HUBBELL INC
10-Qs and 10-Ks
PROXIES
Table of Contents
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10Q
| þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2011
| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from
to
Commission File Number 1-2958
HUBBELL INCORPORATED
(Exact name of registrant as specified in its charter)
| State of Connecticut | 06-0397030 | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
| 40 Waterview Drive, Shelton, CT | 06484 | |
| (Address of principal executive offices) | (Zip Code) | |
(475) 882-4000
(Registrant’s telephone number, including area code)
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report.)
(Former name, former address and former fiscal year, if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes
þ
No
o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files). Yes
þ
No
o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated
filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
(Check one):
| Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | |||
| (Do not check if a smaller reporting company) |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes
o
No
þ
The number of shares outstanding of the Class A Common Stock and Class B Common Stock as of October
17, 2011 were 7,167,506 and 51,768,996, respectively.
HUBBELL INCORPORATED
Table of Contents
| ITEM 1. |
FINANCIAL
STATEMENTS
|
HUBBELL INCORPORATED
Condensed Consolidated Statement of Income
(unaudited)
(in millions, except per share amounts)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30 | September 30 | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
|
Net Sales
|
$ | 764.3 | $ | 685.0 | $ | 2,131.6 | $ | 1,901.9 | ||||||||
|
Cost of goods sold
|
512.0 | 449.8 | 1,444.2 | 1,280.0 | ||||||||||||
|
|
||||||||||||||||
|
Gross Profit
|
252.3 | 235.2 | 687.4 | 621.9 | ||||||||||||
|
Selling & administrative expenses
|
127.0 | 117.6 | 373.4 | 345.1 | ||||||||||||
|
|
||||||||||||||||
|
Operating income
|
125.3 | 117.6 | 314.0 | 276.8 | ||||||||||||
|
|
||||||||||||||||
|
Interest expense, net
|
(7.3 | ) | (7.8 | ) | (22.3 | ) | (22.9 | ) | ||||||||
|
Other expense, net
|
— | (0.6 | ) | (3.8 | ) | (1.6 | ) | |||||||||
|
|
||||||||||||||||
|
Total other expense, net
|
(7.3 | ) | (8.4 | ) | (26.1 | ) | (24.5 | ) | ||||||||
|
Income before income taxes
|
118.0 | 109.2 | 287.9 | 252.3 | ||||||||||||
|
Provision for income taxes
|
34.7 | 37.5 | 88.2 | 83.7 | ||||||||||||
|
|
||||||||||||||||
|
Net income
|
83.3 | 71.7 | 199.7 | 168.6 | ||||||||||||
|
Less: Net income attributable to noncontrolling interest
|
0.9 | 0.4 | 1.8 | 1.1 | ||||||||||||
|
|
||||||||||||||||
|
Net income attributable to Hubbell
|
$ | 82.4 | $ | 71.3 | $ | 197.9 | $ | 167.5 | ||||||||
|
|
||||||||||||||||
|
Earnings per share
|
||||||||||||||||
|
Basic
|
$ | 1.38 | $ | 1.19 | $ | 3.29 | $ | 2.79 | ||||||||
|
Diluted
|
$ | 1.37 | $ | 1.18 | $ | 3.25 | $ | 2.77 | ||||||||
|
Cash dividends per common share
|
$ | 0.38 | $ | 0.36 | $ | 1.14 | $ | 1.08 | ||||||||
See notes to unaudited condensed consolidated financial statements.
3
Table of Contents
HUBBELL INCORPORATED
Condensed Consolidated Balance Sheet
(unaudited)
(in millions)
| September 30, 2011 | December 31, 2010 | |||||||
|
|
||||||||
|
ASSETS
|
||||||||
|
Current Assets
|
||||||||
|
Cash and cash equivalents
|
$ | 511.8 | $ | 520.7 | ||||
|
Short-term investments
|
6.7 | 8.8 | ||||||
|
Accounts receivable, net
|
455.3 | 341.8 | ||||||
|
Inventories, net
|
331.2 | 298.4 | ||||||
|
Deferred taxes and other
|
59.5 | 56.4 | ||||||
|
|
||||||||
|
Total Current Assets
|
1,364.5 | 1,226.1 | ||||||
|
Property, Plant, and Equipment, net
|
357.3 | 358.3 | ||||||
|
Other Assets
|
||||||||
|
Investments
|
39.3 | 30.2 | ||||||
|
Goodwill
|
722.7 | 724.0 | ||||||
|
Intangible assets, net
|
259.9 | 273.5 | ||||||
|
Other long-term assets
|
66.4 | 93.7 | ||||||
|
|
||||||||
|
Total Assets
|
$ | 2,810.1 | $ | 2,705.8 | ||||
|
|
||||||||
|
|
||||||||
|
LIABILITIES AND EQUITY
|
||||||||
|
Current Liabilities
|
||||||||
|
Short-term debt
|
$ | 2.3 | $ | 1.8 | ||||
|
Accounts payable
|
221.0 | 160.8 | ||||||
|
Accrued salaries, wages and employee benefits
|
60.7 | 70.4 | ||||||
|
Accrued insurance
|
49.7 | 48.5 | ||||||
|
Dividends payable
|
22.4 | 21.9 | ||||||
|
Other accrued liabilities
|
173.7 | 141.6 | ||||||
|
|
||||||||
|
Total Current Liabilities
|
529.8 | 445.0 | ||||||
|
Long-Term Debt
|
596.2 | 595.9 | ||||||
|
Other Non-Current Liabilities
|
201.6 | 201.4 | ||||||
|
|
||||||||
|
Total Liabilities
|
1,327.6 | 1,242.3 | ||||||
|
Total Hubbell Shareholders’ Equity
|
1,477.1 | 1,459.2 | ||||||
|
Noncontrolling interest
|
5.4 | 4.3 | ||||||
|
|
||||||||
|
Total Equity
|
1,482.5 | 1,463.5 | ||||||
|
|
||||||||
|
Total Liabilities and Equity
|
$ | 2,810.1 | $ | 2,705.8 | ||||
|
|
||||||||
See notes to unaudited condensed consolidated financial statements.
4
Table of Contents
HUBBELL INCORPORATED
Condensed Consolidated Statement of Cash Flows
(unaudited)
(in millions)
| Nine Months Ended | ||||||||
| September 30 | ||||||||
| 2011 | 2010 | |||||||
|
Cash Flows from Operating Activities
|
||||||||
|
Net income
|
$ | 199.7 | $ | 168.6 | ||||
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
|
Depreciation and amortization
|
51.7 | 54.8 | ||||||
|
Deferred income taxes
|
14.5 | 4.7 | ||||||
|
Stock-based compensation
|
7.7 | 6.9 | ||||||
|
Tax benefit on stock-based awards
|
(4.0 | ) | (2.4 | ) | ||||
|
Changes in assets and liabilities:
|
||||||||
|
Increase in accounts receivable, net
|
(116.3 | ) | (97.4 | ) | ||||
|
Increase in inventories, net
|
(33.5 | ) | (29.3 | ) | ||||
|
Increase in current liabilities
|
89.6 | 59.4 | ||||||
|
Changes in other assets and liabilities, net
|
13.1 | 13.8 | ||||||
|
Contribution to defined benefit pension plans
|
(2.1 | ) | (2.6 | ) | ||||
|
Other, net
|
(3.2 | ) | (0.5 | ) | ||||
|
|
||||||||
|
Net cash provided by operating activities
|
217.2 | 176.0 | ||||||
|
|
||||||||
|
Cash Flows from Investing Activities
|
||||||||
|
Capital expenditures
|
(41.3 | ) | (33.8 | ) | ||||
|
Purchases of available-for-sale investments
|
(14.0 | ) | (22.1 | ) | ||||
|
Proceeds from available-for-sale investments
|
8.2 | 10.1 | ||||||
|
Other, net
|
5.5 | 2.3 | ||||||
|
|
||||||||
|
Net cash used in investing activities
|
(41.6 | ) | (43.5 | ) | ||||
|
|
||||||||
|
Cash Flows from Financing Activities
|
||||||||
|
Short-term debt borrowings, net
|
0.6 | 2.2 | ||||||
|
Payment of dividends
|
(67.7 | ) | (64.0 | ) | ||||
|
Payment of dividends to noncontrolling interest
|
(0.7 | ) | (0.9 | ) | ||||
|
Acquisition of common shares
|
(137.7 | ) | (2.9 | ) | ||||
|
Proceeds from exercise of stock options
|
17.2 | 11.1 | ||||||
|
Tax benefit on stock-based awards
|
4.0 | 2.4 | ||||||
|
Other, net
|
0.1 | — | ||||||
|
|
||||||||
|
Net cash used in financing activities
|
(184.2 | ) | (52.1 | ) | ||||
|
|
||||||||
|
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
(0.3 | ) | 3.9 | |||||
|
|
||||||||
|
(Decrease) increase in cash and cash equivalents
|
(8.9 | ) | 84.3 | |||||
|
Cash and cash equivalents
|
||||||||
|
Beginning of period
|
520.7 | 258.5 | ||||||
|
|
||||||||
|
End of period
|
$ | 511.8 | $ | 342.8 | ||||
|
|
||||||||
See notes to unaudited condensed consolidated financial statements.
