Business Acquisitions (Tables)

3 Months Ended

Mar. 31, 2018

Summary of preliminary estimate of the assets acquired and liabilities assumed

The following is a preliminary estimate of the assets acquired and the liabilities assumed by the Company in the merger, reconciled to the estimated acquisition consideration (in millions):



Accounts receivable	$	116.1
Inventories	76.9
Other current assets	11.7
Property, plant and equipment	31.5
Intangible assets	444.0
Accounts payable	(50.5		)
Other accrued liabilities	(67.5		)
Deferred tax liabilities	(72.3		)
Other non-current liabilities	(37.0		)
Noncontrolling interest	(2.5		)
Goodwill	669.0
Total Estimate of Consideration Transferred, Net of Cash Acquired	$	1,119.4

Schedule of preliminary purchase price allocation to identified intangible assets acquired

The preliminary purchase price allocation to identifiable intangible assets acquired is as follows:



	Estimated Fair Value		Weighted Average Estimated Useful Life
Patents, tradenames and trademarks	$	55.0	20.0
Customer relationships	204.0		17.0
Developed technology	185.0		13.0
Total	$	444.0

Pro-forma nonrecurring adjustments

The following unaudited supplemental pro-forma information presents consolidated results as if the acquisition had been completed on January 1, 2017. Following that approach, for the purpose of the pro-forma results presented in the tables below, certain costs incurred by the company during the three months ended March 31, 2018 and December 31, 2017 have been reclassified out of their respective periods and into the pro-forma period ended March 31, 2017. Those reclassifications primarily include the following, which represent the amount of increase or (decrease) to reported results to arrive at the pro forma results. Per share amounts in 2018 reflect the reduction in the U.S. Federal corporate income tax rate from 35% to 21%:



(pre-tax in millions, except per share amounts)	Three Months Ended March 31,						Per Diluted Share
	2018			2017			2018			2017
Aclara transaction costs incurred in the first quarter of 2018⁽¹⁾	$	10.3		$	(10.3	)	$	0.15		$	(0.14	)
Aclara transaction costs incurred in the fourth quarter of 2017⁽¹⁾	—			(7.1		)	—			(0.11		)
Intangible amortization and inventory step up⁽²⁾	1.6			(16.9		)	0.02			(0.19		)
Interest expense⁽³⁾	$	(2.1	)	$	(7.2	)	$	(0.03	)	$	(0.08	)

⁽¹⁾ Aclara transaction costs incurred in the first quarter of 2018 are presented in the pro-forma March 31, 2017 period. The pro-forma March 31, 2017 period also includes transaction costs incurred by the Company during the fourth quarter of 2017.

⁽²⁾ Aclara intangible amortization and inventory step up amortization incurred in the first quarter of 2018 has been reclassified into the pro-forma March 31, 2017 period and increased to include three months of amortization expense. The pro-forma March 31, 2018 period includes three months of intangible amortization that would be incurred assuming the transaction had been completed on January 1, 2017.

⁽³⁾ Interest expense incurred in the first quarter of 2018, reflecting two months recognized in the quarter from the date of the acquisition, has been reclassified into the pro-forma March 31, 2017 period and increased to include three months of interest expense. The pro-forma March 31, 2018 period includes three months of interest expense that would be incurred assuming the transaction

Summary of pro forma information



(pre-tax in millions, except per share amounts)	Three Months Ended March 31,						Per Diluted Share
	2018			2017			2018			2017
Aclara transaction costs incurred in the first quarter of 2018⁽¹⁾	$	10.3		$	(10.3	)	$	0.15		$	(0.14	)
Aclara transaction costs incurred in the fourth quarter of 2017⁽¹⁾	—			(7.1		)	—			(0.11		)
Intangible amortization and inventory step up⁽²⁾	1.6			(16.9		)	0.02			(0.19		)
Interest expense⁽³⁾	$	(2.1	)	$	(7.2	)	$	(0.03	)	$	(0.08	)

The pro-forma results were calculated by combining the results of the Company with the stand-alone results of Aclara for the pre-acquisition periods, as described above:



	Three Months Ended March 31,
	2018		2017
Net sales	$	1,037.9	$	959.2
Net income attributable to Hubbell	$	67.7	$	39.5
Earnings Per Share:
Basic	$	1.23	$	0.71
Diluted	$	1.22	$	0.71