Zurn Elkay Water Solutions Corp 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The consolidated financial statements included in this Form 10-K include the accounts of Zurn Elkay Water Solutions Corporation and subsidiaries (collectively, the "Company"). Index to Financial Statements Zurn Elkay Water Solutions Corporation and Subsidiaries Consolidated Financial Statements As of December 31, 2025 and 2024 and for the years ended December 31, 2025, December 31, 2024, and December 31, 2023 Reports of Ernst & Young LLP, Independent Registered Public Accounting Firm (PCAOB ID: 42 ) 38 Consolidated Balance Sheets 41 Consolidated Statements of Operations 42 Consolidated Statements of Comprehensive Income 43 Consolidated Statements of Stockholders' Equity 44 Consolidated Statements of Cash Flows 45 Notes to Consolidated Financial Statements 46 37 Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Zurn Elkay Water Solutions Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Zurn Elkay Water Solutions Corporation and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, 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, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 9, 2026 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates. 38 Accounting for the U.S. Pension Plan Settlement Gain Description of the Matter For the year ended December 31, 2025, the Company recorded a $ 10.0 million pre-tax pension settlement gain within other income (expense), net. As described in Note 14 to the consolidated financial statements, the Company’s Board of Directors approved a resolution to terminate the Company’s U.S. defined benefit pension plan (the “Pension Plan”) with the full freeze of benefit accruals under the Pension Plan effective March 31, 2025 and the termination of the Pension Plan effective April 1, 2025. As explained in Note 14 of the consolidated financial statements, the Company remeasures the pension assets and obligations at the end of each year or more frequently upon any required remeasurement event. The amounts are measured using actuarial valuations, which are dependent, in part, on the selection of certain actuarial assumptions. Auditing the pension obligations was complex and required the involvement of specialists as a result of the complex nature of the actuarial assumptions, such as discount rates and mortality rates used in the Company’s accounting of the U.S. defined benefit pension plan termination and the related remeasurement process. These assumptions had a significant effect on the projected benefit obligation used to calculate the pension settlement gain. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s valuation of the projected benefit obligation used to calculate the pension settlement gain. For example, we tested the Company’s controls over management’s review of the significant assumptions utilized in the valuation, including discount and mortality rates. To test the projected benefit obligation used to calculate the pension settlement gain, we performed audit procedures that included, among others, evaluating the methodology used, and the significant actuarial assumptions described above. We evaluated the change in the projected benefit obligation from the prior year due to the change in service cost, interest cost, actuarial gains and losses, benefit payments, lump-sum distributions, and other activities. In addition, we involved our actuaries to assist in evaluating management’s methodology for selecting the appropriate discount rates that reflect the maturity and duration of the expected benefit payments and applying those discount rates to the benefit payments used to measure the projected benefit obligation. To evaluate the mortality rates, we assessed whether the information is consistent with publicly available information, and whether any adjustments for entity-specific factors were applied. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2002. Milwaukee, Wisconsin February 9, 2026 39 Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Zurn Elkay Water Solutions Corporation Opinion on Internal Control Over Financial Reporting We have audited Zurn Elkay Water Solutions Corporation and subsidiaries’ internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Zurn Elkay Water Solutions Corporation and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria. 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, 2025 and December 31, 2024, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) and our report dated February 9, 2026 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. 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. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Milwaukee, Wisconsin February 9, 2026 40 Zurn Elkay Water Solutions Corporation and Subsidiaries Consolidated Balance Sheets (in Millions, except share amounts) December 31, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 300.5 $ 198.0 Receivables, net 184.8 202.2 Inventories, net 274.4 272.6 Income taxes receivable 13.3 19.6 Other current assets 38.7 29.7 Total current assets 811.7 722.1 Property, plant and equipment, net 157.6 164.0 Intangible assets, net 835.0 891.6 Goodwill 795.0 794.2 Other assets 80.1 76.6 Total assets $ 2,679.4 $ 2,648.5 Liabilities and stockholders' equity Current liabilities: Current maturities of debt $ 0.9 $ 0.8 Trade payables 65.2 71.7 Compensation and benefits 40.9 37.9 Current portion of pension and other postretirement benefit obligations 1.1 1.2 Other current liabilities 151.3 136.2 Total current liabilities 259.4 247.8 Long-term debt 495.6 494.8 Pension and other postretirement benefit obligations 9.6 14.1 Deferred income taxes 189.7 196.5 Operating lease liability 42.0 43.3 Other liabilities 79.8 65.2 Total liabilities 1,076.1 1,061.7 Stockholders' equity: Common stock, $ 0.01 par value; 200,000,000 shares authorized; shares issued and outstanding: 166,981,602 at December 31, 2025 and 170,308,023 at December 31, 2024 1.7 1.7 Additional paid-in capital 2,810.0 2,828.2 Retained deficit ( 1,131.7 ) ( 1,168.7 ) Accumulated other comprehensive loss ( 76.7 ) ( 74.4 ) Total stockholders' equity 1,603.3 1,586.8 Total liabilities and stockholders' equity $ 2,679.4 $ 2,648.5 See notes to consolidated financial statements. 41 Zurn Elkay Water Solutions Corporation and Subsidiaries Consolidated Statements of Operations (in Millions, except share and per share amounts) Year Ended December 31, 2025 December 31, 2024 December 31, 2023 Net sales $ 1,695.9 $ 1,566.5 $ 1,530.5 Cost of sales 931.1 859.5 882.4 Gross profit 764.8 707.0 648.1 Selling, general and administrative expenses 417.6 389.8 371.3 Restructuring and other similar charges 9.6 13.5 15.3 Loss on divestiture of asbestos liabilities and certain assets — — 11.4 Amortization of intangible assets 58.7 59.1 58.7 Income from operations 278.9 244.6 191.4 Non-operating expense: Interest expense, net ( 28.6 ) ( 33.1 ) ( 38.5 ) Loss on the extinguishment of debt — — ( 0.9 ) Actuarial gain on pension and other postretirement benefit obligations 0.5 1.4 2.0 Other income (expense), net 5.5 ( 5.9 ) ( 7.2 ) Income before income taxes 256.3 207.0 146.8 Provision for income taxes ( 63.9 ) ( 48.1 ) ( 42.6 ) Net income from continuing operations 192.4 158.9 104.2 Income from discontinued operations, net of tax 5.6 1.3 8.5 Net income $ 198.0 $ 160.2 $ 112.7 Basic net income per share: Continuing operations $ 1.14 $ 0.92 $ 0.60 Discontinued operations $ 0.03 $ 0.01 $ 0.05 Net income $ 1.17 $ 0.93 $ 0.65 Diluted net income per share: Continuing operations $ 1.12 $ 0.91 $ 0.59 Discontinued operations $ 0.03 $ 0.01 $ 0.05 Net income $ 1.15 $ 0.92 $ 0.64 Weighted-average number of common shares outstanding (in thousands): Basic 168,659 171,686 174,251 Effect of dilutive equity awards 2,599 2,973 3,008 Diluted 171,258 174,659 177,259 See notes to consolidated financial statements. 42 Zurn Elkay Water Solutions Corporation and Subsidiaries Consolidated Statements of Comprehensive Income (in Millions) Year Ended December 31, 2025 December 31, 2024 December 31, 2023 Net income $ 198.0 $ 160.2 $ 112.7 Other comprehensive income (loss): Foreign currency translation and other adjustments 4.9 ( 10.0 ) 3.6 Change in pension and other postretirement benefit obligations, net of tax ( 7.2 ) 3.3 3.7 Other comprehensive income (loss), net of tax ( 2.3 ) ( 6.7 ) 7.3 Total comprehensive income $ 195.7 $ 153.5 $ 120.0 See notes to consolidated financial statements. 43 Zurn Elkay Water Solutions Corporation and Subsidiaries Consolidated Statements of Stockholders’ Equity (in Millions) Common Stock Additional Paid-In Capital Retained (Deficit) Earnings Accumulated Other Comprehensive (Loss) Income Total Stockholders’ Equity Balance at December 31, 2022 $ 1.8 $ 2,853.1 $ ( 1,164.9 ) $ ( 75.0 ) $ 1,615.0 Net income $ — $ — $ 112.7 $ — $ 112.7 Foreign currency translation and other adjustments — — — 3.6 3.6 Change in pension and other postretirement benefit obligations, net of $ 1.2 million of income tax — — — 3.7 3.7 Total comprehensive income — — 112.7 7.3 120.0 Stock-based compensation expense — 41.6 — — 41.6 Proceeds from exercise of stock options — 4.3 — — 4.3 Taxes withheld and paid on employees' share-based payment awards — ( 3.1 ) — — ( 3.1 ) Repurchase of common stock (1) ( 0.1 ) — ( 126.0 ) — ( 126.1 ) Elkay Merger (2) — ( 5.1 ) — — ( 5.1 ) Common stock dividends ($ 0.29 per share) — ( 43.8 ) — — ( 43.8 ) Balance at December 31, 2023 $ 1.7 $ 2,847.0 $ ( 1,178.2 ) $ ( 67.7 ) $ 1,602.8 Net income $ — $ — $ 160.2 $ — $ 160.2 Foreign currency translation and other adjustments — — — ( 10.0 ) ( 10.0 ) Change in pension and other postretirement benefit obligations, net of $ 1.1 million of income tax — — — 3.3 3.3 Total comprehensive income — — 160.2 ( 6.7 ) 153.5 Stock-based compensation expense — 37.9 — — 37.9 Proceeds from exercise of stock options and ESPP contributions — 8.6 — — 8.6 Taxes withheld and paid on employees' share-based payment awards — ( 8.6 ) — — ( 8.6 ) Repurchase of common stock (1) — — ( 150.7 ) — ( 150.7 ) Common stock dividends ($ 0.33 per share) — ( 56.7 ) — — ( 56.7 ) Balance at December 31, 2024 $ 1.7 $ 2,828.2 $ ( 1,168.7 ) $ ( 74.4 ) $ 1,586.8 Net income $ — $ — $ 198.0 $ — $ 198.0 Foreign currency translation and other adjustments — — — 4.9 4.9 Change in pension and other postretirement benefit obligations, net of $ 2.3 million of income tax benefit — — — ( 7.2 ) ( 7.2 ) Total comprehensive income — — 198.0 ( 2.3 ) 195.7 Stock-based compensation expense — 40.6 — — 40.6 Proceeds from exercise of stock options and ESPP contributions — 7.8 — — 7.8 Taxes withheld and paid on employees' share-based payment awards — ( 0.6 ) — — ( 0.6 ) Repurchase of common stock (1) — — ( 161.0 ) — ( 161.0 ) Common stock dividends ($ 0.38 per share) — ( 66.0 ) — — ( 66.0 ) Balance at December 31, 2025 $ 1.7 $ 2,810.0 $ ( 1,131.7 ) $ ( 76.7 ) $ 1,603.3 ____________________ (1) During the years ended December 31, 2025, 2024, and 2023, the Company repurchased and canceled 4.4 million shares, 4.7 million shares and 5.3 million shares of common stock at a total cost of $ 159.9 million, $ 150.2 million and $ 125.0 million at an average price of $ 36.74 , $ 31.81 and $ 23.66 per share, respectively. For the years ended December 31, 2025, 2024, and 2023 the Company recognized $ 1.1 million, $ 0.5 million, and $ 1.0 million of excise tax on the repurchases, respectively. See Note 17, Common Stock Repurchases for additional information. (2) Refer to "Item 8. Financial Statements and Supplementary Data, Note 3, Acquisitions" of our 2024 Form 10-K for additional information regarding the Elkay Merger. See notes to consolidated financial statements. 44 Zurn Elkay Water Solutions Corporation and Subsidiaries Consolidated Statements of Cash Flows (in Millions) Year Ended December 31, 2025 December 31, 2024 December 31, 2023 Operating activities Net income $ 198.0 $ 160.2 $ 112.7 Adjustments to reconcile net income to cash provided by operating activities: Depreciation 30.0 29.2 29.2 Amortization of intangible assets 58.7 59.1 58.7 Non-cash restructuring charges 2.5 8.0 2.5 Loss on divestiture of asbestos liabilities and certain assets — — 9.3 Divestiture of asbestos liabilities and certain assets — — ( 13.0 ) Loss (gain) on dispositions of long-lived assets 4.0 0.6 ( 2.7 ) Deferred income taxes ( 4.6 ) ( 14.8 ) ( 4.2 ) Other non-cash expenses 2.2 5.1 1.9 Actuarial gain on pension and other postretirement benefit obligations ( 0.5 ) ( 1.4 ) ( 2.0 ) Loss on the extinguishment of debt — — 0.9 Pension curtailment and settlement ( 10.7 ) — — Stock-based compensation expense 40.6 37.9 40.0 Changes in operating assets and liabilities: Receivables, net 18.4 6.3 10.1 Inventories, net ( 0.1 ) 2.7 65.0 Other assets 6.9 1.4 2.5 Accounts payable ( 6.8 ) 15.8 ( 60.8 ) Accruals and other 7.9 ( 16.6 ) 3.8 Cash provided by operating activities 346.5 293.5 253.9 Investing activities Expenditures for property, plant and equipment ( 29.9 ) ( 21.8 ) ( 21.3 ) Proceeds from dispositions of long-lived assets — 1.6 7.7 Proceeds from insurance claims — — 9.0 Cash used for investing activities ( 29.9 ) ( 20.2 ) ( 4.6 ) Financing activities Proceeds from borrowings of debt — — 13.0 Repayments of debt ( 0.8 ) ( 0.8 ) ( 77.9 ) Proceeds from exercise of stock options and ESPP contributions 7.9 8.7 4.3 Taxes withheld and paid on employees' share-based payment awards ( 0.6 ) ( 8.6 ) ( 3.1 ) Repurchase of common stock ( 159.9 ) ( 150.2 ) ( 125.1 ) Payment of common stock dividends ( 63.9 ) ( 56.6 ) ( 50.4 ) Cash used for financing activities ( 217.3 ) ( 207.5 ) ( 239.2 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 3.2 ( 4.5 ) 1.8 Increase in cash, cash equivalents and restricted cash 102.5 61.3 11.9 Cash, cash equivalents and restricted cash at beginning of period (1) 198.0 136.7 124.8 Cash, cash equivalents and restricted cash at end of period (1) $ 300.5 $ 198.0 $ 136.7 ____________________ (1) The Company has combined cash flows from discontinued operations with cash flows from continuing operations within operating, investing and financing categories. See notes to consolidated financial statements. 