Condensed Consolidated Statements of Operations
UL Solutions Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
(in millions, except per share data) 2026 2025 2026 2025
Revenue $ 816 $ 776 $ 1,574 $ 1,481
Cost of revenue 399 394 776 759
Selling, general and administrative expenses 267 244 510 476
Restructuring — (1) — (2)
Operating income 150 139 288 248
Interest expense (5) (10) (13) (22)
Gain on divestiture 191 — 191 —
Other income (expense), net 2 (4) 2 (7)
Income before income taxes 338 125 468 219
Income tax expense 84 28 116 51
Net income 254 97 352 168
Less: net income attributable to non-controlling interests 8 6 13 10
Net income attributable to stockholders of UL Solutions $ 246 $ 91 $ 339 $ 158
Earnings per common share:
Basic $ 1.22 $ 0.45 $ 1.69 $ 0.79
Diluted $ 1.21 $ 0.45 $ 1.66 $ 0.78
Weighted average common shares outstanding:
Basic 202 201 201 201
Diluted 204 203 204 203
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements
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UL Solutions Inc.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
Condensed Consolidated Statements of Comprehensive Income
Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2026 2025 2026 2025
Net income $ 254 $ 97 $ 352 $ 168
Other comprehensive income, net of tax:
Pension and postretirement benefit plans, net of tax 14 (1) 19 (1)
Foreign currency translation (loss) gain (1) 36 (13) 53
Total other comprehensive income 13 35 6 52
Comprehensive income 267 132 358 220
Less: comprehensive income attributable to non-controlling interests 8 6 13 10
Comprehensive income attributable to stockholders of UL Solutions $ 259 $ 126 $ 345 $ 210
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements
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UL Solutions Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
Condensed Consolidated Balance Sheets
(in millions, except share and per share data) June 30, 2026 December 31, 2025
Assets
Current assets:
Cash and cash equivalents $ 434 $ 295
Accounts receivable, net of allowance of $13 and $12 471 422
Contract assets, net of allowance of $2 and $2 239 204
Other current assets 90 79
Total current assets 1,234 1,000
Property, plant and equipment, net of accumulated depreciation of $908 and $879 766 699
Goodwill 642 656
Intangible assets, net of accumulated amortization of $257 and $256 41 48
Operating lease right-of-use assets 166 179
Deferred income taxes 46 94
Capitalized software, net of accumulated amortization of $461 and $475 90 105
Other assets 134 140
Total Assets $ 3,119 $ 2,921
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 179 $ 183
Accrued compensation and benefits 196 282
Operating lease liabilities - current 39 43
Contract liabilities 347 173
Other current liabilities 105 79
Total current liabilities 866 760
Long-term debt 301 491
Pension and postretirement benefit plans 103 134
Operating lease liabilities 136 149
Other liabilities 93 93
Total Liabilities 1,499 1,627
Commitments and contingencies (Note 17)
Stockholders’ equity:
Class A common stock, $0.001 per share, 78,139,909 and 77,270,964 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively — —
Class B common stock, $0.001 per share, 123,755,000 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively — —
Additional paid-in capital 934 887
Retained earnings 750 470
Accumulated other comprehensive loss (89) (95)
Total stockholders’ equity before non-controlling interests 1,595 1,262
Non-controlling interests 25 32
Total Stockholders’ Equity 1,620 1,294
Total Liabilities and Stockholders’ Equity $ 3,119 $ 2,921
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements
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UL Solutions Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
Condensed Consolidated Statements of Stockholders’ Equity
(in millions, except per share data) Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Non-controlling Interests Total
Balance at March 31, 2026 $ — $ 888 $ 533 $ (102) $ 17 $ 1,336
Net income — — 246 — 8 254
Other comprehensive income, net of tax — — — 13 — 13
