What changed in this filing

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Item 1. Financial Statements

2024-08-01 compared with 2024-05-02 · 351 added, 184 removed, 713 unchanged (43% of the section changed)

6 unchanged sentences

Cash and cash equivalents $ 324 $ 479

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

Accounts receivable, net of allowances of $ 6 and $ 5 at June 30, 2024 and December 31, 2023, respectively

Inventories 155 150

28 unchanged sentences

Commitments and contingencies (Note 14)

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

5.5 % Series B Redeemable Convertible Preferred Stock, $ 0.0001 par value, 0 and 800,000 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Shareholders’ equity:

1 unchanged sentence

7,000,000 authorized shares;

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

4,000,000 shares issued and outstanding at June 30, 2024 and December 31, 2023

Common stock;

$ 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)

$ 0.0001 par value, 500,000,000 authorized shares, 274,319,653 shares and 235,575,316 shares issued at June 30, 2024 and December 31, 2023, respectively (excluding 8,281,148 shares declared for stock dividend at December 31, 2023)

Additional paid-in capital 3,280 2,572

7 unchanged sentences

(In millions, except per share amounts)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Net revenues $ 1,730 $ 1,771 $ 3,331 $ 3,385

10 unchanged sentences

Net income $ 69 $ 48 $ 114 $ 74

Net (loss) income attributable to common shareholders:

Net income (loss) attributable to common shareholders:

Stock dividend on Series B Preferred Stock $ — $ ( 11 ) $ ( 7 ) $ ( 22 )

Conversion of Series B Preferred Stock — — ( 372 ) —

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

Net (loss) income per common share:

Net income (loss) attributable to common shareholders $ 69 $ 37 $ ( 265 ) $ 52

Net income (loss) per common share:

Basic $ 0.23 $ 0.12 $ ( 1.02 ) $ 0.17

7 unchanged sentences

(In millions)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Net income $ 69 $ 48 $ 114 $ 74

Other comprehensive income:

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

Fair value change - derivatives, net of tax expense of $( 1 ), $( 5 ), $( 6 ), and $( 2 ), respectively

Foreign currency translation adjustment ( 1 ) 27 ( 43 ) 41

23 unchanged sentences

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

Net income — — — — — 69 — 69

Fair value change - derivatives — — — — — — 4 4

Foreign currency translation adjustment — — — — — — ( 1 ) ( 1 )

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

Issuance of common shares — — 12,650,000 — 458 — — 458

Share-based compensation and other, net — — 32,702 — 8 — — 8

Balance, June 30, 2024 4,000,000 $ — 274,319,653 $ — $ 3,280 $ 79 $ ( 524 ) $ 2,835

Preferred Stock Issued

2 unchanged sentences

Capital (Accumulated

Deficit Accumulated

Deficit) Retained Earnings Accumulated

Comprehensive

5 unchanged sentences

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

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

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 — — — — — 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

See notes to condensed consolidated financial statements.

2 unchanged sentences

(In millions)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

4 unchanged sentences

Restructuring charges, net of cash paid ( 10 ) 4

Deferred taxes ( 1 ) 3

Share-based compensation expense 17 11

1 unchanged sentence

Non-cash lease expense 48 36

Net periodic pension cost (benefit) 4 ( 3 )

Net periodic pension expense (benefit) 12 ( 6 )

Loss on extinguishment of debt, net — 3

3 unchanged sentences

Contract assets ( 48 ) ( 47 )

Inventories ( 8 ) ( 6 )

Prepaid expenses and other current assets ( 31 ) ( 50 )

3 unchanged sentences

Other assets and liabilities ( 56 ) ( 51 )

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

Net cash provided by operating activities 117 73

Cash flows from investing activities:

4 unchanged sentences

Cash flows from financing activities:

Net short-term debt 100 —

Proceeds from long-term borrowings 850 —

1 unchanged sentence

Repurchases of common stock — ( 23 )

Proceeds from issuance of common shares 458 —

Conversion of Series B Preferred Stock ( 600 ) —

Payments of acquisition-related consideration ( 2 ) ( 3 )

Restricted shares tendered for taxes ( 11 ) ( 2 )

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

Other financing activities ( 4 ) —

Net cash provided by (used in) financing activities 357 ( 232 )

Effect of foreign currency exchange rate change on cash, cash equivalents, and restricted cash ( 5 ) 4

31 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 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 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 six months ended June 30, 2024 were immaterial.