45 Zurn Elkay Water Solutions Corporation and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 1. Basis of Presentation and Description of Business The consolidated financial statements included herein have been prepared by Zurn Elkay Water Solutions Corporation ("Zurn Elkay" or the "Company"), in accordance with accounting principles generally accepted in the United States ("GAAP") pursuant to the rules and regulations of the Securities and Exchange Commission. The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the consolidated financial statements include all adjustments necessary for a fair presentation of the financial position and the results of operations for the periods presented. U.S. Pension Plan Termination & Settlement On January 30, 2025, the Company's Board of Directors approved a resolution to terminate the Company's U.S. defined benefit pension plan (the "Pension Plan") with the full freeze of benefit accruals under the Pension Plan effective March 31, 2025 and the termination of the Pension Plan effective April 1, 2025. The Pension Plan freeze resulted in a curtailment gain of $ 0.7 million in the first quarter of 2025. Pension Plan participants were provided the opportunity to receive their full accrued benefits from the Pension Plan assets by either electing immediate lump sum distributions or annuity contracts with a qualifying third-party annuity provider. During the quarter ended September 30, 2025, the Company entered into an agreement to purchase annuities from a third-party annuity provider and contributed $ 4.3 million to fund the liquidation of the Pension Plan. As a result, Pension Plan liabilities were settled and the Pension Plan was exited during the quarter ended September 30, 2025, resulting in a pre-tax settlement gain of $ 10.0 million from accumulated other comprehensive loss to other income (expense), net in the consolidated statements of operations. Divestiture of Asbestos Liabilities and Certain Assets On December 15, 2023, Zurn Holdings, Inc. (“Holdings”) sold all of the equity interests of its direct subsidiary Zurn Industries, LLC (“Zurn Industries”), together with Zurn Industries’ direct and indirect subsidiaries that primarily held asbestos liabilities, certain assets and cash, in a stock sale transaction to an unaffiliated buyer (“Sale Transaction”). As a result of the Sale Transaction, all asbestos obligations and liabilities, related insurance assets and associated deferred taxes, and other assets sold to the buyer, have been removed from the Company’s consolidated balance sheet effective December 15, 2023 and the Company no longer has any obligation with respect to pending and future asbestos claims related to the divested entities. A loss on the divestiture of asbestos liabilities and certain assets of $ 11.4 million was recognized in the consolidated statements of operations for the twelve months ended December 31, 2023. Spin-Off of Process & Motion Control Segment On October 4, 2021, the Company completed a Reverse Morris Trust tax-free spin-off transaction (the “Spin-Off Transaction”). Following completion of the Spin-Off Transaction, the Company's name was changed to “Zurn Water Solutions Corporation” and was subsequently changed to "Zurn Elkay Water Solutions Corporation". As a result of the Spin-Off Transaction, in accordance with the authoritative guidance, the operating results of PMC are reported as discontinued operations in the consolidated statements of operations for all periods presented. The consolidated statements of cash flows for the years ended December 31, 2025, 2024, and 2023 have not been adjusted to separately disclose cash flows related to the discontinued operations. See Note 3, Discontinued Operations for additional information. The Company Zurn Elkay is a growth-oriented, pure-play water management business that designs, procures, manufactures, and markets what the Company believes to be the broadest sustainable product portfolio of specification-driven water management solutions to improve health, hydration, human safety and the environment. The Company's product portfolio includes professional grade water safety and control products, flow systems products, hygienic and environmental products, and filtered drinking water products for public and private spaces that deliver superior value to building owners, positively impact the environment and human hygiene and reduce product installation time. The Company's heritage of innovation and specification has allowed it to provide highly-engineered, mission-critical solutions to customers for decades and affords it the privilege of having long-term, valued relationships with market leaders. The Company operates in a disciplined way and the Zurn Elkay Business System (“ZEBS”) is its operating philosophy. Grounded in the spirit of continuous improvement, ZEBS creates a scalable, process-based framework that focuses on driving superior customer satisfaction and financial results by targeting world-class operating performance throughout all aspects of its business. 46 2. Significant Accounting Policies Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Revenue Recognition See Note 5, Revenue Recognition for the Company's policy for recognizing revenue under Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers ("ASC 606") as well as the various other disclosures required by ASC 606. Leases The Company determines if an arrangement is a lease, or contains a lease, at the inception of the arrangement and determines whether it is an operating or financing lease. Operating and financing leases result in the Company recording a right-of-use ("ROU") asset, current lease liability, and long-term lease liability on its balance sheet. Lease expense for operating leases and amortization expense for finance leases is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet and are instead recognized on a straight-line basis over the lease term. See Note 12, Leases, for additional discussion about the Company's policy for accounting for leases and other required disclosures. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718, Accounting for Stock Compensation ("ASC 718"). ASC 718 requires compensation costs related to stock-based payment transactions to be recognized in the financial statements. Generally, compensation cost is measured based on the grant-date fair value of the equity instruments issued. Compensation cost is recognized over the requisite service period, generally as the awards vest. See further discussion of the Company’s equity plans in Note 13, Stock-Based Compensation. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less to be cash and cash equivalents. Cash and cash equivalents that are restricted from operating use are classified as restricted cash. We had $ 40.1 million and $ 38.8 million classified as restricted cash as of December 31, 2025 and 2024, respectively. Receivables Receivables are stated net of allowances for credit losses of $ 1.2 million at December 31, 2025, and $ 1.8 million at December 31, 2024. The Company assesses the collectability of customer receivables based on the credit worthiness of a customer as determined by credit checks and analysis, as well as the customer’s payment history. In determining the allowance for credit losses, the Company also considers various factors including the aging of customer accounts and historical write-offs. In addition, the Company monitors other risk factors, including forward-looking information when establishing adequate allowances for credit losses, which reflects the current estimate of credit losses expected to be incurred over the life of the receivables. Generally, advance payment is not required. Allowances for credit losses established are recorded within selling, general and administrative expenses within the consolidated statements of operations. Inventories Inventories are comprised of material, direct labor and manufacturing overhead, and are stated at the lower of cost or market. Market is determined based on estimated net realizable values. The percentage of the Company’s total inventories valued using the Last-In, First-Out ("LIFO") method was 89 % and 94 % at December 31, 2025 and 2024, respectively. All remaining inventories are valued using the First-In, First-Out ("FIFO") method. In some cases, the Company has determined a certain portion of inventories are excess or obsolete. In those cases, the Company writes down the value of those inventories to their net realizable value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, adjustments to established inventory reserves may be required. The total write-down of inventories charged to expense was $ 2.2 million, $ 11.6 million and $ 3.4 million, during the years ended December 31, 2025, 2024, and 2023, respectively. 47 Property, Plant and Equipment Property, plant and equipment are initially stated at cost. Depreciation is provided using the straight-line method over 10 to 30 years for buildings and improvements, 5 to 10 years for machinery and equipment and 3 to 5 years for computer hardware and software. Where appropriate, the depreciable lives of certain assets may be adjusted to reflect a change in the use of those assets, or depreciation may be accelerated in the case of an eventual asset disposal. Goodwill and Intangible Assets Intangible assets consist of acquired trademarks and tradenames, customer relationships (including distribution network) and patents. The customer relationships, patents, and certain tradenames are being amortized using the straight-line method over their estimated useful lives of 7 to 20 years, 3 to 13 years and 5 to 20 years, respectively. Where appropriate, the lives of certain intangible assets may be adjusted to reflect a change in the use of those assets, or amortization may be accelerated in the case of a known intangible asset discontinuation. Goodwill, trademarks and certain tradenames have indefinite lives and are not amortized. However, the goodwill and intangible assets are tested annually for impairment, and may be tested more frequently if any triggering events occur that would reduce the recoverability of the asset. In conducting the annual impairment test for goodwill, the Company has the option to first assess qualitative factors to determine whether it is more likely than not (greater than 50% likelihood) the fair value of any reporting unit is less than its carrying amount. If a qualitative assessment determines an impairment is more likely than not, the Company is required to perform a quantitative impairment test. Otherwise, no further analysis is required. Alternatively, the Company may elect to proceed directly to the quantitative impairment test. In conducting a quantitative assessment, the Company utilizes a discounted cash flow methodology based on future business projections and a market value approach (guideline public company comparables). The Company performs the goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. If the carrying amount exceeds the fair value of the reporting unit, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit's fair value up to the amount of the recorded goodwill. During the fourth quarter of the year ended December 31, 2025, the Company completed its annual goodwill and intangible asset impairment tests and elected to perform a qualitative assessment. No goodwill impairment charges were recorded during the years ended December 31, 2025, 2024, or 2023. During the year ended December 31, 2024, we recorded a $ 0.6 million impairment charge related to an indefinite-lived tradename no longer used. No intangible asset impairment charges were recorded during the years ended December 31, 2025 or 2023. Impairment of Long-Lived Assets The carrying value of long-lived assets, including amortizable intangible assets and tangible fixed assets, are evaluated for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Impairment of amortizable intangible assets and tangible fixed assets is generally determined by comparing projected undiscounted cash flows to be generated by the asset, or group of assets, to its carrying value. If impairment is identified, a loss is recorded equal to the excess of the asset's net book value over its fair value, and the cost basis is adjusted accordingly. During the years ended December 31, 2025, 2024, and 2023, the Company recognized $ 2.0 million, $ 7.4 million, and $ 2.5 million of fixed asset impairment charges, respectively. Impairments are determined utilizing Level 3 inputs within the Fair Value hierarchy, and the Company reviews and considers input from outside specialists, when appropriate. Actual results could vary from these estimates. Refer to Note 11, Fair Value Measurements for additional information. Product Warranty The Company offers warranties on the sales of certain of its products and records an accrual for estimated future claims. Such accruals are based upon historical experience and management’s estimate of the level of future claims. The following table presents changes in the Company’s product warranty liability during each of the periods presented (in millions): Year Ended December 31, 2025 December 31, 2024 December 31, 2023 Balance at beginning of period $ 4.9 $ 4.7 $ 4.2 Charged to operations 4.1 3.0 2.4 Claims settled ( 2.4 ) ( 2.8 ) ( 1.9 ) Total $ 6.6 $ 4.9 $ 4.7 Less current reserve $ 3.1 $ 4.9 $ 4.7 Long-term reserve $ 3.5 $ — $ — 48 Income Taxes Deferred income taxes are provided for future tax effects attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, net operating losses, tax credits and other applicable carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be actually paid or recovered. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of continuing operations in the period that includes the date of enactment. The Company regularly reviews its deferred tax assets for recoverability and provides a valuation allowance against its deferred tax assets if, based upon consideration of all positive and negative evidence, the Company determines that it is more-likely-than-not that a portion or all of the deferred tax assets will ultimately not be realized in future tax periods. Such positive and negative evidence would include review of historical earnings and losses, anticipated future earnings, the time period over which the temporary differences and carryforwards are anticipated to reverse and implementation of feasible, prudent tax planning strategies. The Company is subject to income taxes in the United States and multiple foreign jurisdictions. Significant judgment is required in determining the Company’s worldwide provision for income taxes and recording the related deferred tax assets and liabilities. In the ordinary course of the Company’s business, there is inherent uncertainty in quantifying the ultimate tax outcome of all the numerous transactions and required calculations relating to the Company’s tax positions. Accruals for unrecognized tax benefits are provided for in accordance with the requirements of ASC 740, Income Taxes ("ASC 740") . An unrecognized tax benefit represents the difference between the recognition of benefits related to uncertain tax positions for income tax reporting purposes and financial reporting purposes. The Company has established a reserve for interest and penalties, as applicable, for uncertain tax positions and it is recorded as a component of the overall income tax provision. The Company is subject to periodic income tax examinations by domestic and foreign income tax authorities. Although the outcome of income tax examinations is always uncertain, the Company believes that it has appropriate support for the positions taken on its income tax returns and has adequately provided for potential income tax assessments. Nonetheless, the amounts ultimately settled relating to issues raised by the taxing authorities may differ materially from the amounts accrued for each year. See Note 15, Income Taxes for additional information. Per Share Data Basic net income per share from continuing and discontinued operations is computed by dividing net income from continuing operations and income from discontinued operations, respectively, by the corresponding weighted average number of common shares outstanding for the period. Diluted net income per share from continuing and discontinued operations is computed based on the weighted average number of common shares outstanding, increased by the number of incremental shares that would have been outstanding if the potential dilutive shares were issued through the exercise of outstanding stock options to purchase common shares and the vesting of restricted stock units and performance stock units using the treasury stock method, except when the effect would be anti-dilutive. There were no common shares with anti-dilutive effects for the year ended December 31, 2025. The computation for diluted net income per share for the years ended December 31, 2024 and 2023 excludes 0.2 million and 0.3 million common shares due to their anti-dilutive effects, respectively. 49 Accumulated Other Comprehensive Loss The changes in accumulated other comprehensive loss, net of tax, for the years ended December 31, 2025, 2024, and 2023 are as follows (in millions): Foreign Currency Translation and Other Adjustments Pension and Other Postretirement Benefit Obligations Total Balance at December 31, 2022 $ ( 75.1 ) $ 0.1 $ ( 75.0 ) Other comprehensive income before reclassifications $ 3.6 $ 3.7 $ 7.3 Balance at December 31, 2023 $ ( 71.5 ) $ 3.8 $ ( 67.7 ) Other comprehensive (loss) income before reclassifications $ ( 10.0 ) $ 3.3 $ ( 6.7 ) Balance at December 31, 2024 $ ( 81.5 ) $ 7.1 $ ( 74.4 ) Other comprehensive income before reclassifications $ 4.9 $ 0.8 $ 5.7 Amounts reclassified from accumulated other comprehensive loss — ( 8.0 ) ( 8.0 ) Net current period other comprehensive income (loss) 4.9 ( 7.2 ) ( 2.3 ) Balance at December 31, 2025 $ ( 76.6 ) $ ( 0.1 ) $ ( 76.7 ) The following table summarizes the amounts reclassified from accumulated other comprehensive loss to net income for the year ended December 31, 2025 (in millions): Year Ended December 31, 2025 Income Statement Line Pension and other postretirement benefit obligations Settlement gain ( 10.0 ) Other income (expense), net Provision for income taxes 2.0 Total net of tax $ ( 8.0 ) There were no amounts reclassified from accumulated other comprehensive loss to net income during the years ended December 31, 2024 and 2023. Foreign Currency Translation Assets and liabilities of subsidiaries operating outside of the United States with a functional currency other than the U.S. dollar are translated into U.S. dollars using exchange rates at the end of the respective period. Revenues and expenses of such entities are translated at average exchange rates in effect during the respective period. Foreign currency translation adjustments are included as a component of accumulated other comprehensive loss. Currency transaction (gains) losses totaled $ 0.7 million, $( 0.8 ) million and $ 0.9 million for the years ended December 31, 2025, 2024, and 2023, respectively, and are included in other income (expense), net in the consolidated statements of operations. Advertising Costs Advertising costs are charged to selling, general and administrative expenses on the consolidated statements of operations as incurred and amounted to $ 20.8 million, $ 18.1 million and $ 18.4 million for the years ended December 31, 2025, 2024, and 2023, respectively. Research, Development and Engineering Costs Research, development and engineering costs are charged to selling, general and administrative expenses on the consolidated statements of operations as incurred and amounted to $ 25.0 million, $ 25.9 million and $ 23.7 million for the years ended December 31, 2025, 2024, and 2023, respectively. Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist of cash and temporary investments and trade accounts receivable. Recent Accounting Pronouncements In December 2023, the FASB issued Accounting Standards Update 2023-09 “Income Taxes (Topic 470): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which establishes new income tax disclosures to consistently categorize and provide greater disaggregation of information in the rate reconciliation, including dollar value and percentage impacts of each component of the reconciliation, as well as further disaggregates income taxes paid. This update is effective for the Company for annual fiscal periods beginning after December 15, 2024. The Company has adopted ASU 2023-09 for the 50 2025 calendar year prospectively. Because the ASU affects disclosures only, the adoption did not affect the Company’s consolidated statements of operations or consolidated balance sheets. In November 2024, the FASB issued Accounting Standards Update 2024-03 “Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses” (“ASU 2024-03”), which is intended to improve disclosures about a public business entity's expenses, primarily through additional disaggregation of income statement expenses. The ASU’s amendments are effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. The Company is evaluating the impact of the adoption of ASU 2024-03 on the consolidated financial statements. In September 2025, the FASB issued Accounting Standards Update 2025-06 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software” ("ASU 2025-06"), which replaces the stage-based capitalization model for the treatment of development costs of internal-use software with a principles-based framework, reflecting modern software development practices. In addition, ASU 2025-06 requires companies to capitalize software costs once management authorizes and commits to funding with probable completion and use. This guidance will be effective for annual reporting periods beginning after December 15, 2027, and for interim periods within annual reporting periods within those annual reporting periods, and allows multiple transition methods, including retrospective, prospective, or modified prospective application, with early adoption permitted. The Company is evaluating the impact of the adoption of ASU 2025-06 on the consolidated financial statements. 3. Discontinued Operations During the year ended December 31, 2021, the Company completed the Spin-Off Transaction of PMC. The operating results of PMC are reported as discontinued operations in the consolidated statements of operations for all periods presented, as the Spin-Off Transaction of PMC represented a strategic shift that had a major impact on operations and financial results. The consolidated statements of cash flows for the years ended December 31, 2025, 2024, and 2023 have not been adjusted to separately disclose cash flows related to the discontinued operations. The major components of the Income from discontinued operations, net of tax presented in the consolidated statements of operations during the years ended December 31, 2025, 2024, and 2023 are included in the table below (in millions): Year Ended December 31, 2025 December 31, 2024 December 31, 2023 Selling, general and administrative income (1) ( 4.7 ) ( 0.7 ) ( 8.4 ) Income from discontinued operations before income tax 4.7 0.7 8.4 Income tax benefit 0.9 0.6 0.1 Income from discontinued operations, net of tax $ 5.6 $ 1.3 $ 8.5 __________________ (1) Selling, general and administrative income for the years ended December 31, 2025, 2024, and 2023 includes the release of certain accruals as a result of costs the Company will no longer incur related to the Spin-Off Transaction. 4. Restructuring and Other Similar Charges During the year ended December 31, 2025, the Company continued to execute various restructuring actions. These initiatives were implemented to drive efficiencies and reduce operating costs while also modifying the Company's footprint to reflect changes in the markets it serves, the impact of acquisitions on the Company's overall manufacturing capacity and the refinement of its overall product portfolio. These restructuring actions primarily resulted in workforce reductions, lease termination costs and other facility rationalization costs. Management expects to continue executing similar initiatives to optimize its operating margin and manufacturing footprint. As such, the Company expects further expenses related to workforce reductions, potential impairment or accelerated depreciation of assets, lease termination costs and other facility rationalization costs. The Company's restructuring plans are preliminary and the full extent of related expenses are not yet estimable. 51 The following table summarizes the Company's restructuring and other similar charges incurred during the years ended December 31, 2025, 2024, and 2023 (in millions): Year Ended December 31, 2025 December 31, 2024 December 31, 2023 Employee termination benefits $ 3.2 $ 2.1 $ 3.4 Asset impairment charges 2.5 8.0 2.5 Contract termination and other associated costs 3.9 3.4 9.4 Total restructuring and other similar charges $ 9.6 $ 13.5 $ 15.3 Restructuring Costs To-date (Period from April 1, 2011 to December 31, 2025) Restructuring Costs To-date (Period from April 1, 2011 to December 31, 2025) Employee termination benefits $ 39.1 Asset impairment charges 13.0 Contract termination and other associated costs 25.8 Total restructuring and other similar charges $ 77.9 The following table summarizes the activity in the Company's accrual for restructuring and other similar charges for the years ended December 31, 2025 and 2024 (in millions): Employee termination benefits Asset impairment charges Contract termination and other associated costs Total Accrued restructuring costs, December 31, 2023 (1) $ 0.7 $ — $ 0.6 $ 1.3 Charges 2.1 8.0 3.4 13.5 Cash payments ( 1.7 ) — ( 3.9 ) ( 5.6 ) Non-cash charges — ( 8.0 ) — ( 8.0 ) Accrued restructuring costs, December 31, 2024 (1) $ 1.1 $ — $ 0.1 $ 1.2 Charges 3.2 2.5 3.9 9.6 Cash payments ( 2.7 ) — ( 3.7 ) ( 6.4 ) Non-cash charges — ( 2.5 ) — ( 2.5 ) Accrued restructuring costs, December 31, 2025 (1) $ 1.6 $ — $ 0.3 $ 1.9 ____________________ (1) As of December 31, 2025 and December 31, 2024, the accrual for restructuring and other similar charges is included in other current liabilities in the consolidated balance sheets. 