted EPS using the if-converted method and options, restricted shares, and performance shares are reflected using the treasury stock method.

For periods of net loss, basic and diluted EPS are the same, as the assumed exercise of Series A Preferred Stock, Series B Preferred Stock, restricted and performance shares, and stock options are anti-dilutive.

The Series A Preferred Stock represents participating securities.

Earnings attributable to Series A Preferred Stock are not included in earnings attributable to common shares in calculating earnings per common share (the two-class method).

For periods of net loss, there is no impact from the two-class method on earnings per share (“EPS”) as net loss is allocated to common shares because Series A Preferred Stock shares are not contractually obligated to share the loss.

The following table sets forth the computation of earnings per common share using the two-class method.

The dilutive effect of outstanding Series A Preferred Stock, and the Series A Preferred Stock dividend, is reflected in diluted EPS using the if-converted method and options, restricted shares, performance shares and market shares are reflected using the treasury stock method.

For periods of net loss, basic and diluted EPS are the same, as the assumed exercise of Series A Preferred Stock,

restricted, performance shares, market shares and stock options are anti-dilutive.

(Amounts in millions, except share and per share amounts.):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Basic earnings per common share:

Three Months Ended March 31,

Basic (loss) earnings per common share:

Net income $ 45 $ 26

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Less stock dividend attributable to Series B Preferred Stock ( 7 ) ( 11 )

Net income attributable to common shareholders $ 35 $ 13 $ 75 $ 14

Less conversion of Series B Preferred Stock ( 372 ) —

Net (loss) income attributable to common shareholders $ ( 334 ) $ 12

Weighted average shares outstanding - basic 249,744,275 234,386,758

Income per common share - basic $ 0.15 $ 0.06 $ 0.32 $ 0.06

Diluted earnings per common share:

(Loss) income per common share - basic $ ( 1.34 ) $ 0.05

Diluted (loss) earnings per common share:

Net income $ 45 $ 26

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Less stock dividend attributable to Series B Preferred Stock ( 7 ) ( 11 )

Net income attributable to common shareholders - diluted $ 39 $ 15 $ 85 $ 16

Less conversion of Series B Preferred Stock ( 372 ) —

Net (loss) income attributable to common shareholders - diluted $ ( 334 ) $ 14

Weighted average shares outstanding - basic 249,744,275 234,386,758

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Shares issuable upon conversion of Series B Preferred Shares — 32,520,000

Shares issuable pursuant to the Series A Preferred Stock dividend (2)

1,679,291 — 1,099,296 —

Weighted average shares outstanding - diluted 249,744,275 267,172,273

Income per common share - diluted $ 0.15 $ 0.06 $ 0.32 $ 0.06

For all periods presented, 4,000,000 shares of Series A Preferred Stock, which are convertible to the same number of common shares, have been excluded from the calculation of diluted shares, as their inclusion would be anti-dilutive.

For the three and nine months ended September 30, 2023, dilutive securities include common share equivalents which represent the annual dividend, payable in the form of common shares or cash at the Company's sole option, that Series A Preferred Shares would be entitled to receive assuming that the volume weighted average price of the Company’s common shares for the last ten trading days of the period would be the same average price during the last ten trading days of the calendar year.

The holders of the Series A Preferred Stock are entitled to receive an annual dividend based on the increase in the market price of the Company’s common stock (the "Annual Dividend Amount").

The Annual Dividend Amount is equal to 20 % of the increase in the volume-weighted average market price per share of the Company’s common shares for the last ten trading days of the calendar year, multiplied by 141,194,638 shares.

During 2023, the Annual Dividend Amount was calculated based on the appreciation of the Company’s share price over the highest previously used share price of $ 24.3968 .

(Loss) income per common share - diluted $ ( 1.34 ) $ 0.05

The following items were excluded from the calculation of diluted shares as their inclusion would be anti-dilutive:

For all periods presented, 4,000,000 shares of Series A Preferred Stock, which are convertible to the same number of common shares.

