What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-26 compared with 2024-02-28 · 453 added, 346 removed, 1338 unchanged (37% of the section changed)

4 unchanged sentences

Consolidated Statements of Operations for the Years Ended December 31, 2024, 2023, and 2022

Consolidated Statements of Comprehensive (Loss) I ncome for the Years Ended December 31, 2023, 2022, and 2021

Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2024, 2023, and 2022

Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2024, 2023, and 2022

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Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors

To the Shareholders and Board of Directors

APi Group Corporation:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of APi Group Corporation and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive (loss) income, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements).

We have audited the accompanying consolidated balance sheets of APi Group Corporation and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 28, 2024 expressed an adverse opinion on the effectiveness of the Company’s internal control over financial reporting.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 26, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

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Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

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Total estimated costs for certain fixed price projects recognized over time

As discussed in Note 7 to the consolidated financial statements, the Company recognizes revenue on certain safety services, specialty services, and industrial services for fixed price projects over time.

As discussed in Note 7 to the consolidated financial statements, the Company recognizes revenue on certain safety services and specialty services for fixed price projects over time.

For these fixed price projects, the Company uses a cost-to-cost measure of progress.

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Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors

To the Shareholders and Board of Directors

APi Group Corporation:

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We have audited APi Group Corporation and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, because of the effect of the material weaknesses, described below, on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements), and our report dated February 26, 2025 expressed an unqualified opinion on those consolidated financial statements.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Material weaknesses related to (i) user access controls specific to segregation of duties in the change management process in certain information technology systems and (ii) controls over the completeness and accuracy of time keeping and service order information used in certain revenue and cost of revenue processes have been identified and included in management’s assessment.

The material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2023 consolidated financial statements, and this report does not affect our report on those consolidated financial statements.

The Company acquired Elevated Facility Services Group during 2024, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024, Elevated Facility Services Group’s internal control over financial reporting associated with 7.5% of consolidated assets and 1.7% of consolidated revenues included in the consolidated financial statements of the Company as of and for the year ended December 31, 2024.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Elevated Facility Services Group.

Basis for Opinion

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A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and

directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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(In millions, except share and per share amounts)

2023 December 31,

Current assets:

Cash and cash equivalents $ 499 $ 479

Accounts receivable, net of allowances of $ 5 and $ 3 at December 31, 2023 and December 31, 2022, respectively

Accounts receivable, net of allowances of $ 9 and $ 5 at December 31, 2024 and 2023, respectively

Inventories 143 150

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Commitments and contingencies (Note 18) — —

5.5 % Series B Redeemable Convertible Preferred Stock, $ 0.0001 par value, 800,000 authorized shares, issued and outstanding at December 31, 2023 and 2022, respectively, aggregate liquidation preference of $ 840

5.5 % Series B Redeemable Convertible Preferred Stock, $ 0.0001 par value;

0 and 800,000 shares issued and outstanding at December 31, 2024 and 2023, respectively

Shareholders’ equity:

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

Common stock;

$ 0.0001 par value, 500,000,000 authorized shares, 235,575,316 shares and 233,403,912 shares issued at December 31, 2023 and 2022, respectively (excluding 8,281,148 and 584,584 shares declared for stock dividend at December 31, 2023 and 2022, respectively)

Common stock, $ 0.0001 par value;

500,000,000 authorized shares;

274,778,327 shares and 235,575,316 shares issued at December 31, 2024 and 2023, respectively (excluding 7,944,104 and 8,281,148 shares declared for stock dividend at December 31, 2024 and 2023, respectively)

Additional paid-in capital 3,305 2,572

Accumulated deficit ( 11 ) ( 164 )

Retained earnings (accumulated deficit) 215 ( 11 )

Accumulated other comprehensive loss ( 567 ) ( 490 )

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Loss (gain) on extinguishment of debt, net 1 7 ( 5 )

Non-service pension benefit ( 12 ) ( 42 ) —

Investment income and other, net ( 13 ) ( 9 ) ( 12 )

Investment expense (income) and other, net 7 ( 25 ) ( 51 )

Other expense, net 154 127 69

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Stock dividend on Series B Preferred Stock ( 7 ) ( 44 ) ( 44 )

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

Net (loss) income attributable to common shareholders $ ( 224 ) $ ( 161 ) $ 29

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APi Group Corporation and Subsidiaries

Consolidated Statements of Comprehensive (Loss) Income

Consolidated Statements of Comprehensive Income (Loss)

(In millions)

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Net income $ 250 $ 153 $ 73

Other comprehensive (loss) income:

Fair value change - derivatives, net of tax benefit (expense) of $ 8 , ($ 11 ), and $( 9 ), respectively

Defined benefit pension plans adjustment, net of tax expense of $ 81 , $ 55 , and $ 0 , respectively

Other comprehensive income (loss):

Fair value change - derivatives, net of tax (expense) benefit of ($ 7 ), $ 8 , and $( 11 ), respectively

Defined benefit pension plans adjustment, net of tax (expense) benefit of $( 9 ), $ 81 , and $ 55 , respectively

26 ( 244 ) ( 165 )

Foreign currency translation adjustment ( 107 ) 61 ( 164 )

Comprehensive (loss) income $ ( 54 ) $ ( 194 ) $ 61

Comprehensive income (loss) $ 187 $ ( 54 ) $ ( 194 )

See notes to consolidated financial statements.

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and Outstanding Additional

Capital Accumulated Deficit Accumulated

Capital (Accumulated Deficit) Retained Earnings Accumulated

Comprehensive

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Foreign currency translation adjustment — — — — — — ( 164 ) ( 164 )

Pension plans adjustment — — — — — — ( 165 ) ( 165 )

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

Issuance of common shares — — 22,716,049 — 446 — — 446

Warrants exercised — — 19,994,203 — 230 — — 230

Series B Preferred Stock dividend — — 1,944,939 — — — — —

Share repurchases — — ( 2,505,723 ) — ( 44 ) — — ( 44 )

Profit sharing plan contributions — — 622,655 — 13 — — 13

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Foreign currency translation adjustment — — — — — — 61 61

Pension plans adjustment — — — — — — ( 165 ) ( 165 )

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

Pension plans fair value adjustment — — — — — — ( 244 ) ( 244 )

Loss on dedesignated derivatives amortized from AOCI into income — — — — — — ( 16 ) ( 16 )

Series B Preferred Stock dividend — — 1,933,004 — — — — —

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Pension plans fair value adjustment — — — — — — 26 26

Gain on dedesignated derivatives amortized from AOCI into income — — — — — — ( 16 ) ( 16 )

Loss on dedesignated derivatives amortized from AOCI into income — — — — — — ( 14 ) ( 14 )

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

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

Share repurchases — — ( 1,626,493 ) — ( 41 ) — — ( 41 )

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

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

Profit sharing plan contributions — — 510,319 — 16 — — 16

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Non-cash lease expense 97 88 67

Net periodic pension benefit ( 8 ) ( 35 ) —

Net periodic pension expense (benefit) 27 ( 8 ) ( 35 )

Loss (gain) on extinguishment of debt, net 1 7 ( 5 )

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Repurchases of common stock — ( 41 ) ( 44 )

Proceeds from equity issuances — 797 676

Proceeds from the issuance of common shares 458 — 797

Conversion of Series B Preferred Stock ( 600 ) — —

Payments of acquisition-related consideration ( 8 ) ( 4 ) ( 5 )

Restricted shares tendered for taxes ( 13 ) ( 3 ) ( 3 )

Net cash (used in) provided by financing activities ( 532 ) 1,756 917

Other financing activities ( 5 ) — —

Net cash provided by (used in) financing activities 245 ( 532 ) 1,756

Effect of foreign currency exchange rate change on cash, cash equivalents, and restricted cash ( 15 ) 6 ( 9 )

Net (decrease) increase in cash, cash equivalents, and restricted cash ( 127 ) ( 884 ) 976

Net increase (decrease) in cash, cash equivalents, and restricted cash 21 ( 127 ) ( 884 )

Cash, cash equivalents, and restricted cash, beginning of period 480 607 1,491

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Shares of common stock issued to profit sharing plan 18 14 13

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

See notes to consolidated financial statements.

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NATURE OF BUSINESS

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

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

SIGNIFICANT ACCOUNTING POLICIES

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Use of estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S.

GAAP") requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net revenues and expenses during the reporting period.

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net revenues and expenses during the reporting period.

Actual results could differ from those estimates.

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dollars at average monthly rates of exchange in effect during the year.

Foreign currency transaction gains and losses, including hedging impacts, are classified in investment income and other, net, in the consolidated statements of operations and were a gain (loss) of $ 1 , $( 2 ) and $( 3 ) for the years ended December 31, 2023, 2022, and 2021, respectively.

Foreign currency transaction gains and losses, including hedging impacts, are classified in investment (expense) income and other, net, in the consolidated statements of operations and were a (loss) gain of ($ 2 ), $ 1 and $( 2 ) for the years ended December 31, 2024, 2023, and 2022, respectively.

These net foreign currency transaction gains and losses include derivative instruments designed to reduce foreign currency exchange rate risks.

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Translation gains or losses, which are recorded in accumulated other comprehensive loss on the consolidated balance sheets, result from translation of the assets and liabilities of APi Group’s foreign subsidiaries into U.S.

Foreign currency translation gains (losses) totaled approximately $ 61 , $( 164 ), and $( 11 ) for the years ended December 31, 2023, 2022, and 2021, respectively.

Foreign currency translation (losses) gains totaled approximately ($ 107 ), $ 61 , and $( 164 ) for the years ended December 31, 2024, 2023, and 2022, respectively.

Nearly all of the Company’s foreign operations use their local currency as their functional currency.