5
Table of Contents
HUBBELL INCORPORATED
Notes to Condensed Consolidated Financial Statements
(unaudited)
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of Hubbell Incorporated
(“Hubbell”, the “Company”, “registrant”, “we”, “our” or “us”, which references shall include its
divisions and subsidiaries) have been prepared in accordance with generally accepted accounting
principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted in the United States
of America (“U.S.”) for complete financial statements. In the opinion of management, all
adjustments consisting only of normal recurring adjustments considered necessary for a fair
statement of the results of the periods presented have been included. Operating results for the
nine months ended September 30, 2011 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2011.
The balance sheet at December 31, 2010 has been derived from the audited financial statements
at that date but does not include all of the information and footnotes required by accounting
principles generally accepted in the U.S. for complete financial statements.
For further information, refer to the consolidated financial statements and footnotes thereto
included in the Hubbell Incorporated Annual Report on Form 10-K for the year ended December 31,
2010.
Recent Accounting Pronouncements
In September 2011, the Financial Accounting Standards Board (“FASB”) amended its goodwill
guidance by providing entities an option to use a qualitative approach to test goodwill for
impairment. An entity will be able to first perform a qualitative assessment to determine whether
it is more likely than not that the fair value of a reporting unit is less than its carrying value.
If it is concluded that this is the case, it is necessary to perform the currently prescribed two
step goodwill impairment test. Otherwise, the two-step goodwill impairment test is not required.
The amendment will be effective for the Company on January 1, 2012. The Company does not anticipate
that this amendment will have a material impact on its financial statements.
In September 2011, the FASB amended the disclosure requirements related to multiemployer
pension plans. The amendment is applicable to all entities that participate in multiemployer
pension plans and will expand the information currently disclosed about an employer’s financial
obligations to the multiemployer plans as well as the financial health of all significant plans in
which the employer participates. The amendment is effective for fiscal years ending after December
15, 2011, with early adoption permitted and retrospective application required. The Company does
not anticipate that this amendment will have a material impact on its financial statements.
In June 2011, the FASB issued an amendment regarding the presentation of other comprehensive
income. Under this amendment, entities will be required to present the total of comprehensive
income, the components of net income, and the components of other comprehensive income either in a
single continuous statement of comprehensive income or in two separate but consecutive statements.
The current option to report other comprehensive income and its components in the statement of
changes in equity has been eliminated. This amendment will be effective for the Company on January
1, 2012 and full retrospective application is required. The Company does not anticipate that this
amendment will have a material impact on its financial statements.
In May 2011, the FASB issued an amendment to provide a consistent definition of fair value and
ensure that the fair value measurement and disclosure requirements are similar between GAAP and
International Financial Reporting Standards (“IFRS”). This amendment changes certain fair value
measurement principles and enhances the disclosure requirements particularly for Level 3 fair value
measurements. This amendment will be effective for the Company on January 1, 2012. The Company is
currently evaluating the impact this amendment will have, if any, on its financial statements.
6
Table of Contents
In December 2010, the FASB issued amended guidance to clarify the acquisition date that should
be used for reporting pro forma financial information for business combinations. If comparative
financial statements are presented, the pro forma revenue and earnings of the combined entity for
the comparable prior reporting period should be reported as though the acquisition date had been
completed as of the beginning of the comparable prior annual reporting period. The Company has
adopted this amendment effective January 1, 2011 and will apply the guidance prospectively for
business combinations, if any, occurring on or after January 1, 2011.
In December 2010, the FASB issued an amendment to the guidance on goodwill impairment testing.
The amendment modifies Step 1 of the goodwill impairment test for reporting units with zero or
negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of
the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In
making that determination, an entity should consider whether there are any adverse qualitative
factors indicating that an impairment may exist. The Company has adopted this amendment effective
January 1, 2011. This amendment had no impact on the Company’s financial position, results of
operations or cash flows. See Note 4 — Goodwill and Other Intangible Assets.
2. Segment Information
The Company’s reporting segments consist of the Electrical segment and the Power segment. The
following table sets forth financial information by business segment (in millions):
| Operating Income | ||||||||||||||||||||||||
| Net Sales | Operating Income | as a % of Net Sales | ||||||||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||
|
Three Months Ended
|
||||||||||||||||||||||||
|
September 30,
|
||||||||||||||||||||||||
|
Electrical
|
$ | 526.6 | $ | 490.6 | $ | 81.5 | $ | 83.9 | 15.5 | % | 17.1 | % | ||||||||||||
|
Power
|
237.7 | 194.4 | 43.8 | 33.7 | 18.4 | % | 17.3 | % | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Total
|
$ | 764.3 | $ | 685.0 | $ | 125.3 | $ | 117.6 | 16.4 | % | 17.2 | % | ||||||||||||
|
|
||||||||||||||||||||||||
|
Nine Months Ended
|
||||||||||||||||||||||||
|
September 30,
|
||||||||||||||||||||||||
|
Electrical
|
$ | 1,490.6 | $ | 1,358.3 | $ | 208.3 | $ | 185.1 | 14.0 | % | 13.6 | % | ||||||||||||
|
Power
|
641.0 | 543.6 | 105.7 | 91.7 | 16.5 | % | 16.9 | % | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Total
|
$ | 2,131.6 | $ | 1,901.9 | $ | 314.0 | $ | 276.8 | 14.7 | % | 14.6 | % | ||||||||||||
|
|
||||||||||||||||||||||||
3. Inventories, net
Inventories, net are comprised of the following (in millions):
| September 30, 2011 | December 31, 2010 | |||||||
|
Raw material
|
$ | 119.6 | $ | 106.0 | ||||
|
Work-in-process
|
72.6 | 62.4 | ||||||
|
Finished goods
|
221.9 | 206.4 | ||||||
|
|
||||||||
|
|
414.1 | 374.8 | ||||||
|
Excess of FIFO over LIFO cost basis
|
(82.9 | ) | (76.4 | ) | ||||
|
|
||||||||
|
Total
|
$ | 331.2 | $ | 298.4 | ||||
|
|
||||||||
7
Table of Contents
4. Goodwill and Other Intangible Assets
Changes in the carrying values of goodwill for the nine months ended September 30, 2011, by
segment, were as follows (in millions):
| Segment | ||||||||||||
| Electrical | Power | Total | ||||||||||
|
Balance December 31, 2010
|
$ | 448.2 | $ | 275.8 | $ | 724.0 | ||||||
|
Translation adjustments
|
(0.3 | ) | (1.0 | ) | (1.3 | ) | ||||||
|
|
||||||||||||
|
Balance September 30, 2011
|
$ | 447.9 | $ | 274.8 | $ | 722.7 | ||||||
|
|
||||||||||||
The Company performs its annual goodwill impairment test as of April 1
st
of each
year, unless circumstances dictate the need for more frequent assessments. As of April 1, 2011,
the Company’s impairment testing resulted in fair values for each reporting unit that exceeded the
reporting unit’s carrying value, including goodwill. The Company has not recorded any goodwill
impairments since the initial adoption of the accounting guidance in 2002.
The carrying value of other intangible assets included in Intangible assets, net in the
Condensed Consolidated Balance Sheet is as follows (in millions):
| September 30, 2011 | December 31, 2010 | |||||||||||||||
| Accumulated | Accumulated | |||||||||||||||
| Gross Amount | Amortization | Gross Amount | Amortization | |||||||||||||
|
Definite-lived:
|
||||||||||||||||
|
Patents, tradenames and trademarks
|
$ | 83.3 | $ | (18.1 | ) | $ | 83.6 | $ | (15.2 | ) | ||||||
|
Customer/Agent relationships and other
|
181.7 | (43.2 | ) | 183.1 | (34.6 | ) | ||||||||||
|
|
||||||||||||||||
|
Total
|
265.0 | (61.3 | ) | 266.7 | (49.8 | ) | ||||||||||
|
Indefinite-lived:
|
||||||||||||||||
|
Tradenames and other
|
56.2 | — | 56.6 | — | ||||||||||||
|
|
||||||||||||||||
|
Total
|
$ | 321.2 | $ | (61.3 | ) | $ | 323.3 | $ | (49.8 | ) | ||||||
|
|
||||||||||||||||
Amortization expense associated with these definite-lived intangible assets was $12.4 million
and $12.3 million for the nine months ended September 30, 2011 and 2010. Future amortization
expense associated with these intangible assets is expected to be $3.6 million for the remainder of
2011, $15.4 million in 2012, $15.0 million in 2013, $14.5 million in 2014, $13.2 million in 2015
and $12.5 million in 2016.