Stock-based compensation — 46 — — — 46
Dividend to stockholders of UL Solutions ($0.145 per share) — — (29) — — (29)
Balance at June 30, 2026 $ — $ 934 $ 750 $ (89) $ 25 $ 1,620
Balance at December 31, 2025 $ — $ 887 $ 470 $ (95) $ 32 $ 1,294
Net income — — 339 — 13 352
Other comprehensive income, net of tax — — — 6 — 6
Stock-based compensation — 47 — — — 47
Dividends to stockholders of UL Solutions ($0.29 per share) — — (59) — — (59)
Dividend to non-controlling interest — — — — (20) (20)
Balance at June 30, 2026 $ — $ 934 $ 750 $ (89) $ 25 $ 1,620
Balance at March 31, 2025 $ — $ 829 $ 291 $ (150) $ 14 $ 984
Net income — — 91 — 6 97
Other comprehensive income, net of tax — — — 35 — 35
Stock-based compensation — 23 — — — 23
Dividend to stockholders of UL Solutions ($0.13 per share) — — (26) — — (26)
Balance at June 30, 2025 $ — $ 852 $ 356 $ (115) $ 20 $ 1,113
Balance at December 31, 2024 $ — $ 821 $ 250 $ (167) $ 27 $ 931
Net income — — 158 — 10 168
Other comprehensive income, net of tax — — — 52 — 52
Stock-based compensation — 31 — — — 31
Dividends to stockholders of UL Solutions ($0.26 per share) — — (52) — — (52)
Dividend to non-controlling interest — — — — (17) (17)
Balance at June 30, 2025 $ — $ 852 $ 356 $ (115) $ 20 $ 1,113
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements
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UL Solutions Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Condensed Consolidated Statements of Cash Flows
Six Months Ended June 30,
(in millions) 2026 2025
Operating activities
Net income $ 352 $ 168
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization 93 91
Gain on divestiture (191) —
Stock-based compensation 35 21
Losses on foreign exchange transactions 3 5
Deferred income taxes 41 1
Other, net 6 11
Changes in assets and liabilities, excluding the effects of acquisitions and divestitures:
Accounts receivable (63) (26)
Contract and other assets (59) (48)
Accounts payable 1 (27)
Accrued expenses (10) (38)
Pension and postretirement benefit plans (5) (5)
Contract and other liabilities 176 148
Net cash flows provided by operating activities 379 301
Investing activities
Capital expenditures (138) (93)
Proceeds from divestiture 199 —
Purchases of investments — (14)
Sales of investments 8 1
Other investing activities, net 1 (1)
Net cash flows provided by (used in) investing activities 70 (107)
Financing activities
Proceeds from long-term debt 187 150
Repayments of long-term debt (378) (285)
Dividends to stockholders of UL Solutions (58) (52)
Dividends to non-controlling interest (20) (17)
Employee taxes paid on settlement of stock-based compensation (32) (13)
Other financing activities, net (7) (4)
Net cash flows used in financing activities (308) (221)
Effect of exchange rate changes on cash and cash equivalents (2) 1
Net increase (decrease) in cash and cash equivalents 139 (26)
Cash and cash equivalents
Beginning of period 295 298
End of period $ 434 $ 272
Supplemental disclosures of cash flow information
Cash paid during the period for interest $ 13 $ 22
Cash paid during the period for income taxes 45 40
Noncash investing and financing activities
Capital expenditures funded by liabilities $ 46 $ 23
Conversion of stock-based compensation awards to equity 47 25
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements
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UL Solutions Inc.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Notes to the Condensed Consolidated Financial Statements
1. Significant Accounting Policies
Description of Business
UL Solutions Inc. (together with its consolidated subsidiaries, “UL Solutions” and the “Company,” unless the context otherwise requires) is a global safety science leader that provides independent third-party testing, inspection and certification services, advisory offerings and software solutions. Underwriters Laboratories Inc. (“UL Research Institutes”) is the sole member of ULSE Inc. (“UL Standards & Engagement”), which controls the majority of the voting power of the Company’s common stock.