The Company’s share of earnings from the non-consolidated joint ventures was $ 2 and $ 2 during the three months ended June 30, 2024 and 2023, respectively, and $ 4 and $ 4 during the six months ended June 30, 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.

The investment balances were $ 6 and $ 4 as of June 30, 2024 and December 31, 2023, respectively, and are recorded within other assets in the condensed consolidated balance sheets.

RECENT ACCOUNTING PRONOUNCEMENTS

3 unchanged sentences

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.

The disclosures will be required at the earliest in the annual financial statements for the year ended December 31, 2025, subject to legal challenges and the SEC's voluntary stay of the disclosure requirements.

The Company will continue to assess the impact of the new rule on its consolidated financial statements while the stay is in place.

BUSINESS COMBINATIONS

9 unchanged sentences

2024 Acquisitions

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 .

On June 3, 2024, the Company completed its acquisition of 100 % of the equity interests of Elevated Facility Services Group ("Elevated").

Elevated is a premier provider of contractually based services for all major brands of elevator and escalator equipment.

Elevated is headquartered in Florida and serves customers in over 18 states.

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

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

Cash paid at closing $ 564

Cash deposited into escrow 6

Total consideration $ 570

Accounts receivable 27

Contract assets 29

Other current assets 3

Property and equipment 4

Operating lease right of use assets 2

Intangible assets 257

Accounts payable ( 9 )

Contract liabilities ( 16 )

Other accrued liabilities ( 19 )

Current and noncurrent operating and finance lease liabilities ( 3 )

Deferred tax liabilities ( 65 )

Other noncurrent liabilities ( 7 )

Net assets acquired $ 570

The Company has not finalized its accounting for any areas of purchase price allocation related to the Elevated acquisition.

The Company anticipates that it will finalize its accounting for the Elevated acquisition during the second quarter of 2025.

The Company will make appropriate adjustments to the purchase price allocation prior to completion of the measurement period, as required.

Based on preliminary estimates, the total amount of goodwill from the Elevated acquisition expected to be deductible for tax purposes is $ 19 .

During the three and six months ended June 30, 2024, the Company incurred transaction costs of $ 7 , which were expensed and included as a component of selling, general, and administrative expenses in the condensed consolidated statements of operations.

The results of operations for Elevated are included in the consolidated financial statements of the Company from the date of acquisition.

In addition to the Elevated acquisition, during the six months ended June 30, 2024, the Company completed six individually immaterial acquisitions for aggregate consideration transferred of $ 49 , made up of cash paid at closing of $ 41 and accrued consideration of $ 8 .

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.

Other 2024 acquisitions

Cash paid at closing $ 41

Accrued consideration 8

Total consideration $ 49

Accounts receivable $ 2

Property and equipment 3

Intangible assets 20

Contract liabilities ( 1 )

Net assets acquired $ 49

2023 Acquisitions

6 unchanged sentences

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.

The Company has not finalized its accounting for the acquisitions and will make appropriate adjustments to the purchase price allocation prior to completion of the measurement periods, as required.

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.

The Company has not finalized its accounting for Acquisition B23 and four of the individually immaterial acquisitions completed during 2023 and will make appropriate adjustments to the purchase price allocation prior to completion of the measurement periods, as required.

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

5 unchanged sentences

Accrued consideration 3 5 2

Total net consideration $ 38 $ 32 $ 24

Total consideration $ 38 $ 32 $ 24

Cash and cash equivalents $ — $ 1 $ —

7 unchanged sentences

Net assets acquired $ 38 $ 32 $ 24

For the three months ended June 30, 2024, net revenues and operating income from the Company's material acquisitions that closed over the previous twelve months was $ 31 and $ 1 , respectively.

For the six months ended June 30, 2024, net revenues and operating income from the Company's material acquisitions that closed over the previous twelve months was $ 46 and $ 4 , respectively.

Accrued consideration

The Company’s acquisition purchase agreements typically include deferred payment provisions, often to sellers who become employees of the Company or its subsidiaries.

The provisions are made up of three general types of arrangements, contingent compensation and contingent consideration (both of which are contingent on the future performance of the acquired entity) and deferred payments related to indemnities.

Contingent compensation arrangements are typically contingent on the former owner’s future employment with the Company, and the related amounts are recognized over the required employment period, which is typically one to four years .