For the three months ended March 31, 2024, 125,000 stock options to purchase the same number of common shares.

For the three months ended March 31, 2024, 1,188,112 time-based, performance-based, and market-based restricted stock units.

SEGMENT INFORMATION

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Both reportable segments derive their revenues from installation, inspection, maintenance, service and repair, retrofitting and upgrading, engineering and design, distribution, fabrication, and various types of other services in over 20 countries.

The Safety Services segment focuses on end-to-end integrated occupancy systems (fire protection solutions, HVAC, and entry systems), including design, installation, inspection, and service of these integrated systems.

The Safety Services segment focuses on end-to-end integrated occupancy systems (fire protection services, HVAC, and entry systems), including design, installation, inspection, and service of these integrated systems.

The work performed within this segment spans across industries and facilities and includes commercial, education, healthcare, high-tech, industrial and special-hazard settings.

The Specialty Services segment provides a variety of infrastructure services and specialized industrial plant services, which include maintenance and repair of critical infrastructure such as underground electric, gas, water, sewer, and telecommunications infrastructure.

This segment’s services include engineering and design, fabrication, installation, maintenance service and repair, retrofitting and upgrading, pipeline infrastructure, access and road construction, supporting facilities, and performing ongoing integrity management and maintenance to customers within the energy industry.

This segment’s services include engineering and design, fabrication, installation,

maintenance service and repair, retrofitting and upgrading, pipeline infrastructure, access and road construction, supporting facilities, and performing ongoing integrity management and maintenance to customers within the energy industry.

Customers within this segment vary from private and public utilities, communications, healthcare, education, transportation, manufacturing, industrial plants, and governmental agencies throughout North America.

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Summarized financial information for the Company’s reportable segments is presented and reconciled to consolidated financial information in the following tables, including a reconciliation of consolidated operating income (loss) to EBITDA:

Three Months Ended September 30, 2023

Services Specialty

Services Corporate and

Eliminations Consolidated

Net revenues $ 1,217 $ 569 $ ( 2 ) $ 1,784

EBITDA Reconciliation

Operating income (loss) $ 98 $ 43 $ ( 37 ) $ 104

Investment income and other, net 2 1 1 4

Non-service pension benefit 3 — — 3

Depreciation 8 13 — 21

Amortization 42 13 1 56

EBITDA $ 153 $ 70 $ ( 35 ) $ 188

Total assets $ 5,983 $ 1,315 $ 651 $ 7,949

Capital expenditures 5 10 3 18

Three Months Ended September 30, 2022

Three Months Ended March 31, 2024

Services Specialty

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Operating income (loss) $ 125 $ 7 $ ( 32 ) $ 100

Investment income and other, net 1 2 — 3

Non-service pension benefit 10 — — 10

Gain on extinguishment of debt, net — — 5 5

Investment (expense) income and other, net ( 6 ) 2 1 ( 3 )

Depreciation 8 11 — 19

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Capital expenditures 5 10 7 22

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2023

Services Specialty

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Investment income and other, net 3 2 — 5

Non-service pension benefit 9 — — 9

Loss on extinguishment of debt, net — — ( 3 ) ( 3 )

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Capital expenditures 5 15 1 21

Nine Months Ended September 30, 2022

Services Specialty

Services Corporate and

Eliminations Consolidated

Net revenues $ 3,374 $ 1,520 $ ( 39 ) $ 4,855

EBITDA Reconciliation

Operating income (loss) $ 186 $ 70 $ ( 143 ) $ 113

Investment income and other, net 2 5 ( 2 ) 5

Non-service pension benefit 32 — — 32

Gain on extinguishment of debt, net — — 5 5

Depreciation 20 35 5 60

Amortization 120 43 2 165

EBITDA $ 360 $ 153 $ ( 133 ) $ 380

Total assets $ 5,879 $ 1,357 $ 705 $ 7,941

Capital expenditures 16 37 7 60

SUBSEQUENT EVENTS

On October 3, 2023, the Company entered into a definitive agreement to sell an infrastructure/utility operating company in its Specialty Services segment, for $ 37 .