Currency gains or losses resulting from transactions executed in currencies other than the functional currency are included in investment income and other, net, in the consolidated statements of operations.

Currency gains or losses resulting from transactions executed in currencies other than the functional currency are included in investment expense (income) and other, net, in the consolidated statements of operations.

Cash and cash equivalents

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The fair value of the Company's debt 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 fair value of the Company’s derivative instruments designated as hedge instruments are determined using standard pricing models and market-based assumptions for all significant inputs, such as yield curves and quoted spot and forward exchange rates.

The fair value of the Company’s derivative instruments designated as hedging instruments are determined using standard pricing models and market-based assumptions for all significant inputs, such as yield curves and quoted spot and forward exchange rates.

The fair value of the Company’s contingent consideration obligations is determined using a probability-weighted discounted cash flow method.

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Operating lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term (or at fair values in the case of those leases assumed in an acquisition).

As most of the Company’s leases do not provide an implicit rate, the Company uses incremental borrowing rates that are based on its own external unsecured borrowing rates and are risk-adjusted to approximate secured borrowing rates over similar terms.

rates over similar terms.

These rates are assessed on a quarterly basis for measurement of new lease obligations.

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Any goodwill impairment is limited to the total amount of goodwill allocated to that reporting unit.

For the Heating, Ventilation and Air Conditioning ("HVAC"), Infrastructure/Utility, Fabrication and Specialty Contracting reporting units, the Company performs a qualitative assessment to analyze whether or not goodwill has been impaired.

For the quantitative analysis performed on the Life Safety reporting unit, the Company determines the fair value of the reporting unit using a combination of the income approach (discounted cash flow method) and market approach (guideline transaction method and guideline public company method).

For the Heating, Ventilation and Air Conditioning ("HVAC"), North American Life Safety, Fabrication, and Specialty Contracting reporting units, the Company performs a qualitative assessment to analyze whether or not goodwill has been impaired.

For the quantitative analysis performed on the Infrastructure/Utility and International Life Safety reporting units, the Company determines the fair value of the reporting unit using a combination of the income approach (discounted cash flow method) and market approach (guideline transaction method and guideline public company method).

Management weights each of the methods applied to determine the fair value of the reporting unit.

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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 as of December 31, 2023 were immaterial.

The Company exercises control over one joint venture that is consolidated into the Company's financial statements.

The share of earnings from the consolidated joint venture was $ 1 and $ 0 for the years ended December 31, 2024 and 2023, respectively.

The Company’s share of earnings from the non-consolidated joint ventures was $ 8 , $ 7 , and $ 3 , during the years ended December 31, 2024, 2023, and 2022, respectively.

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

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

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

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Under this guidance, actuarial gains and losses, prior service costs or credits, and any remaining transition assets or obligations that have not been recognized under previous accounting standards must be recognized in accumulated other comprehensive loss, net of tax effects, until they are amortized as a component of net periodic benefit cost.

Company reviews its actuarial assumptions at each measurement date and makes modifications to the assumptions based on current rates and trends, if appropriate.

The Company reviews its actuarial assumptions at each measurement date and makes modifications to the assumptions based on current rates and trends, if appropriate.

During 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 insurance contracts, which were 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.

The Company's accounting policies related to pension and post-retirement obligations and the buy-in transaction are disclosed in Note 16 - "Pension".

The Company's

accounting policies related to pension and post-retirement obligations and the buy-in transaction are disclosed in Note 16 – "Pension."

In December 2024, the Company entered into a non-binding agreement in principle with the Trustees of the two pension plans in the United Kingdom to proceed with wind-up of the plans contingent on certain conditions.

If all conditions are met, the Company expects to execute the final wind-up in late 2026.

Definite-lived intangibles

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The amounts the Company will ultimately incur could differ in the near-term from the estimated amounts accrued.

At December 31, 2023 and 2022, the Company had accrued $ 98 and $ 123 , respectively, relating to workers’ compensation, general and automobile claims, with $ 74 and $ 66 , respectively, included in other noncurrent liabilities.

At December 31, 2024 and 2023, the Company had accrued $ 112 a nd $ 98 , respectively, relating to workers’ compensation, general and automobile claims, with $ 87 and $ 74 , respectively, included in other noncurrent liabilities.

The Company recorded a receivable from the insurance carriers of $ 11 and $ 12 at December 31, 2024 and 2023, respectively, to offset the liabilities due above the Company’s deductible, which, under contract, are payable by the insurance carrier.

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Basic earnings per common share excludes dilution and is computed by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding during the period.

The Company has determined that its Series A Preferred Stock and Series B Preferred Stock are participating securities as the Series A Preferred Stock and Series B Preferred Stock participate in dividends with common stock according to a predetermined

The Company has determined that its Series A Preferred Stock and, prior to its extinguishment, Series B Preferred Stock were participating securities as the Series A Preferred Stock and Series B Preferred Stock participated in dividends with common stock according to a predetermined formula.

Accordingly, the Company used the two-class method of computing basic and diluted earnings per share for common stock according to participation rights of the Series A Preferred Stock and Series B Preferred Stock.

Under this method, net income applicable to holders of common stock is first reduced by the amount of dividends declared on Series A Preferred Stock and Series B Preferred Stock in the current period with remaining undistributed earnings allocated on a pro rata basis to the holders of common stock, Series A Preferred Stock, and Series B Preferred Stock to the extent that each class may share income for the period;

undistributed earnings allocated on a pro rata basis to the holders of common stock, Series A Preferred Stock, and Series B Preferred Stock to the extent that each class may share income for the period;

whereas undistributed net loss is allocated to common stock because holders of Series A Preferred Stock and Series B Preferred Stock are not contractually obligated to share the loss.

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Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

The Company records interest and penalties relating to unrecognized tax benefits and penalties in income tax expense.

The Company records interest and penalties relating to unrecognized tax benefits and delinquent payments in income tax expense.

RECENT ACCOUNTING PRONOUNCEMENTS

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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.

The Company adopted this ASU on January 1, 2024 and it did not have a material impact on its consolidated financial statements.

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

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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.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

The Company adopted this ASU on January 1, 2024 and it did not have a material impact on its consolidated financial statements.

In November 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

The ASU expands segment disclosures by requiring disclosure of significant segment expenses that are regularly reviewed by the Chief Operating Decision Maker (the "CODM") and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets.

The ASU expands segment disclosures by requiring disclosure of significant segment expenses that are regularly reviewed by the Chief Operating Decision Maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets.

ASU 2023-07 is effective for the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and subsequent interim periods, with early adoption permitted.

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

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

The Company adopted this ASU as of December 31, 2024.

Refer to Note 22 – "Segment Information" for details.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

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ASU 2023-09 requires the Company to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with early

adoption permitted.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the potential impact of adopting this ASU on its consolidated financial statements and disclosures.

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

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, 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.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) , which requires business entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods.

The ASU also requires disclosure of purchases of inventory, employee compensation, depreciation, and intangible asset amortization.

ASU 2024-03 is effective for annual periods beginning after December 15, 2026, with early adoption permitted.

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

In November 2024, the FASB issued ASU 2024-04, Debt - Debt with Conversion and Other Options (Subtopic 470-20) , which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.

ASU 2024-04 is effective for all entities for annual and interim periods in fiscal years beginning after December 15, 2025.

Early adoption is permitted for all entities that have adopted the amendments in ASU 2020-06.

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

BUSINESS COMBINATIONS

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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.

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.

Purchase price is allocated to acquired assets and liabilities assumed based upon their estimated fair values, with limited exceptions as permitted pursuant to GAAP, as determined based on estimates and assumptions deemed reasonable by the Company.

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.

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Goodwill is attributable to the workforce of the acquired businesses, the complementary strategic fit and resulting synergies these businesses bring to existing operations, and the opportunities in new markets expected to be achieved from the expanded platform .

2023 Acquisitions

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

Elevated acquisition

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 in the consolidated financial statements of the Company from the date of acquisition 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 $ 572

Cash deposited into escrow 6

Total net consideration $ 578

Cash and cash equivalents $ 7

Accounts receivable 28

Contract assets 18

Other current assets 7

Property and equipment 4

Operating lease right-of-use assets 2

Intangible assets 222

Accounts payable ( 12 )

Contract liabilities ( 15 )

Other accrued liabilities ( 12 )

Current and noncurrent operating and finance lease liabilities ( 4 )

Deferred tax liabilities ( 54 )

Other noncurrent liabilities ( 6 )

Net assets acquired $ 578

The Company has not finalized its accounting for purchase price allocation for accounts receivable, contract assets, contract liabilities, legal reserves, and taxes 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, including intangible assets and goodwill, 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 .

See Note 8 – “Goodwill and Intangibles” for the provisional goodwill assigned to each segment.

During the year ended December 31, 2024, the Company incurred transaction costs of $ 7 , which were expensed and included as a component of selling, general, and administrative expenses in the consolidated statements of operations.

Other 2024 acquisitions

On September 3, 2024, the Company completed an acquisition included within the Safety Services segment ("Acquisition A24").

The results of the A24 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 .

On December 29, 2023, the Company completed an acquisition included within the Safety Services segment ("Acquisition B23").

Consideration for Acquisition A24 included cash paid at closing of $ 24 and accrued consideration of $ 9 .

On October 1, 2024, the Company completed an acquisition included within the Safety Services segment ("Acquisition B24").

The results of the B24 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 .

Consideration for Acquisition B24 included cash paid at closing of $ 99 , cash deposited into escrow for future deferred payments of $ 2 , and no accrued consideration.

On December 2, 2024, the Company completed an acquisition included within the Safety Services segment ("Acquisition C24").

The results of the C24 business are reported within the Company's Safety Services segment.