Contingent consideration arrangements are not contingent on employment and are included as part of purchase consideration at the time of the initial acquisition and are paid over a one to four year period.

The liability for deferred payments is recognized at the date of acquisition based on the Company’s best estimate and is typically payable over a one to three year period.

The provisions are made up of three general types of arrangements, contingent compensation, contingent consideration (both of which are contingent on the future performance of the acquired entity) and deferred payments related to indemnities.

The liability for deferred payments is recognized at the date of acquisition based on the Company’s best estimate and is typically payable over a 1 to 4 years period.

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 $ 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 total contingent compensation arrangement liability was $ 7 and $ 9 as of June 30, 2024 and December 31, 2023, respectively.

The maximum payout of these arrangements upon completion of the future performance periods was $ 9 and $ 15 , inclusive of the $ 7 and $ 9 , accrued as of June 30, 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 $ 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.

The total liability for deferred payments was $ 29 and $ 17 as of June 30, 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 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.

During the six months ended June 30, 2024, the Company incurred pre-tax restructuring costs within the Safety Services segment of $ 5 in connection with the Chubb restructuring program.

Since the Chubb acquisition, the Company has incurred aggregate restructuring costs of $ 73 .

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.

As of June 30, 2024, the Company had $ 22 in restructuring liabilities recorded in other accrued liabilities on the condensed consolidated balance sheets for this plan.

In addition, the Company has incurred $ 8 of related costs which include lease impairment charges, asset write-downs, and consulting fees.

2 unchanged sentences

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 three months ended March 31, 2024 and 2023:

Employee termination benefits Program related costs Asset write-downs Total

The following table summarizes the Company's restructuring liabilities for the six months ended June 30, 2024 and 2023:

December 31, 2023 $ 32

Charges 1 4 — 5

Payments ( 14 )

Currency translation adjustment ( 1 )

March 31, 2024 $ 24 $ — $ 6 $ 30

Employee termination benefits Program related costs Asset write-downs Total

June 30, 2024 $ 22

In addition to the costs noted above, the Company incurred asset write-down costs of $ 1 for the three and six months ended June 30, 2024.

The Company also incurred program related costs of $ 3 and $ 7 for the three and six months ended June 30, 2024, respectively.

December 31, 2022 $ 22

Charges — — — —

Payments ( 11 )

March 31, 2023 $ 17 $ — $ — $ 17

Currency translation adjustment —

June 30, 2023 $ 15

Additionally, during the six months ended June 30, 2023, the Company incurred $ 3 of asset write-down costs related to the abandonment of leases.

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 months ended March 31, 2024 and 2023.

following tables provide disclosure of disaggregated net revenues by segment for the three and six months ended June 30, 2024, and 2023.

Disaggregated net revenues information is as follows:

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Services Specialty

7 unchanged sentences

Net revenues $ 1,279 $ 453 $ 1,730

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Services Specialty

7 unchanged sentences

Net revenues $ 1,225 $ 555 $ 1,771

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

Services Specialty

Services Consolidated

Life Safety $ 2,267 $ — $ 2,267

HVAC 226 — 226

Infrastructure/Utility — 451 451

Fabrication — 97 97

Specialty Contracting — 294 294

Corporate and Eliminations — — ( 4 )

Net revenues $ 2,493 $ 842 $ 3,331

Six Months Ended June 30, 2023

Services Specialty

Services Consolidated

Life Safety $ 2,166 $ — $ 2,166

HVAC 250 — 250

Infrastructure/Utility — 547 547

Fabrication — 113 113

Specialty Contracting — 325 325

Corporate and Eliminations — — ( 16 )

Net revenues $ 2,416 $ 985 $ 3,385

Three Months Ended June 30, 2024

Services Specialty

Services Corporate and

4 unchanged sentences

Net revenues $ 1,279 $ 453 $ ( 2 ) $ 1,730

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Services Specialty

5 unchanged sentences

Net revenues $ 1,225 $ 555 $ ( 9 ) $ 1,771

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

Six Months Ended June 30, 2024

Services Specialty

Services Corporate and

Eliminations Consolidated

United States $ 1,204 $ 837 $ ( 4 ) $ 2,037

France 319 — — 319

Other 970 5 — 975

Net revenues $ 2,493 $ 842 $ ( 4 ) $ 3,331

Six Months Ended June 30, 2023

Services Specialty

Services Corporate and

Eliminations Consolidated

United States $ 1,143 $ 966 $ ( 16 ) $ 2,093

France 306 — — 306

Other 967 19 — 986

Net revenues $ 2,416 $ 985 $ ( 16 ) $ 3,385

For in-process contracts, the aggregate amount of transaction price allocated to the unsatisfied performance obligations at June 30, 2024 was $ 3,019 .