5. Other Accrued Liabilities
Other accrued liabilities are comprised of the following, (in millions):
| September 30, 2011 | December 31, 2010 | |||||||
|
Deferred revenue
|
$ | 33.6 | $ | 34.9 | ||||
|
Customer incentive programs
|
27.3 | 31.2 | ||||||
|
Accrued income taxes
|
44.4 | 15.2 | ||||||
|
Other
|
68.4 | 60.3 | ||||||
|
|
||||||||
|
Total
|
$ | 173.7 | $ | 141.6 | ||||
|
|
||||||||
8
Table of Contents
6. Total Equity
Total equity is comprised of the following (in millions, except per share amounts):
| September 30, | December 31, | |||||||
| 2011 | 2010 | |||||||
|
Common stock, $.01 par value:
|
||||||||
|
Class A — authorized 50.0 shares; issued and outstanding 7.2 and 7.2 shares
|
$ | 0.1 | $ | 0.1 | ||||
|
Class B — authorized 150.0 shares; issued and outstanding 51.8 and 53.5
shares
|
0.5 | 0.5 | ||||||
|
Additional paid-in-capital
|
91.2 | 201.3 | ||||||
|
Retained earnings
|
1,468.3 | 1,338.6 | ||||||
|
Accumulated other comprehensive loss:
|
||||||||
|
Pension and post retirement benefit plan adjustment, net of tax
|
(91.7 | ) | (95.6 | ) | ||||
|
Cumulative translation adjustment
|
7.6 | 14.6 | ||||||
|
Unrealized gain on investment, net of tax
|
0.9 | 0.5 | ||||||
|
Cash flow hedge gain (loss), net of tax
|
0.2 | (0.8 | ) | |||||
|
|
||||||||
|
Total Accumulated other comprehensive loss
|
(83.0 | ) | (81.3 | ) | ||||
|
|
||||||||
|
Hubbell Shareholders’ equity
|
1,477.1 | 1,459.2 | ||||||
|
Noncontrolling interest
|
5.4 | 4.3 | ||||||
|
|
||||||||
|
Total equity
|
$ | 1,482.5 | $ | 1,463.5 | ||||
|
|
||||||||
9
Table of Contents
A summary of the changes in equity for the nine months ended September 30, 2011 and 2010 is
provided below (in millions):
| Nine Months Ended September 30, | ||||||||||||||||||||||||
| 2011 | 2010 | |||||||||||||||||||||||
| Hubbell | Hubbell | |||||||||||||||||||||||
| Shareholders’ | Noncontrolling | Total | Shareholders’ | Noncontrolling | Total | |||||||||||||||||||
| Equity | interest | Equity | Equity | interest | Equity | |||||||||||||||||||
|
Equity, January 1,
|
$ | 1,459.2 | $ | 4.3 | $ | 1,463.5 | $ | 1,298.2 | $ | 3.8 | $ | 1,302.0 | ||||||||||||
|
Total comprehensive income
|
196.2 | 1.8 | 198.0 | 178.7 | 1.1 | 179.8 | ||||||||||||||||||
|
Stock-based compensation
|
7.7 | — | 7.7 | 6.9 | — | 6.9 | ||||||||||||||||||
|
Exercise of stock options
|
17.2 | — | 17.2 | 11.1 | — | 11.1 | ||||||||||||||||||
|
Income tax windfall from
stock-based awards, net
|
4.0 | — | 4.0 | 2.4 | — | 2.4 | ||||||||||||||||||
|
Acquisition/surrender of common
shares
|
(139.8 | ) | — | (139.8 | ) | (3.6 | ) | — | (3.6 | ) | ||||||||||||||
|
Issuance of shares related to
director’s deferred compensation
|
0.8 | — | 0.8 | — | — | — | ||||||||||||||||||
|
Dividends to noncontrolling
interest
|
— | (0.7 | ) | (0.7 | ) | — | (0.9 | ) | (0.9 | ) | ||||||||||||||
|
Cash dividends declared
|
(68.2 | ) | — | (68.2 | ) | (64.8 | ) | — | (64.8 | ) | ||||||||||||||
|
|
||||||||||||||||||||||||
|
Equity, September 30,
|
$ | 1,477.1 | $ | 5.4 | $ | 1,482.5 | $ | 1,428.9 | $ | 4.0 | $ | 1,432.9 | ||||||||||||
|
|
||||||||||||||||||||||||
The detailed components of total comprehensive income are presented in Note 7 —
Comprehensive Income.
7. Comprehensive Income
Total comprehensive income and its components are as follows (in millions):
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30 | September 30 | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
|
Net income
|
$ | 83.3 | $ | 71.7 | $ | 199.7 | $ | 168.6 | ||||||||
|
Foreign currency translation adjustments
|
(22.5 | ) | 14.2 | (7.0 | ) | 7.8 | ||||||||||
|
Amortization of net prior service costs and net actuarial losses, net of tax
|
1.2 | 0.8 | 3.9 | 2.5 | ||||||||||||
|
Change in unrealized gains on investments, net of tax
|
0.2 | 0.2 | 0.4 | 0.3 | ||||||||||||
|
Change in unrealized gains (losses) on cash flow hedges, net of tax
|
1.0 | (0.2 | ) | 1.0 | 0.6 | |||||||||||
|
|
||||||||||||||||
|
Total Comprehensive income
|
63.2 | 86.7 | 198.0 | 179.8 | ||||||||||||
|
Less: Comprehensive income attributable to noncontrolling interest
|
0.9 | 0.4 | 1.8 | 1.1 | ||||||||||||
|
|
||||||||||||||||
|
Comprehensive income attributable to Hubbell
|
$ | 62.3 | $ | 86.3 | $ | 196.2 | $ | 178.7 | ||||||||
|
|
||||||||||||||||
10
Table of Contents
8. Earnings Per Share
The Company computes earnings per share using the two-class method, which is an earnings
allocation formula that determines earnings per share for common stock and participating
securities. Restricted stock granted by the Company is considered a participating security since it
contains a non-forfeitable right to dividends.
The following table sets forth the computation of earnings per share for the three and nine
months ended September 30, 2011 and 2010 (in millions, except per share amounts):
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30 | September 30 | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
|
Numerator:
|
||||||||||||||||
|
Net income attributable to Hubbell
|
$ | 82.4 | $ | 71.3 | $ | 197.9 | $ | 167.5 | ||||||||
|
Less: Earnings allocated to participating securities
|
0.2 | 0.3 | 0.7 | 0.7 | ||||||||||||
|
|
||||||||||||||||
|
Net income available to common shareholders
|
82.2 | 71.0 | 197.2 | 166.8 | ||||||||||||
|
|
||||||||||||||||
|
Denominator:
|
||||||||||||||||
|
Average number of common shares outstanding
|
59.3 | 59.8 | 59.9 | 59.8 | ||||||||||||
|
Potential dilutive shares
|
0.6 | 0.4 | 0.7 | 0.4 | ||||||||||||
|
|
||||||||||||||||
|
Average number of diluted shares outstanding
|
59.9 | 60.2 | 60.6 | 60.2 | ||||||||||||
|
|
||||||||||||||||
|
|
||||||||||||||||
|
Earnings per share:
|
||||||||||||||||
|
Basic
|
$ | 1.38 | $ | 1.19 | $ | 3.29 | $ | 2.79 | ||||||||
|
Diluted
|
$ | 1.37 | $ | 1.18 | $ | 3.25 | $ | 2.77 | ||||||||
|
|
||||||||||||||||
|
Anti-dilutive securities excluded from the calculation of earnings
per diluted share:
|
||||||||||||||||
|
Stock options and performance shares
|
— | 0.8 | — | 0.8 | ||||||||||||
|
Stock appreciation rights
|
— | 1.6 | — | 1.6 | ||||||||||||
The Company did not have any anti-dilutive securities during the three and nine months ended
September 30, 2011.
11
Table of Contents
9. Pension and Other Benefits
The following table sets forth the components of net pension and other benefit costs for the
three and nine months ended September 30, 2011 and 2010, (in millions):
| Pension Benefits | Other Benefits | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
|
Three Months Ended September 30
|
||||||||||||||||
|
Service cost
|
$ | 3.5 | $ | 3.0 | $ | — | $ | 0.1 | ||||||||
|
Interest cost
|
9.5 | 9.4 | 0.4 | 0.5 | ||||||||||||
|
Expected return on plan assets
|
(10.4 | ) | (10.4 | ) | — | — | ||||||||||
|
Amortization of prior service cost
|
0.1 | 0.1 | — | — | ||||||||||||
|
Amortization of actuarial losses/(gains)
|
2.1 | 1.3 | (0.2 | ) | (0.1 | ) | ||||||||||
|
|
||||||||||||||||
|
Net periodic benefit cost
|
$ | 4.8 | $ | 3.4 | $ | 0.2 | $ | 0.5 | ||||||||
|
|
||||||||||||||||
|
|
||||||||||||||||
|
Nine Months Ended September 30
|
||||||||||||||||
|
Service cost
|
$ | 10.5 | $ | 9.1 | $ | — | $ | 0.2 | ||||||||
|
Interest cost
|
28.6 | 28.1 | 1.2 | 1.6 | ||||||||||||
|
Expected return on plan assets
|
(31.4 | ) | (31.3 | ) | — | — | ||||||||||
|
Amortization of prior service cost
|
0.3 | 0.2 | — | — | ||||||||||||
|
Amortization of actuarial losses/(gains)
|
6.2 | 3.8 | (0.6 | ) | (0.2 | ) | ||||||||||
|
|
||||||||||||||||
|
Net periodic benefit cost
|
$ | 14.2 | $ | 9.9 | $ | 0.6 | $ | 1.6 | ||||||||
|
|
||||||||||||||||
Employer Contributions
The Company anticipates making required contributions of approximately $3.0 million to its
foreign pension plans during 2011, of which $2.1 million has been contributed through September 30,
2011. In addition, the Company may make a voluntary contribution to its foreign pension plans in
2011. Although not required under the Pension Protection Act of 2006, the Company may also make a
voluntary contribution to its qualified domestic benefit pension plans in 2011.