Consideration for Acquisition C24 included cash paid at closing of $ 26 and accrued consideration of $ 7 .

During 2024, the Company completed nine individually immaterial acquisitions for aggregate consideration transferred $ 76 , made up of cash paid at closing of $ 63 and accrued consideration of $ 13 .

The Company has not finalized its accounting for acquisitions completed during 2024 and will make appropriate adjustments to the purchase price allocation prior to completion of the measurement periods, as required.

preliminary estimates, the total amount of goodwill from acquisitions expected to be deductible for tax purposes is $ 84 .

The results of operations of these acquisitions are included in the Company’s consolidated statements 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.

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

See Note 8 – “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 Acquisition B23 Other 2023 acquisitions

Acquisition A24 Acquisition B24 Acquisition C24 Other 2024 acquisitions

Cash paid at closing $ 24 $ 99 $ 26 $ 63

6 unchanged sentences

Other current assets 2 3 1 —

Property and equipment 3 3 — 3

Intangible assets 8 37 10 32

Goodwill 9 50 17 44

Accounts payable ( 2 ) ( 4 ) ( 2 ) —

Other accrued liabilities ( 3 ) ( 6 ) ( 6 ) ( 1 )

Contract liabilities ( 5 ) ( 1 ) — ( 2 )

Deferred tax liabilities — ( 2 ) ( 2 ) ( 2 )

Net assets acquired $ 33 $ 101 $ 33 $ 76

2022 Chubb Acquisition

During 2022, the Company completed the acquisition of 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.

During 2022, the Company incurred transaction costs of $ 24 , which were expensed and included as a component of selling, general, and administrative expenses in the consolidated statements of operations.

The Chubb Acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805, Business Combinations .

The purchase price has been allocated to the tangible assets and identifiable intangible assets acquired and liabilities assumed based upon their estimated fair values, with the exception of the following:

(1) pre-acquisition contingencies which are recognized and measured in accordance with ASC 450, Contingencies , if fair value cannot be determined;

(2) deferred income tax assets acquired and liabilities assumed are recognized and measured in accordance with ASC 740, Income Taxes ;

(3) pensions and other post-retirement benefits other than pensions are recognized and measured in accordance with ASC 715, Compensation – Retirement Benefits ;

(4) contract assets and liabilities are measured and recognized in accordance with ASC 606, Revenue from Contracts with Customers ("ASC 606");

and (5) certain lease related assets and liabilities which are measured and recognized in accordance with ASC 842, Leases ("ASC 842").

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

2023 Acquisitions

On June 30, 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 .

On December 29, 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 .

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

The total amount of goodwill from acquisitions deductible for tax purposes is $ 54 .

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

Acquisition A23 Acquisition B23 Other 2023 acquisitions

Cash paid at closing $ 30 $ 27 $ 22

Working capital and net indebtedness adjustment ( 42 )

Cash deposited into escrow 5 — —

Accrued consideration 3 5 2

Total net consideration $ 38 $ 32 $ 24

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 11

Goodwill 21 18 14

Accounts payable ( 192 )

Other accrued liabilities — ( 2 ) —

Contract liabilities ( 3 ) ( 5 ) ( 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

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

The Company has assigned final goodwill of $ 1,367 to its Safety Services reportable segment (see Note 8 - "Goodwill and Intangibles").

Based on U.S.

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

entities, the Company does not expect any of the amount of goodwill to be deductible for U.S.

income tax purposes.

Intangible assets

The Company has identified the following significant intangible assets:

customer relationships, trade names and trademarks, and contractual backlog.

As of the effective date of the Chubb Acquisition, identifiable intangible assets are required to be measured at fair value, and these assets could include assets that are not intended to be used or sold or that are intended to be used in a manner other than their highest and best use.

For purposes of these consolidated financial statements, the fair value and weighted-average useful lives of these intangible assets have been estimated using variations of the income approach.

Specifically, the excess earnings method was utilized to estimate the fair value of the customer relationships and the contractual backlog.

The relief from royalty method was utilized to estimate the fair value of the trade names and trademarks.

Significant inputs used to value these intangible assets include projections of future cash flows, long-term growth rates, customer attrition rates, discount rates, royalty rates, and applicable income tax rates.

The following table summarizes the fair value of the identifiable intangible assets:

Customer relationships $ 695

Trade names and trademarks 450

Contractual backlog 55

Total intangibles $ 1,200

The estimated useful lives over which the intangible assets will be amortized are as follows:

customer relationships ( fifteen years ), trade names and trademarks ( fifteen years ), and contractual backlog ( two years ).

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

The final allocations of the purchase prices did not differ materially from preliminary estimates with the exception of measurement period adjustments, primarily related to accounts receivable, intangible assets, goodwill, and other accrued liabilities, recorded during the year ended December 31, 2024.

Accrued consideration

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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 years 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 years 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.

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.

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The Company received $ 38 in cash for the sale.

During the year ended December 31, 2023, the Company recorded an impairment charge of $ 12 in selling, general, and administrative expenses in the consolidated statements of operations related to impairment of goodwill, intangible assets, and other assets of the Operating Company.

During the year ended December 31, 2023, the Company recorded an impairment charge of $ 12 in selling, general, and administrative expenses in the consolidated statements of operating related to impairment of goodwill, intangible assets, and other assets of the Operating Company.

RESTRUCTURING

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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 2023 restructuring program for the years ended December 31, 2023 and 2022:

Employee termination benefits Program related costs Asset write-downs Total

The following table summarizes the Company's restructuring liabilities for the years ended December 31, 2024 and 2023:

December 31, 2022 $ 22

Charges 30 — — 30

Payments ( 27 )

Reversals ( 1 )

Currency translation adjustment 1

December 31, 2023 32

Charges 37 3 6 46

Payments ( 28 )

Reversals ( 1 )

Currency translation adjustment 1 — — 1

December 31, 2024 $ 15

In addition to the costs noted above, the Company incurred asset write-down costs of $ 1 and $ 6 for the years ended December 31, 2024 and 2023, respectively.

The Company also incurred program related costs of $ 13 and $ 3 for the years ended December 31, 2024 and 2023, respectively.

Under ASC 606, revenue is recognized when or as control of promised goods and services is transferred to customers, and the amount of revenue recognized reflects the consideration to which an entity expects to be entitled in exchange for the goods and services transferred.

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Contracts with customers

The Company derives net revenues primarily from contracts with a duration of less than one week to three years (with the majority of contracts with durations of less than six months) which are subject to multiple pricing options, including fixed price, unit price, time and material, or cost plus a markup.

The Company derives net revenues primarily from contracts with a duration of less than one week to three years (with the majority of contracts with durations of less than six months ) which are subject to multiple pricing options, including fixed

price, unit price, time and material, or cost plus a markup.

The Company also enters into fixed price service contracts related to monitoring, maintenance, and inspection of safety systems.

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Management reviews estimates of total contract transaction price and total project costs on an ongoing basis.

Changes in job performance, job conditions, and management’s assessment of expected variable consideration are factors that

influence estimates of the total contract transaction price, total costs to complete those contracts, and the Company’s profit recognition.

Changes in job performance, job conditions, and management’s assessment of expected variable consideration are factors that influence estimates of the total contract transaction price, total costs to complete those contracts, and the Company’s profit recognition.

Changes in these factors could result in cumulative revisions to net revenues in the period in which the revisions are determined, which could materially affect the Company’s consolidated results of operations for that period.

2 unchanged sentences

The following tables provide disclosure of disaggregated net revenues by segment for the years ended December 31, 2024, 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.

Disaggregated net revenues information is as follows:

56 unchanged sentences

The stand-alone selling price is estimated using the expected cost plus a margin approach for each performance obligation.

For in-process contracts, the aggregate amount of transaction price allocated to the unsatisfied performance obligations at December 31, 2023 was $ 2,871 .

For in-process contracts, the aggregate amount of transaction price allocated to the unsatisfied perform ance obligations at December 31, 2024 was $ 3,040 .

The Company expects to recognize revenue on approximately 87 % of the remaining performance obligations over the next twelve months .

2 unchanged sentences

Contracts are often modified through change orders to account for changes in the scope and price of the goods or services being provided.

Although the Company evaluates each change order to determine whether such modification creates a separate performance obligation, the majority of change orders are for goods or services that are not distinct within the context of the original contract and, therefore, not treated as a separate performance obligation but rather as a modification of the existing contract and performance obligation.

context of the original contract and, therefore, not treated as a separate performance obligation but rather as a modification of the existing contract and performance obligation.

Variable consideration

19 unchanged sentences

As of December 31, 2024 and 2023, none of the Company’s contracts contained a significant financing component.

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

Contract assets and contract liabilities are classified as current in the 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 December 31, 2024, 2023, and 2022 are as follows:

7 unchanged sentences

At December 31, 2024 and 2023, retentions receivable were $ 160 and $ 156 , respectively, while the portions that may not be received within one year were $ 38 and $ 25 , respectively.

There were no other significant changes due to business acquisitions or significant changes in estimates of contract progress or transaction price.

were no other significant changes due to business acquisitions or significant changes in estimates of contract progress or transaction price.

There were no significant impairments of contract assets recognized during the period.

11 unchanged sentences

Acquisitions 47 — 47

Foreign currency translation and other, net (1)

Impairment of goodwill (1)

— ( 4 ) ( 4 )

Foreign currency translation and other, net (2)

Goodwill as of December 31, 2023 2,294 177 2,471

Acquisitions 510 3 513

Impairment of goodwill (2)

Foreign currency translation and other, net (2)

( 90 ) — ( 90 )

Foreign currency translation 46 — 46

Goodwill as of December 31, 2024 $ 2,714 $ 180 $ 2,894

(1) Other includes immaterial measurement period adjustments recorded during the year ended December 31, 2022 related to acquisitions for which the measurement period ended during the year ended December 31, 2022.

