UL Solutions Inc.

1. Significant Accounting Policies

Description of Business

UL Solutions Inc. is a global safety science leader that provides independent third-party testing, inspection and certification services and related software and advisory offerings. 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.

References to “UL Solutions” and the “Company” refer to UL Solutions Inc. and its consolidated subsidiaries as a whole, unless the context otherwise requires.

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, 2024 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.

Recently Issued Accounting Standards – Not Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which provides qualitative and quantitative updates to the rate reconciliation and income taxes paid disclosures, among others, in order to enhance the transparency of income tax disclosures, including consistent categories and greater disaggregation of information in the rate reconciliation and disaggregation by jurisdiction of income taxes paid. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments will be applied prospectively. The ASU will result in additional income tax disclosures within the Company’s financial statements but is not expected to impact the Company’s financial condition, results of operations or cash flows.

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 is currently evaluating the impact this ASU may have on its consolidated financial statements.

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.

2. Earnings Per Share

Basic and diluted earnings per share were calculated as follows:

3. Revenue

The table below summarizes the major service categories from which the Company derives its revenues:

Contract Balances

The revenue recognized during the three and nine months ended September 30, 2025, which was included in contract liabilities at December 31, 2024, amounted to $25 million and $112 million, respectively. The revenue recognized during the three and nine months ended September 30, 2024, which was included in contract liabilities at December 31, 2023, amounted to $27 million and $106 million, respectively.

Remaining Performance Obligations

At September 30, 2025, the Company estimates that $189 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 63% 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 maintenance agreements, which are typically recognized as the performance obligation is satisfied.

4. Acquisitions and Divestitures

Acquisitions

In July 2024, the Company acquired 100% of the outstanding stock of TesTneT Engineering GmbH (together with its subsidiaries, “TesTneT”) for approximately $19 million in cash consideration (as adjusted for customary post-closing adjustments). TesTneT is a Germany-based company that provides testing services for various hydrogen storage systems, refueling stations and their components. Goodwill of $14 million represents anticipated future revenue growth and margin expansion opportunities from new customers and has been included within the Company’s Industrial segment. Goodwill related to this acquisition is not deductible for income tax purposes.

In May 2024, the Company acquired 100% of the outstanding stock of BatterieIngenieure GmbH (together with its subsidiaries, “BatterieIngenieure”) for approximately $12 million in cash consideration (as adjusted for customary post-closing adjustments). BatterieIngenieure is a Germany-based battery testing company that was, at the time of acquisition, in the process of building a laboratory in Aachen, Germany to replace the leased facility it was using and to add testing and simulation capacity. The purchase price is primarily related to property, plant, and equipment of $9 million and goodwill of $8 million. Goodwill represents anticipated future revenue growth and margin expansion opportunities from new customers and has been included within the Company’s Industrial segment. Goodwill related to this acquisition is not deductible for income tax purposes.

Aggregate acquisition-related costs associated with business combinations are not material for the three and nine months ended September 30, 2025 and 2024, and are included in selling, general and administrative expenses in the Company’s Condensed Consolidated Statements of Operations as incurred.

Divestiture

In May 2024, the Company completed the sale of its payments testing business in the Industrial segment to an affiliate of Gallant Capital Partners, a California-based private equity firm, for a base price of $29 million in cash (as adjusted for customary post-closing adjustments) with the potential for additional cash consideration if certain earn-out provisions are met. The divestiture resulted in a pre-tax gain on sale of $24 million, which was recorded within other (expense) income, net in the Company’s Condensed Consolidated Statements of Operations.

5. Other (Expense) Income, net

The components of other (expense) income, net are as follows:

(a)See Note 4.

6. Fair Value of Financial Instruments

The carrying amount and fair value of the Company’s debt was as follows:

The fair value of the Company’s term loans and revolving credit facility reflect current market conditions and are 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 September 30, 2025 and $36 million as of December 31, 2024.

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 $196 million and $193 million and liabilities of $88 million and $87 million, inclusive of intercompany eliminations, were included in the Company’s Condensed Consolidated Balance Sheets at September 30, 2025 and December 31, 2024, respectively.

8. Goodwill

Changes in the carrying amount of goodwill for the nine months ended September 30, 2025 were as follows:

(a)Net of accumulated impairment losses of $137 million as of September 30, 2025 and December 31, 2024.

9. Intangible Assets

The following table summarizes intangible assets:

Intangible asset amortization expenses for the three and nine months ended September 30, 2025, reported within selling, general and administrative expenses within the Condensed Consolidated Statements of Operations, were $3 million and $9 million, respectively. Intangible asset amortization expenses for the three and nine months ended September 30, 2024, reported within selling, general and administrative expenses within the Condensed Consolidated Statements of Operations, were $4 million and $10 million, respectively.