5. Revenue Recognition A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and revenue is recognized when obligations under the terms of a contract with the customer are satisfied. For the majority of the Company's product sales, revenue is recognized at a point-in-time when control of the product is transferred to the customer, which generally occurs when the product is shipped from the Company's manufacturing facility to the customer. When contracts include multiple products to be delivered to the customer, generally each product is separately priced and is determined to be distinct within the context of the contract. Other than a standard assurance-type warranty that the product will conform to agreed-upon specifications, there are generally no other significant post-shipment obligations. The expected costs associated with standard warranties continues to be recognized as an expense when the products are sold. When the contract provides the customer the right to return eligible products or when the customer is part of a sales rebate program, the Company reduces revenue at the point of sale using current facts and historical experience by using an estimate for expected product returns and rebates associated with the transaction. The Company adjusts these estimates at the earlier of when the most likely amount of consideration that is expected to be received changes or when the consideration becomes fixed. Accordingly, an increase or decrease to revenue is recognized at that time. Sales and other taxes collected concurrent with revenue-producing activities are excluded from revenue. The Company has elected to recognize the cost for freight and shipping when control of products has transferred to the customer as a 52 component of cost of sales in the consolidated statements of operations. The Company classifies shipping and handling fees billed to customers as net sales and the corresponding costs are classified as cost of sales in the consolidated statements of operations. Unsatisfied performance obligations as of December 31, 2025 have an expected duration of one year or less. Revenue by Category The Company designs, procures, manufactures, and markets a comprehensive portfolio of water management solutions. The Company disaggregates its sales by customer type and geographic location, which the Company believes best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows may be impacted differently by certain economic factors. The following tables present revenue disaggregated by customer type and the geographic region of the end customer (in millions): Year Ended Customer Type December 31, 2025 December 31, 2024 December 31, 2023 Institutional $ 830.0 $ 740.5 $ 690.5 Commercial 477.3 451.1 443.1 All other 388.6 374.9 396.9 Total $ 1,695.9 $ 1,566.5 $ 1,530.5 Year Ended Geography December 31, 2025 December 31, 2024 December 31, 2023 United States $ 1,551.1 $ 1,428.9 $ 1,410.1 Canada 97.8 90.1 78.7 Rest of world 47.0 47.5 41.7 Total $ 1,695.9 $ 1,566.5 $ 1,530.5 Contract Balances For substantially all of the Company's product sales, the customer is billed 100 % of the contract value when the product ships and payment is generally due 30 days from shipment. Certain contracts include longer payment periods; however, the Company has elected to utilize the practical expedient in which the Company will only recognize a financing component to the sale if payment is due more than one year from the date of shipment. Billings are recorded as accounts receivable when an unconditional right to the contractual consideration exists. Contract assets arise when the Company performs by transferring goods or services to a customer before the customer pays consideration, or before the customer’s payment is due. A contract liability exists when the Company has received consideration or the amount is due from the customer in advance of revenue recognition. Contract liabilities and contract assets as of December 31, 2025 and December 31, 2024 were not material. Timing of Performance Obligations Satisfied at a Point in Time The Company determined that the customer is able to control the product when it is delivered to them; thus, depending on the shipping terms, control will transfer at different points between the Company's manufacturing facility or warehouse and the customer’s location. The Company considers control to have transferred upon shipment or delivery because the Company has a present right to payment at that time, the customer has legal title to the asset, the Company has transferred physical possession of the asset and the customer has significant risks and rewards of ownership of the asset. Variable Consideration The Company provides volume-based rebates and the right to return product to certain customers, which are accrued for based on current facts and historical experience. Rebates are paid either on an annual or quarterly basis. There are no other significant variable consideration elements included in the Company's contracts with customers. Contract Costs The Company has elected to expense contract costs as incurred if the amortization period is expected to be one year or less. If the amortization period of these costs is expected to be greater than one year, the costs would be subject to capitalization. As of December 31, 2025 and December 31, 2024, the contract assets capitalized are not significant. During the years ended December 31, 2025, 2024, and 2023, contract asset amortization was not significant and no impairment losses were recognized. 53 6. Inventories The major classes of inventories are summarized as follows (in millions): December 31, 2025 December 31, 2024 Finished goods $ 241.3 $ 228.7 Work in progress 17.3 12.1 Raw materials 49.2 44.8 Inventories at First-In, First-Out ("FIFO") cost 307.8 285.6 Adjustment to state inventories at Last-In, First-Out ("LIFO") cost ( 33.4 ) ( 13.0 ) $ 274.4 $ 272.6 7. Property, Plant and Equipment Property, plant and equipment, net is summarized as follows (in millions): December 31, 2025 December 31, 2024 Land $ 12.7 $ 13.5 Buildings and improvements 100.4 103.5 Machinery and equipment 135.0 123.8 Computer hardware and software 31.1 30.4 Construction in-progress 19.3 15.4 298.5 286.6 Less accumulated depreciation ( 140.9 ) ( 122.6 ) $ 157.6 $ 164.0 8. Goodwill and Intangible Assets The changes in the net carrying value of goodwill for the years ended December 31, 2025 and 2024 consisted of the following (in millions): Net carrying amount as of December 31, 2023 $ 796.0 Currency translation adjustments ( 1.8 ) Net carrying amount as of December 31, 2024 $ 794.2 Currency translation adjustments 0.8 Net carrying amount as of December 31, 2025 $ 795.0 54 The gross carrying amount and accumulated amortization for each major class of identifiable intangible assets as of December 31, 2025 and December 31, 2024 consisted of the following (in millions): December 31, 2025 Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets subject to amortization: Patents 10 years $ 28.4 $ ( 23.3 ) $ 5.1 Customer relationships (including distribution network) 16 years 1,068.6 ( 448.9 ) 619.7 Tradenames 19 years 156.7 ( 32.8 ) 123.9 Intangible assets not subject to amortization - trademarks and tradenames 86.3 — 86.3 Total intangible assets, net 16 years $ 1,340.0 $ ( 505.0 ) $ 835.0 December 31, 2024 Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets subject to amortization: Patents 9 years $ 27.4 $ ( 22.9 ) $ 4.5 Customer relationships (including distribution network) 16 years 1,066.9 ( 398.1 ) 668.8 Tradenames 19 years 156.7 ( 24.7 ) 132.0 Intangible assets not subject to amortization - trademarks and tradenames 86.3 — 86.3 Total intangible assets, net 16 years $ 1,337.3 $ ( 445.7 ) $ 891.6 Intangible asset amortization expense totaled $ 58.7 million, $ 59.1 million and $ 58.7 million for the years ended December 31, 2025, 2024, and 2023, respectively. There were no acquired intangibles in 2025, 2024, or 2023. During the year ended December 31, 2024, the Company recorded a $ 0.6 million impairment charge related to an indefinite-lived tradename no longer used. The Company expects to recognize amortization expense on intangible assets subject to amortization of $ 58.5 million in 2026, $ 58.5 million in 2027, $ 58.5 million in 2028, $ 58.5 million in 2029, and $ 58.5 million in 2030. 9. Other Current Liabilities Other current liabilities are summarized as follows (in millions): December 31, 2025 December 31, 2024 Commissions $ 9.1 $ 9.2 Current portion of operating lease liability (1) 14.7 12.7 Income taxes payable 3.1 2.3 Professional fees 5.8 1.6 Product warranty (2) 3.1 4.9 Restructuring and other similar charges (3) 1.9 1.2 Risk management (4) 5.8 5.5 Sales rebates 81.1 73.2 Tax indemnities 9.2 12.2 Taxes, other than income taxes 3.1 2.9 Other 14.4 10.5 $ 151.3 $ 136.2 ___________________ (1) See more information related to leases within Note 12, Leases. (2) See more information related to the product warranty obligations balance within Note 2, Significant Accounting Policies. (3) See more information related to the restructuring obligations balance within Note 4, Restructuring and Other Similar Charges. (4) Includes projected liabilities related to losses arising from automobile, general, environmental, worker's compensation, and product liability claims. 55 10. Long-Term Debt Long-term debt is summarized as follows (in millions): December 31, 2025 December 31, 2024 Term loan (1) $ 476.4 $ 475.0 Finance leases (2) 20.1 20.6 Total 496.5 495.6 Less current maturities 0.9 0.8 Long-term debt $ 495.6 $ 494.8 ____________________ (1) Includes unamortized debt issuance costs of $ 4.0 million and $ 5.4 million at December 31, 2025 and December 31, 2024, respectively. (2) See more information related to finance leases within Note 12 , Leases. Senior Secured Credit Facility On October 4, 2021, ZBS Global, Inc. (“Holdings”), Zurn Holdings, Inc., Zurn LLC (together, the “Original Borrowers”), the lenders from time to time party thereto, and Credit Suisse AG, Cayman Islands Branch, as administrative agent for the lenders (in such capacity, the “Administrative Agent”) entered into a Fourth Amended and Restated First Lien Credit Agreement as amended by that certain Amendment No. 1 to Fourth Amended and Restated First Lien Credit Agreement dated as of July 1, 2022 (the "Amendment") (as so amended, the “Credit Agreement”). Pursuant to the Amendment, Elkay joined the Credit Agreement as a borrower (Elkay and the Original Borrowers, collectively, the "Borrowers"). The Credit Agreement is funded by a syndicate of banks and other financial institutions and provides for (i) a $ 550.0 million term loan facility (the “Term Loan”) and (ii) a $ 200.0 million revolving credit facility (the “Revolving Credit Facility”). The obligations under the Credit Agreement and related documents are secured by liens on substantially all of the assets of Holdings, the Borrowers, and certain subsidiaries of the Borrowers pursuant to a Third Amended and Restated Guarantee and Collateral Agreement, dated as of October 4, 2021, among Holdings, the Borrowers, the subsidiaries of the Borrowers party thereto, and the Administrative Agent, as supplemented pursuant to that certain Supplement No. 1 dated as of July 1, 2022, executed by Elkay and its domestic subsidiaries, and certain other collateral documents. The Credit Agreement contains representations, warranties, covenants and events of default, including, without limitation, a financial covenant under which the Borrowers are, if certain conditions are met, obligated to maintain on a consolidated basis, as of the end of each fiscal quarter, a certain maximum Net First Lien Leverage Ratio (as defined in the Credit Agreement). As of December 31, 2025, the Borrowers were in compliance with all applicable covenants under the Credit Agreement. Term Debt The Credit Agreement provides for the issuance of a term loan facility in an aggregate principal amount of $ 550.0 million. The proceeds of the Term Loan were, together with the dividend received by the Company in connection with the Spin-Off Transaction and cash on hand, used to (i) repay in full the aggregate principal amount outstanding of the prior term loan, together with accrued interest thereon, (ii) redeem the $ 500 million of outstanding principal amount of the 4.875 % Senior Notes due 2025, and (iii) pay related fees and expenses. On October 11, 2023, the Company made a voluntary prepayment on its Term Loan of $ 60.0 million. In connection with this prepayment, the Company recognized a $ 0.9 million loss on debt extinguishment to write off a portion of the unamortized debt issuance costs. The Term Loan has a maturity date of October 4, 2028. Commencing on March 31, 2022, the Borrowers were required to make quarterly payments of principal in an amount equal to $ 1.4 million each quarter until the maturity date. In connection with the voluntary prepayment of $ 60.0 million, the quarterly principal payments of $ 1.4 million are no longer required. For purposes of the Term Loan, effective July 1, 2023, the secured overnight financing rate ("SOFR") replaced LIBOR, and accordingly, beginning July 1, 2023 the Term Loan bears interest at the Borrowers' option, by reference to a base rate or a rate based on Term SOFR, plus a Term SOFR adjustment of 0.115 %, 0.262 %, or 0.428 % for interest periods of one month, three months, and six months, respectively, plus an applicable margin based on the Borrowers' Net First Lien Leverage Ratio as of the last day of each fiscal quarter. If the Net First Lien Leverage Ratio is greater than 1.80 to 1.00, the applicable margin shall equal 1.25 % in the case of base rate borrowings and 2.25 % in the case of SOFR borrowings. In the event the Borrowers’ Net First Lien Leverage Ratio is less than or equal to 1.80 to 1.00, the applicable margin on both base rate and 56 SOFR borrowings would decrease by 0.25 %. The Borrowers’ Net First Lien Leverage Ratio was 0.53 to 1.00 as of December 31, 2025 and therefore the applicable rate is 