(1) The Company sold an operating company (See Note 5 – "Divestitures").

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

Pursuant to the authoritative literature, the Company evaluated the recoverability of the carrying value of the assets and liabilities and recorded a goodwill impairment charge of $ 4 for the year ended December 31, 2023.

(2) Other includes immaterial measurement period adjustments related to acquisitions for which the measurement period was open at the beginning of the year (see Note 4 – "Business Combinations").

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

46 unchanged sentences

Fair Value Measurements at December 31, 2024

Financial assets:

Level 1 Level 2 Level 3 Total

Derivatives designated as hedge instruments

Cash flow hedges - interest rate swaps $ — $ 7 $ — $ 7

Cash flow hedges - cross currency contracts — 10 — 10

Net investment hedges - cross currency contracts — 20 — 20

Financial assets

Derivatives designated as hedging instruments:

Cash flow hedges –

Interest rate swaps $ — $ 25 $ — $ 25

Cross currency contracts — 14 — 14

Foreign currency forward contracts — — — —

Fair value hedges – cross currency contracts — 54 — 54

Derivatives not designated as hedge instruments

Net investment hedges – cross currency contracts — 28 — 28

Derivatives not designated as hedging instruments:

Foreign currency forward contracts — — — —

1 unchanged sentence

Financial liabilities

Derivatives not designated as hedge instruments

Derivatives not designated as hedging instruments:

Foreign currency forward contracts — — — —

2 unchanged sentences

Fair Value Measurements at December 31, 2023

Financial assets:

Level 1 Level 2 Level 3 Total

Derivatives designated as hedge instruments

Cash flow hedges - interest rate swaps $ — $ 14 $ — $ 14

Cash flow hedges - cross currency contracts — 17 — 17

Net investment hedges - cross currency contracts — 32 — 32

Financial assets

Derivatives designated as hedging instruments:

Cash flow hedges –

Interest rate swaps $ — $ 7 $ — $ 7

Cross currency contracts — 10 — 10

Foreign currency forward contracts — — — —

Fair value hedges – cross currency contracts — 17 — 17

Derivatives not designated as hedge instruments

Net investment hedges – cross currency contracts — 20 — 20

Derivatives not designated as hedging instruments:

Foreign currency forward contracts — — — —

1 unchanged sentence

Financial liabilities

Derivatives not designated as hedge instruments

Derivatives not designated as hedging instruments:

Foreign currency forward contracts — ( 1 ) — ( 1 )

1 unchanged sentence

Total $ — $ ( 1 ) $ ( 6 ) $ ( 7 )

The Company determines the fair value of its derivative instruments designated as hedge instruments using standard pricing models and market-based assumptions for all inputs such as yield curves and quoted spot and forward exchange rates.

The Company determines the fair value of its derivative instruments designated as hedging instruments using standard pricing models and market-based assumptions for all inputs such as yield curves and quoted spot and forward exchange rates.

Accordingly, the Company’s derivative instruments are classified as Level 2.

21 unchanged sentences

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

During 2024, the Company repriced and upsized the 2021 Term Loan by an aggregate principal amount equal to $ 850 .

During 2024, the Company also repaid $ 100 to the 2021 Term Loan and the remaining $ 330 of the 2019 Term Loan.

During 2023, the Company completed repricing of its 2019 Term Loan and 2021 Term Loan and $ 422 of the 2019 Term Loan was extended to the 2021 Term Loan.

5 unchanged sentences

4.125 % Senior Notes

337 305 337 305

4.750 % Senior Notes

277 259 277 257

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.

2 unchanged sentences

Changes in fair value are recognized immediately in earnings unless the derivative qualifies and is designated as a hedge under ASC 815, Derivatives and Hedging .

Cash flows from derivatives are classified in the consolidated statements of cash flows in the

same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationships.

Cash flows from derivatives are classified in the consolidated statements of cash flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationships.

The Company evaluates hedge effectiveness at inception and on an ongoing basis.

7 unchanged sentences

December 31, 2024 December 31, 2023

Outstanding Gross Other

Assets Other Outstanding Gross Other

Notional Amount Noncurrent liabilities Notional Amount Noncurrent liabilities

Outstanding Gross Notional Amount Other

Assets Other Noncurrent Liabilities Outstanding Gross Notional Amount Other

Assets Other Noncurrent Liabilities

Derivatives designated as hedging instruments:

3 unchanged sentences

Foreign currency forward contracts — — — — — —

Fair value hedges:

Cross currency contracts 721 17 — 721 50 —

Net investment hedges:

Cross currency contracts 230 20 — 230 32 —

Fair value hedges – cross currency contracts 737 54 — 721 17 —

Net investment hedges – cross currency contracts 230 28 — 230 20 —

Total derivatives designated as hedging instruments $ 2,927 $ 121 $ — $ 2,191 $ 54 $ —

10 unchanged sentences

Interest rate swaps Interest expense, net $ 32 $ 32 $ 1

Cross currency contracts Investment income and other, net ( 3 ) 6 7

Cross currency contracts Investment expense (income) and other, net 7 ( 3 ) 6

Cross currency contracts Interest expense, net 2 2 2

Fair value hedging relationships:

Cross currency contracts Investment income and other, net ( 25 ) 53 —

Cross currency contracts Investment expense (income) and other, net 37 ( 25 ) 53

Cross currency contracts Interest expense, net 3 2 3

2 unchanged sentences

Not designated as hedging instruments:

Foreign currency forward contracts Investment income and other, net 1 2 1

Foreign currency forward contracts Investment expense and other, net — 1 2

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 $ 1 , $( 2 ) and $( 3 ) for the years ended December 31, 2023, 2022, and 2021, 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 $( 2 ), $ 1 and $( 2 ) for the years ended December 31, 2024, 2023, and 2022, respectively.

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

8 unchanged sentences

Interest rate swaps $ 14 $ ( 6 ) $ 48 Interest expense, net $ 13 $ 16 $ 3

Cross currency contracts ( 3 ) 3 — Investment income and other, net ( 3 ) 10 ( 7 )

Cross currency contracts ( 2 ) ( 3 ) 3 Investment expense (income) and other, net 7 ( 3 ) 10

Fair value hedging relationships:

Cross currency contracts ( 6 ) ( 2 ) — Investment income and other, net ( 25 ) 53 —

Cross currency contracts — ( 6 ) ( 2 ) Investment expense (income) and other, net 36 ( 25 ) 53

Net investment hedging relationships:

8 unchanged sentences

During 2022, the Company terminated the previously outstanding $ 720 notional amount interest rate swap with a maturity date in October 2024 ("2024 Interest Rate Swap").

The present value as of the date of termination of the 2024 Interest Rate Swap is recorded in AOCI on the consolidated balance sheets.

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 December 31, 2023, approximately $ 14 of unrealized pre-tax gains remained in AOCI.

The present value as of the date of termination of the 2024 Interest Rate Swap was recorded in AOCI on the consolidated balance sheets.

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

As of December 31, 2024, no unrealized pre-tax gains related to the terminated swap 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 January 2028.

As of December 31, 2023, the Company had $ 1,120 total notional amount outstanding in the 2028 Interest Rate Swap and the 2026 Interest Rate Swap.

On September 18, 2024, the Company entered into a $ 720 notional amount forward starting interest rate swap that exchanges a variable rate of interest (SOFR) for an average fixed rate of interest of approximately 3.13 % over the term of the agreement, commencing in October 2026 and maturing in January 2029 ("2029 Interest Rate Swap").

Upon commencement, the 2029 Interest Rate Swap will cover the remainder of the interest payments starting in October 2026 to the maturity of the 2021 Term Loan.

As of December 31, 2024, the Company had $ 1,840 total notional amount outstanding in the 2026 Interest Rate Swap, the 2028 Interest Rate Swap, and the 2029 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 $ 2,157 .

11 unchanged sentences

The Company periodically assesses whether its currency exchange contracts are effective, and when a contract is determined to be no longer effective as a hedge, the Company discontinues hedge accounting prospectively.

As of December 31, 2024, the Company had $ 0 total notional amount outstanding in foreign currency forward contracts designated as cash flow hedges.

Fair value hedges

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 all with maturity dates of January 2027 and are designated as fair value hedges with gross notional U.S.

In June 2024, to hedge these exposures, the Company entered into a cross currency swap maturing June 2029 and designated as a fair value hedge with a gross notional U.S.

dollar equivalent of $ 16 in AUD.

In 2022, the Company entered into three cross currency swaps all 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 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 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.

4 unchanged sentences

During 2021, the Company entered into a $ 230 notional foreign currency swap designated as a net investment hedge for a portion of the Company’s net investments in Euro-denominated subsidiaries.

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 consolidated balance sheets.

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 consolidated balance sheets.

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.

7 unchanged sentences

These forward contracts are undesignated for hedge accounting purposes.

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

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

PROPERTY AND EQUIPMENT, NET

12 unchanged sentences

The Company determines if an arrangement is or contains a lease at inception, which is the date on which the terms of the contract are agreed to, and the agreement creates enforceable rights and obligations.

Under ASC 842, a contract is or contains a lease when (i) explicitly or implicitly identified assets have been deployed in the contract and (ii) the customer obtains substantially all of the economic benefits from the use of that underlying asset and directs how and for what purpose the asset is used during the term of the contract.

purpose the asset is used during the term of the contract.

The Company also considers whether its service arrangements include the right to control the use of an asset.