Effective beginning in the first quarter of 2026, the Company reorganized its segments to be consistent with how the Chief Executive Officer currently evaluates business performance and allocates resources. The changes primarily related to the Company’s Advisory business, which was previously included within the Software and Advisory segment and is now included within the Industrial segment. As a result of the reorganization, the Software and Advisory segment was renamed “Risk & Compliance Software” and costs related to the Company’s corporate functions were reallocated across its segments. The prior period amounts within Note 8, “Goodwill” and Note 19, “Segment Information”, have been recast to reflect the Company’s segment reorganization. This reorganization had no impact on the Company’s consolidated financial position, results of operations or cash flows.
Basis of Presentation
The condensed consolidated financial statements are unaudited and have been prepared in accordance with applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K. It is management’s opinion that these financial statements include all normal and recurring adjustments necessary for a fair statement of the Company’s results of operations, financial position and cash flows. Results of operations for any interim period are not necessarily indicative of future or annual results. The Company has reclassified certain amounts in prior period financial statements to conform to the current period’s presentation.
Recently Issued Accounting Standards – Not Adopted
In November 2024, the FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures, which is intended to improve disclosures about a public business entity’s expenses and provide more detailed information to investors about the types of expenses in commonly presented expense captions. The amendments in ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, on either a prospective or retrospective basis, with early adoption permitted. The Company expects to adopt the new annual disclosures as required for the year ending December 31, 2027 and the interim disclosures as required beginning with the first quarter of 2028. The application of this new guidance is not expected to have a material impact on the Company’s consolidated financial condition, results of operations, or cash flows, as the guidance pertains to disclosure only.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The amendments are intended to modernize the recognition and capitalization framework to reflect current software development practices, including iterative and agile methodologies, by removing references to “development stages” and clarifying the threshold to begin capitalizing costs. The amendments in ASU 2025-06 are effective for fiscal years beginning after December 15, 2027, and interim periods within those annual reporting periods, on either a prospective, modified transition or retrospective basis, with early adoption permitted. The Company is currently evaluating the impact this ASU may have on its consolidated financial statements.
In November 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. The amendments are intended to improve GAAP by establishing authoritative guidance on the accounting for government grants received by business entities. The amendments in ASU 2025-10 are effective for fiscal years beginning after December 15, 2028, and interim periods within those annual reporting periods, on either a modified prospective, modified retrospective or retrospective basis, with early adoption permitted. The Company is currently evaluating the impact this ASU may have on its consolidated financial statements.
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2. Earnings Per Share
Basic and diluted earnings per share were calculated as follows:
Three Months Ended June 30, Six Months Ended June 30,
(in millions, except per share data) 2026 2025 2026 2025
Net income attributable to stockholders of UL Solutions $ 246 $ 91 $ 339 $ 158
Basic weighted average common shares outstanding 202 201 201 201
Effect of dilutive securities 2 2 3 2
Diluted weighted average common shares outstanding 204 203 204 203
Basic earnings per share attributable to stockholders of UL Solutions $ 1.22 $ 0.45 $ 1.69 $ 0.79
Diluted earnings per share attributable to stockholders of UL Solutions $ 1.21 $ 0.45 $ 1.66 $ 0.78
3. Revenue
The table below summarizes the major service categories from which the Company derives its revenues:
Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2026 2025 2026 2025
Certification Testing $ 237 $ 215 $ 448 $ 404
Ongoing Certification Services 270 250 535 495
Non-certification Testing and Other Services 248 241 457 444
Software 61 70 134 138
Total $ 816 $ 776 $ 1,574 $ 1,481
Contract Balances
The revenue recognized during the three and six months ended June 30, 2026, that was included in contract liabilities at December 31, 2025, amounted to $45 million and $88 million, respectively. The revenue recognized during the three and six months ended June 30, 2025, that was included in contract liabilities at December 31, 2024, amounted to $51 million and $87 million, respectively.
Remaining Performance Obligations
At June 30, 2026, the Company estimates that $130 million in revenue is expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. The Company expects to recognize approximately 68% of its unsatisfied (or partially unsatisfied) performance obligations as revenue in the subsequent 12 months, with the remaining balance to be recognized thereafter.