10. Pension

The components of net periodic benefit cost for the Company’s U.S. defined benefit pension plan were as follows:

During the third quarter of 2025, the Company adopted an amendment related to its U.S. defined benefit pension plan to freeze all future benefit accruals effective December 31, 2025. The freeze resulted in a curtailment, which reduced the projected benefit obligation by $12 million, with a corresponding decrease in accumulated other comprehensive loss on the Company’s Condensed Consolidated Balance Sheet. There was no impact on the Company’s Condensed Consolidated Statement of Operations as a result of the curtailment.

The Company anticipates making approximately $43 million of contributions to its U.S. pension plan in 2025, inclusive of a discretionary contribution of $23 million made in the third quarter of 2025.

For the three and nine months ended September 30, 2025, expenses related to various defined contribution plans were $13 million and $42 million, respectively. For the three and nine months ended September 30, 2024, expenses related to various defined contribution plans were $11 million and $36 million, respectively.

11. Income Taxes

The effective tax rate for the three and nine months ended September 30, 2025 was 27.4% and 24.9%, 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 (“GILTI”) net of related foreign tax credits, and limitations on current year compensation deductions of certain executive officers under U.S. Internal Revenue Code Section 162(m).

Several countries in which the Company operates have enacted into their local legislation effective either January 1, 2024, or January 1, 2025, aspects of the Organisation for Economic Co-operation and Development’s Pillar Two rules, which impose a 15% corporate minimum tax. The effective tax rate for the three and nine months ended September 30, 2025 of 27.4% and 24.9%, respectively, was higher than the effective tax rate for the three and nine months ended September 30, 2024 of 19.0% and 19.5%, respectively, primarily due to the impact of the Qualified Domestic Minimum Top-up Tax, a subset of the Pillar Two rules that became effective on January 1, 2025.

The effective tax rate for the three and nine months ended September 30, 2024 of 19.0% and 19.5%, respectively, differed from the U.S. federal statutory tax rate of 21%, primarily due to earnings subject to lower tax rates in foreign jurisdictions and a discrete tax benefit for the release of valuation allowances, partially offset by Section 162(m) limitations on current year compensation deductions of certain executive officers and U.S. tax on GILTI net of related foreign tax credits. The effective tax rate for the nine months ended September 30, 2024 also included a discrete tax expense for the reduction to previously established deferred tax assets of approximately $5 million due to the Company becoming subject to Section 162(m), which limits U.S. public company compensation expenses of certain executive officers that were previously deductible as a private company.

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the U.S. The OBBBA includes several corporate tax provisions that apply to the Company, such as the permanent extension of certain expiring provisions of the U.S. Tax Cuts and Jobs Act and modifications to the international tax framework and business interest expense limitations. The Company has assessed the impact of the OBBBA and has determined that there is no material impact to its consolidated financial statements.

12. Long-Term Debt

The Company’s outstanding debt consisted of the following:

2022 Credit Facility

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 $1.25 billion (collectively, and as amended, the “2022 Credit Facility”), consisting of term loans and revolving loan commitments. The Company’s wholly owned subsidiary, UL LLC, a Delaware limited liability company (“UL LLC”), provides a guaranty of its obligations thereunder. As of September 30, 2025, the Company was in compliance with all covenants under the 2022 Credit Facility. The interest rate on the term loans was 5.26% as of September 30, 2025 and 5.58% as of December 31, 2024. The interest rate on the revolving credit facility was 5.34% as of September 30, 2025. As described below, in connection with the entry into the 2025 Credit Facility, the Company repaid in full all indebtedness and other obligations outstanding under, and terminated, the 2022 Credit Facility.

Senior Notes

In October 2023, the Company issued $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.

In connection with the issuance of the notes, the Company entered into a registration rights agreement on the same date. In September 2025, pursuant to the registration rights agreement, the Company completed an exchange offer, pursuant to which the Company exchanged all of the outstanding notes for new 6.500% senior notes due 2028 registered under the Securities Act of 1933, as amended (the “exchange notes”). The terms of the exchange notes are substantially the same as the notes. Subsequent to the balance sheet date, the Company entered into a Credit Agreement on October 28, 2025, and repaid in full all indebtedness and other obligations outstanding under, and terminated, the 2022 Credit Facility. In connection with such termination, the guaranty by UL LLC of the Company’s obligations under the 2022 Credit Facility and the exchange notes was released. Refer to Note 18.

13. Accumulated Other Comprehensive Loss

The following tables summarize the changes in accumulated other comprehensive loss.