75 unchanged sentences

Operating and finance leases - current $ 84 $ 6 $ 90

Operating and finance leases - non-current 164 8 172

Operating and finance leases - noncurrent 187 5 192

Total present value of lease liabilities $ 271 $ 11 $ 282

4 unchanged sentences

2019 Term Loan October 1, 2026 $ — $ 330

Revolving Credit Facility October 1, 2026 — —

Revolving Credit Facility January 3, 2027 — —

2021 Term Loan January 3, 2029 2,157 1,407

10 unchanged sentences

Term loan facility

During 2023, the Company completed its Third Amendment to its Credit Agreement, 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.

During 2023, the Company completed its Fourth Amendment to its Credit Agreement, repricing 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.

As of December 31, 2024, the Company had no principal outstanding under the $ 1,200 term loan (the "2019 Term Loan") and $ 2,157 of principal outstanding under the incremental term loan (the "2021 Term Loan").

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 credit spread adjustment ("CSA").

As of December 31, 2024 and 2023, the Company had no amounts outstanding under the Revolving Credit Facility, and $ 494 and $ 495 , respectively, was available under the Revolving Credit Facility, after giving effect to $ 6 and $ 5 , respectively, of outstanding letters of credit.

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

The repricing reduced the applicable margin on the 2021 Term Loan by 50 basis points and removed the 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 19 – "Shareholders' Equity and Redeemable Convertible Preferred Stock."

During 2024, the Company made aggregate payments of $ 330 and $ 100 on the 2019 Term Loan and 2021 Term Loan, respectively.

As a result of the principal payments, the Company incurred a loss on debt extinguishment of $ 1 related to unamortized debt issuance costs, which was recorded within loss (gain) on extinguishment of debt, net in the consolidated statements of operations.

As of December 31, 2023, 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 December 31, 2023, the Company had $ 1,407 of principal outstanding under the $ 1,100 term loan (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.

During 2023, the Company made aggregate payments of $ 375 and $ 100 on the 2019 Term Loan and 2021 Term Loan, respectively.

As a result of the principal payments, the Company incurred a loss on debt extinguishment of $ 7 related to unamortized debt issuance costs, which was recorded within loss (gain) on extinguishment of debt, net in the consolidated statements of operations.

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

Swap activity

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

As of December 31, 2023, 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 loan is 3.41 % and the second swapped $ 720 notional value of the term loans is 3.59 % through their maturity.

The remaining $ 617 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.

As of December 31, 2024, the Company had a $ 720 notional value 2026 Interest Rate Swap, exchanging one-month SOFR for a fixed rate of 3.59 % per annum, and $ 400 notional value 2028 Interest Rate Swap, 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 loan is 5.41 % and the second swapped $ 720 notional value of the term loans is 5.59 % through the swaps' maturity.

The remaining $ 1,037 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.

During 2024, the Company entered into a $ 720 notional amount forward starting interest rate swap commencing in October 2026 and maturing in January 2029 that exchanges a variable rate of interest (SOFR) for an average fixed rate of interest of approximately 3.13 % over the term of the agreement.

Refer to Note 10 – "Derivatives" for additional information.

At December 31, 2023 and 2022, the Company had no amounts outstanding under the Revolving Credit Facility, and $ 495 and $ 446 was available at December 31, 2023 and 2022, respectively, after giving effect to $ 5 and $ 54 of outstanding letters of credit, respectively.

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

4.125 % Senior Notes

13 unchanged sentences

Years Ending December 31:

Thereafter 2,021

Total $ 2,776

For the years ended December 31, 2024, 2023, and 2022, the components of income before income taxes are as follows:

Years Ended December 31,

Year Ended December 31,

2024 2023 2022

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Total earnings $ 330 $ 232 $ 93

The income tax provision (benefit) for the years ended December 31, 2023, 2022, and 2021, consisted of the following:

Years Ended December 31,

The income tax provision for the years ended December 31, 2024, 2023, and 2022, consisted of the following:

Year Ended December 31,

2024 2023 2022

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Foreign ( 12 ) ( 21 ) ( 12 )

Total deferred tax (benefit) provision $ ( 32 ) $ ( 47 ) $ 6

Total deferred tax benefit $ ( 27 ) $ ( 32 ) $ ( 47 )

Total income tax provision $ 80 $ 79 $ 20

The reconciliation of the federal statutory income tax rate to the Company’s provision for income taxes is as follows:

Years Ended December 31,

Year Ended December 31,

2024 2023 2022

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Reserves and allowances 6 6

Interest limitation 36 2

Gross deferred tax assets 310 298

Valuation allowance ( 114 ) ( 100 )

Valuation allowances ( 92 ) ( 114 )

Net deferred tax assets $ 218 $ 184

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Realization of these assets is ultimately dependent upon future taxable income.

Deferred tax assets must be reduced by a valuation allowance if, based on all

available evidence, it is considered more likely than not that some or all of the recorded deferred tax assets will not be realized in a future period.

Deferred tax assets must be reduced by a valuation allowance if, based on all available evidence, it is considered more likely than not that some or all of the recorded deferred tax assets will not be realized in a future period.

The Company considers all negative and positive evidence, including the weight of the evidence, to determine if a valuation allowance is required.

As of December 31, 2023 and 2022, valuation allowances of $ 114 and $ 100 were recorded against certain deferred tax assets of the Company’s foreign subsidiaries.

As of December 31, 2024 and 2023, valuation allowances of $ 92 and $ 114 were recorded against certain deferred tax assets of the Company’s domestic and foreign subsidiaries.

As of December 31, 2024, the Company had gross federal, state and foreign net operating loss carryforwards of approximately $ 0 , $ 20 , and $ 93 , respectively.

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A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

Years Ended December 31,

Year Ended December 31,

2024 2023 2022

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Additions for tax positions taken in the current period — 1 1

Reductions for tax positions taken in current period — — —

Reductions for tax positions due to lapse in statue of limitations ( 1 ) — —

Reductions for tax positions due to lapse in statute of limitations — ( 1 ) —

Foreign currency translation adjustments — — ( 2 )

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If all of the Company’s unrecognized tax benefits as of December 31, 2024 were recognized, $ 12 would impact the Company’s effective tax rate.

The Company does not expect any unrecognized tax benefits to expire in the next twelve months due to lapses in the statute of limitations.

The Company expects $ 1 of unrecognized tax benefits to expire in the next twelve months due to lapses in the statute of limitations.

The Company files income tax returns in the U.S.

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

As of December 31, 2023, with few exceptions, neither the Company nor its subsidiaries are subject to examination prior to tax year 2014.

As of December 31, 2024, with few exceptions, neither the Company nor its subsidiaries are subject to examination.

There are various other audits in state and foreign jurisdictions.

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

T he IRS exam related to the 2019 final S Corporation return has been closed without adjustments.

EMPLOYEE BENEFIT PLANS

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Sales of shares of the Company’s common stock under the ESPP are generally made pursuant to offerings that are intended to satisfy the requirements of Section 423 of the Internal Revenue Code.

The ESPP permits employees of the Company to purchase common stock at a price equal to 85 % of the lesser of (i) the market value of the common stock on the first date of the offering period, or (ii) the market value of the common stock on the purchase date, whichever is lower.

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.

common stock on the purchase date, whichever is lower.

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.

During the year ended December 31, 2024, the Company recognized $ 5 of expense, and issued 616,740 shares of the Company's common stock at a weighted-average price per share of $ 26.64 related to the ESPP.

As of December 31, 2023, the Company accrued a liability of $ 6 , which has been recorded as accrued salaries and wages in the consolidated balance sheets, for 264,603 shares of the Company's common stock that were issued to employees in January 2024.

As of December 31, 2023, there were approximately 6,012,500 shares reserved for future issuance under the ESPP.

As of December 31, 2024, the Company accrued a liability of $ 7 , which has been recorded as accrued salaries and wages in the consolidated balance sheets, for 228,787 sha res of the Company's common stock that were issued to employees in January 2025.

As of December 31, 2024, there were approximate ly 5,431,500 sha res reserved for future issuance under the ESPP.

The Company has 401(k) plans that provide for annual contributions not to exceed the maximum amount allowed by the Internal Revenue Code.

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however, its required contributions may increase based on the funded status of the MEPP and the legal requirements of the Pension Protection Act of 2006 (the "PPA"), which requires substantially underfunded MEPPs to implement a funding improvement plan ("FIP") or a rehabilitation plan ("RP") to improve their funded status.

Factors that could impact the funded status of the MEPP include, without limitation, investment performance, changes in the participant demographics, decline in the number of contributing employers, changes in actuarial assumptions, and the utilization of extended amortization provisions.

Factors that could impact the funded status of the MEPP include, without limitation, investment performance, changes in the participant demographics,

decline in the number of contributing employers, changes in actuarial assumptions, and the utilization of extended amortization provisions.

The Company believes that certain of the MEPPs in which the Company participates may have underfunded vested benefits.