The Company expects to recognize revenue on approximately 87 % 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 March 31, 2024 and December 31, 2023 are as follows:

The balances of accounts receivable, net of allowances, contract assets, and contract liabilities from contracts with customers as of June 30, 2024 and December 31, 2023 are as follows:

allowances Contract

assets Contract

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

Balance at June 30, 2024 $ 1,314 $ 509 $ 547

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 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.

At June 30, 2024 and December 31, 2023, retentions receivable were $ 145 and $ 156 , respectively, while the portions that may not be received within one year were $ 33 and $ 25 , respectively.

GOODWILL AND INTANGIBLES

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:

The following table provides disclosure of goodwill by segment as of June 30, 2024 and December 31, 2023.

The changes in the carrying amount of goodwill by reportable segment for the six months ended June 30, 2024 are as follows:

Services Specialty

4 unchanged sentences

( 34 ) — ( 34 )

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

Goodwill as of June 30, 2024 $ 2,646 $ 179 $ 2,825

(1) Other includes measurement period adjustments recorded during the six months ended June 30, 2024 related to acquisitions for which the measurement period was open during the six months ended June 30, 2024 (see Note 3 - "Business Combinations").

The Company’s identifiable intangible assets are comprised of the following as of June 30, 2024 and December 31, 2023:

June 30, 2024

Weighted Average Remaining

18 unchanged sentences

Amortization expense recognized on identifiable intangible assets is as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Cost of revenues $ 3 $ 6 $ 3 $ 13

16 unchanged sentences

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.

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 March 31, 2024 and December 31, 2023:

Fair Value Measurements at March 31, 2024

Fair Value Measurements at June 30, 2024

Financial assets:

20 unchanged sentences

Cash flow hedges - cross currency contracts — 10 — 10

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

Net investment hedges - cross currency contracts — 20 — 20

14 unchanged sentences

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.

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:

Three Months Ended

March 31, 2024

Six Months Ended

June 30, 2024

Balance as of December 31, 2023 $ 6

Settlements ( 1 )

Balance as of March 31, 2024 $ 6

Balance as of June 30, 2024 $ 6

Number of open contingent consideration arrangements at the end of the period 6

Maximum potential payout at the end of the period $ 6

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

At June 30, 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 months ended March 31, 2024.

The fair value adjustments and the related unobservable inputs were not considered significant for the three and six months ended June 30, 2024.

Fair value estimates

2 unchanged sentences

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

During the first quarter of 2024, the Company upsized the 2021 Term Loan by an aggregate principal amount equal to $ 300 .

During the second quarter of 2024, the Company upsized the 2021 Term Loan by an aggregate principal amount equal to $ 550 and repriced the 2021 Term Loan and repaid the remaining $ 330 of the 2019 Term Loan.

June 30, 2024 December 31, 2023

Carrying Value Fair Value Carrying Value Fair Value

16 unchanged sentences

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 March 31, 2024.

These arrangements do not call for collateral, and no cash collateral had been received or pledged related to the underlying derivatives as of June 30, 2024.

The following table presents the fair value of derivative instruments:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Outstanding Gross

19 unchanged sentences

Amount of income (expense) recognized in income

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

Derivatives Location of income (expense)

recognized in the condensed consolidated statements of operations Three Months Ended June 30,

Cash flow hedging relationships:

10 unchanged sentences

Foreign currency forward contracts Investment expense (income) and other, net — ( 1 )

Amount of income (expense) recognized in income

Derivatives Location of income (expense)

recognized in the condensed consolidated statements of operations Six Months Ended June 30,

Cash flow hedging relationships:

Interest rate swaps Interest expense, net $ 18 $ 15

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

Cross currency contracts Interest expense, net 1 1

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

Fair value hedging relationships:

Cross currency contracts Investment expense (income) and other, net 15 ( 22 )

Cross currency contracts Interest expense, net 1 1

Net investment hedging relationships:

Cross currency contracts Interest expense, net 2 2

Not designated as hedging instruments:

Foreign currency forward contracts Investment expense (income) and other, net — ( 1 )

Currency Effects

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"):

5 unchanged sentences

AOCI into income

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

Three Months Ended June 30, Three Months Ended June 30,

Derivatives 2024 2023 2024 2023

7 unchanged sentences

Cross currency contracts 2 ( 4 ) 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

Six Months Ended June 30, Six Months Ended June 30,

Derivatives 2024 2023 2024 2023

Cash flow hedging relationships:

Interest rate swaps $ 13 $ 8 Interest expense, net $ 8 $ 8

Cross currency contracts — ( 1 ) Investment expense (income) and other, net 3 ( 2 )

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

Fair value hedging relationships:

Cross currency contracts 1 4 Investment expense (income) and other, net 15 ( 22 )

Net investment hedging relationships:

Cross currency contracts 4 ( 5 ) Interest expense, net — —

Cash flow hedges

8 unchanged sentences

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

As of June 30, 2024, approximately $ 5 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").

2 unchanged sentences

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

As of June 30, 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 loan of $ 2,257 .

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.

11 unchanged sentences

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

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.

In January 2022, 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.

In June 2024, the Company entered into a cross-currency swap with a maturity date of June 2029 and designated it as a fair value hedge with gross notional U.S.

dollar equivalent of $ 16 in AUD.

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

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PROPERTY AND EQUIPMENT, NET

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

(In Years) March 31,

The components of property and equipment as of June 30, 2024 and December 31, 2023 are as follows:

(In Years) June 30,

2024 December 31,

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Property and equipment, net $ 383 $ 385

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 related to property and equipment, including finance leases, was $ 20 and $ 19 during the three months ended June 30, 2024 and 2023, and $ 39 and $ 38 during the six months ended June 30, 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 March 31,

Maturity Date June 30,

2024 December 31,

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Term loan facility

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.

During the second quarter of 2024, the Company completed its Sixth Amendment to its credit agreement, refinancing the 2021 Term Loan through an upsizing and repricing and repaying the 2019 Term Loan.

The repricing reduced the applicable margin on the 2021 Term Loan by 50 basis points and removed the credit spread adjustment ("CSA").

As part of the transaction, the Company incurred approximately $ 550 of incremental principal on the 2021 Term Loan.

The proceeds were used to repay the remaining $ 330 of the 2019 Term Loan, repay $ 100 of the Revolving Credit Facility outstanding, and for general corporate purposes, including to partially fund the Elevated acquisition.

During the first quarter of 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 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.

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.

As of June 30, 2024, the Company had $ 0 of principal outstanding under the $ 1,200 term loan (the "2019 Term Loan") with a maturity date of October 1, 2026.

As of June 30, 2024, the Company had $ 2,257 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 1.00 % or (2) Term SOFR rate (adjusted for statutory reserves) plus an applicable margin equal to 2.00 %.

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 June 30, 2024 and December 31, 2023, the Company had no amounts outstanding under the Revolving Credit Facility, and $ 496 and $ 495 was available at June 30, 2024 and December 31, 2023, respectively, after giving effect to $ 4 and $ 5 of outstanding letters of credit, respectively.

As of June 30, 2024 and December 31, 2023, the Company was in compliance with all applicable debt covenants.

Swap activity

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 %.

As of June 30, 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.

The remaining $ 1,137 of the term loan balance will bear interest based on one-month SOFR plus 200 basis points, but the rate will fluctuate as SOFR fluctuates.

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

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

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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 balance as of March 31, 2024 was $ 337 .

The balance as of June 30, 2024 was $ 337 .

4.750 % Senior Notes

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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 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.

The balance as of June 30, 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 June 30, 2024, and December 31, 2023.

Other obligations

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.

As of June 30, 2024 and December 31, 2023, the Company had $ 4 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 28.0 % and 30.6 % for the three months ended March 31, 2024 and 2023, respectively.

The Company’s effective tax rate was 22.4 % and 37.2 % for the three months ended June 30, 2024 and 2023, and 24.7 % and 35.0 % for the six months ended June 30, 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 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.

federal income tax rate of 21.0 % for the three and six months ended June 30, 2024 and 2023 is due to nondeductible permanent items, taxes on foreign earnings in jurisdictions that have higher tax rates, state taxes, and discrete items.