14. Stock-based Compensation

Stock-based compensation expense was as follows:

15. Commitments and Contingencies

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.

16. Related Party Transactions

In the three and nine months ended September 30, 2025, the Company incurred expenses of $5 million and $16 million, respectively, to access the library of standards owned and maintained by UL Standards & Engagement. In the three and nine months ended September 30, 2024, the Company incurred expenses of $6 million and $16 million, respectively, to access the library of standards owned and maintained by UL Standards & Engagement.

In the three and nine months ended September 30, 2025, the Company declared and paid regular cash dividends to stockholders, resulting in payments of $18 million and $54 million to UL Standards & Engagement, respectively. In the three and nine months ended September 30, 2024, the Company declared and paid regular cash dividends to stockholders, resulting in payments of $20 million and $65 million to UL Standards & Engagement, respectively.

17. Segment Information

The following table provides revenue, significant segment expenses and operating income, by segment for the three months ended September 30, 2025 and 2024:

The following table provides revenue, significant segment expenses and operating income, by segment for the nine months ended September 30, 2025 and 2024:

Capital expenditures of the Company’s segments were as follows:

Assets by segment are not disclosed as the Company does not allocate assets to segments for internal reporting presentations provided to the Company’s chief operating decision maker.

18. Subsequent Events

Restructuring Initiative

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”). The Company expects to incur pre-tax expenses associated with the Restructuring Plan of approximately $42-$47 million in the aggregate, consisting of $37-$42 million in cash charges relating to employee separation expenses and approximately $5 million in other cash charges, primarily relating to contract cancellations. The majority of costs associated with the Restructuring Plan are expected to be recorded in the fourth quarter of 2025 in the Consumer and Industrial segments. The Company anticipates the Restructuring Plan will be substantially completed by the end of the first quarter of 2027.

On October 28, 2025, UL Solutions Inc. entered into a Credit Agreement (the “Credit Agreement”), by and among the Company 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 provides for a $1.0 billion senior unsecured five-year multi-currency revolving facility (the “2025 Credit Facility”), with a $25 million sub-limit for the issuance of letters of credit. The Credit Agreement includes an accordion feature permitting an increase in the 2025 Credit Facility by an aggregate amount of up to $500 million, 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. The Borrowers’ obligations (other than the Company’s) under the Credit Agreement are guaranteed by the Company.

On October 28, 2025, the Company borrowed $291 million under the 2025 Credit Facility. The initial borrowing was used to refinance the outstanding amounts under the 2022 Credit Facility. Additional amounts, if any, borrowed under the 2025 Credit Facility are anticipated to be used for general corporate purposes.

Borrowings under the 2025 Credit Facility bear interest at a rate per annum equal to, at the applicable Borrower’s option, (a) a specified benchmark rate for the applicable currency (which, in the case of U.S. Dollar loans, shall be the Term SOFR or Daily SOFR (in each case as defined in the Credit Agreement), at the applicable Borrower’s option), plus a margin that ranges from 0.875% to 1.375% per annum or (b) for U.S. Dollar loans made to the Company only, a base rate (which is equal to the highest of (i) the Bank of America prime rate, (ii) the U.S. federal funds rate plus 0.5% per annum, or (iii) the Term SOFR or Daily SOFR rate plus 1.0%) plus a margin that ranges from 0.0% to 0.375% per annum. The 2025 Credit Facility matures on October 28, 2030 and may be prepaid without fees or penalties, subject to reimbursement of the lenders’ customary breakage and redeployment costs in applicable cases.

The 2025 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, calculated on a consolidated basis for each consecutive four fiscal quarter period, with an increase in the maintenance level to 4.0 to 1.0 for each of the four test periods immediately following any permitted acquisition that involves the payment of aggregate consideration in excess of $100 million, subject to a two fiscal quarter rest period between increases for separate acquisitions. The calculation of the consolidated net leverage ratio permits the netting of up to $250 million of unrestricted cash from funded debt.

The 2025 Credit Facility includes customary representations and warranties, covenants and events of default, subject to certain customary exceptions, materiality thresholds and grace periods. The covenants include, among other things, financial reporting, maintenance of line of business, notices of default and other material changes, as well as limitations on investments and acquisitions, mergers and transfers of all or substantially all assets, dividends and distributions, burdensome contracts with affiliates, liens and indebtedness. Future borrowings under the 2025 Credit Facility are subject to the satisfaction of customary conditions, including the absence of any default or event of default and the accuracy of representations and warranties.

On October 28, 2025, in connection with the entry into the Credit Agreement described above, the Company repaid in full all indebtedness and other obligations outstanding under, and terminated, the 2022 Credit Facility.