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National Automatic Sprinkler Industry Pension Fund 52-6054620-001 12/31/2023 Green Green Green No $ 34 $ 32 $ 30 Yes No 3/31/2025

Heavy And General Laborers Local Unions 472 And 172 Of New Jersey Pension Fund 22-6032103-001 3/31/2024 Green Green Green No 10 5 5 Yes No 2/28/2027

Twin City Pipe Trades Pension Plan 41-6131800-001 4/30/2023 Green Green Green No 8 11 10 Yes No 4/30/2027

Boilermaker-Blacksmith National Pension Trust 48-6168020-001 12/31/2023 Red Green Yellow Yes 5 6 5 No No 12/31/2025

Sheet Metal Workers' National Pension Fund 52-6112463-001 12/31/2023 Green Green Yellow No 4 6 6 No No 4/30/2025

National Electrical Benefit Fund 53-0181657-001 12/31/2023 Green Green Green No 3 8 8 No No 6/30/2027

Boilermaker-Blacksmith National Pension Trust 48-6168020-001 12/31/2022 Green Yellow Yellow No 6 5 6 No No 12/31/2025

Sheet Metal Workers' National Pension Fund 52-6112463-001 12/31/2022 Green Yellow Yellow No 6 6 6 No No 4/30/2025

Heavy And General Laborers Local Unions 472 And 172 Of New Jersey Pension Fund (4)

22-6032103-001 3/31/2022 Green Green Green No 5 5 6 Yes No 2/29/2024

Central Pension Fund Of The IUOE & Participating Employers 36-6052390-001 1/31/2023 Green Green Green No 4 3 3 No No 5/31/2026

United Association National Pension Fund 52-6152779-001 6/30/2022 Green Yellow Yellow No 3 4 4 No No 6/1/2024

Building Trades United Pension Trust Fund Milwaukee And Vicinity 51-6049409-001 5/31/2023 Green Green Green No 2 2 2 No No 5/31/2026

Minnesota Laborers Pension Fund 41-6159599-001 12/31/2022 Green Green Green No 2 2 2 No No 4/30/2026

Twin City Carpenters And Joiners Pension Fund 41-6043137-001 12/31/2022 Green Green Yellow No 2 1 — No No 4/30/2024

Sheet Metal Workers' Local 10 Pension Fund 41-1562581-001 12/31/2023 Green Green Green No 2 2 3 Yes No 4/30/2027

Building Trades United Pension Trust Fund Milwaukee And Vicinity 51-6049409-001 5/31/2024 Green Green Green No 2 2 2 No No 5/31/2026

Operating Engineers 825 Pension Fund 22-6033380-001 6/30/2023 Green Green Green No 2 1 1 Yes No 6/30/2026

Central Pension Fund Of The IUOE & Participating Employers 36-6052390-001 1/31/2024 Green Green Green No 2 4 3 No No 5/31/2026

United Association National Pension Fund 52-6152779-001 6/30/2023 Green Green Yellow No 2 3 4 No No 4/30/2027

Eastern NY Laborers International Local 754 13-4164083-001 6/30/2024 Green Green Green No 1 1 1 Yes No 5/31/2025

Total other 14 19 21

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The above-noted percentages of contributions are based upon disclosures contained in the plans’ Forms.

Those Forms, among other things, disclose the names of individual participating employers whose annual contributions account for more than 5% of the aggregate annual amount contributed by all participating employers for a plan year.

Accordingly, if the annual contribution of two or more of the Company’s subsidiaries each accounted for less than 5% of such contributions,

but in the aggregate accounted for in excess of 5% of such contributions, that greater percentage is not available and accordingly is not disclosed.

Those Forms, among other things, disclose the names of individual

participating employers whose annual contributions account for more than 5% of the aggregate annual amount contributed by all participating employers for a plan year.

Accordingly, if the annual contribution of two or more of the Company’s subsidiaries each accounted for less than 5% of such contributions, but in the aggregate accounted for in excess of 5% of such contributions, that greater percentage is not available and accordingly is not disclosed.

(3) 2024 , 2023, and 2022 periods represent the years ended December 31, 2024, 2023, and 2022.

(4) Subsequent to December 31, 2023, this agreement was renewed until February 2027.

The nature and diversity of the Company’s business may result in volatility in the amount of its contributions to a particular MEPP for any given period.

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Pension and post-retirement obligation balances and related costs reflected within the consolidated balance sheets include costs directly attributable to plans dedicated to the Company.

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

During 2023, an annuity purchase transaction, commonly known as a “buy-in,” was executed for the two pension plans in the United Kingdom ("U.K.").

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

In July 2024, the U.K.

Court of Appeal upheld a ruling in the matter of Virgin Media Limited versus NTL Pension Trustees II Limited, that certain historical amendments for contracted out defined benefit schemes were invalid if they were not accompanied by the correct actuarial confirmation, a decision that the Company was not a party to or involved in and could impact the Company's non-U.S.

pension plans in the U.K.

The Company has not identified any benefit uncertainties for which the potential impact would need to be considered and will continue to monitor this development during 2025 and beyond.

Projected benefit obligation ("PBO") funded status

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Beginning balance $ 1,588 $ 1,262

Acquisition — 2,041

Service cost 5 4

1 unchanged sentence

Plan participants' contributions 1 1

Actuarial loss (gain) 284 ( 531 )

Actuarial (gain) loss ( 132 ) 284

Benefits paid ( 98 ) ( 89 )

4 unchanged sentences

Beginning balance $ 1,650 $ 1,617

Acquisition — 2,615

Employer contributions 6 4

1 unchanged sentence

Benefits paid ( 98 ) ( 89 )

Actual return on assets 40 ( 687 )

Actual (loss) return on assets ( 58 ) 40

Settlements ( 5 ) ( 4 )

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Fair value of plan assets 14 20

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

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

Service cost $ 5 $ 4

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Cost of Settlement — 1

Net periodic pension benefit $ ( 8 ) $ ( 35 )

Net periodic pension cost (benefit) $ 25 $ ( 8 )

Major assumptions used in determining the benefit obligation and net periodic benefit cost for pension plans are presented in the following table as weighted averages:

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Expected return on plan assets — % 3.9 % — % 4.9 %

The discount rate assumptions are developed using a bond yield curve constructed from a population of high-quality, non-callable, corporate bond issues with maturities ranging from six months to nineteen years .

Except for the U.K.

pension plans, the discount rate assumptions are developed using a bond yield curve constructed from a population of high-quality, non-callable, corporate bond issues with maturities ranging from six years to nineteen years .

A discount rate is estimated for, and is based on, the durations of the underlying plans.

pension plans, the discount rate is set using the U.K.

gilt yield curve.

The expected long-term rate of return used for the Company’s pension plans is determined in each local jurisdiction and is based on the assets held in that jurisdiction, the expected rate of returns for the type of assets held and any guaranteed rate of return provided by the investment.

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Global equity funds $ — $ 79 $ — $ — $ 79

Insurance contracts — — 1,383 — 1,383

Fixed income securities:

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The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented for the total pension assets.

(2) Represents investments in real estate, including commingled funds and directly held properties.

(3) Represents various contracts and global risk balanced commingled funds consisting mainly of equity, bonds, and some commodities.

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(5) Represents trust receivables and payables that are not leveled.

(5) Represents investments in real estate, including commingled funds and directly held properties.

The insurance contracts were initially valued by taking the initial purchase price for the buy-in contract and using this to assess an assumed pricing basis.

This pricing basis is then adjusted over time to reflect broad changes in insurers’ pricing methodologies under different prevailing market conditions, using third party actuarial guidance as to typical insurer pricing based on similar transactions.

This pricing basis is then adjusted over time to reflect broad changes in insurers’ pricing

methodologies under different prevailing market conditions, using third party actuarial guidance as to typical insurer pricing based on similar transactions.

The table below presents a reconciliation of the fair value of the Company’s pension assets that use significant unobservable inputs (Level 3):

Year Ended December 31,

Balance at the beginning of the year $ —

December 31, 2022 $ —

Purchase of insurance contracts 1,422

1 unchanged sentence

Payments from insurance policy ( 12 )

Balance at the end of the year $ 1,383

Derivatives in the plan are primarily used to manage risk and gain asset class exposure while still maintaining liquidity.

Derivative instruments mainly consist of equity futures, interest rate futures, interest rate swaps, and currency forward contracts.

December 31, 2023 1,383

Return on assets ( 94 )

Payments from insurance policy ( 86 )

December 31, 2024 $ 1,203

The plans review assets at least quarterly to ensure they are within the targeted asset allocation ranges and, if necessary, asset balances are adjusted back within target allocations.

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The Company incurred advisory fees of $ 4 during both the years ended December 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 December 31, 2021 settled in 7,944,104 shares and 7,539,697 shares issued during January 2024 and January 2022, respectively.

In addition, dividends for Series A Preferred Stock were declared as of December 31, 2024 and December 31, 2023 settled in 2,543,662 shares and 7,944,104 shares, respectively, issued during January 2025 and January 2024, respectively.

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.

2 unchanged sentences

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 year-ended December 31, 2023, the Company declared dividends of

421,364 shares of common stock on the Series B Preferred Stock held by Viking Purchasers, with 337,103 shares issued in 2023, and 84,261 shares issued in January 2024.

In 2022, the Company declared dividends of 632,379 shares of common stock on the Series B Preferred Stock held by the Viking Purchasers, with 486,234 shares issued in 2022, and 146,145 shares issued in January 2023.

The Company has entered into sales contracts with Royal Oak Enterprises, an entity controlled by the co-chair of the Company's Board of Directors, and recorded $ 3 in net revenues for the year ended December 31, 2023.

During the year ended December 31, 2024, the Company declared and issued dividends of 70,798 shares of common stock on the Series B Preferred Stock held by Viking Purchasers.

During the year-ended December 31, 2023, the Company declared dividends of 421,364 shares of common stock on the Series B Preferred Stock held by Viking Purchasers, with 337,103 shares issued in 2023 and 84,261 shares issued in 2024.

During 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 19 –"Shareholders' Equity and Redeemable Convertible Preferred Stock."

The Company entered into sales contracts with Royal Oak Enterprises, an entity indirectly controlled by the co-chair of the Company's Board of Directors, and recorded $ 0 and $ 3 in net revenues for the years ended December 31, 2024 and 2023, respectively.

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

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As of December 31, 2024, an annual dividend was calculated based on the appreciation of the Company’s share price of $ 37.3070 over the highest price previously used in calculating the Annual Dividend Amount of $ 33.9465 .