Remaining consideration from contracts with customers is included in the amount presented above and includes contracts with multiple performance obligations and multi-year agreements, which are typically recognized as the performance obligation is satisfied.
4. Acquisitions and Divestitures
Acquisitions
In April 2026, Underwriters Laboratories Holdings B.V. (“ULH”), a wholly owned subsidiary of the Company, and the Company as guarantor, entered into a sale and purchase agreement for the entire issued share capital of Electrical and Electronics Testing LUX Holding SARL, a private limited liability company, and certain of its subsidiaries and related companies. The transaction includes a “locked box” structure, subject to customary leakage prohibitions (with customary permitted leakage). The purchase price will be comprised of an enterprise value of €575 million, subject to certain customary
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adjustments, and additional consideration of €41 thousand per day from September 1, 2025, through the closing date of the transaction. The sale and purchase agreement provides that, in the event of termination as a result of ULH’s failure to submit certain required regulatory filings within the prescribed deadlines, or certain conditions not being satisfied by October 13, 2027, ULH will pay a break fee of €34.5 million. The break fee is not payable to the extent termination of the sale and purchase agreement results from certain specified breaches by the seller. The Company expects to fund the transaction with cash on hand, including proceeds from its portfolio management activities, and available capacity under its revolving credit facility. The transaction is expected to close in the fourth quarter of 2026, subject to the satisfaction of customary closing conditions, including applicable regulatory approvals.
Divestitures
On April 1, 2026, the Company completed the sale of its Employee Health and Safety software business in the Company’s Risk & Compliance Software segment to an affiliate of Peak Rock Capital, a private investment firm. The preliminary purchase price was $202 million in cash consideration, subject to customary post-closing adjustments. The divestiture does not qualify as discontinued operations and therefore, its results are included within continuing operations for all periods presented. The divestiture resulted in a pre-tax gain on sale of $191 million.
5. Other Income (Expense), net
The components of other income (expense), net are as follows:
Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2026 2025 2026 2025
Foreign exchange losses $ (3) $ (2) $ (4) $ (5)
Interest income 2 1 3 2
Non-operating pension and postretirement benefit expense — (1) (1) (2)
Other 3 (2) 4 (2)
Total $ 2 $ (4) $ 2 $ (7)
6. Fair Value of Financial Instruments
The carrying amount and fair value of the Company’s debt was as follows:
June 30, 2026 December 31, 2025
(in millions) Carrying Amount Fair Value Carrying Amount Fair Value
Revolving credit facility $ — $ — $ 191 $ 191
Senior notes 300 311 300 317
Other 3 3 3 3
Total $ 303 $ 314 $ 494 $ 511
The fair value of the Company’s revolving credit facility reflects current market conditions and is primarily determined using broker quotes, which are Level 2 inputs in the fair value hierarchy. The fair value of the Company’s senior notes is estimated based on prevailing interest rates and trading activity, which are Level 2 inputs in the fair value hierarchy.
7. Investments in Equity Securities
The Company holds investments in equity securities of various companies, certain of which comprise less than 10% of the applicable company’s outstanding equity securities and are included within other assets in the Company’s Condensed Consolidated Balance Sheets. The Company accounts for these investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The carrying amount of these investments was $33 million as of June 30, 2026 and December 31, 2025.
In April 2026, the Company entered into a definitive agreement with an affiliate of Montagu, a private equity firm, and certain other parties to sell its approximately 28% shareholding of DQS Holding GmbH (“DQS”), a global management
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system assessment company headquartered in Germany. The Company expects to receive approximately €105 million in cash consideration, subject to customary post-closing adjustments, a portion of which will be held in escrow to cover certain indemnification obligations under the share purchase and transfer agreement. The Company accounts for DQS using the equity method and DQS financial results are not consolidated within the Company’s financial statements. The sale is expected to be completed in the second half of 2026, subject to the satisfaction of customary closing conditions, including applicable regulatory approvals. The carrying amount of the Company’s investment in DQS was $22 million as of June 30, 2026 and December 31, 2025, respectively, and is included within other assets in the Company’s Condensed Consolidated Balance Sheets.
