Financial Analysis

(5) Acquisitions Saudi Cast On November 29, 2025, the Company completed the acquisition of The Industrial Company for Castings and Sanitary Fittings (Saudi Cast) in a share purchase transaction funded with cash on hand. Saudi Cast is a leading manufacturer of cast iron and stainless steel drainage solutions, located in Riyadh, Saudi Arabia, offering high quality, specified drainage solutions serving the non-residential and industrial markets. Saudi Casts operating results since the date of acquisition are included in the APMEA segment. The Company accounted for the transaction as a business combination and it was deemed not to be material to the Companys consolidated financial statements. Superior On November 14, 2025, the Company completed the acquisition of Superior Boiler (Superior) in an equity purchase transaction funded with cash on hand. The aggregate net purchase price was $88.7 million, net of cash acquired of $4.5 million, and is subject to a final post-closing working capital adjustment. Superior is headquartered in Hutchinson, Kansas, and is a designer and manufacturer of a wide range of customized steam and hot water boiler systems for commercial, institutional and industrial applications. Superiors operating results since the date of acquisition are included in the Americas segment. The Company has determined that both the pro-forma and actual results, including Superiors net sales, net income, and earnings per share, are not material to the Companys financial r …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

(17) Contingencies and Environmental Remediation Accrual and Disclosure Policy The Company is a defendant in numerous legal matters arising from its ordinary course of operations, including those involving product liability, environmental matters, and commercial disputes. The Company reviews its lawsuits and other legal proceedings on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions. The Company establishes accruals for matters when the Company assesses that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company does not establish accruals for such matters when the Company does not believe both that it is probable that a loss has been incurred and that the amount of the loss can be reasonably estimated. The Companys assessment of whether a loss is probable is based on its assessment of the ultimate outcome of the matter following all appeals. Under the FASB-issued ASC 450, Contingencies , an event is reasonably possible if the chance of the future event or events occurring is more than remote but less than likely and an event is remote if the chance of the future event or events occurring is slight. Thus, references to the upper end of the range of reasonably possible loss for cases in which the Company is able to estimate a range of reasonably possible loss mean the upper end of the range of loss for cases for which the Company believes the risk of loss is more …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

(13) Financing Arrangements The Companys debt consists of the following: December 31, 2025 2024 (in millions) Line of Credit due July 2029 $ 200.0 200.0 Less debt issuance costs (deduction from debt liability) (2.3) (3.0) Total long-term debt $ 197.7 $ 197.0 Principal payments during each of the next five years are due as follows (in millions): 2026: $0; 2027: $0; 2028: $0; 2029: $200.0; 2030: $0. On July 12, 2024, the Company and certain of its subsidiaries entered into the Third Amended and Restated Credit Agreement by and among the Company, certain subsidiaries of the Company, the lenders and other parties from time to time parties thereto and JPMorgan Chase Bank, N.A., as administrative agent (the Credit Agreement). The Credit Agreement establishes a senior unsecured revolving credit facility of $800 million (the Revolving Credit Facility). The maturity date of the Revolving Credit Facility is July 12, 2029, subject to extension under certain circumstances and subject to the terms of the Credit Agreement. The Credit Agreement provides for a maximum consolidated leverage ratio of 3.50 to 1.00 (or 4.00 to 1.00 during temporary step-ups following certain acquisitions) and a minimum consolidated interest ratio of 3.50 to 1.00. The Revolving Credit Facility also includes sub-limits of $100 million for letters of credit and $15 million for swing line loans. As of December 31, 2025, the Company had drawn down $200.0 million on this line of credit and had $12.2 million in letters …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

