UL Solutions Inc

Previous wording

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the Company’s condensed consolidated financial statements and the related notes as of March 31, 2024 and for the three month periods ended March 31, 2024 and 2023, which are included in this Quarterly Report, as well as the Company’s consolidated financial statements and the related notes included in the Company’s final prospectus for its initial public offering (the “IPO”) filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2024 (the “Prospectus”). This discussion and analysis contains forward-looking statements that involve risks and uncertainties about the Company’s business and operations. The Company’s actual results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those the Company describes under “Risk Factors” in Part II Item 1A of this Quarterly Report. See “Cautionary Note Regarding Forward-Looking Statements.” Additionally, the Company’s historical results are not necessarily indicative of the results that may be expected for any period in the future.

Current wording

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the Company’s condensed consolidated financial statements and the related notes as of June 30, 2024 and for the three and six month periods ended June 30, 2024 and 2023, which are included in this Quarterly Report, as well as the Company’s consolidated financial statements and the related notes included in the Company’s final prospectus for its initial public offering (the “IPO”) filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2024 (the “Prospectus”). This discussion and analysis contains forward-looking statements that involve risks and uncertainties about the Company’s business and operations. The Company’s actual results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those the Company describes under “Risk Factors” in Part II Item 1A of the Quarterly Report on Form 10-Q for the period ended March 31, 2024. See “Cautionary Note Regarding Forward-Looking Statements.” Additionally, the Company’s historical results are not necessarily indicative of the results that may be expected for any period in the future.

Previous wording

UL Solutions manages the company and reports its financial results through the Company’s two businesses, TIC and S&A, and three segments: Industrial, Consumer and Software and Advisory.

Current wording

UL Solutions manages the company and reports its financial results through two businesses, TIC and S&A, and three segments: Industrial, Consumer and Software and Advisory.

Previous wording

Since January 1, 2023, the Company has completed the following acquisitions, which impact the comparability of results between periods:

Current wording

Since January 1, 2023, the Company has completed the following acquisitions and divestitures, which impact the comparability of results between periods:

Previous wording

•In July 2023, the Company acquired 100% of the outstanding stock of HBI Compliance Limited (together with its operating subsidiaries, “Healthy Buildings International”) for approximately $6 million. Healthy Buildings International is a United Kingdom-based health, safety and compliance company. The results of operations of Healthy Buildings International are included in the Software and Advisory segment since the date of acquisition.

Current wording

•In July 2023, the Company acquired 100% of the outstanding stock of HBI Compliance Limited (together with its subsidiaries, “Healthy Buildings International”) for approximately $6 million. Healthy Buildings International is a United Kingdom-based health, safety and compliance company. The results of operations of Healthy Buildings International are included in the Software and Advisory segment since the date of acquisition.

Previous wording

Cost of revenue includes personnel related expenses consisting of salaries, incentives, stock-based compensation and fringe benefits for employees directly attributable to revenue generation across each of the Company’s four major service categories. In addition, cost of revenue includes facility related costs for laboratories and other buildings where testing and inspection services are performed, depreciation on equipment used in testing, amortization of capitalized software, customer-related travel costs, expenses related to third party contractors or third party facilities and consumable materials and supplies used in testing and inspection and other costs associated with generating revenue.

Current wording

Cost of revenue includes personnel related expenses consisting of salaries, incentives, stock-based compensation and other benefits for employees directly attributable to revenue generation across each of the Company’s four major service categories. In addition, cost of revenue includes facility related costs for laboratories and other buildings where testing and inspection services are performed, depreciation on equipment used in testing, amortization of capitalized software, customer-related travel costs, expenses related to third party contractors or third party facilities and consumable materials and supplies used in testing and inspection and other costs associated with generating revenue.

Previous wording

Selling, general and administrative expenses include personnel related expenses consisting of salaries, incentives, stock-based compensation and fringe benefits for indirect administrative functions such as executive, finance, legal, human resources and information technology, not included within cost of revenue. Additionally, selling, general and administrative expenses include third party consultancy costs, facility costs, depreciation and amortization, internal research and development costs as well as legal and accounting fees, travel, marketing, bad debt and non-chargeable materials and supplies. The Company expects selling, general and administrative expenses will be impacted by costs associated with being a publicly traded company.