The Company owns 70% of the issued and outstanding equity interests of UL-CCIC Company Limited (“UL-CCIC”), an entity formed under the laws of the People’s Republic of China. The Company determined that it is the primary beneficiary of UL-CCIC and assets of $200 million and $219 million and liabilities of $96 million and $94 million, inclusive of intercompany eliminations, were included in the Company’s Condensed Consolidated Balance Sheets at June 30, 2026 and December 31, 2025, respectively.
8. Goodwill
Changes in the carrying amount of goodwill for the six months ended June 30, 2026 were as follows:
(in millions) Industrial Consumer Risk & Compliance Software Total
Balance at December 31, 2025(a)(b) $ 377 $ 234 $ 45 $ 656
Divestiture — — (8) (8)
Effect of changes in foreign exchange rates (3) (2) (1) (6)
Balance at June 30, 2026(a) $ 374 $ 232 $ 36 $ 642
__________
(a)Net of accumulated impairment losses of $63 million as of June 30, 2026 and $137 million as of December 31, 2025.
(b)Effective beginning in the first quarter of 2026, the Company reorganized its segments to be consistent with how the Chief Executive Officer currently evaluates business performance and allocates resources. The amounts presented for the year ended December 31, 2025 have been recast to reflect the Company’s segment reorganization. Refer to Note 1, “Significant Accounting Policies” for further information.
9. Intangible Assets
The following table summarizes intangible assets:
June 30, 2026 December 31, 2025
(in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount
Customer relationships $ 264 $ (229) $ 35 $ 268 $ (226) $ 42
Intellectual property and patents 17 (15) 2 16 (14) 2
Trademarks 17 (13) 4 20 (16) 4
Total $ 298 $ (257) $ 41 $ 304 $ (256) $ 48
Intangible asset amortization was $4 million and $8 million for the three and six months ended June 30, 2026, respectively, compared to $3 million and $6 million for the three and six months ended June 30, 2025, respectively.
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10. Other Current Liabilities
The components of other current liabilities are as follows:
(in millions) June 30, 2026 December 31, 2025
Accrued income taxes $ 75 $ 34
Accrued restructuring 12 25
Other 18 20
Total $ 105 $ 79
11. Pension
The components of net periodic benefit cost for the Company’s U.S. defined benefit pension plan were as follows:
Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2026 2025 2026 2025
Service cost $ — $ 1 $ — $ 1
Interest cost 3 4 7 8
Expected return on plan assets (3) (3) (7) (6)
Amortization of net actuarial loss — — — 1
Settlement losses — — 1 —
Net periodic benefit cost $ — $ 2 $ 1 $ 4
For the three and six months ended June 30, 2026, expenses related to various defined contribution plans were $11 million and $23 million, respectively. For the three and six months ended June 30, 2025, expenses related to various defined contribution plans were $14 million and $29 million, respectively.
12. Income Taxes
The effective tax rate for the three and six months ended June 30, 2026 was 24.9% and 24.8%, respectively, which differed from the U.S. federal statutory tax rate of 21%, primarily due to state and local income taxes and foreign tax effects.
The effective tax rate for the three and six months ended June 30, 2025 was 22.4% and 23.3%, respectively, which differed from the U.S. federal statutory tax rate of 21%, primarily due to foreign tax effects, U.S. tax on Global Intangible Low Taxed Income net of related foreign tax credits, and Section 162(m) limitations on current year compensation deductions of certain executive officers, partially offset by excess tax benefits associated with stock-based compensation deductions.