For the Year Ended December 31, 2025 (in millions) Distribution Channel Americas Europe APMEA Consolidated Wholesale $ 1,188.9 $ 314.3 $ 101.5 $ 1,604.7 OEM 105.3 133.9 8.7 247.9 Specialty 472.5 30.2 502.7 DIY 80.7 2.5 83.2 Total $ 1,847.4 $ 450.7 $ 140.4 $ 2,438.5 For the Year Ended December 31, 2025 (in millions) Principal Product Category Americas Europe APMEA Consolidated Residential & Commercial Flow Control $ 1,192.5 $ 172.1 $ 123.3 $ 1,487.9 HVAC and Gas Products 379.7 181.2 11.2 572.1 Drainage and Water Re-use Products 163.6 93.4 5.1 262.1 Water Quality Products 111.6 4.0 0.8 116.4 Total $ 1,847.4 $ 450.7 $ 140.4 $ 2,438.5 For the Year Ended December 31, 2024 (in millions) Distribution Channel Americas Europe APMEA Consolidated Wholesale $ 1,086.3 $ 313.0 $ 95.0 $ 1,494.3 OEM 99.7 138.1 6.4 244.2 Specialty 396.6 32.6 429.2 DIY 82.3 2.2 84.5 Total $ 1,664.9 $ 453.3 $ 134.0 $ 2,252.2 For the Year Ended December 31, 2024 (in millions) Principal Product Category Americas Europe APMEA Consolidated Residential & Commercial Flow Control $ 1,070.9 $ 167.7 $ 118.6 $ 1,357.2 HVAC and Gas Products 346.2 186.3 11.7 544.2 Drainage and Water Re-use Products 143.5 95.2 2.6 241.3 Water Quality Products 104.3 4.1 1.1 109.5 Total $ 1,664.9 $ 453.3 $ 134.0 $ 2,252.2 …

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(15) Stock-Based Compensation As of December 31, 2025, the Company maintains one stock incentive plan, the Third Amended and Restated 2004 Stock Incentive Plan (the 2004 Stock Incentive Plan). At December 31, 2025, 764,240 shares of Class A common stock were available for future grants of new equity awards under this plan. The Company currently grants deferred stock awards to key employees and stock awards to non-employee members of the Companys Board of Directors under the 2004 Stock Incentive Plan. The Company also previously granted shares of restricted stock to key employees. Stock awards to non-employee members of the Companys Board of Directors vest immediately. Employees restricted stock awards and deferred stock awards typically vest over a three-year period at the rate of one-third per year. The shares that are subject to restricted stock awards are outstanding upon grant of the restricted stock awards whereas the shares that are subject to deferred stock awards are outstanding only upon vesting and settlement of the deferred stock award. The restricted stock awards and deferred stock awards are amortized to expense on a straight-line basis over the vesting period. The Company also grants performance stock units to key employees under the 2004 Stock Incentive Plan. Performance stock units cliff vest at the end of a performance period set by the Compensation Committee of the Board of Directors at the time of grant, which is currently three years. Upon vesting, the num …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

(6) Goodwill & Intangibles Goodwill The Company performs its annual goodwill impairment testing for each reporting unit as of fiscal October month-end or more frequently if there is a triggering event or circumstance that indicates an impairment loss may have occurred. As of the October 26, 2025 testing date, the Company had $780.0 million of goodwill on its balance sheet. In 2025, the Company had eight reporting units. The Company performed a qualitative analysis for seven reporting units, which include Blucher, Front-of-the-Wall, US Drains, Water Quality, Fluid Solutions-Americas, Heating and Hot Water Solutions (HHWS) and APMEA. The Company performed a quantitative analysis for the Fluid Solutions-Europe reporting unit in connection with the annual strategic plan and due to underperformance to prior year and budget, primarily cause by the challenging European economic environment in 2025. The Company estimated the fair value of the reporting unit using a weighted calculation of the income approach and the market approach. The income approach calculated the present value of expected future cash flows and included the impact of recent underperformance of the reporting unit due to the continued challenging macroeconomic environment in Europe and lowered expectations for the reporting unit going forward included in the strategic plan. The guideline public company method (market approach) calculated estimated fair values based on valuation multiples derived from stock price …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