10. Guarantees
The Company accrues for costs associated with guarantees when it is probable that a liability
has been incurred and the amount can be reasonably estimated. The most likely costs to be incurred
are accrued based on an evaluation of currently available facts and, where no amount within a range
of estimates is more likely, the minimum is accrued.
The Company records a liability equal to the fair value of guarantees in the Condensed
Consolidated Balance Sheet in accordance with the guarantees accounting guidance. As of September
30, 2011, the fair value and maximum potential payment related to the Company’s guarantees were not
material.
The Company offers product warranties which cover potential defects on most of its products.
These warranties primarily apply to products that are properly installed, maintained and used for
their intended purpose. The Company accrues estimated warranty costs at the time of sale. Estimated
warranty expenses, recorded in cost of goods sold, are based upon historical information such as
past experience, product failure rates, or the number of units to be repaired or replaced.
Adjustments are made to the product warranty accrual as claims are incurred or as historical
experience indicates. The product warranty accrual is reviewed for reasonableness on a quarterly
basis and is adjusted as additional information regarding expected warranty costs becomes known.
12
Table of Contents
Changes in the accrual for product warranties during the nine months ended September 30, 2011
are set forth below (in millions):
|
Balance at December 31, 2010
|
$ | 6.7 | ||
|
Provision
|
5.2 | |||
|
Expenditures/other
|
(5.3 | ) | ||
|
|
||||
|
Balance at September 30, 2011
|
$ | 6.6 | ||
|
|
||||
11. Fair Value Measurement
Fair value is defined as the amount that would be received for selling an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date.
The FASB fair value measurement guidance established a fair value hierarchy that prioritizes the
inputs used to measure fair value. The three broad levels of the fair value hierarchy are as
follows:
| Level 1 — |
Quoted prices (unadjusted) in active markets for identical assets or liabilities
|
||
| Level 2 — |
Quoted prices for similar assets and liabilities in active markets or inputs that
are observable for the asset or liability, either directly or indirectly
|
||
| Level 3 — |
Unobservable inputs for which little or no market data exists, therefore
requiring a company to develop its own assumptions
|
The following table shows, by level within the fair value hierarchy, our financial assets and
liabilities that are accounted for at fair value on a recurring basis at September 30, 2011 and
December 31, 2010 (in millions):
| Quoted Prices in | Quoted Prices in | |||||||||||
| Active Markets | Active Markets | |||||||||||
| for Identical | for Similar Assets | |||||||||||
| Asset (Liability) | Assets (Level 1) | (Level 2) | Total | |||||||||
|
September 30, 2011
|
||||||||||||
|
Available for sale investments
|
$ | 42.3 | $ | — | $ | 42.3 | ||||||
|
Trading securities
|
3.7 | — | 3.7 | |||||||||
|
Deferred compensation plan liabilities
|
(3.7 | ) | — | (3.7 | ) | |||||||
|
Derivatives:
|
||||||||||||
|
Forward exchange contracts
|
— | 0.9 | 0.9 | |||||||||
|
|
||||||||||||
|
|
$ | 42.3 | $ | 0.9 | $ | 43.2 | ||||||
|
|
||||||||||||
| Quoted Prices in | Quoted Prices in | |||||||||||
| Active Markets | Active Markets | |||||||||||
| for Identical | for Similar Assets | |||||||||||
| Assets (Level 1) | (Level 2) | Total | ||||||||||
|
December 31, 2010
|
||||||||||||
|
Available for sale investments
|
$ | 36.4 | $ | — | $ | 36.4 | ||||||
|
Trading securities
|
2.6 | — | 2.6 | |||||||||
|
Deferred compensation plan liabilities
|
(2.5 | ) | — | (2.5 | ) | |||||||
|
Derivatives:
|
||||||||||||
|
Forward exchange contracts
|
— | (0.6 | ) | (0.6 | ) | |||||||
|
|
||||||||||||
|
|
$ | 36.5 | $ | (0.6 | ) | $ | 35.9 | |||||
|
|
||||||||||||
The methods and assumptions used to estimate the Level 2 fair values were as follows:
Forward exchange contracts — The fair value of forward exchange contracts were based on
quoted forward foreign exchange prices at the reporting date.
13
Table of Contents
During the three and nine months ended September 30, 2011 there were no transfers of financial
assets or liabilities in or out of Level 1 or Level 2 of the fair value hierarchy. During the nine
months ended September 30, 2011 and as of December 31, 2010, the Company did not have any financial
assets or liabilities that fell within the Level 3 hierarchy.
Investments
At September 30, 2011 and December 31, 2010, the Company had $42.3 million and $36.4 million,
respectively, of municipal bonds classified as available-for-sale securities. The Company also had
$3.7 million and $2.6 million of trading securities at September 30, 2011 and December 31, 2010,
respectively. These investments are carried on the balance sheet at fair value. Unrealized gains
and losses associated with available-for-sale securities are reflected in Accumulated other
comprehensive loss, net of tax, while unrealized gains and losses associated with trading
securities are reflected in the results of operations.
Deferred compensation plans
The Company offers certain employees the opportunity to participate in non-qualified deferred
compensation plans. A participant’s deferrals are invested in a variety of participant-directed
debt and equity mutual funds that are classified as trading securities. During the nine months
ended September 30, 2011 and 2010, the Company purchased $1.4 million and $0.7 million,
respectively, of trading securities related to these deferred compensation plans. The unrealized
gains and losses associated with these trading securities are directly offset by the changes in the
fair value of the underlying deferred compensation plan obligation.
Derivatives
In order to limit financial risk in the management of its assets, liabilities and debt, the
Company may use derivative financial instruments such as foreign currency hedges, commodity hedges,
interest rate hedges and interest rate swaps. All derivative financial instruments are matched with
an existing Company asset, liability or proposed transaction. Market value gains or losses on the
derivative financial instrument are recognized in income when the effects of the related price
changes of the underlying asset or liability are recognized in income.
The fair values of derivative instruments in the Condensed Consolidated Balance Sheet are as
follows (in millions):
| Asset/(Liability) Derivatives | ||||||||||||
| Fair Value | ||||||||||||
| Derivatives designated as hedges | Balance Sheet Location | September 30, 2011 | December 31, 2010 | |||||||||
|
Forward exchange contracts designated as cash flow hedges
|
Other accrued liabilities | $ | — | $ | (0.6 | ) | ||||||
|
Forward exchange contracts designated as cash flow hedges
|
Deferred taxes and other | 0.9 | — | |||||||||
|
|
||||||||||||
|
|
$ | 0.9 | $ | (0.6 | ) | |||||||
|
|
||||||||||||
14
Table of Contents
Forward exchange contracts
In 2011 and 2010, the Company entered into a series of forward exchange contracts to purchase
U.S. dollars in order to hedge its exposure to fluctuating rates of exchange on anticipated
inventory purchases. As of September 30, 2011, the Company had 18 individual forward exchange
contracts for $1.0 million each, which have various expiration dates through September 2012. These
contracts have been designated as cash flow hedges in accordance with the accounting guidance for
derivatives.
Interest rate locks
Prior to the 2010 and 2008 issuance of long-term notes, the Company entered into forward
interest rate locks to hedge its exposure to fluctuations in treasury rates. The 2010 interest rate
lock resulted in a $1.6 million loss while the 2008 interest rate lock resulted in a $1.2 million
gain. These amounts were recorded in Accumulated other comprehensive loss, net of tax, and are
being amortized over the life of the respective notes. The amortization associated with these
interest rate locks is reclassified from Accumulated other comprehensive loss to Interest expense,
net in the Condensed Consolidated Statement of Income. The reclassification for the nine months
ended September 30, 2011 and 2010 was not material. As of September 30, 2011 and December 31, 2010
there was $0.4 million and $0.5 million, respectively, of net unamortized losses reflected in
Accumulated other comprehensive loss.