2.00 %. Prior to July 1, 2023, the Term Loan bore interest at the Borrowers’ option, by reference to a base rate or a rate based on LIBOR, in either case plus an applicable margin determined quarterly based on the Borrowers’ Net First Lien Leverage Ratio as of the last day of each fiscal quarter as illustrated above. At December 31, 2025 and December 31, 2024, the borrowings under the Term Loan had effective interest rates of 5.80 % and 6.42 %, respectively. During the year ended December 31, 2025 and December 31, 2024, the borrowings under the Term Loan had weighted-average effective interest rates of 6.36 % and 7.28 %, respectively. Revolving Credit Facility The Credit Agreement includes a $ 200.0 million revolving credit facility that has a maturity date of October 2, 2026. Similar to the Term Loan, effective July 1, 2023, the SOFR replaced LIBOR, and accordingly, beginning July 1, 2023 the Revolving Credit Facility bears interest by reference to a base rate or a rate based on Term SOFR, plus a Term SOFR adjustment of 0.115 %, 0.262 %, or 0.428 % for interest periods of one month, three months, and six months, respectively, plus an applicable margin based on the Borrowers' Net First Lien Leverage Ratio as of the last day of each fiscal quarter. If the Net First Lien Leverage Ratio is greater than 2.00 to 1.00, the applicable margin shall equal 1.00 % in the case of base rate borrowings and 2.00 % in the case of SOFR borrowings. In the event the Borrowers' Net First Lien Leverage Ratio is less than or equal to 2.00 to 1.00, the applicable margin on both base rate and SOFR borrowings would decrease by 0.25 %. The Borrowers’ Net First Lien Leverage Ratio was 0.53 to 1.00 as of December 31, 2025. The Borrowers are also required to pay a quarterly commitment fee on the average daily unused portion of the Revolving Credit Facility for each fiscal quarter and fees in connection with the issuance of letters of credit. If the Net First Lien Leverage Ratio is greater than 2.00 to 1.00, the commitment fee is 0.50 %, and if the Company's Net First Lien Leverage Ratio is less than or equal to 2.00 to 1.00, the commitment fee is 0.375 %. Prior to July 1, 2023, borrowings under the Revolving Credit Facility bore interest at the Borrowers’ option, by reference to a base rate or a rate based on LIBOR, in either case, plus an applicable margin determined quarterly based on the Borrowers’ Net First Lien Leverage Ratio as of the last day of each fiscal quarter as illustrated above. At December 31, 2025 and December 31, 2024, there were no amounts borrowed under the Revolving Credit Facility. As of December 31, 2025 and December 31, 2024, $ 10.1 million and $ 11.3 million of the Revolving Credit Facility was considered utilized in connection with outstanding letters of credit, respectively. Finance Leases At December 31, 2025 and 2024, the Company had finance lease obligations of $ 20.1 million and $ 20.6 million, respectively. For more information related to finance leases, see Note 12, Leases. Future Debt Maturities Future maturities of debt and finance lease obligations as of December 31, 2025, excluding the unamortized debt issuance costs of $ 4.0 million, were as follows (in millions): Years ending December 31: 2026 $ 0.9 2027 1.0 2028 481.5 2029 1.3 2030 1.4 Thereafter 14.4 $ 500.5 Cash interest paid for the years ended December 31, 2025, 2024, and 2023 was $ 33.9 million, $ 30.9 million and $ 36.1 million, respectively. 11. Fair Value Measurements ASC 820, Fair Value Measuremen t ("ASC 820"), defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. ASC 820 also specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, 57 while unobservable inputs (lowest level) reflect internally developed assumptions about the assumptions a market participant would use. In accordance with ASC 820, fair value measurements are classified under the following hierarchy: • Level 1- Quoted prices for identical instruments in active markets. • Level 2- Quoted prices for similar instruments; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable. • Level 3- Model-derived valuations in which one or more inputs or value-drivers are both significant to the fair value measurement and unobservable. If applicable, the Company uses quoted market prices in active markets to determine fair value, and therefore classifies such measurements within Level 1. In some cases where market prices are not available, the Company makes use of observable market based inputs to calculate fair value, in which case the measurements are classified within Level 2. If quoted or observable market prices are not available, fair value is based upon internally developed models that use, where possible, current market-based parameters. These measurements are classified within Level 3 if they use significant unobservable inputs. Fair Value of Non-Derivative Financial Instruments The carrying amounts of cash, receivables, payables and accrued liabilities approximated fair value at December 31, 2025 and December 31, 2024 due to the short-term nature of those instruments. The fair value of long-term debt recorded on the consolidated balance sheets as of December 31, 2025 and December 31, 2024 was approximately $ 502.9 million and $ 503.4 million, respectively. The fair value is based on quoted market prices for the same instruments. 12. Leases The Company determines if a contract is (or contains) a lease at inception by evaluating whether the contract conveys the right to control the use of an identified asset. The Company has operating and finance leases primarily associated with real estate, automobiles and manufacturing and office equipment. The Company has lease agreements that include lease and non-lease components, which the Company has elected to account for as a single lease component for all classes of the underlying assets. The term of the Company’s leases generally reflects the non-cancellable period of the lease. Some of the Company’s lease agreements include options to extend or terminate the lease, which are excluded from the minimum lease terms unless the Company is reasonably certain the option will be exercised. Lease expense for operating leases and amortization expense for finance leases is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets and are instead recognized on a straight-line basis over the lease term. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company rents or subleases certain real estate to third parties, primarily related to exited facilities, with income offsetting restructuring expense. The sublease income related to these arrangements is not material to the consolidated financial statements. Right-of-use (“ROU”) assets and liabilities are recognized in the consolidated balance sheets based on the present value of remaining lease payments over the lease term. Additionally, ROU assets include any lease payments made at or before the lease commencement date, any initial direct costs incurred, and are reduced by lease incentives received. As most of the Company’s leases do not provide an implicit rate, the present value of lease payments is determined using the Company’s incremental borrowing rate at the commencement date of the lease. Lease payments included in the measurement of the lease liabilities are comprised of fixed payments, variable payments that depend on an index or rate, and amounts probable to be paid if an option is reasonably certain to be exercised. Variable lease payments, typically based on usage of the asset or changes in an index or rate, are excluded from the lease liabilities and are recognized in the period in which the obligation for those payments is incurred. 58 ROU assets and lease liability balances recorded on the consolidated balance sheets are summarized as follows (in millions): Leases Classification December 31, 2025 December 31, 2024 Assets: Operating ROU assets Other assets $ 52.4 $ 51.2 Finance ROU assets Property, plant and equipment, net (1) 17.8 19.0 Total ROU assets $ 70.2 $ 70.2 Liabilities: Current Operating Other current liabilities $ 14.7 $ 12.7 Finance Current maturities of debt 0.9 0.8 Non-current Operating Operating lease liability 42.0 43.3 Finance Long-term debt 19.2 19.8 Total lease liabilities $ 76.8 $ 76.6 ____________________ (1) Finance lease assets are recorded net of accumulated amortization of $ 4.4 million and $ 3.2 million as of December 31, 2025 and December 31, 2024, respectively. The components of lease expense reported in the consolidated statements of operations are as follows (in millions): Year Ended December 31, 2025 December 31, 2024 December 31, 2023 Operating lease expenses (1) $ 17.0 $ 14.9 $ 13.8 Finance lease expenses: Depreciation of finance ROU assets (1) 1.5 1.6 1.7 Interest on lease liabilities (2) 1.4 1.5 1.5 Total finance lease expense 2.9 3.1 3.2 Variable and short-term lease expense (1) 7.8 7.6 7.0 Total lease expense $ 27.7 $ 25.6 $ 24.0 ____________________ (1) Included in cost of sales, selling, general and administrative expenses, and restructuring and other similar charges. (2) Included in interest expense, net. Future minimum lease payments under operating and finance leases as of December 31, 2025 are as follows (in millions): Years ending December 31, Operating Leases Finance Leases 2026 $ 17.8 $ 2.3 2027 17.6 2.4 2028 11.2 2.4 2029 7.4 2.4 2030 3.9 2.5 Thereafter 7.4 18.2 Total future minimum lease payments 65.3 30.2 Less: Imputed interest ( 8.6 ) ( 10.1 ) Total lease liabilities $ 56.7 $ 20.1 59 The weighted-average remaining lease terms and discount rates for leases are as follows: Year Ended Lease Term and Discount Rate December 31, 2025 December 31, 2024 December 31, 2023 Weighted-average remaining lease terms (years): Operating leases 4.4 5.0 5.9 Finance leases 11.9 13.0 13.8 Weighted-average discount rate: Operating leases 6.3 % 6.4 % 6.4 % Finance leases 7.1 % 7.1 % 7.1 % Cash paid for amounts included in the measurement of lease liabilities are as follows (in millions): Year Ended December 31, 2025 December 31, 2024 December 31, 2023 Operating cash flows from operating leases $ 17.5 $ 14.1 $ 13.2 Operating cash flows from finance leases 1.4 1.5 1.5 Financing cash flows from finance leases 0.8 0.8 0.8 ROU assets obtained (disposed) in exchange for lease liabilities are as follows (in millions): Year Ended December 31, 2025 December 31, 2024 December 31, 2023 Operating leases $ 12.8 $ 18.9 $ 14.4 Finance leases 0.4 ( 0.2 ) 21.8 13. Stock-Based Compensation Generally, compensation cost associated with share-based payment transactions is measured based on the grant-date fair value of the equity instruments issued. Compensation cost is recognized over the requisite service period, generally as the awards vest. The Company accounts for forfeitures of stock-based compensation as they occur. The Zurn Elkay Water Solutions Corporation Performance Incentive Plan, which was last approved by stockholders in fiscal 2025 (the "Plan"), is utilized to provide performance incentives to the Company's officers, employees, directors and certain others by permitting grants of equity awards (for common stock), as well as performance-based cash awards, to such persons, to encourage them to maximize Zurn Elkay's performance and create value for Zurn Elkay's stockholders. To date, equity awards consisting of stock options, Restricted Stock Units ("RSUs") and Performance Stock Units ("PSUs") have been issued under the Plan. The Plan is administered by the Compensation Committee. The options granted under the Plan have a maximum term of 10 years after the grant date. Options and RSUs granted since fiscal 2016 generally vest ratably over 3 years. RSUs granted to nonemployee directors vest immediately, but shares are not issued until six months after the director's cessation of service. PSUs generally cliff vest after 3 years based on performance over that three-year period. A portion of PSUs granted to certain executives during the year ended December 31, 2024 include a total shareholder return ("TSR") multiplier to determine the final number of PSUs earned. In May 2024, the Company’s stockholders approved the adoption of the Zurn Elkay Water Solutions Corporation Employee Stock Purchase Plan (“ESPP"). The number of shares of Company common stock available for purchase under the ESPP is 2,000,000 shares, subject to adjustment in the event of a change in capitalization. During the years ended December 31, 2025 and December 31, 2024, the Company issued 70,943 and 44,436 shares of common stock related to the ESPP, respectively. As of December 31, 2025, 1,884,621 shares remained available for future issuance. During the years ended December 31, 2025 and December 31, 2024, the Company recognized $ 0.5 million and $ 0.3 million of stock-based compensation expense related to the ESPP, respectively. During the years ended December 31, 2025, 2024, and 2023, the Company recorded $ 40.6 million, $ 37.9 million and $ 40.0 million, respectively, of stock-based compensation expense from continuing operations (the related tax benefit on these amounts subject to the 162(m) compensation limitations during the years ended December 31, 2025, 2024, and 2023 was $ 8.5 million, $ 9.2 million, and $ 9.8 million, respectively). During the year ended December 31, 2025, 2024, and 2023, the Company also recorded $ 2.1 million, $ 4.6 million and $ 2.0 million, respectively, of an excess tax benefit related to stock options exercised during each period. As of December 31, 2025, there was $ 26.3 million of total unrecognized compensation 60 cost related to non-vested stock options, RSUs and PSUs granted under