(11) Income Taxes The significant components of the Companys deferred income tax liabilities and assets are as follows: December 31, 2025 2024 (in millions) Deferred income tax liabilities: Excess tax over book depreciation $ 29.1 $ 26.5 Intangibles 57.0 43.7 Goodwill 4.4 2.2 Foreign earnings 1.0 1.0 Operating lease ROU assets 18.3 8.6 Other 4.1 5.4 Total deferred tax liabilities 113.9 87.4 Deferred income tax assets: Accrued expenses 6.9 5.7 Accrued bonus 9.8 6.8 Product liability 5.3 5.0 Operating lease liabilities 19.1 9.3 Stock based compensation 6.2 6.2 Foreign tax credits 4.9 13.5 Net operating loss carry forward 11.9 5.2 Capital loss carry forward 1.6 Inventory reserves 17.2 14.9 Intangibles 8.9 10.5 Capitalized R&D 3.5 41.7 Other 12.1 12.1 Total deferred income tax assets 105.8 132.5 Less: valuation allowance (10.5) (19.6) Net deferred income tax assets 95.3 112.9 Net deferred income tax (liabilities) assets $ (18.6) $ 25.5 The provision for income taxes is based on the following pre-tax income: Years Ended December 31, 2025 2024 2023 (in millions) Domestic $ 344.8 $ 270.3 $ 228.2 Foreign 101.0 115.7 121.3 $ 445.8 $ 386.0 $ 349.5 The provision for income taxes consists of the following: Years Ended December 31, 2025 2024 2023 (in millions) Current tax expense: U.S. federal $ 24.5 $ 62.5 $ 54.6 U.S. state and local 16.6 15.3 15.8 Non-U.S. 25.3 31.9 35.6 Total current 66.4 109.7 106.0 Deferred tax expense (benefit): U.S. federal 36.7 (11.8) (14.7) U.S. state and loc …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

"Recently Adopted Accounting Standards In December 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09 ""Income Taxes (Topic 740): Improvements to Income Tax Disclosures"" to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for annual periods beginning January 1, 2025, with early adoption permitted. The Company adopted this standard, on a prospective basis, for its annual reporting beginning January 1, 2025 and has included the required additional disclosures in the Income Tax footnote of the consolidated financial statements for the year ended December 31, 2025. Accounting Standard Updates In November 2024, the FASB issued ASU 2024-03 ""Income Statement - Reporting Comprehensive Income (Subtopic 220-40): Expense Disaggregation Disclosures"" to expand the disclosure requirements of certain expense categories included in the income statement. ASU 2024-03 is effective for annual periods beginning January 1, 2027, with early adoption permitted. The Company is currently evaluating the potential effect that the updated standard will have on the Companys consolidated financial statement disclosures. In July 2025, the FASB issued ASU No. 2025-05 Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide a practical expedient permitting an entity to assume the cond …

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(16) Employee Benefit Plans The Companys U.S. employees are eligible to participate in the Companys 401(k) savings plan. The Company provides a base contribution of 2% of an employees salary, regardless of whether the employee elects to contribute to the plan. Further, the Company matches 100% of employee contributions of up to the first 4% of eligible compensation. The Companys match contributions for the years ended December 31, 2025, 2024 and 2023, were $11.1 million, $8.5 million and $8.1 million, respectively. Charges for Europe pension plans approximated $4.3 million, $4.0 million and $3.3 million for the years ended December 31, 2025, 2024 and 2023, respectively. These costs relate to plans administered by certain European subsidiaries, with benefits calculated according to government requirements and paid out to employees upon retirement or change of employment. With the acquisition of Bradley on October 23, 2023, the Company acquired the defined benefit retirement plan (the Pension Plan) of Bradley. The Pension Plan was frozen effective September 30, 2011, and the Pension Plan pension benefit obligation (PBO) was close to fully funded prior to the acquisition date. The Company terminated the Pension Plan with a plan termination effective date of December 31, 2023. As a result of the plan termination the December 31, 2023 balance sheet liability of $73.5 million was calculated on a termination basis by valuing the PBO on a going concern basis. In September 2024, the C …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