Current wording

Selling, general and administrative expenses include personnel related expenses consisting of salaries, incentives, stock-based compensation and other benefits for indirect administrative functions such as executive, finance, legal, human resources and information technology, not included within cost of revenue. Additionally, selling, general and administrative expenses include third party consultancy costs, facility costs, depreciation and amortization, internal research and development costs as well as legal and accounting fees, travel, marketing, bad debt and non-chargeable materials and supplies. The Company expects selling, general and administrative expenses will be impacted by costs associated with being a publicly traded company.

Previous wording

Other (expense) income, net consists primarily of non-operating gains and losses, income and expenses related to the revaluation performed on designated balance sheet accounts, gains and losses on foreign currency transactions, investment income, equity in earnings of non-consolidated affiliates and non-operating pension and postretirement benefit expenses.

Current wording

Other income, net consists primarily of non-operating gains and losses, income and expenses related to the revaluation performed on designated balance sheet accounts, gains and losses on foreign currency transactions, investment income, equity in earnings of non-consolidated affiliates and non-operating pension and postretirement benefit expenses.

Previous wording

Income before income taxes is calculated as revenue less cost of revenue, selling, general and administrative expenses, interest expense and other (expense) income, net.

Current wording

Income before income taxes is calculated as revenue less cost of revenue, selling, general and administrative expenses, interest expense and other income, net.

Previous wording

Net income is calculated as revenue less cost of revenue, selling, general and administrative expenses, interest expense, other (expense) income, net and income tax expense. Net income margin is calculated as net income as a percentage of revenue.

Current wording

Net income is calculated as revenue less cost of revenue, selling, general and administrative expenses, interest expense, other income, net and income tax expense. Net income margin is calculated as net income as a percentage of revenue.

Previous wording

Revenue increased by $41 million, or 6.5%, for the three months ended March 31, 2024, as compared to the same period in 2023. Revenue increased on an organic basis by $47 million, or 7.5%, due to organic growth across all segments in the first quarter of 2024, led by the Industrial segment in both Certification Testing and Ongoing Certification Services revenue. FX decreased revenue by $7 million, or 1.1%, primarily due to the relative weakness of the Japanese yen and Chinese renminbi.

Current wording

Revenue increased by $41 million, or 6.0%, for the three months ended June 30, 2024, as compared to the same period in 2023. Revenue increased on an organic basis by $58 million, or 8.4%, due to organic growth across all segments in the second quarter of 2024, led by the Industrial segment in both Ongoing Certification Services and Certification Testing revenue. FX decreased revenue by $11 million, or 1.6%, primarily due to the relative weakness of the Japanese yen and Chinese renminbi. Acquisitions and divestitures decreased revenue by $6 million, or 0.9%, primarily due to the sale of the payments testing business in the Industrial segment.

Previous wording

During the period ended March 31, 2024, the Company incurred $2 million of expenses related to the IPO. No material expenses were incurred in the period ended March 31, 2023.

Current wording

During the three months ended June 30, 2024 and 2023, the Company incurred $2 million and $1 million of expenses, respectively, related to the IPO.

Previous wording

The effective tax rate for the three months ended March 31, 2024 and 2023 was 17.8% and 19.4%, respectively, which differed from the U.S. statutory tax rate of 21% primarily due to earnings subject to lower tax rates in foreign jurisdictions, partially offset by U.S. tax on Global Intangible Low Taxed Income net of related foreign tax credits.

Current wording

The effective tax rate for the three months ended June 30, 2023 was 17.5%, which differed from the U.S. statutory tax rate of 21% primarily due to earnings subject to lower tax rates in foreign jurisdictions, partially offset by U.S. tax on GILTI net of related foreign tax credits.

Previous wording

Several countries in which the Company operates have adopted aspects of Pillar Two rules which impose a 15% corporate minimum tax into their local legislation effective January 1, 2024. In accordance with Financial Accounting Standards Board guidance which states that the Pillar Two minimum tax should be reflected as a period cost in the period the law is effective rather than enacted, the Company has reflected the impact of the Pillar Two rules that are effective January 1, 2024 in its financial results for the three months ended March 31, 2024, and the impact is immaterial. The Company is continuing to evaluate aspects of the legislation that will be effective January 1, 2025 and the potential impact on future periods as such changes could result in an increase in its effective tax rate in 2025 and/or other future periods.