the Plan. That cost is expected to be recognized over a weighted-average period of 1.5 years. Stock Options The fair value of each option granted under the Plan was estimated on the date of grant using the Black-Scholes valuation model that uses the following weighted-average assumptions: Year Ended December 31, 2025 December 31, 2024 December 31, 2023 Expected option term (in years) 6.5 6.5 6.5 Expected volatility factor 32 % 32 % 32 % Weighted-average risk-free interest rate 4.39 % 4.33 % 3.90 % Expected dividend rate 1.0 % 1.0 % 1.2 % Management’s estimate of the option term for options granted under the Plan is based on the midpoint between when the options vest and when they expire. The Company uses the simplified method to determine the expected term, as management does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. The Company’s expected volatility assumption for all options granted prior to the Spin-Off Transaction is based on the historical volatility of the Company's common stock price. The expected volatility assumption for all options granted after the Spin-Off Transaction is based on the historical volatility of the common stock prices of a peer group. The weighted average risk free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant. The weighted-average grant date fair value of options granted under the Plan during the years ended December 31, 2025, 2024, and 2023 was $ 13.11 , $ 11.43 and $ 8.28 , respectively. The total fair value of options vested during the years ended December 31, 2025, 2024, and 2023 was $ 0.7 million, $ 1.1 million and $ 0.9 million, respectively. A summary of stock option activity during the years ended December 31, 2025, 2024, and 2023 is as follows: Year Ended December 31, 2025 December 31, 2024 December 31, 2023 Shares Weighted Avg. Exercise Price Shares Weighted Avg. Exercise Price Shares Weighted Avg. Exercise Price Number of shares under options: Outstanding at beginning of period 914,583 $ 18.72 2,089,493 $ 14.67 2,647,578 $ 13.75 Granted 66,540 35.47 93,410 31.05 146,295 22.25 Exercised (1) ( 401,017 ) 13.95 ( 1,241,512 ) 12.62 ( 655,644 ) 11.66 Canceled/Forfeited ( 30,434 ) 26.62 ( 26,808 ) 28.49 ( 48,736 ) 27.77 Outstanding at end of period (2) 549,672 $ 23.80 914,583 $ 18.72 2,089,493 $ 14.67 Exercisable at end of period (3) 407,617 $ 21.14 747,808 $ 16.71 1,878,789 $ 13.35 ______________________ (1) The total intrinsic value of options exercised during the years ended December 31, 2025, 2024, and 2023 was $ 11.5 million, $ 29.3 million and $ 11.0 million, respectively. (2) The weighted average remaining contractual life of options outstanding was 5.5 years at December 31, 2025, 4.8 years at December 31, 2024 and 4.1 years at December 31, 2023. The aggregate intrinsic value of options outstanding at December 31, 2025 was $ 12.4 million. (3) The weighted average remaining contractual life of options exercisable was 4.5 years at December 31, 2025, 3.9 years at December 31, 2024 and 3.4 years at December 31, 2023. The aggregate intrinsic value of options exercisable at December 31, 2025 was $ 10.3 million. Shares Weighted Avg. Exercise Price Nonvested options at beginning of period 166,775 $ 27.77 Granted 66,540 35.47 Vested ( 71,876 ) 27.03 Canceled/Forfeited ( 19,384 ) 29.92 Nonvested options at end of period 142,055 $ 31.41 61 Restricted Stock Units During the years ended December 31, 2025, 2024, and 2023 the Company granted RSUs to certain of its officers, directors, and employees. The fair value of each award is determined based on the Company's closing stock price on the date of grant. A summary of RSU activity during the years ended December 31, 2025, 2024, and 2023 is as follows: Year Ended December 31, 2025 December 31, 2024 December 31, 2023 Units Weighted Avg. Grant Date Fair Value Units Weighted Avg. Grant Date Fair Value Units Weighted Avg. Grant Date Fair Value Nonvested RSUs at beginning of period 263,075 $ 26.97 501,321 $ 26.05 580,112 $ 29.33 Granted 198,393 35.71 125,565 31.23 242,385 23.40 Vested ( 165,527 ) 29.29 ( 318,274 ) 27.06 ( 218,153 ) 30.70 Canceled/Forfeited ( 29,882 ) 31.02 ( 45,537 ) 27.30 ( 103,023 ) 28.40 Nonvested RSUs at end of period 266,059 $ 31.70 263,075 $ 26.97 501,321 $ 26.05 Performance Stock Units During the years ended December 31, 2025, 2024, and 2023, the Company granted PSUs to certain of its officers and employees. The PSUs granted during the years ended December 31, 2025, 2024, and 2023 had a three-year performance period and are earned and vest, subject to continued employment, based on performance relative to metrics determined by the Compensation Committee. The number of performance share awards earned, which can range between 0 % and 200 % of the target awards granted depending on the Company's actual performance during the respective performance period, will be satisfied with Zurn Elkay common stock. A summary of PSU activity during the years ended December 31, 2025, 2024, and 2023 is as follows: Year Ended December 31, 2025 December 31, 2024 December 31, 2023 Units Weighted Avg. Grant Date Fair Value Units Weighted Avg. Grant Date Fair Value Units Weighted Avg. Grant Date Fair Value Nonvested PSUs at beginning of period 945,741 $ 29.53 866,810 $ 27.88 939,459 $ 27.07 Granted 395,700 35.64 553,548 34.33 425,246 23.25 Vested (1) ( 402,020 ) 23.25 ( 431,702 ) 32.25 ( 468,722 ) 22.17 Canceled/Forfeited ( 10,528 ) 33.00 ( 42,915 ) 30.91 ( 29,173 ) 26.07 Nonvested PSUs at end of period 928,893 $ 34.81 945,741 $ 29.53 866,810 $ 27.88 ______________________ (1) For the years ended December 31, 2025, 2024, and 2023, represents the target level of PSUs vested. During the years ended December 31, 2025 and 2024, PSUs were granted with vesting based on goals related to free cash flow conversion, return on invested capital, and sales growth, and certain awards granted in 2024 contained a TSR multiplier. During the year ended December 31, 2023, PSUs were granted with vesting based on goals related to free cash flow conversion and return on invested capital. The fair value of the portion of PSUs with vesting based on free cash flow conversion, return on invested capital, and sales growth is determined based on the Company's closing stock price on the date of grant. The fair value of the portion of PSUs granted in 2024 that include a TSR multiplier is determined using a Monte Carlo valuation model. For these awards, the number of PSUs earned based on the achievement of goals related to free cash flow conversion, return on invested capital, and sales growth may be increased by 0-75% if the Company's TSR over the performance period falls within a predefined range. 14. Retirement Benefits The Company sponsors pension and other postretirement benefit plans for certain employees. Most of the Company’s employees are accumulating retirement income benefits through defined contribution plans. The Company previously sponsored a frozen U.S. pension plan for certain salaried participants that was terminated in 2025. Other postretirement benefits consist of retiree medical plans that cover a portion of employees in the United States that meet certain age and service requirements. Net periodic benefit costs are primarily comprised of service and interest cost and the expected return on plan assets. The service cost component of net periodic benefit cost is presented within cost of sales and selling, general and administrative 62 expenses in the statements of operations while the other components of net periodic benefit cost are presented within other income (expense), net. The Company recognizes the net actuarial gains or losses in excess of the corridor in operating results during the final quarter of each fiscal year (or upon any required re-measurement event). The corridor is 10% of the greater of the projected benefit obligation or the fair value of the plan assets. In connection with this accounting policy, the Company recognized non-cash actuarial gain of $ 0.5 million, $ 1.4 million, and $ 2.0 million within the consolidated statements of operations from continuing operations, during the years ended December 31, 2025, 2024, and 2023, respectively. These amounts are recorded within actuarial gain on pension and other postretirement benefit obligations in the consolidated statements of operations. On January 30, 2025, the Company's Board of Directors approved a resolution to terminate the Company's U.S. defined benefit pension plan (the "Pension Plan") with the full freeze of benefit accruals under the Pension Plan effective March 31, 2025 and the termination of the Pension Plan effective April 1, 2025. The Pension Plan freeze resulted in a curtailment gain of $ 0.7 million in the first quarter of 2025. Pension Plan participants were provided the opportunity to receive their full accrued benefits from the Pension Plan assets by either electing immediate lump sum distributions or annuity contracts with a qualifying third-party annuity provider. During the year ended December 31, 2025, the Company entered into an agreement to purchase annuities from a third-party annuity provider and contributed $ 4.3 million to fund the liquidation of the Pension Plan. As a result, Pension Plan liabilities were settled and the Pension Plan was exited during the third quarter of 2025, resulting in a pre-tax settlement gain of $ 10.0 million from accumulated other comprehensive loss to other income (expense), net in the consolidated statements of operations. The components of net periodic benefit (income) cost reported in the consolidated statements of operations are as follows (in millions): Year Ended December 31, 2025 December 31, 2024 December 31, 2023 Pension Benefits: Service cost $ 0.1 $ 0.1 $ 0.1 Interest cost 8.6 11.2 12.1 Expected return on plan assets ( 6.9 ) ( 7.5 ) ( 7.5 ) Amortization of prior service cost 0.3 — — Settlement ( 10.0 ) — — Curtailment ( 0.7 ) — — Recognition of actuarial gains ( 0.1 ) ( 0.1 ) — Net periodic benefit (income) cost $ ( 8.7 ) $ 3.7 $ 4.7 Other Postretirement Benefits: Interest cost $ 0.4 $ 0.4 $ 0.6 Recognition of actuarial gains ( 0.4 ) ( 1.3 ) ( 2.0 ) Net periodic benefit (income) cost $ — $ ( 0.9 ) $ ( 1.4 ) During the year ended December 31, 2025, the recognition of $ 0.5 million of net non-cash actuarial gains was primarily due to demographic and claims gains experienced during 2025 that were reflected in certain other post-retirement benefit plans. During the year ended December 31, 2024, the recognition of $ 1.4 million of net non-cash actuarial gains was primarily due to a combination of discount rate increases coupled with demographic and claims gains experienced during 2024 that were reflected in the other post-retirement benefit plans. These gains were partially offset by a increase in the medical cost growth assumption from the prior measurement. During the year ended December 31, 2023, the recognition of $ 2.0 million of net non-cash actuarial gains was primarily due to demographic gains experienced during 2023 that were reflected in the other post-retirement benefit plans. The Company made contributions to the now terminated U.S. qualified pension plan trusts of $ 4.3 million, $ 20.0 million and $ 11.0 million during the years ended December 31, 2025, 2024, and 2023, respectively. The Company does not expect to make any further contributions to the U.S. qualified pension plan trusts given it was terminated in 2025. 63 The status of the plans is summarized as follows (in millions): Pension Benefits Other Postretirement Benefits Year Ended December 31, 2025 Year Ended December 31, 2024 Year Ended December 31, 2025 Year Ended December 31, 2024 Benefit obligation at beginning of period $ ( 210.6 ) $ ( 224.0 ) $ ( 7.2 ) $ ( 8.7 ) Service cost ( 0.1 ) ( 0.1 ) — — Interest cost ( 8.6 ) ( 11.2 ) ( 0.4 ) ( 0.4 ) Actuarial (losses) gains ( 3.8 ) 5.4 ( 0.7 ) 1.1 Plan amendments ( 0.3 ) — — — Benefits paid 15.9 19.1 1.0 1.0 Plan participant contributions — — ( 0.1 ) ( 0.2 ) Curtailments 0.7 — — — Settlements 201.1 0.2 — — Benefit obligation at end of period $ ( 5.7 ) $ ( 210.6 ) $ ( 7.4 ) $ ( 7.2 ) Plan assets at the beginning of the period $ 203.0 $ 195.2 $ — $ — Actual return on plan assets 12.4 6.6 — — Contributions 4.7 20.4 1.0 1.0 Benefits paid ( 15.9 ) ( 19.1 ) ( 1.0 ) ( 1.0 ) Settlements ( 201.1 ) ( 0.1 ) — — Plan assets at end of period $ 3.1 $ 203.0 $ — $ — Funded status of plans $ ( 2.6 ) $ ( 7.6 ) $ ( 7.4 ) $ ( 7.2 ) Net amount on consolidated balance sheets consists of: Non-current assets $ 0.7 $ 0.5 $ — $ — Current liabilities $ ( 0.3 ) $ ( 0.3 ) $ ( 0.8 ) $ ( 0.9 ) Long-term liabilities ( 3.0 ) ( 7.8 ) ( 6.6 ) ( 6.3 ) Total net funded status $ ( 2.6 ) $ ( 7.6 ) $ ( 7.4 ) $ ( 7.2 ) As of December 31, 2025, the Company had pension plans with a combined projected benefit obligation of $ 5.7 million compared to plan assets of $ 3.1 million, resulting in an under-funded status of $ 2.6 million compared to an under-funded status of $ 7.6 million at December 31, 2024. The Company’s funded status improved during the year ended December 31, 2025 primarily due to the termination and settlement of the Company's U.S. defined benefit pension plan. Any further changes in the assumptions underlying the Company’s pension values, including those that arise as a result of declines in equity markets and changes in interest rates, could result in increased pension obligation and pension cost which could negatively affect the Company’s consolidated financial position and results of operations in future periods. Amounts included in accumulated other comprehensive loss, net of tax, related to defined benefit plans at December 