The following table summarizes the results of cash flow hedging relationships for the three
months ended September 30, 2011 and 2010, (in millions):
| Derivative Gain/(Loss) | ||||||||||||||||||||
| Recognized in | ||||||||||||||||||||
| Accumulated Other | Loss Reclassified into | |||||||||||||||||||
| Comprehensive Loss (net | Earnings (Effective | |||||||||||||||||||
| of tax) | Location of Gain/(Loss) Reclassified into | Portion) | ||||||||||||||||||
| Derivative Instrument | 2011 | 2010 | Income (Effective Portion) | 2011 | 2010 | |||||||||||||||
|
Forward
exchange contract
|
$ | 0.8 | $ | (0.3 | ) | Cost of goods sold | $ | (0.2 | ) | $ | (0.1 | ) | ||||||||
The following table summarizes the results of cash flow hedging relationships for the nine
months ended September 30, 2011 and 2010, (in millions):
| Derivative Gain/(Loss) | ||||||||||||||||||||
| Recognized in | ||||||||||||||||||||
| Accumulated Other | Loss Reclassified into | |||||||||||||||||||
| Comprehensive Loss (net | Earnings (Effective | |||||||||||||||||||
| of tax) | Location of Gain/(Loss) Reclassified into | Portion) | ||||||||||||||||||
| Derivative Instrument | 2011 | 2010 | Income (Effective Portion) | 2011 | 2010 | |||||||||||||||
|
Forward
exchange contract
|
$ | 0.3 | $ | (0.1 | ) | Cost of goods sold | $ | (1.0 | ) | $ | (1.2 | ) | ||||||||
There was no hedge ineffectiveness with respect to the forward exchange cash flow hedges
during the three and nine months ended September 30, 2011 and 2010.
Long-term Debt
The total carrying value of long-term debt as of September 30, 2011 was $596.2 million, net of
unamortized discount. As of September 30, 2011, the estimated fair value of the long-term debt was
$666.0 million based on quoted market prices.
15
Table of Contents
12. Subsequent Events
In October 2011, the Company entered into a five year $500 million revolving credit facility
to replace the $350 million credit facility scheduled to expire in October 2012. The new credit
facility, which serves as a backup to our commercial paper program, is scheduled to expire in
October 2016. The interest rate applicable to borrowing under the new credit agreement is
generally either the prime rate or a surcharge over LIBOR. The single financial covenant in the
$500 million credit facility requires that total debt not exceed 55% of total capitalization.
Annual commitment fees to support availability under the credit facility are not material.
16
Table of Contents
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
EXECUTIVE OVERVIEW OF THE BUSINESS
The Company is primarily engaged in the design, manufacture and sale of quality electrical and
electronic products for a broad range of non-residential and residential construction, industrial
and utility applications. Products are either sourced complete, manufactured or assembled by
subsidiaries in the United States, Canada, Switzerland, Puerto Rico, China, Mexico, Italy, the
United Kingdom, Brazil and Australia. The Company also participates in joint ventures in Taiwan
and China, and maintains sales offices in Singapore, China, Mexico, South Korea and countries in
the Middle East. The Company employs approximately 14,000 individuals worldwide and operates
approximately 75 facilities in 11 countries.
The Company’s reporting segments consist of the Electrical segment and the Power segment.
Results for the three and nine months ended September 30, 2011 are included under “Segment Results”
within this Management’s Discussion and Analysis.
We believe our current strategy provides the means for the Company to continue to grow profits
and deliver attractive returns to our shareholders. In 2011, we continue to execute a business plan
focused on:
| • |
Revenue
|
|
|
Organic Demand:
The Company remains focused on expanding market share through an emphasis on new
product introductions and more effective utilization of sales and marketing efforts across the
organization. In 2011, organic demand is expected to be higher than 2010 primarily due to
strength in the industrial and utility markets.
|
||
|
Acquisitions:
The Company continues to assess opportunities to expand sales through acquisitions
of businesses that fill product line gaps or allow for expansion into new markets.
|
||
| • |
Price Realization
|
|
|
Our goal is to achieve parity between pricing and commodity cost increases. In 2011, we are
experiencing a competitive pricing environment. Since the fourth quarter of 2010, we have
experienced increases in the cost of commodity raw materials used in our products including
steel, copper, zinc and aluminum, as well as certain purchased electronic components such as
ballasts and fluorescent lamps. While these costs have declined from their peaks they are still
higher than their 2010 average cost. In addition, transportation costs are also increasing,
reflecting higher levels of fuel costs. As a result, broad price increases have been
implemented. For the fourth quarter of 2011 we expect price realization to be at parity with
commodity cost increases.
|
||
| • |
Cost Containment
|
|
|
Global sourcing
: We remain focused on expanding our global product and component sourcing and
supplier cost reduction program. We continue to consolidate suppliers, utilize reverse auctions
and partner with vendors to shorten lead times, improve quality and delivery and reduce costs.
|
||
|
Freight and Logistics:
Transporting our products from suppliers, to warehouses, and ultimately
to our customers, is a major cost to our Company. In 2011, we expect these costs to remain flat
as a percent of net sales. Cost increases due to rising diesel fuel and ocean container costs
are expected to be offset by productivity initiatives including increasing the effectiveness of
our internal freight and logistics processes through capacity utilization and network
optimization.
|
17
Table of Contents
| • |
Productivity
|
|
|
The Company expects to expand upon the benefits of our enterprise-wide information technology
system, including standardizing best practices in inventory management, production planning and
scheduling to improve manufacturing throughput and to reduce costs. Value-engineering efforts and product transfers,
including those to our recently expanded manufacturing operations in China, are also expected to
contribute to our productivity improvements. This continuing emphasis on operational
improvements is expected to lead to further reductions in lead times and improved service levels
to our customers.
|
||
|
Transformation of business processes.
We are continuing our long-term initiative of applying
lean process improvement techniques throughout the enterprise, with particular emphasis on
reducing supply chain complexity to eliminate waste and improve efficiency and reliability. We
plan to continue to build on the shared services model that has been implemented in information
technology, sourcing and logistics and expect to apply those principles in other areas.
|
Results of Operations — Third Quarter of 2011 compared to the Third Quarter of 2010
Summary of Consolidated Results (in millions, except per share data):
| Three Months Ended September 30 | ||||||||||||||||
| 2011 | % of Net sales | 2010 | % of Net sales | |||||||||||||
|
Net Sales
|
$ | 764.3 | $ | 685.0 | ||||||||||||
|
Cost of goods sold
|
512.0 | 449.8 | ||||||||||||||
|
|
||||||||||||||||
|
Gross Profit
|
252.3 | 33.0 | % | 235.2 | 34.3 | % | ||||||||||
|
Selling & administrative expense
|
127.0 | 16.6 | % | 117.6 | 17.2 | % | ||||||||||
|
|
||||||||||||||||
|
Operating income
|
125.3 | 16.4 | % | 117.6 | 17.2 | % | ||||||||||
|
Net income attributable to Hubbell
|
82.4 | 10.8 | % | 71.3 | 10.4 | % | ||||||||||
|
Earnings per share — diluted
|
$ | 1.37 | $ | 1.18 | ||||||||||||
Net Sales
Net sales of $764.3 million for the third quarter of 2011 increased 12% compared to the third
quarter of 2010 due to higher organic volume, price realization and favorable foreign currency
translation. Compared to the third quarter of 2010, organic volume increased net sales by
approximately eight percentage points while foreign currency translation and price realization each
added approximately two percentage points.
Gross Profit
The consolidated gross profit margin in the third quarter of 2011 was 33.0% compared to 34.3%
in the third quarter of 2010. The decrease in gross profit margin was due to higher commodity costs
in excess of price realization and a less favorable mix.
Selling & Administrative Expenses (“S&A”)
S&A expenses in the third quarter of 2011 were $127.0 million compared to $117.6 million in
the third quarter of 2010. As a percentage of net sales, S&A expenses declined to 16.6% in the
third quarter of 2011 compared to 17.2% in the third quarter of 2010 due to leveraging of the
higher sales volume.
Total Other Expense, net
Total other expense, net decreased $1.1 million in the third quarter of 2011 compared to the
third quarter of 2010. This decrease is primarily due to lower net foreign currency transaction
losses and reduced net interest costs in the third quarter of 2011 compared to the comparable prior
year period.
Income Taxes
The effective tax rate in the third quarter of 2011 decreased to 29.4% from 34.3% in the third
quarter of 2010. This decrease is due to a $2.5 million benefit resulting primarily from a change
in estimates, the reinstatement of the federal research and development tax credit in the fourth quarter of 2010 and an additional
$2.2 million of tax expense recorded in the third quarter of 2010 related to the conclusion of an
IRS audit of the Company’s 2006 and 2007 federal income tax returns.
18
Table of Contents
Net income attributable to Hubbell and Earnings Per Diluted Share
Net income attributable to Hubbell and earnings per diluted share each increased 16% in the
third quarter of 2011 compared to the third quarter of 2010. These increases are due to higher
operating income and a lower effective tax rate.
Segment Results
Electrical
| Three Months Ended | ||||||||
| September 30 | ||||||||
| (In millions) | 2011 | 2010 | ||||||
|
Net sales
|
$ | 526.6 | $ | 490.6 | ||||
|
Operating income
|
81.5 | 83.9 | ||||||
|
Operating margin
|
15.5 | % | 17.1 | % | ||||
Net sales in the Electrical segment increased 7% in the third quarter of 2011 compared with
the third quarter of 2010. This improvement was due to higher broad based organic volume with the
exception of the industrial market due to lower high voltage test equipment project sales. Compared
to the third quarter of 2010, organic volume increased net sales by approximately four percentage
points while foreign currency translation and price realization added approximately two and one
percentage points, respectively, to net sales.