Current wording

Several countries in which the Company operates have adopted aspects of Pillar Two rules which impose a 15% corporate minimum tax into their local legislation effective January 1, 2024. In accordance with Financial Accounting Standards Board guidance which states that the Pillar Two minimum tax should be reflected as a period cost in the period the law is effective rather than enacted, the Company has reflected the impact of the Pillar Two rules that are effective as of June 30, 2024 in its financial results for the three months ended June 30, 2024, and the impact is immaterial. The Company is continuing to evaluate aspects of the legislation that will be effective January 1, 2025 and the potential impact on future periods as such changes could result in an increase in its effective tax rate in 2025 and/or other future periods.

Previous wording

Interest expense increased by $7 million for the three months ended March 31, 2024, as compared to the same period in 2023. The increase is primarily due to interest on the Company’s outstanding senior notes which were not outstanding in the same period in 2023. For additional information refer to “—Liquidity and Capital Resources.”

Current wording

Interest expense increased by $12 million for the six months ended June 30, 2024, as compared to the same period in 2023. The increase is primarily due to interest on the Company’s outstanding senior notes which were not outstanding in the same period in 2023. For additional information refer to “—Liquidity and Capital Resources.”

Previous wording

Revenue increased by $25 million, or 9.3%, for the three months ended March 31, 2024, as compared to the same period in 2023. On an organic basis, revenue increased $27 million or 10.0%, primarily due to growth in Certification Testing revenue of $12 million driven by continued demand for electrical product, renewable energy and component certification testing, as well as returns on new capacity provided by recent laboratory investments. Ongoing Certification Services revenue also had strong growth of $12 million across most industries due to early 2024 price increases. Non-Certification Testing and Other Services revenue grew $4 million due in part to increases in materials and building products.

Current wording

Revenue increased by $22 million, or 7.5%, for the three months ended June 30, 2024, as compared to the same period in 2023. On an organic basis, revenue increased $34 million or 11.6%, primarily due to growth in Ongoing Certification Services revenue of $16 million across most industries due to price increases. Certification Testing revenue increased $14 million, driven by continued demand for electrical product, renewable energy and component certification testing, as well as returns on new capacity provided by recent laboratory investments. Acquisitions and divestitures decreased revenue by $7 million, or 2.4%, primarily due to the sale of the payments testing business. FX decreased revenue by $5 million, or 1.7%, primarily due to the relative weakness of the Japanese yen and Chinese renminbi.

Previous wording

Revenue increased by $11 million, or 4.0%, for the three months ended March 31, 2024, as compared to the same period in 2023. On an organic basis, revenue increased $16 million, or 5.8%, primarily due to Non-certification Testing and Other Services revenue growth of $4 million in consumer technology driven by higher electromagnetic compatibility testing for automotive and consumer electronics and improved retail demand of $3 million. Certification Testing revenue in consumer technology improved $3 million due to strength in medical. FX decreased revenue by $4 million, or 1.4%, primarily due to the relative weakness of the Japanese yen and Chinese renminbi.

Current wording

Revenue increased by $13 million, or 4.2%, for the three months ended June 30, 2024, as compared to the same period in 2023. On an organic basis, revenue increased $19 million, or 6.1%, primarily due to Non-certification Testing and Other Services revenue growth of $11 million in consumer technology driven by higher electromagnetic compatibility testing for automotive and consumer electronics and improved retail demand. Certification Testing revenue increased $4 million, driven by strength in HVAC. FX decreased revenue by $6 million, or 1.9%, primarily due to the relative weakness of the Japanese yen and Chinese renminbi.

Previous wording

Segment operating loss increased by $1 million for the three months ended March 31, 2024, as compared to the same period in 2023 due to offsetting increases in organic revenue and operating expenses. Expenses increased primarily due to increased compensation expenses due to base salary increases and higher healthcare costs, partially offset by a decrease in expenses associated with the change in estimated fair value of the Company’s outstanding CSARs.

Current wording

Segment operating income increased by $1 million for the three months ended June 30, 2024, as compared to the same period in 2023 primarily due to the $5 million increase in organic revenue noted above partially offset by a $5 million increase in expenses. Expenses increased due to higher compensation expenses of $4 million primarily due to long-term incentive costs related to the Company’s CSARs and Performance Cash awards.

Previous wording

There are material limitations to using these non-GAAP financial measures. Adjusted EBITDA does not take into account certain significant items, including depreciation and amortization, interest expense, other expense (income), income tax expense, stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses which directly affect the Company’s net income, as applicable. Adjusted Net Income and Adjusted Diluted Earnings Per Share do not take into account certain significant items, including other expense (income), stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses which directly affect the Company’s net income and diluted earnings per share, as applicable. Free Cash Flow adjusts for cash items that are ultimately within management’s discretion to direct, and therefore, may imply that there is less or more cash that is available than the most comparable GAAP measure. Free Cash Flow is not intended to represent residual cash flow for discretionary expenditures since debt repayment requirements and other non-discretionary expenditures are not deducted. These limitations are best addressed by considering the economic effects of the excluded items independently, and by considering these non-GAAP financial measures in conjunction with net income, operating income, diluted earnings per share and net cash provided by operating activities as calculated in accordance with GAAP.