31, 2025 and December 31, 2024 consist of the following (in millions): As of December 31, 2025 Pension Benefits Other Postretirement Benefits Total Unrecognized actuarial (gain) loss ( 0.3 ) 0.4 0.1 Accumulated other comprehensive (income) loss, gross ( 0.3 ) 0.4 0.1 Deferred income tax provision 0.1 ( 0.1 ) — Accumulated other comprehensive (income) loss, net $ ( 0.2 ) $ 0.3 $ 0.1 As of December 31, 2024 Pension Benefits Other Postretirement Benefits Total Unrecognized actuarial gain ( 8.7 ) ( 0.7 ) ( 9.4 ) Accumulated other comprehensive income, gross ( 8.7 ) ( 0.7 ) ( 9.4 ) Deferred income tax provision 2.1 0.2 2.3 Accumulated other comprehensive income, net $ ( 6.6 ) $ ( 0.5 ) $ ( 7.1 ) 64 The following table presents significant assumptions used to determine benefit obligations and net periodic benefit (income) cost in weighted-average percentages: Pension Benefits Other Postretirement Benefits December 31, 2025 December 31, 2024 December 31, 2023 December 31, 2025 December 31, 2024 December 31, 2023 Benefit Obligations: Discount rate 6.1 % 5.7 % 5.2 % 5.4 % 5.6 % 5.2 % Rate of compensation increase 3.4 % 3.0 % 3.0 % n/a n/a n/a Net Periodic Benefit (Income) Cost: Discount rate 6.3 % 5.2 % 5.6 % 5.6 % 5.2 % 5.6 % Rate of compensation increase 3.4 % 3.0 % 3.0 % n/a n/a n/a Expected return on plan assets 4.3 % 4.0 % 4.3 % n/a n/a n/a The fair values of the Company’s pension plan assets for both the U.S and non-U.S. plans at December 31, 2025 and December 31, 2024, by asset category are included in the table below (in millions). For additional information on the fair value hierarchy and the inputs used to measure fair value, see Note 11, Fair Value Measurements. December 31, 2025 Quoted Prices in Active Market (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Measured at Net Asset Value (1) Total Investment funds International equity funds (3) — — — 0.5 0.5 Balanced funds (3) — — — 2.6 2.6 Total $ — $ — $ — $ 3.1 $ 3.1 December 31, 2024 Quoted Prices in Active Market (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Measured at Net Asset Value (1) Total Cash and cash equivalents $ 4.2 $ — $ — $ — $ 4.2 Investment funds Fixed income funds (2) — — — 178.3 178.3 U.S. equity funds (3) 3.0 — — 9.4 12.4 International equity funds (3) — — — 5.7 5.7 Balanced funds (3) — — — 2.4 2.4 Total $ 7.2 $ — $ — $ 195.8 $ 203.0 ______________________ (1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position. (2) The Company's fixed income mutual and commingled funds primarily include investments in U.S. government securities and corporate bonds. The commingled funds also include an insignificant portion of investments in asset-backed securities or partnerships. The mutual and commingled funds are primarily valued using the net asset value, which reflects the plan's share of the fair value of the investments. (3) The Company's equity mutual and commingled funds primarily include investments in U.S. and international common stock. The balanced mutual and commingled funds invest in a combination of fixed income and equity securities. The mutual and commingled funds are primarily valued using the net asset value, which reflects the plan's share of the fair value of the investments. 65 Expected benefit payments to be paid in each of the next five years and in the aggregate for the five years thereafter are as follows (in millions): Years Ending December 31: Pension Benefits Other Postretirement Benefits 2026 $ 0.4 $ 0.8 2027 0.4 0.8 2028 0.5 0.8 2029 0.5 0.8 2030 0.5 0.8 2031 - 2035 3.0 2.8 Pension Plans That Are Not Fully Funded At December 31, 2025, the projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the pension plans with accumulated benefit obligations in excess of the fair value of plan assets were $ 5.7 million, $ 5.4 million, and $ 3.1 million, respectively. At December 31, 2024, the projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the pension plans with accumulated benefit obligations in excess of the fair value of plan assets were $ 210.6 million, $ 209.2 million and $ 203.0 million, respectively. Other Postretirement Benefits The other postretirement benefit obligation was determined using an assumed health care cost trend rate of 7.5 % in 2026 grading down to 5.0 % in 2036 and thereafter. The discount rate and health care cost trend rate assumptions are determined as of the measurement date. Defined Contribution Savings Plans The Company sponsors certain defined-contribution savings plans for eligible employees. Expense recognized related to these plans was $ 6.1 million, $ 5.6 million and $ 4.5 million during the years ended December 31, 2025, 2024, and 2023 , respectively, primarily related to the Company matching contributions. During the year ended December 31, 2025, the Company utilized 127,489 shares of its common stock with a weighted average fair value of $ 39.22 per share in funding the cost associated with the Company matching contributions. During the year ended December 31, 2024, the Company utilized 137,031 shares of its common stock with a weighted average fair value of $ 33.71 per share in funding the cost associated with the Company matching contributions. Deferred Compensation Plan The Company has a nonqualified deferred compensation plan for certain executives and other highly compensated employees. Assets are invested primarily in mutual funds and corporate-owned life insurance contracts held in a Rabbi trust and restricted for payments to participants of the plan. The assets are classified in other assets on the consolidated balance sheets. The short-term liabilities and long-term liabilities are classified in compensation and benefits and other liabilities, respectively, on the consolidated balance sheets. Changes in the values of the assets held by the rabbi trust and changes in the value of the deferred compensation liabilities are recorded in other income (expense), net in the consolidated statements of operations. 66 The fair values of the Company’s deferred compensation plan assets and liability are included in the table below (in millions). For additional information on the fair value hierarchy and the inputs used to measure fair value, see Note 11, Fair Value Measurements. Fair Value as of December 31, 2025 Quoted Prices in Active Market (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Deferred compensation plan assets: Mutual funds (1) $ 2.3 $ — $ — $ 2.3 Corporate-owned life insurance policies (2) — 16.4 — 16.4 Total assets at fair value $ 2.3 $ 16.4 $ — $ 18.7 Deferred compensation liability at fair value (3): $ 22.9 $ — $ — $ 22.9 Fair Value as of December 31, 2024 Quoted Prices in Active Market (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Deferred compensation plan assets: Mutual funds (1) $ 1.2 $ — $ — $ 1.2 Corporate-owned life insurance policies (2) — 15.1 — 15.1 Total assets at fair value $ 1.2 $ 15.1 $ — $ 16.3 Deferred compensation liability at fair value (3): $ 18.9 $ — $ — $ 18.9 ______________________ (1) The Company has elected to use the fair value option for the mutual funds to better align the measurement of the assets with the measurement of the liability, which are measured using quoted prices of identical instruments in active markets and are categorized as Level 1. (2) The corporate-owned life insurance contracts are recorded at cash surrender value, which is provided by a third party and reflects the net asset value of the underlying publicly traded mutual funds, and are categorized as Level 2. (3) The deferred compensation liability is measured at fair value based on the quoted prices of identical instruments to the investment vehicles selected by the participants. 15. Income Taxes The provision for income taxes consists of amounts for taxes currently payable, amounts for tax items deferred to future periods; as well as adjustments relating to the Company’s determination of uncertain tax positions, including interest and penalties. The Company recognizes deferred tax assets and liabilities based on the future tax consequences attributable to tax net operating loss (“NOL”) carryforwards, capital loss carryforwards, tax credit carryforwards and differences between the financial statement carrying amounts and the tax bases of applicable assets and liabilities. Deferred tax assets are regularly reviewed for recoverability and valuation allowances are established based on historical losses, projected future taxable income and the expected timing of the reversals of existing temporary differences. As a result of this review, the Company established a full valuation allowance against U.S. federal and state capital loss carryforwards, as well as certain foreign NOL carryforwards and related deferred tax assets, and continues to maintain a partial valuation allowance against certain U.S. state NOL and tax credit carryforwards. In October 2021, the Organization for Economic Co-operation and Development (“OECD”) issued rules for a new global minimum tax ("Pillar 2") which included the introduction of a 15% global minimum tax ("Top-Up Tax") that applies to tax years beginning in 2024. Based upon the current OECD rules and administrative guidance, as well as the related legislation of those countries in which we do business, the Company does not anticipate being subject to material Top-Up Taxes. The Company is continuing to monitor the potential impact of the Pillar 2 proposals and development on our consolidated financial statements and related disclosures, including eligibility for any transitional safe harbor rules. On July 4, 2025, the U.S. enacted the One Big Beautiful Bill Act (“OBBBA”). OBBBA incorporates changes that extend several provisions of the Tax Cuts and Jobs Act ("TCJA") of 2017 that were set to expire on December 31, 2025, including immediate expensing of domestic research and development expenses, 100% bonus depreciation, 100% depreciation of qualified production property, and reinstatement of utilizing EBITDA for the interest deduction limitation. These changes are effective for the Company’s fiscal year ending December 31, 2025. However, OBBBA incorporates additional changes to the 67 U.S tax code that will be effective after January 1, 2026, including charitable contribution limitations, deductible meal limitations, and changes to the U.S. system for taxing international corporate income. The Company is continuing to monitor these business tax provision for further guidance from the U.S. Treasury and the Internal Revenue Service. Income Tax Provision The components of the provision for income taxes are as follows (in millions): Year Ended December 31, 2025 December 31, 2024 December 31, 2023 Current: United States $ 53.2 $ 48.4 $ 36.4 Non-United States 4.2 5.3 4.6 State and local 11.4 7.7 7.6 Total current 68.8 61.4 48.6 Deferred: United States ( 3.8 ) ( 12.9 ) ( 7.5 ) Non-United States ( 0.4 ) 0.2 1.3 State and local ( 0.7 ) ( 0.6 ) 0.2 Total deferred ( 4.9 ) ( 13.3 ) ( 6.0 ) Provision for income taxes $ 63.9 $ 48.1 $ 42.6 The following illustrates the specific categories and the reconciling items disclosed by a public business entity in its tabular rate reconciliation in accordance with paragraphs ASC 740-10-50-12A through 50-12B (in millions). The entity is domiciled in the United States and presents comparative financial statements. For the disclosure of foreign tax effects in accordance with paragraph ASC 740-10-50-12A(b)(2), it is assumed that the 5 percent threshold, computed by multiplying the income (or loss) from continuing operations before income taxes by applicable statutory federal (national) income tax rate of the United States, is met for Canada, at the jurisdictional level, but not for any individual reconciling items of the same nature within Canada. Year Ended December 31, 2025 Amount Percent U.S. federal statutory tax rate $ 53.8 21.0 % State and local income taxes, net of federal income tax effect (1) 8.6 3.4 % Changes in valuation allowances ( 1.3 ) ( 0.5 ) % Foreign tax effects Canada Statutory tax rate difference between Canada and United States 0.7 0.2 % Effect of changes in tax laws or rates enacted in the current period — — % Effect on cross-border tax laws ( 0.3 ) ( 0.2 ) % Tax credits ( 0.5 ) ( 0.2 ) % Nontaxable or nondeductible items Share-based compensation ( 2.1 ) ( 0.8 ) % §162(m) limitation 5.8 2.3 % Other 0.5 0.2 % Changes in unrecognized tax benefits ( 1.0 ) ( 0.4 ) % Other adjustments ( 0.3 ) ( 0.1 ) % Effective tax rate $ 63.9 24.9 % ____________________ (1) During the year ended December 31, 2025, state taxes in California, Illinois, New York, and Texas made up the majority of the tax effect in this category. 68 The following illustrates how the provision for income taxes differs from the United States statutory income tax rate related to the retrospective years ending December 31, 2024 and December 31, 2023 (in millions): Year Ended December 31, 2024 December 31, 2023 Provision for income taxes at U.S. federal statutory income tax rate $ 43.5 $ 30.8 State and local income taxes, net of federal benefit 6.4 5.2 Net effects of foreign rate differential 0.9 0.9 Net effects of foreign operations — 0.1 Nondeductible acquisition costs — ( 1.3 ) Unrecognized tax benefits, net of federal benefit ( 2.9 ) 0.5 Excess tax benefits related to equity compensation ( 4.6 ) ( 1.7 ) §162(m) compensation limitation 5.4 6.2 Nondeductible loss on divestiture of asbestos liabilities and certain assets — 2.0 Net changes in valuation allowance ( 0.2 ) 0.5 Other ( 0.4 ) ( 0.6 ) Provision for income taxes $ 48.1 $ 42.6 The provision for income taxes was calculated based upon the following components of income from continuing operations before income taxes (in millions): Year Ended December 31, 2025 December 31, 2024 December 31, 2023 United States $ 241.1 $ 185.0 $ 127.6 Non-United States 15.2 22.0 19.2 Income before income taxes $ 256.3 $ 207.0 $ 146.8 The components of income taxes paid are as follows (in millions): Year Ended Jurisdiction December 31, 2025 U.S. federal $ 49.3 State: California 2.5 Other 7.3 State subtotal 9.8 Foreign Canada 3.0 Other 0.9 Foreign subtotal 3.9 Total cash paid for income taxes (net of refunds) 63.0 The total cash paid for income taxes prior to ASU 2023-09 for the tax years ending December 31, 2024 and December 31, 2023 were $ 68.1 million and $ 45.7 million, respectively. 