Within the segment, electrical systems products net sales increased 7% in the third quarter of
2011 compared to the third quarter of 2010 due to higher organic volume, price realization and
favorable foreign currency translation. Sales of lighting products increased 8% in the third
quarter of 2011 compared to 2010. Compared to the third quarter of 2010, sales of commercial and
industrial lighting products increased 9% primarily driven by stronger demand in the retrofit and
relight markets. Sales of residential lighting products increased 5% year-over-year.
Operating income in the third quarter of 2011 decreased 3% to $81.5 million compared to the
third quarter of 2010 and operating margin decreased by 160 basis points. Operating income and
margin decreased primarily due to the less favorable mix and higher commodity costs partially
offset by income from higher sales and price realization.
Power
| Three Months Ended | ||||||||
| September 30 | ||||||||
| (In millions) | 2011 | 2010 | ||||||
|
Net sales
|
$ | 237.7 | $ | 194.4 | ||||
|
Operating income
|
43.8 | 33.7 | ||||||
|
Operating margin
|
18.4 | % | 17.3 | % | ||||
Net sales in the Power segment increased 22% in the third quarter of 2011 compared to the
third quarter of 2010. Organic volume increased net sales by approximately eighteen percentage
points due to strong growth in both distribution and transmission products including international
growth. Price realization was favorable by three percentage points while favorable foreign currency
translation added one percentage point.
Operating income increased 30% to $43.8 million and operating margin increased to 18.4% in the
third quarter of 2011 compared to 17.3% in the third quarter of 2010. The operating income and
margin increases were primarily due to the higher volume partially offset by commodity costs in
excess of price realization; however the gap continued to narrow in the third quarter of 2011
compared to the second quarter of 2011. Productivity improvements were offset by other inflationary
increases and spending to support product development initiatives.
19
Table of Contents
Results of Operations — Nine Months Ended September 30, 2011 compared to the Nine Months Ended
September 30, 2010
Summary of Consolidated Results (in millions, except per share data):
| Nine Months Ended September 30 | ||||||||||||||||
| 2011 | % of Net sales | 2010 | % of Net sales | |||||||||||||
|
Net Sales
|
$ | 2,131.6 | $ | 1,901.9 | ||||||||||||
|
Cost of goods sold
|
1,444.2 | 1,280.0 | ||||||||||||||
|
|
||||||||||||||||
|
Gross Profit
|
687.4 | 32.2 | % | 621.9 | 32.7 | % | ||||||||||
|
Selling & administrative expense
|
373.4 | 17.5 | % | 345.1 | 18.1 | % | ||||||||||
|
|
||||||||||||||||
|
Operating income
|
314.0 | 14.7 | % | 276.8 | 14.6 | % | ||||||||||
|
Net income attributable to Hubbell
|
197.9 | 9.3 | % | 167.5 | 8.8 | % | ||||||||||
|
Earnings per share — diluted
|
$ | 3.25 | $ | 2.77 | ||||||||||||
Net Sales
Net sales of $2.1 billion for the first nine months of 2011 increased 12% compared to the
first nine months of 2010 due to higher organic volume, price realization and favorable foreign
currency translation. Compared to the first nine months of 2010, organic volume increased net sales
by eight percentage points. Foreign currency translation and price realization each increased net
sales by two percentage points.
Gross Profit
The consolidated gross profit margin was 32.2% the first nine months of 2011 compared to 32.7%
in the first nine months of 2010. The decrease in gross profit margin was primarily due to lower
mix of industrial sales caused by timing of project sales. The unfavorable impact of higher
commodity costs in excess of price realization was essentially offset by productivity in excess of
other cost increases.
Selling & Administrative Expenses
S&A expenses in the first nine months of 2011 were $373.4 million compared to $345.1 million
in the first nine months of 2010. As a percentage of net sales, S&A expenses declined to 17.5% in
the first nine months of 2011 compared to 18.1% in the first nine months of 2010 due to leveraging
the higher sales.
Total Other Expense, net
Total other expense, net increased $1.6 million in the first nine months of 2011 compared to
the first nine months of 2010. This increase is primarily due to higher net foreign currency
transaction losses in the first nine months of 2011 compared to the comparable prior year period.
These losses were partially offset by lower net interest expense.
Income Taxes
The effective tax rate in the first nine months of 2011 decreased to 30.6% from 33.2% in the
first nine months of 2010. This decrease is due to a $2.5 million benefit resulting primarily from
a change in estimates, the reinstatement of the federal research and development tax credit in the
fourth quarter of 2010 and an additional $2.2 million of tax expense recorded in the third quarter
of 2010 related to the conclusion of an IRS audit of the Company’s 2006 and 2007 federal income tax
returns.
20
Table of Contents
Net income attributable to Hubbell and Earnings Per Diluted Share
Net income attributable to Hubbell and earnings per diluted share increased 18% and 17%,
respectively, in the first nine months of 2011 compared to the first nine months of 2010. The
increase in net income attributable to Hubbell is due to higher operating income, lower net
interest expense and a lower effective tax rate partially offset by higher foreign currency
transaction losses.
Segment Results
Electrical
| Nine Months Ended | ||||||||
| September 30 | ||||||||
| (In millions) | 2011 | 2010 | ||||||
|
|
||||||||
|
Net sales
|
$ | 1,490.6 | $ | 1,358.3 | ||||
|
Operating income
|
208.3 | 185.1 | ||||||
|
Operating margin
|
14.0 | % | 13.6 | % | ||||
Net sales in the Electrical segment increased 10% in the first nine months of 2011 compared
with the first nine months of 2010 due to higher organic volume, favorable foreign currency
translation and price realization. Compared to the first nine months of 2010, organic volume added
approximately six percentage points to net sales. In addition, foreign currency translation and
price realization each increased net sales by two percentage points.
Within the segment, electrical systems products net sales increased 12% in the first nine
months of 2011 compared to the first nine months of 2010 due to higher organic volume and favorable
foreign currency translation. Sales of lighting products increased 7% in the first nine months of
2011 compared to 2010. Compared to the first nine months of 2010, sales of commercial and
industrial lighting products increased 10% primarily driven by stronger demand in the retrofit and
relight markets while sales of residential lighting products decreased 5%.
Operating income in the first nine months of 2011 increased 13% to $208.3 million compared to
the first nine months of 2010 while operating margin increased 40 basis points. Operating income
and operating margin increased primarily due to sales volume leverage partially offset by commodity
costs in excess of price realization. Productivity improvements were essentially offset by
inflationary spending increases.
Power
| Nine Months Ended | ||||||||
| September 30 | ||||||||
| (In millions) | 2011 | 2010 | ||||||
|
|
||||||||
|
Net sales
|
$ | 641.0 | $ | 543.6 | ||||
|
Operating income
|
105.7 | 91.7 | ||||||
|
Operating margin
|
16.5 | % | 16.9 | % | ||||
Net sales in the Power segment increased 18% in the first nine months of 2011 compared to the
first nine months of 2010. Organic volume increased net sales by approximately fifteen percentage
points due to higher net sales of distribution and transmission products, including international
growth. Price realization and foreign currency translation added two and one percentage points,
respectively, to net sales.
Operating income increased 15% to $105.7 million but operating margin decreased 40 basis
points to 16.5% in the first nine months of 2011 compared to the first nine months of 2010. The
increase in operating income was due to higher volume; partially offset by commodity costs and
other cost increases in excess of price realization and productivity improvements. Cost increases
included spending to support growth initiatives such as product development and inflationary
increases. The margin decline was primarily due to higher commodity costs in excess of price
realization partially offset by higher sales.
21
Table of Contents
OUTLOOK
For 2011, we expect net sales to increase by approximately twelve percent compared to 2010.
We expect to achieve this increase through higher organic sales including new product introductions
and improved price realization. Demand for our power products is expected to increase as utility
companies spend on distribution products to maintain the network and invest in large scale
transmission projects. The industrial market that we serve is expected to continue to grow overall,
due to higher factory utilization rates and increased demand for harsh and hazardous products that
are benefitting from strong energy markets. In the non-residential construction market, we expect
stronger demand for renovation, relight and controls to be partially offset by declines in new
construction spending. Our residential market, driven by single family home construction, is
expected to decline as high levels of unemployment, slow wage growth and home foreclosures continue
to dampen demand.
For 2011, we plan to continue to work on productivity initiatives, including improved
sourcing, product redesign and lean projects focused on factory efficiency. We anticipate cost
increases from commodities, fuel, pension, healthcare and other inflationary costs. In 2011, due to
the competitive pricing environment, we expect commodity cost increases to be in excess of price
realization. We plan to continue to invest in people and resources to support our growth
initiatives. Overall, we expect to expand operating margin by approximately 20 to 30 basis points
in 2011 compared to 2010. Additionally, we expect our 2011 effective tax rate to be approximately
31.0% and we anticipate generating free cash flow approximately equal to net income.