Current wording

There are material limitations to using these non-GAAP financial measures. Adjusted EBITDA does not take into account certain significant items, including depreciation and amortization, interest expense, other income, income tax expense, stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses which directly affect the Company’s net income, as applicable. Adjusted Net Income and Adjusted Diluted Earnings Per Share do not take into account certain significant items, including other income, stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses which directly affect the Company’s net income and diluted earnings per share, as applicable. Free Cash Flow adjusts for cash items that are ultimately within management’s discretion to direct, and therefore, may imply that there is less or more cash that is available than the most comparable GAAP measure. Free Cash Flow is not intended to represent residual cash flow for discretionary expenditures since debt repayment requirements and other non-discretionary expenditures are not deducted. These limitations are best addressed by considering the economic effects of the excluded items independently, and by considering these non-GAAP financial measures in conjunction with net income, operating income, diluted earnings per share and net cash provided by operating activities as calculated in accordance with GAAP.

Previous wording

The Company defines Adjusted EBITDA as net income adjusted for depreciation and amortization expense, interest expense, other expense (income), income tax expense, as well as stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses, as applicable. Adjusted EBITDA margin is calculated as Adjusted EBITDA as a percentage of revenue.

Current wording

The Company defines Adjusted EBITDA as net income adjusted for depreciation and amortization expense, interest expense, other income, income tax expense, as well as stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses, as applicable. Adjusted EBITDA margin is calculated as Adjusted EBITDA as a percentage of revenue.

Previous wording

The Company defines Adjusted Net Income as net income adjusted for other expense (income), stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses, as applicable, each net of tax. Adjusted Net Income margin is calculated as Adjusted Net Income as a percentage of revenue.

Current wording

The Company defines Adjusted Net Income as net income adjusted for other income, stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses, as applicable, each net of tax. Adjusted Net Income margin is calculated as Adjusted Net Income as a percentage of revenue.

Previous wording

The Company defines Adjusted Diluted Earnings Per Share as diluted earnings per share attributable to stockholder of UL Solutions adjusted for other expense (income), stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses, as applicable.

Current wording

The Company defines Adjusted Diluted Earnings Per Share as diluted earnings per share attributable to stockholders of UL Solutions adjusted for other income, stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses, as applicable.

Previous wording

The Company’s cash flows from operations, borrowing availability and overall liquidity are subject to certain risks and uncertainties, including those referenced in the section titled “Risk Factors” in Part II Item 1A of this Quarterly Report. In addition, the Company cannot predict whether or when it may enter into acquisitions, joint ventures or dispositions, make contributions to the Company’s pension and postretirement plans, pay dividends, or what impact any such transactions could have on the Company’s financial condition, results of operations or cash flows.

Current wording

The Company’s cash flows from operations, borrowing availability and overall liquidity are subject to certain risks and uncertainties, including those referenced in the section titled “Risk Factors” in Part II Item 1A of this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024. In addition, the Company cannot predict whether or when it may enter into acquisitions, joint ventures or dispositions, make contributions to the Company’s pension and postretirement plans, pay dividends, or what impact any such transactions could have on the Company’s financial condition, results of operations or cash flows.

Previous wording

As of March 31, 2024, the Company had $344 million in cash and cash equivalents and $659 million of unused availability under the Credit Facility and access to an accordion feature permitting an increase in the Credit Facility by an aggregate amount of up to $625 million (of which up to $400 million may consist of term loans), subject to the consent of any lenders providing such increase, the absence of any default or event of default and entry into customary documentation with respect to such increase.

Current wording

As of June 30, 2024, the Company had $295 million in cash and cash equivalents and $729 million of unused availability under the Credit Facility and access to an accordion feature permitting an increase in the Credit Facility by an aggregate amount of up to $625 million (of which up to $400 million may consist of term loans), subject to the consent of any lenders providing such increase, the absence of any default or event of default and entry into customary documentation with respect to such increase.

