Comfort Systems USA(FIX) - 2024 Q2 - Quarterly Report

PART I—FINANCIAL INFORMATION This part provides unaudited consolidated financial statements, management's discussion, and market risk disclosures for Comfort Systems USA, Inc Item 1. Financial Statements This section presents Comfort Systems USA, Inc.'s unaudited consolidated financial statements and explanatory notes for Q2 and H1 2024 Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity as of June 30, 2024, and December 31, 2023 Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2024 | December 31, 2023 | Change (vs. Dec 31, 2023) | | :-------------------------------- | :------------ | :---------------- | :-------------------------- | | Total Assets | $4,213,984 | $3,305,579 | +27.5% | | Total Current Assets | $2,323,371 | $1,911,100 | +21.6% | | Total Liabilities | $2,731,690 | $2,027,750 | +34.7% | | Total Current Liabilities | $2,334,948 | $1,721,205 | +35.6% | | Total Stockholders' Equity | $1,482,294 | $1,277,829 | +16.0% | Consolidated Statements of Operations This section details the company's financial performance, including revenue, gross profit, operating income, and net income for the periods presented Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | YoY Change | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | YoY Change | | :--------------------------------- | :------------------------------- | :------------------------------- | :--------- | :----------------------------- | :----------------------------- | :--------- | | Revenue | $1,810,290 | $1,296,430 | +39.6% | $3,347,306 | $2,471,070 | +35.5% | | Gross profit | $363,596 | $227,920 | +59.5% | $660,959 | $433,325 | +52.5% | | Operating income | $184,670 | $92,082 | +100.5% | $320,130 | $162,967 | +96.4% | | Net income | $134,009 | $69,476 | +92.9% | $230,328 | $126,692 | +81.8% | | Basic EPS | $3.75 | $1.94 | +93.3% | $6.44 | $3.54 | +82.0% | | Diluted EPS | $3.74 | $1.93 | +93.8% | $6.43 | $3.53 | +82.2% | Consolidated Statements of Stockholders' Equity This section outlines changes in stockholders' equity, reflecting net income, dividends, and share repurchases for the period Consolidated Statements of Stockholders' Equity Highlights (in thousands) | Metric | June 30, 2024 | December 31, 2023 | Change (6M 2024) | | :--------------------------------- | :------------ | :---------------- | :--------------- | | Total Stockholders' Equity | $1,482,294 | $1,277,829 | +$204,465 | | Net income | $230,328 | N/A | +$230,328 | | Dividends | $(19,634) | N/A | -$(19,634) | | Share repurchase | $(11,139) | N/A | -$(11,139) | Consolidated Statements of Cash Flows This section presents the cash inflows and outflows from operating, investing, and financing activities for the periods Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | YoY Change | | :------------------------------------ | :----------------------------- | :----------------------------- | :--------- | | Net cash provided by operating activities | $336,415 | $252,319 | +33.3% | | Net cash used in investing activities | $(282,434) | $(93,628) | +201.6% | | Net cash used in financing activities | $(59,712) | $(155,898) | -61.7% | | Net increase (decrease) in cash and cash equivalents | $(5,731) | $2,793 | -305.2% | | Cash and cash equivalents, end of period | $199,419 | $60,007 | +232.3% | Condensed Notes to Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the consolidated financial statements Note 1. Business and Organization This note describes Comfort Systems USA, Inc.'s core business activities and organizational structure - Comfort Systems USA, Inc. provides comprehensive mechanical and electrical contracting services, including HVAC, plumbing, electrical, piping, controls, off-site construction, monitoring, and fire protection, across the United States[20] Note 2. Summary of Significant Accounting Policies and Estimates This note outlines the critical accounting policies and estimates used in preparing the financial statements - The company is evaluating ASU 2023-07 (Segment Reporting) and ASU 2023-09 (Income Tax Disclosures), but these standards are not expected to impact consolidated financial position, results of operations, or cash flows[24][26] - Revenue is recognized over time, primarily using a cost-to-cost input method, as control continuously transfers to the customer[27][28] - Credit losses are estimated using a loss-rate method for construction, service, and other portfolio segments, with construction assets