(3) Restructuring and Other Charges, Net The Companys Board of Directors approves all major restructuring programs that may involve the discontinuance of significant product lines or the shutdown of significant facilities. From time to time, the Company takes additional restructuring actions, including involuntary terminations that are not part of a major program. The Company accounts for these costs in the period that the liability is incurred. These costs are included in restructuring charges in the Companys consolidated statements of operations. A summary of the pre-tax cost by restructuring program is as follows: Years Ended December 31, 2025 2024 2023 (in millions) Restructuring costs: 2025 France Actions $ 22.0 $ $ Other Actions 1.7 7.2 5.5 Total restructuring charges $ 23.7 $ 7.2 $ 5.5 The Company recorded pre-tax restructuring in its business segments as follows: Years Ended December 31, 2025 2024 2023 (in millions) Americas $ (0.1) $ 2.1 $ 2.5 Europe 23.7 4.5 2.0 APMEA 0.1 0.6 1.0 Total $ 23.7 $ 7.2 $ 5.5 2025 France Actions On February 3, 2025, the Board of Directors approved a restructuring program with respect to the Companys operating facility in Hautvillers, France, within its Europe operating segment. The restructuring program included the shutdown of the Companys manufacturing facility in Hautvillers, France and relocation of the facilitys production activities primarily to the Companys other facilities in France and other locations in Europe. The program was …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

( 4) Revenue Recognition The Company is a leading supplier of products and solutions that manage and conserve the flow of fluids and energy into, through and out of buildings in the commercial, industrial and residential markets. For over 150 years, the Company has designed and produced valve systems that safeguard and regulate water systems, energy efficient heating and hydronic systems, drainage systems and water filtration technology that help purify and conserve water. The Company distributes products through four primary distribution channels: wholesale, original equipment manufacturers (OEMs), specialty, and do-it-yourself (DIY). The Company operates in three geographic segments: Americas, Europe, and Asia-Pacific, Middle East and Africa (APMEA). Each of these segments sells similar products, which consist of the following principal product and solution categories: Residential and commercial flow control and protectionincludes products and solutions typically sold into plumbing and hot water applications such as backflow preventers, water pressure regulators, temperature and pressure relief valves, thermostatic mixing valves, leak detection and protection products, commercial washroom solutions , hydration solutions and emergency safety products and equipment. Many of our flow control and protection products are now smart and connected enabled, warning of leaks, floods, freezing temperatures and other hazards with alerts to Building Management Systems (BMS) and/or perso …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

(19) Segment Information The Company discloses segment information on the same basis that the Chief Executive Officer, the Companys chief operating decision-maker (CODM), manages the segments, evaluates financial results and makes key operating decisions to allocate investments and resources. The Company operates in three geographic and reportable segments: Americas, Europe, and APMEA. Each of these segments sells similar products and solutions and has separate financial results that are reviewed by the CODM. Each segment earns revenue and income almost exclusively from the sale of the Companys products. The Company sells its products into various end markets around the world with sales by region based upon location of the entity recording the sale. See Note 4 for further detail on sales by region of the product categories. The accounting policies for each segment are the same as those described in Note 2 of the Notes to Consolidated Financial Statements. The Companys segment performance measure is segment earnings as this is the performance measure used by the CODM in assessing segment performance and deciding how to allocate resources. Segment earnings excludes the impact of special items defined as non-recurring, and unusual items such as restructuring costs, acquisition-related costs, gain or loss on sale of assets, pension settlements and contingent consideration adjustments. The CODM uses segment earnings for insight into underlying trends comparing past financial perfo …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"(2) Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its majority and wholly-owned subsidiaries. Upon consolidation, all intercompany accounts and transactions are eliminated. Cash Equivalents Cash equivalents consist of instruments with original maturities of three months or less and consist primarily of money market funds, for which the carrying amount is a reasonable estimate of fair value. Allowance for Credit Losses The allowance for credit losses is established to represent the Companys best estimate of the net realizable value of the outstanding amount of receivables that it will be unable to collect. The Company developed financial asset pools that consist of business or legal entities with similar risk and economic characteristics, including types of products and customers, trade receivable characteristics, and history of credit losses on trade receivables. The development of the Companys allowance for credit losses varies by asset pool, but in general is based on a review of past due amounts, historical write-off experience, aging trends affecting specific accounts, changes in customer payment terms, general operational factors affecting all accounts and as applicable current economic conditions and reasonable and supportable forecasted economic conditions that affect collectability. In addition, factors are developed in certain regions utilizing historical trends of sales and returns and …

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(21) Subsequent Events On February 9, 2026, the Company declared a quarterly dividend of fifty-two cents ($0.52) per share on each outstanding share of Class A common stock and Class B common stock payable on March 13, 2026, to stockholders of record on February 27, 2026. …

SubsequentEventsTextBlock · excerpt; the full note is in the filing