69 Deferred Income Tax Assets and Liabilities Deferred income taxes consist of the tax effects of the following temporary differences (in millions): December 31, 2025 December 31, 2024 Deferred tax assets: Compensation and retirement benefits $ 22.0 $ 19.4 General accruals and reserves 4.1 12.7 Lease liabilities 18.8 19.3 State tax net operating loss and credit carryforwards 6.6 10.3 Federal and state capital loss carryforwards 0.4 0.4 Foreign net operating loss carryforwards 1.0 0.9 Other 2.2 2.4 Total deferred tax assets before valuation allowance 55.1 65.4 Valuation allowance ( 4.8 ) ( 9.0 ) Total deferred tax assets 50.3 56.4 Deferred tax liabilities: Property, plant and equipment 17.9 19.8 Lease ROU assets 17.2 17.7 Inventories 14.3 15.3 Intangible assets and goodwill 187.8 197.2 Total deferred tax liabilities 237.2 250.0 Net deferred tax assets (liabilities) $ ( 186.9 ) $ ( 193.6 ) Net amount on consolidated balance sheets consists of: Other assets $ 2.8 $ 2.9 Deferred income taxes ( 189.7 ) ( 196.5 ) Net long-term deferred tax assets (liabilities) $ ( 186.9 ) $ ( 193.6 ) Management has reviewed the deferred tax assets and has analyzed the uncertainty with respect to ultimately realizing the related tax benefits associated with such assets. Based upon this analysis, management has determined that a valuation allowance should be established for the federal and state capital loss carryforwards, certain foreign NOL carryforwards and related deferred tax assets, as well as certain state NOL and tax credit carryforwards as of December 31, 2025. Significant factors considered by management in this determination included the historical operating results of the Company, as well as anticipated reversals of future taxable temporary differences. Capital losses may generally only be used to offset available capital gains. Federal capital losses are allowed to be carried back three years and carried forward for five. The Company does not have any capital gains in the carryback period with which to offset any portion of the capital loss. States generally follow federal law with respect to capital losses; however, for those that do have a modification, such modification (in most cases) is to deny any carryback period. The carryforward periods for the state NOLs range from five to twenty years. The state credit carryforwards expire over a period of 15 years. The foreign NOL carryforwards are subject to a twenty-year expiration period. At December 31, 2025, the Company had approximately $ 112.8 million of state NOL carryforwards, expiring over various years ending through December 31, 2033. The Company has a tax effected valuation allowance of $ 2.7 million recorded against the related deferred tax asset. In addition, at December 31, 2025, the Company had approximately $ 3.6 million of foreign NOL carryforwards, of which there is a recorded tax effected valuation allowance of $ 1.0 million. The majority of the decrease in the deferred tax asset relating to state net operating loss and credit carryforwards is the result of certain state net operating losses expiring unutilized. These expiring state net operating losses were effectively written off against the full valuation allowance previously recorded by the Company. As such, the majority of the decrease in the valuation allowance was the result of this write-off. No provision has been made for U.S. federal income taxes related to approximately $ 52.5 million of undistributed earnings of foreign subsidiaries considered to be permanently reinvested. No additional income tax liability would be expected to result if such earnings were repatriated to the U.S., other than potential out-of-pocket withholding taxes of approximately $ 2.8 million. The Company’s total receivable for net accrued income taxes as of December 31, 2025 and 2024 was $ 10.2 million and $ 17.3 million, respectively. This net amount is presented in the consolidated balance sheets as income taxes payable (separately disclosed in other current liabilities) of $ 3.1 million and $ 2.3 million as of December 31, 2025 and 2024, respectively; and as income taxes receivable in the consolidated balance sheets of $ 13.3 million and $ 19.6 million as of December 31, 2025 and 2024, respectively. 70 Liability for Unrecognized Tax Benefits The Company's total liability for net unrecognized tax benefits as of December 31, 2025 and 2024 was $ 0.6 million and $ 1.8 million, respectively. The following table represents a reconciliation of the beginning and ending amount of the gross unrecognized tax benefits, excluding interest and penalties, for the years ended December 31, 2025 and 2024 (in millions): Year Ended December 31, 2025 December 31, 2024 Balance at beginning of period $ 1.7 $ 5.1 Additions based on tax positions related to the current year 0.1 0.1 Additions for tax positions of prior years 0.1 — Reductions for tax positions of prior years — ( 0.1 ) Reductions due to lapse of applicable statute of limitations ( 1.4 ) ( 3.4 ) Balance at end of period $ 0.5 $ 1.7 The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. As of December 31, 2025 and 2024, the total amount of unrecognized tax benefits includes $ 0.6 million and $ 0.5 million of gross accrued interest and penalties, respectively. The amount of net interest and penalties recorded as income tax (benefit) expense during the years ended December 31, 2025, 2024, and 2023 was $( 0.5 ) million, $( 0.4 ) million, and $ 0.4 million, respectively. The Company conducts business in multiple locations within and outside the U.S. Consequently, the Company is subject to periodic income tax examinations by domestic and foreign income tax authorities. With certain exceptions, the Company is no longer subject to U.S. federal income tax examinations for tax years ending prior to December 31, 2021, state and local income tax examinations for years ending prior to December 31, 2020 or significant foreign income tax examinations for years ending prior to March 31, 2020. 16. Commitments and Contingencies Contingencies: The Company's subsidiaries are involved in various unresolved legal actions, administrative proceedings and claims in the ordinary course of business involving, among other things, product liability, commercial, employment, workers' compensation, intellectual property claims and environmental matters. The Company establishes accruals in a manner that is consistent with accounting principles generally accepted in the United States for costs associated with such matters when liability is probable and those costs are capable of being reasonably estimated. Although it is not possible to predict with certainty the outcome of these unresolved legal actions or the range of possible loss or recovery, based upon current information, management believes the eventual outcome of these unresolved legal actions, either individually or in the aggregate, will not have a material adverse effect on the financial position, results of operations or cash flows of the Company. 17. Common Stock Repurchases During fiscal 2015, the Company's Board of Directors approved a common stock repurchase program (the "Repurchase Program") authorizing the repurchase of up to $ 200.0 million of the Company's common stock from time to time on the open market or in privately negotiated transactions. On January 27, 2020, the Company's Board of Directors approved increasing the remaining share repurchase authority under the Repurchase Program to $ 300.0 million. On February 8, 2023, the Company's Board of Directors approved increasing the remaining share repurchase authority under the Repurchase Program to $ 500.0 million. On October 28, 2025, the Company's Board of Directors approved increasing the remaining share repurchase authority under the Repurchase Program to $ 500.0 million. The Repurchase Program does not require the Company to acquire any particular amount of common stock and does not specify the timing of purchases or the prices to be paid; however, the program will continue until the maximum amount of dollars authorized have been expended or until it is modified or terminated by the Board. During the year ended December 31, 2025, the Company repurchased 4.4 million shares of common stock at a total cost of $ 159.9 million at an average price of $ 36.74 per share. During the year ended December 31, 2024, the Company repurchased 4.7 million shares of common stock at a total cost of $ 150.2 million at an average price of $ 31.81 per share. During the year ended December 31, 2023, the Company repurchased 5.3 million shares of common stock at a total cost of $ 125.0 million at an average price of $ 23.66 per share. The repurchased shares were canceled by the Company upon receipt. At December 31, 2025, a total of approximately $ 482.1 million of repurchase authority remained under the Repurchase Program. 71 18. Business Segment, Geographic and Customer Information The Company is a pure-play water management business that designs, procures, manufactures and markets what the Company believes to be the broadest sustainable product portfolio of specification-driven water management solutions to improve health, hydration, human safety and the environment. The Company’s product portfolio includes professional grade water safety and control products, flow systems products, hygienic and environmental products and filtered drinking water products. Revenue is primarily generated in the United States and the Company manages and evaluates its operations on a consolidated basis as one operating and reporting segment due to similarities of its products, processes, customer base and methods of distribution. The Company’s accounting policies are described in Note 2, Significant Accounting Policies. The Company’s Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer. The CODM assesses the Company’s performance and makes capital allocation decisions based on Net income from continuing operations as reported in the consolidated statement of operations. This metric is used to monitor forecasted to actual and budgeted results and benchmarking to our peers. The following table includes segment revenue, significant expense items and segment profit as viewed by the CODM for the years ended December 31, 2025, 2024 and 2023: Year Ended December 31, 2025 December 31, 2024 December 31, 2023 Net sales $ 1,695.9 $ 1,566.5 $ 1,530.5 Less: Cost of sales 931.1 859.5 882.4 Selling, general and administrative expenses 417.6 389.8 371.3 Other segment items (1) 154.8 158.3 172.6 Segment profit (Net income from continuing operations) $ 192.4 $ 158.9 $ 104.2 ______________________ (1) Other segment items include restructuring and other similar charges, amortization of intangible assets, interest expense, net, actuarial gain on pension and other postretirement benefit obligations, other income (expense), net, provision for income taxes, and other non-recurring charges. Segment net sales, amortization, interest expense, net, income before income taxes and income tax expense are included on the consolidated statement of operations. Segment assets are included on the consolidated balance sheets and segment depreciation, stock-based compensation expense, non-cash restructuring charges, and expenditures for plant, property and equipment are included on the consolidated statement of cash flows. Interest income for the years ended December 31, 2025, 2024, and 2023 was $ 7.6 million, $ 7.8 million, and $ 4.9 million, respectively. Net sales to third parties and long-lived assets by geographic region are as follows (in millions): Net Sales Long-lived Assets Year Ended December 31, 2025 Year Ended December 31, 2024 Year Ended December 31, 2023 December 31, 2025 December 31, 2024 December 31, 2023 United States $ 1,520.5 $ 1,394.8 $ 1,368.8 $ 141.9 $ 148.0 $ 160.6 Canada 151.7 145.8 133.8 9.6 10.2 11.7 Rest of World 23.7 25.9 27.9 6.1 5.8 8.0 $ 1,695.9 $ 1,566.5 $ 1,530.5 $ 157.6 $ 164.0 $ 180.3 Net sales to third parties are attributed to the geographic regions based on the country in which the shipment originates. Amounts attributed to the geographic regions for long-lived assets are based on the location of the entity that holds such assets. Long-lived assets include property, plant and equipment, net which includes finance lease ROU assets and excludes net intangible assets and goodwill. The Company’s largest customer accounted for 18 %, 19 % and 20 % of consolidated net sales for the years ended December 31, 2025, 2024, and 2023, respectively. No other customers account for more than 10% of consolidated net sales for the years ended December 31, 2025, 2024, or 2023. 19. Subsequent Events Dividends 72 On January 29, 2026, the Company's Board of Directors declared a quarterly cash dividend on the Company's common stock of $ 0.11 per share to be paid on March 6, 2026, to stockholders of record as of February 20, 2026. 73 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None.