For 2012, we expect our overall organic sales to increase in the low single-digit range
compared to 2011. The non-residential construction market is expected to have strong demand for
retrofit and relighting projects offset by new construction weakness. The utility market is
expected to grow with modest increases anticipated for our distribution products. We also
anticipate the recent growth we have experienced for transmission related projects will continue in
2012. The industrial market is expected to expand although the growth is likely to be more modest
than 2011. For the residential market, we do not anticipate any significant improvements in 2012.
We expect to increase our earnings in 2012 through higher sales, careful management of pricing
relative to commodity costs and by continuing our productivity programs. We also expect to continue
to evaluate and pursue additional acquisitions to add to our portfolio.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Cash Flow
| Nine Months Ended | ||||||||
| September 30 | ||||||||
| (In millions) | 2011 | 2010 | ||||||
|
Net cash provided by (used in):
|
||||||||
|
Operating activities
|
$ | 217.2 | $ | 176.0 | ||||
|
Investing activities
|
(41.6 | ) | (43.5 | ) | ||||
|
Financing activities
|
(184.2 | ) | (52.1 | ) | ||||
|
Effect of foreign
currency exchange
rate changes on
cash and cash
equivalents
|
(0.3 | ) | 3.9 | |||||
|
|
||||||||
|
Net change in cash and cash equivalents
|
$ | (8.9 | ) | $ | 84.3 | |||
|
|
||||||||
Cash provided by operating activities for the nine months ended September 30, 2011 increased
from the comparable period in 2010 primarily as a result of higher net income. Cash used for
changes in working capital was $60.2 million and $67.3 million for the nine month periods ended
September 30, 2011 and 2010, respectively. This slight improvement is primarily due to increases
in accounts payable partially offset by higher levels of accounts receivable.
Investing activities used cash of $41.6 million in the first nine months of 2011 compared to
cash used of $43.5 million during the comparable period in 2010. During the nine months ended
September 30, 2011, the Company had lower net purchases of available for sale securities partially
offset by higher capital spending. Financing activities used cash of $184.2 million in the first
nine months of 2011 compared to $52.1 million of cash used during the comparable period of 2010. The increase is primarily due to the repurchase of common shares
partially offset by higher proceeds from the exercise of stock options during the first nine months
of 2011.
22
Table of Contents
Investments in the Business
Investments in our business include both expenditures required to maintain the operation of
our equipment and facilities as well as cash outlays in support of our strategic initiatives.
During the first nine months of 2011, we used cash of $41.3 million for capital expenditures, an
increase of $7.5 million from the comparable period of 2010.
In December 2007, the Board of Directors approved a stock repurchase program (“December 2007
program”) and authorized the repurchase of up to $200 million of Class A and Class B Common Stock.
During the nine months ended September 30, 2011, the Company has spent $137.7 million on the
repurchase of common shares and has completed the December 2007 program.
In September 2011, the Board of Directors approved a new stock repurchase program (“September
2011 program”) and authorized the repurchase of up to $200 million of Class A and Class B Common
Stock. As of September 30, 2011, the entire $200 million remains authorized for repurchases under
the September 2011 program. Depending upon numerous factors, including market conditions and
alternative uses of cash, we may conduct discretionary repurchases through open market and
privately negotiated transactions during our normal trading windows.
Debt to Capital
At September 30, 2011, the Company’s total debt consisted of $2.3 million of short-term debt
and $596.2 million of long-term notes, net of unamortized discount. The long-term fixed-rate
notes, with amounts of $300 million due in both 2018 and 2022, respectively, are callable with a
make whole provision and are only subject to accelerated payment prior to maturity if we fail to
meet certain non-financial covenants, all of which were met at September 30, 2011.
The Company has a credit agreement for a 5.0 million Brazilian Real line of credit to fund its
Brazilian operations. At September 30, 2011, 4.1 million Brazilian Reais were utilized (equivalent
to $2.3 million). This line of credit expires in February 2012 and is not subject to annual
commitment fees.
Net debt, defined as total debt less cash and investments, is a non-GAAP measure that may not
be comparable to definitions used by other companies. We consider net debt to be a useful measure
of our financial leverage for evaluating the Company’s ability to meet its funding needs.
| September 30, | December 31, | |||||||
| (In millions) | 2011 | 2010 | ||||||
|
Total Debt
|
$ | 598.5 | $ | 597.7 | ||||
|
Total Hubbell Shareholders’ Equity
|
1,477.1 | 1,459.2 | ||||||
|
|
||||||||
|
Total Capital
|
$ | 2,075.6 | $ | 2,056.9 | ||||
|
|
||||||||
|
|
||||||||
|
Total Debt to Total Capital
|
29 | % | 29 | % | ||||
|
|
||||||||
|
Total Debt
|
$ | 598.5 | $ | 597.7 | ||||
|
Less: Cash and cash equivalents
|
(511.8 | ) | (520.7 | ) | ||||
|
Investments
|
(46.0 | ) | (39.0 | ) | ||||
|
|
||||||||
|
Net Debt
|
$ | 40.7 | $ | 38.0 | ||||
|
Net Debt to Total Capital
|
2 | % | 2 | % | ||||
23
Table of Contents
Liquidity
We measure liquidity on the basis of our ability to meet short-term and long-term operational
funding needs, fund additional investments, including acquisitions, and make dividend payments to
shareholders. Significant factors affecting the management of liquidity are cash flows from
operating activities, capital expenditures, cash dividend payments, stock repurchases, access to
bank lines of credit and our ability to attract long-term capital with satisfactory terms.
As of September 30, 2011, the Company’s $350 million committed bank credit facility had not
been drawn against. In October 2011, the Company entered into a five year $500 million revolving
credit facility to replace the $350 million credit facility scheduled to expire in October 2012.
The new credit facility, which serves as a backup to our commercial paper program, is scheduled to
expire in October 2016. The interest rate applicable to borrowing under the new credit agreement
is generally either the prime rate or a surcharge over LIBOR. The single financial covenant in the
$500 million credit facility requires that total debt not exceed 55% of total capitalization.
Annual commitment fees to support availability under the credit facility are not material.
Although not the principal source of liquidity, we believe our credit facility is capable of
providing significant financing flexibility at reasonable rates of interest. However, in the event
of a significant deterioration in the results of our operations or cash flows, leading to
deterioration in financial condition, our borrowing costs could increase and/or our ability to
borrow could be restricted. We have not entered into any guarantees that could give rise to
material unexpected cash requirements.
We have contractual obligations for long-term debt, operating leases, purchase obligations,
and certain other long-term liabilities that were summarized in a table of Contractual Obligations
in our Annual Report on Form 10-K for the year ended December 31, 2010. Since December 31, 2010,
there were no material changes to our contractual obligations.
Internal cash generation together with currently available cash and investments, available
borrowing facilities and credit lines, if needed, are expected to be sufficient to fund operations,
the current rate of cash dividends, capital expenditures, and an increase in working capital that
would be required to accommodate a higher level of business activity. We actively seek to expand by
acquisition as well as through the growth of our current businesses. While a significant
acquisition may require additional debt and/or equity financing, we believe that we would be able
to obtain additional financing based on our favorable historical earnings performance and strong
financial position.
The Company maintains a conservative financial structure to provide the strength and
flexibility necessary to achieve its strategic objectives. The 2008 disruption in the credit
markets had a significant adverse impact on a number of financial institutions. While the
Company’s liquidity was not negatively impacted by this disruption, management will continue to
closely monitor the Company’s liquidity and credit markets. Management cannot predict with any
certainty the impact to the Company should any future disruptions occur in the credit environment
as a result of these issues.
Critical Accounting Estimates
A summary of our critical accounting estimates is included in Management’s Discussion and
Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form
10-K for the year ended December 31, 2010. We are required to make estimates and judgments in the
preparation of our financial statements that affect the reported amounts of assets and liabilities,
revenues and expenses and related disclosures. We continually review these estimates and their
underlying assumptions to ensure they are appropriate for the circumstances. Changes in the
estimates and assumptions we use could have a significant impact on our financial results. During
the first nine months of 2011, there were no significant changes in our estimates and critical
accounting policies.