On January 5, 2026, the Organisation for Economic Co-operation and Development (“OECD”) released administrative guidance on Pillar Two (a framework of rules which impose a 15% corporate minimum tax and were enacted by several countries in which the Company operates prior to 2026). The administrative guidance mainly introduces a “side‑by‑side” arrangement that provides safe-harbors against certain aspects of the Pillar Two rules for multinational companies headquartered in countries having an eligible minimum tax system – most notably that of the U.S. Following formal global adoption by OECD member countries, the administrative guidance is effective for fiscal years beginning on or after January 1, 2026, and the Company does not currently expect it to have a material impact on its consolidated financial statements. The Company continues to monitor developments related to the OECD Pillar Two global minimum tax framework, including this new arrangement.
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13. Long-Term Debt
The Company’s outstanding debt consisted of the following:
(in millions) Currency Maturity Date June 30, 2026 December 31, 2025
Revolving credit facility USD October 2030 $ — $ 191
Senior notes USD October 2028 300 300
Other USD August 2033 3 3
Total debt 303 494
Less: unamortized debt issuance costs (2) (3)
Long-term debt $ 301 $ 491
2025 Credit Facility
In October 2025, the Company entered into a credit agreement, by and among UL Solutions Inc. and certain of its non-U.S. subsidiaries as co-borrowers (collectively, the “Borrowers”), Bank of America, N.A., as administrative agent, and the lenders party thereto (the “Credit Agreement”). The Credit Agreement provides for a $1.0 billion senior unsecured five-year multi-currency revolving facility (collectively, and as amended, the “2025 Credit Facility”). The Borrowers’ obligations (other than the Company’s) under the Credit Agreement are guaranteed by the Company. As of June 30, 2026, the Company had no outstanding balances and was in compliance with all covenants under the 2025 Credit Facility. The interest rate on the revolving credit facility was 4.78% as of December 31, 2025.
Senior Notes
The Company has outstanding $300 million in aggregate principal amount of 6.500% senior notes due 2028 (the “notes”). The notes are senior unsecured obligations of UL Solutions Inc. Borrowings under the notes bear a fixed interest rate of 6.500% per annum.
14. Accumulated Other Comprehensive Loss
The following tables summarize the changes in accumulated other comprehensive loss.
Three Months Ended June 30, 2026
(in millions) Foreign Currency Translation Pension and Postretirement Plans Total
Balance at March 31, 2026, net of tax $ (54) $ (48) $ (102)
Amounts before reclassifications (1) 20 19
Amounts reclassified out — (1) (1)
Total other comprehensive (loss) income, before tax (1) 19 18
Tax effect — (5) (5)
Total other comprehensive (loss) income, net of tax (1) 14 13
Balance at June 30, 2026, net of tax $ (55) $ (34) $ (89)
Three Months Ended June 30, 2025
(in millions) Foreign Currency Translation Pension and Postretirement Plans Total
Balance at March 31, 2025, net of tax $ (71) $ (79) $ (150)
Amounts before reclassifications 36 — 36
Amounts reclassified out — (1) (1)
Total other comprehensive income (loss), net of tax 36 (1) 35
Balance at June 30, 2025, net of tax $ (35) $ (80) $ (115)
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Six Months Ended June 30, 2026
(in millions) Foreign Currency Translation Pension and Postretirement Plans Total
Balance at December 31, 2025, net of tax $ (42) $ (53) $ (95)
Amounts before reclassifications (13) 25 12
Total other comprehensive (loss) income, before tax (13) 25 12
Tax effect — (6) (6)
Total other comprehensive (loss) income, net of tax (13) 19 6
Balance at June 30, 2026, net of tax $ (55) $ (34) $ (89)
Six Months Ended June 30, 2025
(in millions) Foreign Currency Translation Pension and Postretirement Plans Total
Balance at December 31, 2024, net of tax $ (88) $ (79) $ (167)
Amounts before reclassifications 53 — 53
Amounts reclassified out — (1) (1)
Total other comprehensive income (loss), net of tax 53 (1) 52