As of June 30, 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 March 31, 2024, the Company had gross federal, state, and foreign net operating loss carryforwards of approximately $ 0 , $ 19 , and $ 112 , respectively.

As of June 30, 2024, the Company had gross federal, state, and foreign net operating loss carryforwards of approximately $ 0 , $ 19 , and $ 110 , respectively.

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

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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 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.

As of June 30, 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 June 30, 2024 and December 31, 2023 of $ 3 and $ 2 , respectively.

During the three and six months ended June 30, 2024 and 2023, the Company did not recognize net interest expense.

If all of the Company’s unrecognized tax benefits as of June 30, 2024, were recognized, $ 11 would impact the Company’s effective tax rate.

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

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

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

As of June 30, 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.

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

Three Months Ended March 31,

Three Months Ended June 30,

Service cost $ 2 $ 1

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

Six Months Ended June 30,

Service cost $ 3 $ 2

Interest cost 30 31

Expected return on plan assets ( 21 ) ( 37 )

Net periodic pension cost (benefit) $ 12 $ ( 4 )

Multiemployer pension plans

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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 $ 19 and $ 23 during the three months ended March 31, 2024 and 2023, respectively.

Total consolidated contributions to multiemployer plans were $ 25 and $ 27 during the three months ended June 30, 2024 and 2023, respectively, and $ 44 and $ 50 during the six months ended June 30, 2024 and 2023, respectively.

Profit sharing plans

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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 $ 6 and $ 5 in expense for shares distributed to eligible employees during the three months ended March 31, 2024 and 2023, respectively.

In connection with these plans, the Company recognized $ 5 and $ 5 in expense for shares distributed to eligible employees during the three months ended June 30, 2024 and 2023, respectively, and $ 11 and $ 10 in expense during the six months ended June 30, 2024 and 2023, respectively.

Employee stock purchase plan

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

The Company recognized $ 2 and $ 1 of expense during the three months ended June 30, 2024 and 2023, respectively, and $ 3 and $ 3 of expense during the six months ended June 30, 2024 and 2023, respectively.

RELATED-PARTY TRANSACTIONS

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.

The Company incurred advisory fees of $ 1 during each of the three months ended June 30, 2024 and 2023 and $ 2 during each of the six months ended June 30, 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.

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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.

During the six months ended June 30, 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 109,247 and 223,820

shares of common stock on the Series B Preferred Stock held by the Viking Purchasers during the three and six months ended June 30, 2023.

During the first quarter of 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."

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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 $ 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.

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 June 30, 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 March 31, 2024 ("Series A Preferred Stock").

The Company had 4,000,000 shares of Series A Preferred Stock issued and outstanding as of June 30, 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.

During the three months ended June 30, 2024, the Company issued 12,650,000 shares of the Company’s common stock in a public underwritten offering.

The proceeds from this offering totaled approximately $ 458 , net of related expenses.

The Company used net proceeds from this offering to finance a portion of the consideration for the Elevated acquisition and for general corporate purposes.

Stock Repurchases

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.

During the first quarter of 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 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 the six months ended June 30, 2024 and 2023, the Company repurchased 16,260,160 and 970,004 shares of common stock for approximately $ 600 and $ 23 , respectively.

The repurchases during the six months ended June 30, 2024 were related to the Series B Preferred Stock Conversion, see below for more information.

During the three months ended June 30, 2023, the Company repurchased 428,688 shares of common stock for aggregate payments of approximately $ 11 .

As of June 30, 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").

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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 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 repurchase price was financed by (i) an incremental term facility of $ 300 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 former 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 six months ended June 30, 2024 for the Series B Preferred Stock outstanding through February 28, 2024.

The Company declared a Series B Preferred Stock dividend of $ 11 , or 436,992 shares of common stock, during the three months ended June 30, 2023.

The Company declared and issued a Series B Preferred Stock dividend of $ 22 , or 935,285 shares of common stock, during the six months ended June 30, 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.

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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.