The sale is expected to close before December 31, 2023.

Refer to Note 4 - "Assets Held for Sale" for additional information.

On October 11, 2023, the Company completed repricing of its 2019 Term Loan and 2021 Term Loan.

The repricing reduces the applicable margin on all outstanding amounts by 25 basis points.

Additionally, $ 422 of the 2019 Term Loan was extended to the 2021 Term Loan and assumed all the same terms as the repriced 2021 Term Loan.

The Company made a repayment of $ 100 on the 2019 Term Loan concurrent with the close of this transaction.

Following the repricing transaction, the Company has $ 505 outstanding on 2019 Term Loan and $ 1,407 outstanding on the 2021 Term Loan.

On April 15, 2024, the Company signed a definitive agreement to acquire Elevated Facility Services Group (“Elevated”), a premier provider of contractually based services for all major brands of elevator and escalator equipment.

Elevated will be acquired from a fund managed by L Squared Capital Partners for approximately $ 570 in cash, subject to working capital and other standard adjustments.

The transaction is expected to close in the second quarter of 2024, subject to customary closing conditions and regulatory approvals.

On April 16, 2024, the Company entered into an underwriting agreement relating to the underwritten public offering of 11,000,000 shares of common stock at a public offering price of $ 37.50 per share.

The offering closed on April 19, 2024.

The underwriters exercised the option in the agreement to purchase an additional 1,650,000 shares of common stock on April 23, 2024.

The net proceeds to the Company from the offering were $ 457 after deducting underwriting discounts, commissions, and offering expenses.

On April 30, 2024, the Company began a process to reprice its 2021 Term Loan with a remaining principal of $ 1,707 .

The Company expects that the repricing will reduce the applicable margin on all outstanding amounts.

Additionally, the Company expects to increase the existing 2021 Term Loan by approximately $ 550 on the same terms as the current 2021 Term Loan.

The Company expects to use the proceeds of approximately $ 550 to refinance the 2019 Term Loan with a remaining principal balance of $ 330 and repay the $ 100 Revolving Credit Facility borrowing as well as to provide funds for general corporate purposes, including the acquisition of Elevated.

The Company expects the transaction to close in May 2024.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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• our expectations regarding the acquisition (the "Chubb Acquisition") of the Chubb fire and security business (the "Chubb business" or "Chubb"), including the operational challenges and the expected benefits of the acquisition and future growth, expansion, cross-selling and other value creation opportunities;

• our beliefs regarding the sufficiency of our current sources of liquidity to fund our future liquidity requirements, our expectations regarding the types of future liquidity requirements and our expectations regarding the availability of future sources of liquidity.

These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, including those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this quarterly report and in our Annual Report on Form 10-K, filed on March 1, 2023, including those described under “Cautionary Note Regarding Forward Looking Statements” and “Risk Factors” in such Form

10-K, and other filings we make with the SEC.

• our beliefs regarding the sufficiency of our current sources of liquidity, including access to capital markets, to fund our future liquidity requirements, our expectations regarding the types of future liquidity requirements and our expectations regarding the availability and terms of future sources of liquidity to satisfy our liquidity needs on terms favorable to us.

including those described under “Cautionary Note Regarding Forward Looking Statements” and “Risk Factors” in such Form 10-K, and other filings we make with the SEC.

In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this quarterly report may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

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These forward-looking statements speak only as of the date of this quarterly report.

We assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future, except as required by applicable law.

We assume no obligation to update or revise these forward-

looking statements for any reason, even if new information becomes available in the future, except as required by applicable law.

All forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements as well as others made in this quarterly report and hereafter in our other SEC filings and public communications.

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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