The annual dividend declared as of December 31, 2024 was settled in shares and the Company iss ued 2,543,662 common shares to the holders of the Series A Preferred Stock in January 2025.

As of December 31, 2023, an annual dividend was calculated based on the appreciation of the Company's share price of $ 33.9465 over the highest price previously used in calculating the Annual Dividend Amount of $ 24.3968 .

The annual dividend declared as of December 31, 2023 was settled in shares and the Company issued 7,944,104 common shares to the holders of the Series A Preferred Stock in January 2024.

As of December 31, 2022, an annual dividend was not declared as the volume-weighted average market price per share of the Company's common shares for the last ten trading days of the calendar year was not above the highest previously used dividend price of $ 24.3968 .

The holders of Series A Preferred Stock are also entitled to participate in any dividends on the common shares on an if-converted basis.

In addition, if the Company pays a dividend on its common shares, the Series A Preferred Stock holders will also receive an amount equal to 20 % of the dividend which would be distributable on 141,194,638 of common shares.

All such dividends on the Series A Preferred Stock will be paid at the same time as the dividends on the common shares.

2 unchanged sentences

If there is more than one holder of Series A Preferred Stock, a holder of Series A Preferred Stock may exercise its rights independently of any other holder of Series A Preferred Stock.

During 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

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.

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

During the twelve months ended December 31, 2023 and 2022, the Company repurchased 1,626,493 and 2,505,723 shares of common stock for approximately $ 41 and $ 44 , respectively.

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

This stock repurchase program will expire when the authorized amount is exhausted, unless otherwise modified or terminated by the Company's Board of Directors at any time in its sole discretion.

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

During the year ended December 31, 2024, the Compan y repurchased 16,260,160 shares of common stock for approximately $ 600 .

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

During 2022, the Company's 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.

During the year ended December 31, 2023, the Company repurchased 1,626,493 shares of common stock for approximately $ 41 under the 2022 SRP.

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 the 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 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 and issued Series B Preferred Stock dividends of $ 33 or 1,348,420 shares of common stock and $ 33 or 1,944,939 shares of common stock during the years ended December 31, 2023 and 2022, respectively.

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.

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 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 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 year ended December 31, 2024 for the Series B Preferred Stock outstanding through February 28, 2024.

The Company declared and issued Series B Preferred Stock dividends of $ 33 or 1,348,420 shares of common stock during the year ended December 31, 2023.

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

SHARE-BASED COMPENSATION

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The 2019 Plan generally provides for awards to vest no earlier than one year from the date of grant, although most awards entitle the recipient to common shares if specified market or performance conditions are achieved, if applicable, and vest over a minimum of three years .

The share-based awards granted to employees include stock options and restricted stock units, as follows:

The share-based awards granted to employees include stock options and restricted stock units.

Stock Options

In 2017 upon its initial public offering, the Company issued 162,500 nonqualified stock options to independent, non-executive directors at exercise price of $ 11.50 per share with contractual terms of five years from the date of the acquisition of APi Group (the "APi Acquisition"), October 1, 2019.

In 2017, upon its initial public offering, the Company issued 162,500 nonqualified stock options to independent, non-executive directors at an exercise price of $ 11.50 per share with contractual terms of five years from the date of the acquisition of APi Group (the "APi Acquisition"), October 1, 2019.

These stock options were performance-based and vested on the consummation of the APi Acquisition.

The Company has not granted stock options since 2017.

The following table summarizes the changes in the number of common shares underlying options for 2023 (shares in whole numbers and per share values in whole dollars):

The following table summarizes the changes in the number of common shares underlying options for the years ended December 31, 2024 and 2023 (shares in whole numbers and per share values in whole dollars):

Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term

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Forfeitures are estimated and recorded using historical forfeiture rates.

During the year ended December 31, 2023, the Company has outstanding RSUs, PSUs, and MSUs, detailed below (shares in whole numbers and per share values in whole dollars).

As of December 31, 2024, the Company had outstanding RSUs, PSUs, and MSUs, detailed below (shares in whole numbers and per share values in whole dollars).

Time-Based Restricted Stock Units

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The PSUs entitle recipients to shares of the Company's common stock if specified performance conditions are achieved.

During the year ended December 31, 2023, the Company approved and granted PSUs with EBITDA-based financial performance conditions.

During the years ended December 31, 2024 and 2023, the Company approved and granted PSUs with EBITDA-based financial performance conditions.

PSUs vest, if at all, following a three-year performance period.

11 unchanged sentences

Granted 407,686 35.80

Vested ( 468,289 ) 19.10

Forfeited ( 404,765 ) 26.15

4 unchanged sentences

The MSUs entitle the recipient to shares of the Company's common stock if specified market conditions are achieved.

During 2022, the Company approved and granted MSUs with certain share-price targets.

During the year ended December 31, 2022, the Company approved and granted MSUs with certain share-price targets.

The MSUs will vest 100 % on March 9, 2025, the third anniversary of the grant date, as the performance condition was satisfied during the year ended December 31, 2023.

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Outstanding at December 31, 2022 438,180 $ 16.19 2.2

Granted 444,926 16.31

Forfeited ( 24,819 ) 1.76

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The Monte Carlo model is based on random projections of stock price paths and must be repeated numerous times to achieve a probabilistic assessment.

Expected volatility is calculated based on the historical volatility and implied volatility of the Company's common stock, and the risk-free

interest rate is based on U.S.

Expected volatility is calculated based on the historical volatility and implied volatility of the Company's common stock, and the risk-free interest rate is based on U.S.

Treasury yield curve rates with maturities consistent with the three-year vesting period.

4 unchanged sentences

The Company recognized $ 29 and $ 24 of compensation expense during the years ended December 31, 2024 and 2023, respectively, for the RSUs, PSUs, and MSUs in total.

Total unrecognized compensation related to unvested RSUs, PSUs, and MSUs as of December 31, 2023 was approximately $ 16 , which is expected to be recognized over a weighted average period of approximately 1.0 year, 1.0 year, and 1.2 years, respectively.

The Company's actual tax benefits realized from the tax deductions related to the vesting of RSUs was $ 1 during both the years ended December 31, 2023 and 2022.

Total unrecognized compensation related to unvested RSUs, PSUs, and MSUs as of December 31, 2024 was approximately $ 21 , which is expected to be recognized over a weighted-average period of approximately 1.6 years, 1.1 years, and 0.2 years, respectively.

The Company's actual tax benefits realized from the tax deductions related to the vesting of RSUs was $ 7 and $ 1 during the years ended December 31, 2024 and 2023, respectively.

EARNINGS (LOSS) PER SHARE

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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, RSUs, PSUs and MSUs 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, RSUs, PSUs, MSUs, 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, Series B Preferred Stock, RSUs, PSUs, MSUs, and stock options are anti-dilutive.

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

For the Years Ended December 31,

Year Ended December 31,

2024 2023 2022

Basic earnings (loss) per common share:

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Less stock dividend attributable to Series B Preferred Stock ( 7 ) ( 44 ) ( 44 )

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

Net (loss) income attributable to common shareholders $ ( 224 ) $ ( 161 ) $ 23

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Less stock dividend attributable to Series B Preferred Stock ( 7 ) ( 44 ) ( 44 )

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

Net (loss) income attributable to common shareholders - diluted $ ( 224 ) $ ( 161 ) $ 26

Weighted average shares outstanding - diluted 235,136,849 233,201,569

Weighted-average shares outstanding - basic 267,675,764 235,136,849 233,201,569

Dilutive securities:

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

For the years ended December 31, 2023 and 2022, 4,000,000 shares of Series A Preferred Stock, which are convertible to the same number of common shares.

For the year ended December 31, 2023, 800,000 shares of Series B Preferred Stock which are convertible to 32,520,000 shares of common stock.

For the year ended December 31, 2023, 125,000 stock options to purchase the same number of common shares.

For the year ended December 31, 2023, 7,944,104 common share equivalents, which represent the dividend that the Series A Preferred Stock holders are entitled to receive.

For each of the years ended December 31, 2024, 2023, and 2022, 4,000,000 shares of Series A Preferred Stock, which are convertible to the same number of common shares.

For the years ended December 31, 2024 and 2023, 0 and 800,000 shares of Series B Preferred Stock which are convertible to 0 and 32,520,000 shares of common stock, respectively.

For the years ended December 31, 2024 and 2023, 0 and 125,000 stock options, respectively, to purchase the same number of common shares.

For the years ended December 31, 2024 and 2023, 2,543,662 and 7,944,104 common share equivalents, respectively, which represent the dividend that the Series A Preferred Stock holders are entitled to receive.

(See additional description in Note 19 – "Shareholders' Equity and Redeemable Convertible Preferred Stock.")

For the year ended December 31, 2023, 904,344 RSUs, 1,652,020 PSUs, and 413,361 MSUs.

For the years ended December 31, 2024 and 2023, 907,345 RSUs, 1,172,208 PSUs, 341,659 MSUs and 904,344 RSUs, 1,652,020 PSUs, 413,361 MSUs, respectively.

SEGMENT INFORMATION

The Company manages its operations under two operating segments which represent the Company’s two reportable segments:

Safety Services and Specialty Services.

This structure is generally focused on various businesses related to contracting services and maintenance of industrial and commercial facilities.

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 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 Company manages its operations under three operating segments which represent the Company’s two reportable segments:

Safety Services, comprised of the North American Life Safety and International Life Safety operating segments, and Specialty Services.

This structure is generally comprised of various businesses related to contracted services and maintenance of industrial and commercial facilities.

The segments have separate management and have results that are regularly reviewed by the Chief Executive Officer and President, who acts as the Company's Chief Operating Decision

Maker (“CODM”), f or the purpose of allocating resources and evaluating performance, identifying them as separate reportable segments.