Previous wording

Net cash provided by operating activities was $141 million for the three months ended March 31, 2024, a decrease of $20 million compared to net cash provided by operating activities of $161 million for the same period in 2023. The decrease was primarily driven by higher receivables and the timing of payments related to Performance Cash incentives, which were paid in the first quarter of 2024 compared to the second quarter of 2023, partially offset by increased contract liabilities due to project invoicing and higher prepayments from customers.

Current wording

Net cash provided by operating activities was $244 million for the six months ended June 30, 2024, an increase of $24 million compared to net cash provided by operating activities of $220 million for the same period in 2023. The increase was primarily driven by lower payments on the Company’s CSARs and higher contract liabilities related to project invoicing and higher prepayments from customers during the six months ended June 30, 2024 compared to the same period in 2023, partially offset by higher receivables.

Previous wording

Net cash used in investing activities was $57 million for the three months ended March 31, 2024, a decrease of $18 million compared to net cash used in investing activities of $75 million for the same period in 2023. The decrease in cash used in investing activities was primarily driven by a $15 million decrease in net purchases of investments and a $6 million decrease in capital expenditures.

Current wording

Net cash used in investing activities was $93 million for the six months ended June 30, 2024, an increase of $8 million compared to net cash used in investing activities of $85 million for the same period in 2023. The increase in cash used in investing activities was primarily driven by a $21 million decrease in net sales of investments and a $9 million increase in acquisitions during the current period, partially offset by a $26 million increase in proceeds from divestitures during the current period.

Previous wording

Net cash used in financing activities was $49 million for the three months ended March 31, 2024, a decrease of $59 million compared to net cash provided by financing activities of $10 million for the same period in 2023. The change was primarily driven by $45 million in repayments of long-term debt during the current period and a $10 million decrease in proceeds from long-term debt compared to the same period in 2023.

Current wording

Net cash used in financing activities was $159 million for the six months ended June 30, 2024, an increase of $120 million compared to net cash used in financing activities of $39 million for the same period in 2023. The change was primarily driven by a $95 million increase in net repayments of long-term debt during the current period and the timing of a $14 million dividend paid to the non-controlling interest, which was paid in the second quarter of 2024 compared to the third quarter of 2023.

Previous wording

The Company makes strategic investments in capital expenditures to enable growth by expanding testing capacity to meet increased demand, to enable new capabilities and product offerings and to increase the efficiency of the Company’s processes. Capital expenditures include the building and refurbishment of laboratories and office space, the replacement and upgrade of existing laboratory equipment at the end of its useful life, and investments in technology for internal-use and sale to customers through product development of new software and enhancements of existing software. Cash paid for capital expenditures decreased $6 million, to $57 million for the three months ended March 31, 2024, compared to $63 million for the same period in 2023.

Current wording

The Company makes strategic investments in capital expenditures to enable growth by expanding testing capacity to meet increased demand, to enable new capabilities and product offerings and to increase the efficiency of the Company’s processes. Capital expenditures include the building and refurbishment of laboratories and office space, the replacement and upgrade of existing laboratory equipment at the end of its useful life, and investments in technology for internal-use and sale to customers through product development of new software and enhancements of existing software. Cash paid for capital expenditures remained flat at $113 million for the six months ended June 30, 2024 and 2023.

Previous wording

The Credit Facility provides for senior unsecured credit facilities in an aggregate principal amount of $1,250 million, consisting of term loans and revolving loan commitments. As of March 31, 2024 the Company had $585 million outstanding under the Credit Facility. The maturity date of the Credit Facility is January 2027. Interest rates under the Credit Facility are variable based on the Bloomberg Short-term Bank Yield Index (“BSBY”) rate plus a margin and were 6.35% for the Company’s term loans and the weighted average interest rate on the revolving credit facility was 6.36% as of March 31, 2024. The Credit Facility also includes a financial covenant tested quarterly which requires the Company to maintain a consolidated net leverage ratio of not greater than 3.5 to 1.0. As of March 31, 2024, the Company was in compliance with all covenants under the Credit Facility.

Current wording

In January 2022, the Company entered into a credit agreement with Bank of America, N.A. and certain other lenders, which provides for senior unsecured credit facilities in an aggregate principal amount of $1,250 million (collectively, the “Credit Facility”), consisting of term loans and revolving loan commitments. As of June 30, 2024, the Company was in compliance with all covenants under the Credit Facility.