24
Table of Contents
Forward-Looking Statements
Some of the information included in this Management’s Discussion and Analysis of Financial
Condition and Results of Operations, and elsewhere in this Form 10-Q, contain “forward-looking
statements” as defined by the Private Securities Litigation Reform Act of 1995. These include
statements about capital resources, performance and results of operations and are based on our
reasonable current expectations. In addition, all statements regarding anticipated growth or
improvement in operating results, anticipated market conditions and economic recovery are forward
looking. Forward-looking statements may be identified by the use of words, such as “believe”,
“expect”, “anticipate”, “intend”, “depend”, “should”, “plan”, “estimated”, “predict”, “could”,
“may”, “subject to”, “continues”, “growing”, “prospective”, “forecast”, “projected”, “purport”,
“might”, “if”, “contemplate”, “potential”, “pending,” “target”, “goals”, “scheduled”, “will likely
be”, and similar words and phrases. Discussions of strategies, plans or intentions often contain
forward-looking statements. Factors, among others, that could cause our actual results and future
actions to differ materially from those described in forward-looking statements include, but are
not limited to:
| • |
Changes in demand for our products, market conditions, product quality, or product
availability adversely affecting sales levels.
|
|
| • |
Changes in markets or competition adversely affecting realization of price increases.
|
|
| • |
Failure to achieve projected levels of efficiencies, cost savings and cost reduction
measures, including those expected as a result of our lean initiative and strategic sourcing
plans.
|
|
| • |
The expected benefits and the timing of other actions in connection with our enterprise-wide
information technology system.
|
|
| • |
Availability and costs of raw materials, purchased components, energy and freight.
|
|
| • |
Changes in expected or future levels of operating cash flow, indebtedness and capital
spending.
|
|
| • |
General economic and business conditions in particular industries or markets, as well as
inflationary trends.
|
|
| • |
The anticipated impacts from the Federal stimulus package.
|
|
| • |
Regulatory issues, changes in tax laws or changes in geographic profit mix affecting tax
rates and availability of tax incentives.
|
|
| • |
A major disruption in one or more of our manufacturing or distribution facilities or
headquarters, including the impact of plant consolidations and relocations.
|
|
| • |
Changes in our relationships with, or the financial condition or performance of, key
distributors and other customers, agents or business partners which could adversely affect our
results of operations.
|
|
| • |
Impact of productivity improvements on lead times, quality and delivery of product.
|
|
| • |
Anticipated future contributions and assumptions including changes in interest rates and plan
assets with respect to pensions.
|
|
| • |
Adjustments to product warranty accruals in response to claims incurred, historical
experiences and known costs.
|
|
| • |
Unexpected costs or charges, certain of which might be outside of our control.
|
|
| • |
Changes in strategy, economic conditions or other conditions outside of our control affecting
anticipated future global product sourcing levels.
|
|
| • |
Ability to carry out future acquisitions and strategic investments in our core businesses as
well as the acquisition related costs.
|
25
Table of Contents
| • |
Unanticipated difficulties integrating acquisitions as well as the realization of expected
synergies and benefits anticipated when we first enter into a transaction.
|
|
| • |
The ability of governments to meet their financial obligations.
|
|
| • |
Political unrest in foreign countries.
|
|
| • |
Natural disasters.
|
|
| • |
Future repurchases of common stock under our common stock repurchase program.
|
|
| • |
Changes in accounting principles, interpretations, or estimates.
|
|
| • |
The outcome of environmental, legal and tax contingencies or costs compared to amounts
provided for such contingencies.
|
|
| • |
Adverse changes in foreign currency exchange rates and the potential use of hedging
instruments to hedge the exposure to fluctuating rates of foreign currency exchange on
inventory purchases.
|
|
| • |
Other factors described in our Securities and Exchange Commission filings, including the
“Business”, “Risk Factors” and “Quantitative and Qualitative Disclosures about Market Risk”
sections in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.
|
Any such forward-looking statements are not guarantees of future performances and actual
results, developments and business decisions may differ from those contemplated by such
forward-looking statements. The Company disclaims any duty to update any forward-looking statement,
all of which are expressly qualified by the foregoing, other than as required by law.
| ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
In the operation of its business, the Company has exposures to fluctuating foreign currency
exchange rates, availability of purchased finished goods and raw materials, changes in material
prices, foreign sourcing issues, and changes in interest rates. The Company’s procurement strategy
continues to emphasize an increased level of purchases from international locations, primarily
China and India, which subjects the Company to increased political and foreign currency exchange
risk. Changes in the Chinese government’s policy regarding the value of the Chinese currency versus
the U.S. dollar has not had a significant impact on our financial condition, results of operations
or cash flows. However, strengthening of the Chinese currency could increase the cost of the
Company’s products procured from this country. These factors have not increased significantly since
the beginning of 2011. Accordingly, there has been no significant change in the Company’s
strategies to manage these exposures during the first nine months of 2011. For a complete
discussion of the Company’s exposure to market risk, refer to Item 7A, Quantitative and Qualitative
Disclosures about Market Risk, contained in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2010.
| ITEM 4. |
CONTROLS AND PROCEDURES
|
The Company maintains disclosure controls and procedures that are designed to ensure that
information required to be disclosed under the Securities Exchange Act of 1934, as amended, the
(“Exchange Act”) is recorded, processed, summarized and reported within the time periods specified
and that such information is accumulated and communicated to management, including the Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding
required disclosure. There are inherent limitations to the effectiveness of any system of
disclosure controls and procedures. Accordingly, even effective disclosure controls and procedures
can only provide reasonable assurance of achieving their control objectives.
26
Table of Contents
The Company carried out an evaluation, under the supervision and with the participation of
management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness
of the design and operation of the Company’s disclosure controls and procedures as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e), as of the end of the period covered by this report on
Form 10-Q. Based upon that evaluation, each of the Chief Executive Officer and Chief Financial
Officer concluded that, as of September 30, 2011, the Company’s disclosure controls and procedures
were effective to allow timely decisions regarding disclosure.
There have been no changes in the Company’s internal control over financial reporting that
occurred during the Company’s most recently completed quarter that have materially affected, or are
reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II — OTHER INFORMATION
| ITEM 1A. |
RISK FACTORS
|
There have been no material changes in the Company’s risk factors from those disclosed in the
Annual Report on Form 10-K for the year ended December 31, 2010.
| ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
ISSUER PURCHASES OF EQUITY SECURITIES
In December 2007, the Board of Directors approved a stock repurchase program and authorized the
repurchase of up to $200 million of Class A and Class B Common Stock. During the nine months
ended September 30, 2011, the Company has spent $137.7 million on the repurchase of common shares
and has completed the December 2007 program.
In September 2011, the Board of Directors approved a new stock repurchase program and
authorized the repurchase of up to $200 million of Class A and Class B Common Stock. As of
September 30, 2011, the entire $200 million remains authorized for repurchases under the September
2011 program. Depending upon numerous factors, including market conditions and alternative uses of
cash, we may conduct discretionary repurchases through open market and privately negotiated
transactions during our normal trading windows.
| Total | ||||||||||||
| Number of | Approximate Value | |||||||||||
| Class B | Average | of Shares that May | ||||||||||
| Shares | Price Paid | Yet Be Purchased | ||||||||||
| Purchased | per Class B | Under the | ||||||||||
| Period | (000’s) | Share | Programs | |||||||||
| (In millions) | ||||||||||||
|
Balance as of June 30, 2011
|
$ | 55.5 | ||||||||||
|
July 2011
|
— | $ | — | 55.5 | ||||||||
|
August 2011
|
358 | 52.41 | 36.7 | |||||||||
|
September 2011
|
650 | 56.44 | 200.0 | |||||||||
|
|
||||||||||||
|
Total for the quarter
ended September 30, 2011
|
1,008 | $ | 55.01 | |||||||||
The Company did not repurchase any Class A Common Stock during the quarter ended, September
30, 2011.
27
Table of Contents
| ITEM 6. |
EXHIBITS
|
EXHIBITS
| Number | Description | |
|
|
||
| 31.1* |
Certification of Chief Executive Officer Pursuant to Item
601(b)(31) of Regulation S-K, as adopted pursuant to Section
302 of the Sarbanes — Oxley Act of 2002.
|
|
|
|
||
| 31.2* |
Certification of Chief Financial Officer Pursuant to Item
601(b)(31) of Regulation S-K, as adopted pursuant to Section
302 of the Sarbanes — Oxley Act of 2002.
|
|
|
|
||
| 32.1* |
Certification of Chief Executive Officer Pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes — Oxley Act of 2002.
|
|
|
|
||
| 32.2* |
Certification of Chief Financial Officer Pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes — Oxley Act of 2002.
|
|
|
|
||
| 101.INS** |
XBRL Instance Document.
|
|
|
|
||
| 101.SCH** |
XBRL Taxonomy Extension Schema Document.
|
|
|
|
||
| 101.CAL** |
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
||
| 101.DEF** |
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
||
| 101.LAB** |
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
||
| 101.PRE** |
XBRL Taxonomy Extension Presentation Linkbase Document.
|
| * |
Filed herewith
|
|
| ** |
In accordance with Rule 406T of Regulation S-T, this interactive data file is deemed not filed
or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the
Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Exchange
Act of 1934, as amended, and otherwise is not subject to liability under these sections.
|
28
Table of Contents
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
Date: October 21, 2011
|
HUBBELL INCORPORATED | |
|
|
||
|
/s/ David G. Nord
|
/s/ Darrin S. Wegman | |
|
|
||
|
David G. Nord
Senior Vice President and Chief Financial Officer |
Darrin S. Wegman
Vice President, Controller (Chief Accounting Officer) |
|
29
TABLE OF CONTENTS
Item 1. Financial StatementsprintItem 2. Management S Discussion and Analysis Of Financial Condition and Results Of OperationsprintItem 3. Quantitative and Qualitative Disclosures About Market RiskprintItem 4. Controls and ProceduresprintPart II Other InformationprintItem 1A. Risk FactorsprintItem 2. Unregistered Sales Of Equity Securities and Use Of ProceedsprintItem 6. Exhibitsprint