The Safety Services segment focuses on end-to-end integrated occupancy systems (fire protection services, elevator and escalator, HVAC, and entry systems), including the 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 in over 20 countries.

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

1 unchanged sentence

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

The accounting policies of the reportable segments are the same as those described in Note 2 – “Significant Accounting Policies”.

All intercompany transactions and balances are eliminated in consolidation.

The accounting policies of the reportable segments are the same as those described in Note 2 – “Significant Accounting Policies.” All intercompany transactions and balances are eliminated in consolidation.

Intercompany revenues and costs between entities within a reportable segment are eliminated to arrive at segment totals, and eliminations between segments are separately presented.

Corporate results include amounts related to corporate functions such as administrative costs, professional fees, acquisition-related transaction costs (exclusive of acquisition integration costs, which are included within the segment results of the acquired businesses), and other discrete items.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is the measure of profitability used by management to manage its segments and, accordingly, in its segment reporting.

As appropriate, the Company supplements the reporting of consolidated financial information determined in accordance with U.S.

GAAP with certain non-U.S.

GAAP financial measures, including EBITDA.

The Company believes these non-U.S.

GAAP measures provide meaningful information and help investors understand the Company’s financial results and assess its prospects for future performance.

The Company uses EBITDA to evaluate its performance, both internally and as compared with its peers, because it excludes certain items that may not be indicative of the Company’s core operating results for its reportable segments.

Segment EBITDA is calculated in a manner consistent with consolidated EBITDA.

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

Segment earnings is the measure of profitability used by the CODM to manage the segments and, accordingly, in segment reporting.

Segment earnings is defined as earnings before interest, taxes, depreciation, and amortization and after adjustments for non-recurring items.

Adjustments include expenses that management deems are non-recurring in nature and not indicative of the Company’s core operating results.

These adjustments include business transformation and other expenses for the integration of acquired businesses, the impact and results of businesses classified as held-for-sale and divested, and one-time and other events such as impairment charges, restructuring costs, transaction and other costs related to acquisitions, amortization of intangible assets, and non-service pension cost or benefit.

The CODM establishes budgets for the segments, including growth of segment earnings.

The CODM considers segment earnings budget-to-actual variances when making decisions about allocating capital to the segments.

Segment earnings is also used in the compensation of certain employees and to assess the performance of each segment by regularly comparing the results of each segment with forecasted amounts.

The CODM uses segment earnings to evaluate its performance, both internally and as compared with its peers, because it excludes certain items that may not be indicative of the Company’s core operating results for its reportable segments.

For the Year Ended December 31, 2024

Services Specialty

Services Corporate and

Eliminations Consolidated

Services Total

Revenues from external customers $ 5,225 $ 1,793 $ 7,018

Intersegment revenues 2 5 7

Net revenues 5,227 1,798 7,025

EBITDA Reconciliation

Operating income (loss) $ 396 $ 108 $ ( 145 ) $ 359

Investment income and other, net 3 9 1 13

Non-service pension benefit 12 — — 12

Loss on extinguishment of debt, net — — ( 7 ) ( 7 )

Reconciliation of revenue:

Elimination of intersegment revenues ( 7 )

Total consolidated revenues $ 7,018

Segment cost of revenues (b)

Segment operating expenses (c)

Segment other income/expense 6 10

Depreciation 33 44

Segment earnings $ 809 $ 209 $ 1,018

Reconciliation of profit/(loss):

Corporate/other profit/(loss) (d)

Interest income/(expense) ( 146 )

Depreciation ( 80 )

Amortization ( 222 )

EBITDA $ 607 $ 217 $ ( 144 ) $ 680

Contingent consideration and compensation ( 3 )

Non-service pension expense ( 22 )

Business process transformation expenses ( 52 )

Acquisition related expenses ( 13 )

Loss on extinguishment of debt, net ( 1 )

Restructuring program related costs ( 32 )

Income before income taxes $ 330

Asset information:

Total assets $ 6,473 $ 1,161 $ 7,634

Capital expenditures 24 47 71

(a) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

Intersegment expenses are included within the amounts shown and amortization expense is excluded from the amounts shown.

(b) Segment cost of revenues consists of costs such as direct labor, materials, subcontract costs and indirect costs related to contract performance, adjusted for non-recurring items.

(c) Segment operating expenses consist primarily of compensation and associated costs for sales and corporate marketing, administrative expenses associated with accounting, finance, legal, information systems, leadership development, and other corporate expenses, adjusted for non-recurring items.

(d) Corporate/other profit/(loss) includes amounts related to corporate functions such as administrative costs, professional fees, and other discrete items.

For the Year Ended December 31, 2023

Services Specialty

Services Corporate and

Eliminations Consolidated

Services Total

Revenues from external customers $ 4,859 $ 2,069 $ 6,928

Intersegment revenues 12 10 22

Net revenues $ 4,871 $ 2,079 $ 6,950

EBITDA Reconciliation

Operating income (loss) $ 256 $ 97 $ ( 191 ) $ 162

Investment income and other, net 1 7 1 9

Non-service pension benefit 42 — — 42

Gain on extinguishment of debt, net — — 5 5

Reconciliation of revenue:

Elimination of intersegment revenues ( 22 )

Total consolidated revenues $ 6,928

Segment cost of revenues (b)

Segment operating expenses (c)

Segment other income/expense 3 10

Depreciation 27 49

Segment earnings $ 664 $ 239 $ 903

Reconciliation of profit/(loss):

Corporate/other profit/(loss) (d)

Interest income/(expense) ( 145 )

Depreciation ( 79 )

Amortization ( 224 )

EBITDA $ 492 $ 206 $ ( 176 ) $ 522

Contingent consideration and compensation ( 14 )

Non-service pension benefit 12

Business process transformation expenses ( 30 )

Acquisition related expenses ( 7 )

Loss on extinguishment of debt, net ( 7 )

Restructuring program related costs ( 46 )

Income before income taxes $ 232

Asset information:

Total assets $ 5,795 $ 1,214 $ 7,009

Capital expenditures 25 48 73

(a) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

Intersegment expenses are included within the amounts shown and amortization expense is excluded from the amounts shown.

(b) Segment cost of revenues consists of costs such as direct labor, materials, subcontract costs and indirect costs related to contract performance, adjusted for non-recurring items.

(d) Corporate/other profit/(loss) includes amounts related to corporate functions such as administrative costs, professional fees, and other discrete items.

For the Year Ended December 31, 2022

Services Specialty

Services Corporate and

Eliminations Consolidated

Services Total

Revenues from external customers $ 4,544 $ 2,014 $ 6,558

Intersegment revenues $ 31 $ 16 $ 47

Net revenues $ 4,575 $ 2,030 $ 6,605

EBITDA Reconciliation

Operating income (loss) $ 207 $ 78 $ ( 149 ) $ 136

Investment income and other, net 6 9 ( 3 ) 12

Loss on extinguishment of debt, net — — ( 9 ) ( 9 )

Reconciliation of revenue:

Elimination of intersegment revenues ( 47 )

Total consolidated revenues $ 6,558

Segment cost of revenues (b)

Segment operating expenses (c)

Segment other income/expense — 7

Depreciation 26 46

Segment earnings $ 559 $ 210 $ 769

Reconciliation of profit/(loss):

Corporate/other profit/(loss) (d)

Interest income/(expense) ( 125 )

Depreciation ( 77 )

Amortization ( 227 )

EBITDA $ 287 $ 205 $ ( 151 ) $ 341

Contingent consideration and compensation ( 9 )

Non-service pension benefit 42

Inventory step-up ( 9 )

Business process transformation expenses ( 31 )

Acquisition related expenses ( 121 )

Gain on extinguishment of debt, net 5

Restructuring program related costs ( 30 )

Income before income taxes $ 93

Asset information:

Total assets $ 6,029 $ 1,281 $ 7,310

Capital expenditures 25 49 74

(a) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

Intersegment expenses are included within the amounts shown and amortization expense is excluded from the amounts shown.

(b) Segment cost of revenues consists of costs such as direct labor, materials, subcontract costs and indirect costs related to contract performance, adjusted for non-recurring items.

(d) Corporate/other profit/(loss) includes amounts related to corporate functions such as administrative costs, professional fees, and other discrete items.

SUBSEQUENT EVENTS

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 were also consummated on February 28, 2024.

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.

As a result of the consummation of the transactions, all dividends and distributions have ceased to accrue on the Series B Preferred Stock, which have been converted and cancelled, the repurchased Conversion Shares are no longer deemed to be outstanding, and all rights of Blackstone and Viking with respect to the Series B Preferred Stock and the repurchased Conversion Shares have been terminated.

Blitzer resigned as a Director of the Company immediately prior to the execution of the Conversion and Repurchase Agreement related to the Series B Preferred Shares.

In January 2025, due to a change in information reviewed by the CODM, the Company realigned its segments by moving the HVAC business from Safety Services to Specialty Services.

As a result, beginning in January 2025, HVAC business leadership responsibility and full accountability was transferred to report through the Specialty Services segment and information for the HVAC business is combined with the Specialty Services segment.

The CODM began regularly reviewing financial information to allocate resources and assess performance utilizing these reorganized segments in January 2025.

Further, as a result of the reallocation of goodwill between reportable segments, the Company will perform an impairment test for the impacted reporting unit pre-realignment and post-realignment, however, as the HVAC business is identified as a separate reporting unit, in all material respects, no impact is expected.

In February 2025, the Company completed its Seventh Amendment to its credit agreement, repricing the 2021 Term Loan.

The repricing reduced the applicable margin on the 2021 Term Loan by 25 basis points .

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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-K

Item 8. Financial Statements and Supplementary Data