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

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

Three Months Ended March 31,

Basic (loss) earnings per common share:

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Basic earnings per common share:

Net income $ 69 $ 48 $ 114 $ 74

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Less conversion of Series B Preferred Stock — — ( 372 ) —

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

Net income (loss) attributable to common shareholders $ 62 $ 28 $ ( 265 ) $ 40

Weighted average shares outstanding - basic 271,541,999 235,182,839 260,643,137 234,784,799

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

Diluted (loss) earnings per common share:

Income (loss) per common share - basic $ 0.23 $ 0.12 $ ( 1.02 ) $ 0.17

Diluted earnings per common share:

Net income $ 69 $ 48 $ 114 $ 74

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Less conversion of Series B Preferred Stock — — ( 372 ) —

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

Net income (loss) attributable to common shareholders - diluted $ 62 $ 32 $ ( 265 ) $ 46

Weighted average shares outstanding - basic 271,541,999 235,182,839 260,643,137 234,784,799

2 unchanged sentences

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

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

2,939,298 1,618,596 — 809,298

Weighted average shares outstanding - diluted 275,728,918 269,561,690 260,643,137 268,366,982

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

Income (loss) per common share - diluted $ 0.22 $ 0.12 $ ( 1.02 ) $ 0.17

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.

For the six months ended June 30, 2024, 125,000 stock options to purchase the same number of common shares.

For the six months ended June 30, 2024, 1,160,800 time-based, performance-based, and market-based restricted stock units.

For the three months ended June 30, 2024, and the three and six months ended June 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 2024, the Annual Dividend amount was calculated based on the appreciation of the Company’s share price over the highest previously used share price of $ 33.9465 .

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 .

SEGMENT INFORMATION

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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 March 31, 2024

Three Months Ended June 30, 2024

Services Specialty

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Capital expenditures 6 13 3 22

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Services Specialty

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Investment income and other, net 3 3 — 6

Depreciation 7 12 — 19

Amortization 42 13 1 56

EBITDA $ 150 $ 69 $ ( 31 ) $ 188

Total assets $ 6,107 $ 1,328 $ 539 $ 7,974

Capital expenditures 9 16 — 25

Six Months Ended June 30, 2024

Services Specialty

Services Corporate and

Eliminations Consolidated

Net revenues $ 2,493 $ 842 $ ( 4 ) $ 3,331

EBITDA Reconciliation

Operating income (loss) $ 264 $ 42 $ ( 80 ) $ 226

Investment (expense) income and other, net ( 10 ) 5 — ( 5 )

Depreciation 15 22 2 39

Amortization 78 26 1 105

EBITDA $ 347 $ 95 $ ( 77 ) $ 365

Total assets $ 6,359 $ 1,144 $ 458 $ 7,961

Capital expenditures 11 23 10 44

Six Months Ended June 30, 2023

Services Specialty

Services Corporate and

Eliminations Consolidated

Net revenues $ 2,416 $ 985 $ ( 16 ) $ 3,385

EBITDA Reconciliation

Operating income (loss) $ 194 $ 41 $ ( 55 ) $ 180

Investment income and other, net 6 5 — 11

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

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Capital expenditures 14 31 1 46

SUBSEQUENT EVENTS

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 future pension contributions;

• 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, 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.

• our expectations regarding our acquisitions, including the operational challenges and the expected benefits of acquisitions 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 February 28, 2024, 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.

Important factors that may materially affect the forward-looking statements include the following:

• adverse developments in the credit markets that could adversely affect funding of construction projects;

• exposure to global economic, political and legal risks related to our international operations, including geopolitical instability;

• the ability and willingness of customers to invest in infrastructure projects;

• a decline in demand for our services or for the products and services of our customers;

• the fact that our revenues are derived primarily from contracts with durations of less than six months and the risk that customers will not renew or enter into new contracts;

• our ability to successfully acquire other businesses, successfully integrate acquired businesses into our operations and manage the risks and potential liabilities associated with those acquisitions;

• the impact of our regional, decentralized business model on our ability to execute on our business strategies and operate our business successfully;

• our ability to compete successfully in the industries and markets we serve;

• our ability to properly manage and accurately estimate costs associated with specific customer projects, in particular for arrangements with fixed price terms;

• supply chain constraints and interruptions, and the resulting increases in the cost, or reductions in the supply, of the materials and commodities we use in our business and for which we bear the risk of such increases;

• the impact of inflation;

• our relationship with our employees, a large portion of which are covered by collective bargaining arrangements, and our ability to effectively manage and utilize our workforce;

• the inherently dangerous nature of the services we provide and the risks of potential liability;

• the impact of customer consolidation;