Previous wording

In November 2023, the Bloomberg Index Services Limited announced that the permanent cessation of BSBY and all its tenors will be effective on November 15, 2024. The Credit Facility includes a provision to replace BSBY with the Secured Overnight Financing Rate (“SOFR”) plus certain specified credit spread adjustments in the event that BSBY ceases to be available as a reference rate. Accordingly, the Company expects that the Credit Facility will transition to SOFR-based pricing on or prior to November 15, 2024.

Current wording

Since entering the agreement in January 2022, borrowings under the Credit Facility bore interest at a rate per annum equal to, at Company’s option, (a) in the case of U.S. dollar loans, the Bloomberg Short-term Bank Yield (“BSBY”) rate plus a margin, and for all other currencies, a specified benchmark rate for the applicable currency plus, in certain instances, a specified spread adjustment plus a margin (loans with a rate based on this clause (a), “benchmark rate loans”) or (b) for U.S. dollar loans only, the base rate plus a margin (loans with a rate based on this clause (b), “base rate loans”). In addition, the Credit Facility included a provision that replaces BSBY with the Secured Overnight Financing Rate (“SOFR”) plus certain specified credit spread adjustments in the event that BSBY ceases to be available as a reference rate. In November 2023, the Bloomberg Index Services Limited announced that the permanent cessation of BSBY and all of its tenors will be effective on November 15, 2024. Accordingly, on June 28, 2024, the Company entered into an amendment (the “First Credit Facility Amendment”) to the Credit Facility with Bank of America, N.A. and certain other lenders. The First Credit Facility Amendment provided, among other things, for (i) the replacement of BSBY with Term SOFR plus a SOFR adjustment of 0.10% as a benchmark rate for interest periods commencing subsequent to June 28, 2024; (ii) UL Solutions Inc., which was previously the guarantor of the facility, became the named borrower, and UL LLC, which was previously the named borrower, became the guarantor. The foregoing summary of certain provisions of the First Credit Facility Amendment is qualified in its entirety by reference to the amendment filed as exhibit 10.1 hereto.

Previous wording

In October 2023, the Company issued $300 million in aggregate principal amount of senior notes due 2028. The notes are senior unsecured obligations of UL Solutions Inc. and are unconditionally guaranteed by UL LLC, a wholly owned subsidiary of the Company. Interest on the notes accrues at 6.500% per annum. The Company pays interest on the notes semi-annually in arrears on April 20 and October 20 of each year, beginning on April 20, 2024.

Current wording

In October 2023, the Company issued $300 million in aggregate principal amount of senior notes due 2028. The notes are senior unsecured obligations of UL Solutions Inc. and are unconditionally guaranteed by UL LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (“UL LLC”).

Previous wording

In the first quarter of 2024 and 2023, the Company paid a dividend of $25 million and $20 million to UL Standards & Engagement, respectively.

Current wording

In the three and six months ended June 30, 2024, the Company paid dividends to stockholders of $25 million and $50 million, respectively. In the three and six months ended June 30, 2023, the Company paid a dividend of $20 million and $40 million to its then sole stockholder, UL Standards & Engagement, respectively.

Previous wording

•the other factors discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in the “Risk Factors” in Part II Item 1A of this Quarterly Report.

Current wording

•the other factors discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in the “Risk Factors” in Part II Item 1A of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024.

Previous wording

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in the section titled “Risk Factors” in Part II Item 1A of this Quarterly Report and the Company’s subsequent filings with the Securities and Exchange Commission (the “SEC”). If one or more events related to these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, actual results may differ materially from what the Company anticipates. Many of the important factors that will determine these results are beyond the Company’s ability to control or predict. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as otherwise required by law, the Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. If the Company updates one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect to those or other forward-looking statements. New factors emerge from time to time, and it is not possible for the Company to predict which will arise. In addition, the Company cannot assess the impact of each factor on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements attributable to the Company, or others acting on the Company’s behalf, are expressly qualified in their entirety by the cautionary statements above.

Current wording

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in the section titled “Risk Factors” in Part II Item 1A of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 and the Company’s subsequent filings with the SEC. If one or more events related to these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, actual results may differ materially from what the Company anticipates. Many of the important factors that will determine these results are beyond the Company’s ability to control or predict. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as otherwise required by law, the Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. If the Company updates one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect to those or other forward-looking statements. New factors emerge from time to time, and it is not possible for the Company to predict which will arise. In addition, the Company cannot assess the impact of each factor on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements attributable to the Company, or others acting on the Company’s behalf, are expressly qualified in their entirety by the cautionary statements above.