Balance at June 30, 2025, net of tax $ (35) $ (80) $ (115)
15. Stock-based Compensation
Stock-based compensation expense was as follows:
Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2026 2025 2026 2025
Cost of revenue $ 2 $ 2 $ 3 $ 3
Selling, general and administrative expenses 23 12 34 20
Stock-based compensation expense 25 14 37 23
Income tax benefit (7) (3) (9) (4)
Stock-based compensation expense, net $ 18 $ 11 $ 28 $ 19
Stock-based compensation expense by type of award
Restricted stock units $ 10 $ 7 $ 15 $ 10
Performance share units 11 3 15 6
Stock options 1 1 2 2
Stock-settled stock appreciation rights — 1 — 1
Employee stock purchase plan 1 1 3 2
Cash-settled awards 2 1 2 2
Stock-based compensation expense $ 25 $ 14 $ 37 $ 23
CEO Special Performance Award
On June 1, 2026, the Company granted a target number of 200,120 performance share units (the “CEO Special Performance Award”) to Jennifer Scanlon, President and Chief Executive Officer. The CEO Special Performance Award is subject to both continued service and market-based vesting conditions. The market-based vesting conditions are based on two alternative metrics: (i) stock price appreciation and (ii) total shareholder return relative to the S&P 500 index. The number of Class A common shares issued may range from 0% to a maximum potential value of 100% of the award’s target value, based on satisfaction of the applicable vesting conditions. The total grant date fair value of approximately $14 million ($69.51 per share) was determined using a Monte Carlo simulation and will be recognized over the five-year term of the award.
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Compensation expense recognized for the CEO Special Performance Award in the three months ended June 30, 2026 was immaterial.
16. Restructuring
On November 4, 2025, the Company announced an expense reduction initiative to further improve the operating model and exit certain lines of business that are no longer considered strategically important to the Company (the “Restructuring Plan”). Inclusive of the charges recorded through the second quarter of 2026, the Company expects to incur pre-tax charges associated with the Restructuring Plan of approximately $40 million in the aggregate, consisting of approximately $32 million in cash charges relating to employee separation expenses and approximately $8 million in other cash charges, primarily relating to facility exits.
The Company has incurred total costs of $31 million related to employee separation expenses, $5 million related to facility exits and $1 million related to professional services in connection with the Restructuring Plan. The Company has incurred total costs of $27 million in Consumer, $8 million in Industrial, and $2 million in Risk & Compliance Software related to the Restructuring Plan. The Company anticipates the Restructuring Plan will be substantially completed by the end of the first quarter of 2027, with the remaining charges expected to be incurred throughout the remainder of the plan.
Charges related to the Restructuring Plan, as well as other qualifying restructuring expenses, are as follows:
Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2026 2025 2026 2025
Employee separation expense adjustments $ — $ (1) $ (2) $ (2)
Facility exits — — 1 —
Professional services — — 1 —
Total $ — $ (1) $ — $ (2)
The following table summarizes the changes in the Company’s accrued restructuring balance:
(in millions) Employee separation expenses Professional services Total
Liability balance as of December 31, 2025 $ 30 $ — $ 30
Restructuring (2) 1 (1)
Cash payments (15) (1) (16)
Foreign exchange rate adjustment (1) — (1)
Liability balance as of June 30, 2026 $ 12 $ — $ 12
The Company had a short-term liability for its restructuring activities of $12 million and $25 million as of June 30, 2026 and December 31, 2025, respectively, which is recorded within other current liabilities on the Condensed Consolidated Balance Sheets. The Company had a long-term liability for its restructuring activities of $0 and $5 million as of June 30, 2026, and December 31, 2025, respectively, which is recorded within other liabilities on the Condensed Consolidated Balance Sheets.