• the loss of the services of key senior management personnel and the availability of skilled personnel;

• the seasonality of our business and the impact of weather conditions;

• the variability of our operating results between periods and the resulting difficulty in forecasting future operating results;

• litigation that results from our business, including costs related to any damages we may be required to pay as a result of general liability or workmanship claims brought by our customers;

• the impact of health, safety, and environmental laws and regulations, and the costs associated with compliance with such laws and regulations;

• our substantial level of indebtedness and the effect of restrictions on our operations set forth in the documents that govern such indebtedness;

• our expectations regarding the acquisition of the Chubb business, including the expected benefits of the acquisition and future value creation opportunities;

• our compliance with certain financial maintenance covenants in our credit agreement and the effect on our liquidity of any failure to comply with such covenants.

• our decentralized business model which subjects us to various risks which may impact our ability to execute on our business strategies and integrated policies and processes;

• our participation in joint ventures which presents certain risks, including risks of harm to our reputation for failures of our joint venture partners;

• expansion of our international operations which subjects us to economic, political, and other risks;

• improperly managed projects or project delays that may result in additional costs on claims against us;

• our business strategy, which relies on our ability to successfully acquire other businesses, and integrate acquired businesses into our operations, and our inability to do so could adversely affect our business and results of operations;

• we may not realize the expected benefits of completed acquisitions because of integration and transition difficulties;

• adverse developments in the credit markets that could adversely affect funding of significant projects in our industries and our ability to secure financing, take advantage of acquisition opportunities, or achieve our growth objectives;

• a significant portion of our revenue is recognized over time based on estimates of contract revenue, costs, and profitability, and our reliance on such projections carries risk of a reduction or reversal of previously recorded revenue or profits;

• we have a significant amount of goodwill and identifiable intangible assets that are subject to impairment in the future under certain circumstances;

• any shortfalls in our remediation of the material weaknesses in our internal controls over financial reporting, or in our implementation and maintenance of effective controls, creates certain risks;

• our substantial level of indebtedness, and the associated compliance obligations contained in the financial maintenance covenants in our credit facilities and restrictions on our operations set forth in our Credit Agreement, increases the potential negative impact of interest rate increases and creates risks to our cash flow and operating flexibility;

• we are effectively self-insured against many potential liabilities, which makes estimating our future expenses for claims difficult and which increases the financial risks associated with the realization of such potential liabilities;

• a portion of our contracts allocate the risks of price increases, or reductions in the supply, of the materials we use in our business to us;

• our contracts portfolio contains many highly-regulated government contracts and guaranties of subsidiary contracts, which present elevated risks in the event of contract breach;

• our contracts portfolio is primarily comprised of contracts with durations of less than six months, many of which are subject to reduction or cancellation, which present risks that turn on our ability to maintain a stable pipeline of projects;

• a large portion of our workforce is covered by collective bargaining agreements, works council arrangements and benefit pension plans, which limits our discretion in the management of covered employees, carries a risk of strikes or other concerted activities that may impair our operations, subjects us to potential works council claims and litigation and imposes obligations to fund certain pension plans;

• we are vulnerable to the economic conditions affecting the industries we serve, including the construction industry and the energy sector, which present risks of a decline in demand for our services or in the financial condition of our customers and their ability and willingness to invest in infrastructure projects;

• we often perform our services under dangerous and challenging conditions, which presents substantial risks of injury and associated liability;

• we face regular litigation in our business across a broad range of claims, including costs related to damages we may be assessed relating to our contractual obligations or as a result of product liability claims against our customers;

• we are governed by many health, safety and environmental laws and regulations, which presents significant risks associated with compliance deficiencies;

• certain of the markets we serve are seasonal, and our projects can be negatively impacted by poor or extreme weather;

• we maintain confidential data and information which exposes us to risks associated with cybersecurity incidents and compliance with data privacy and security laws, identity protection and information security;

• we face risks associated with, deterioration in our performance of services, increases in healthcare costs, significant employee misconduct, and adverse regulatory changes, all of which may negatively impact our operations and financial results;

• our success ultimately depends on our ability to compete successfully in the industries and markets we serve which may be jeopardized by the loss of key senior management personnel or a shortage of highly skilled personnel.

The factors identified above are believed to be important factors, but not necessarily all of the important factors, which could cause actual results to differ materially from those expressed in any forward-looking statement made by us.

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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