17. Commitments and Contingencies
On February 11, 2026, a putative class action complaint was filed against UL LLC, UL Solutions Inc., UL Standards and Engagement and UL Research Institutes (collectively, the “Defendants”) in the United States District Court for the Northern District of Illinois captioned John Martucci, on behalf of himself and the Putative Class v. Underwriters Laboratories Inc., et al., Case No. 1:26-cv-01561. The complaint alleges, among other things, that certain combination-listed single databus burglar and fire alarm system control units (the “Alarm Systems”) tested by the Defendants have defects that the Defendants concealed from and/or failed to disclose to consumers and that the Defendants listed the Alarm Systems as compliant with UL and National Fire Protection Association 72 standards when they were not compliant with such standards. The complaint seeks an order certifying a nationwide class and a New Jersey subclass; compensatory, actual, treble, statutory, punitive, and/or other damages; equitable relief, including restitution and disgorgement of profits; injunctive relief; declaratory relief; and pre- and post judgment interest, attorneys’ fees and costs. The Company currently believes the claims are without merit and
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intends to vigorously defend against this action. A reasonable estimate of the amount of any possible loss or range of loss cannot be made at this time.
The Company is, in the ordinary course of business, party to certain claims, litigation, audits and investigations. The Company will record an accrual for a loss contingency when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company believes it has established adequate accruals for liabilities that are probable and reasonably estimable and that may be incurred in connection with any such currently pending or threatened matter, none of which are material. In the Company’s opinion, the settlement of any such currently pending or threatened matter is not expected to have a material impact on the Company’s financial position, results of operations, or cash flows.
18. Related Party Transactions
In order to access the library of standards owned and maintained by UL Standards & Engagement, the Company incurred expenses of $6 million during each of the three-month periods ended June 30, 2026 and 2025, and $11 million during each of the six-month periods ended June 30, 2026 and 2025.
The Company declared and paid regular cash dividends to stockholders of $18 million to UL Standards & Engagement during each of the three-month periods ended June 30, 2026 and 2025, and $36 million during each of the six-month periods ended June 30, 2026 and 2025.
19. Segment Information
The following table provides revenue, significant segment expenses and operating income, by segment for the three months ended June 30, 2026 and 2025:
Industrial Consumer Risk & Compliance Software Total
(in millions) 2026 2025(a) 2026 2025(a) 2026 2025(a) 2026 2025(a)
Revenue $ 402 $ 373 $ 362 $ 340 $ 52 $ 63 $ 816 $ 776
Employee compensation 193 177 199 197 37 44 429 418
Services and materials 90 80 96 87 5 7 191 174
Depreciation and amortization 16 16 20 20 10 10 46 46
Restructuring — — — (1) — — — (1)
Operating income $ 103 $ 100 $ 47 $ 37 $ — $ 2 $ 150 $ 139
__________
(a)Effective beginning in the first quarter of 2026, the Company reorganized its segments to be consistent with how the Chief Executive Officer currently evaluates business performance and allocates resources. The amounts presented for the three months ended June 30, 2025 have been recast to reflect the Company’s segment reorganization. Refer to Note 1, “Significant Accounting Policies” for further information.
The following table provides revenue, significant segment expenses and operating income, by segment for the six months ended June 30, 2026 and 2025:
Industrial Consumer Risk & Compliance Software Total
(in millions) 2026 2025(a) 2026 2025(a) 2026 2025(a) 2026 2025(a)
Revenue $ 777 $ 713 $ 680 $ 644 $ 117 $ 124 $ 1,574 $ 1,481
Employee compensation 369 342 377 378 78 86 824 806
Services and materials 171 156 186 170 12 12 369 338
Depreciation and amortization 32 32 41 39 20 20 93 91
Restructuring 1 — (1) (2) — — — (2)
Operating income $ 204 $ 183 $ 77 $ 59 $ 7 $ 6 $ 288 $ 248
__________
(a)Described in previous table.
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Capital expenditures of the Company’s segments were as follows:
Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2026 2025(a) 2026 2025(a)
Industrial $ 14 $ 11 $ 25 $ 22
Consumer 29 9 48 21
Risk & Compliance Software 9 7 19 14
Total segments 52 27 92 57
Corporate 17 15 46 36
Total $ 69 $ 42 $ 138 $ 93
__________
(a)Described in previous table.
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