generally having lower loss rates due to lien rights[31] - The Inflation Reduction Act's corporate alternative minimum tax and excise tax on stock repurchases were not material to current year financial results[36] - The company filed for a $107.1 million refund for the 2022 tax year based on IRS guidance for research and experimental expenditures[37] Note 3. Revenue from Contracts with Customers This note details the company's revenue recognition policies and disaggregates revenue by service, customer, and activity type - Net revenue recognized from performance obligations partially satisfied in previous periods positively impacted revenue by 2.4% for the three months ended June 30, 2024, and 3.2% for the six months ended June 30, 2024, due to changes in estimates[52] Revenue by Service Provided (in thousands) | Service Provided | Three Months Ended June 30, 2024 | % | Three Months Ended June 30, 2023 | % | | :----------------- | :------------------------------- | :- | :------------------------------- | :- | | Mechanical Segment | $1,451,679 | 80.2 | $975,923 | 75.3 | | Electrical Segment | $358,611 | 19.8 | $320,507 | 24.7 | | Total | $1,810,290 | 100.0 | $1,296,430 | 100.0 | | Service Provided | Six Months Ended June 30, 2024 | % | Six Months Ended June 30, 2023 | % | | :----------------- | :----------------------------- | :- | :----------------------------- | :- | | Mechanical Segment | $2,636,688 | 78.8 | $1,894,538 | 76.7 | | Electrical Segment | $710,618 | 21.2 | $576,532 | 23.3 | | Total | $3,347,306 | 100.0 | $2,471,070 | 100.0 | Revenue by Type of Customer (in thousands) | Customer Type | Three Months Ended June 30, 2024 | % | Three Months Ended June 30, 2023 | % | | :-------------- | :------------------------------- | :- | :------------------------------- | :- | | Technology | $561,313 | 31.0 | $265,231 | 20.5 | | Manufacturing | $526,215 | 29.0 | $435,819 | 33.6 | | Education | $193,433 | 10.7 | $127,178 | 9.8 | | Healthcare | $140,747 | 7.8 | $138,384 | 10.7 | | Office Buildings | $115,012 | 6.4 | $95,971 | 7.4 | | Retail, Restaurants and Entertainment | $114,501 | 6.3 | $80,783 | 6.2 | | Government | $91,073 | 5.0 | $77,597 | 6.0 | | Multi-Family and Residential | $36,181 | 2.0 | $46,295 | 3.6 | | Other | $31,815 | 1.8 | $29,172 | 2.2 | | Total | $1,810,290 | 100.0 | $1,296,430 | 100.0 | | Customer Type | Six Months Ended June 30, 2024 | % | Six Months Ended June 30, 2023 | % | | :-------------- | :----------------------------- | :- | :----------------------------- | :- | | Technology | $1,026,127 | 30.7 | $491,480 | 19.9 | | Manufacturing | $987,615 | 29.5 | $802,175 | 32.5 | | Education | $327,416 | 9.8 | $237,431 | 9.6 | | Healthcare | $274,476 | 8.2 | $298,199 | 12.1 | | Office Buildings | $216,904 | 6.5 | $194,166 | 7.9 | | Retail, Restaurants and Entertainment | $195,086 | 5.8 | $156,977 | 6.3 | | Government | $178,874 | 5.3 | $142,012 | 5.7 | | Multi-Family and Residential | $77,032 | 2.3 | $91,302 | 3.7 | | Other | $63,776 | 1.9 | $57,328 | 2.3 | | Total | $3,347,306 | 100.0 | $2,471,070 | 100.0 | Revenue by Activity Type (in thousands) | Activity Type | Three Months Ended June 30, 2024 | % | Three Months Ended June 30, 2023 | % | | :-------------- | :------------------------------- | :- | :------------------------------- | :- | | New Construction | $1,082,272 | 59.8 | $681,912 | 52.6 | | Existing Building Construction | $446,574 | 24.7 | $358,807 | 27.7 | | Service Projects | $126,280 | 6.9 | $114,746 | 8.8 | | Service Calls, Maintenance and Monitoring | $155,164 | 8.6 | $140,965 | 10.9 | | Total | $1,810,290 | 100.0 | $1,296,430 | 100.0 | | Activity Type | Six Months Ended June 30, 2024 | % | Six Months Ended June 30, 2023 | % | | :-------------- | :----------------------------- | :- | :----------------------------- | :- | | New Construction | $1,981,248 | 59.2 | $1,309,864 | 53.0 | | Existing Building Construction | $836,943 | 25.0 | $668,290 | 27.1 | | Service Projects | $230,394 | 6.9 | $217,851 | 8.8 | | Service Calls, Maintenance and Monitoring | $298,721 | 8.9 | $275,065 | 11.1 | | Total | $3,347,306 | 100.0 | $2,471,070 | 100.0 | Contract Assets and Liabilities (in thousands) | Metric | June 30, 2024 | December 31, 2023 | | :------------------------------------------------- | :------------ | :---------------- | | Costs and estimated earnings in excess of billings | $69,391 | $28,084 | | Billings in excess of costs and estimated earnings and deferred revenue | $1,149,896 | $909,538 | - Remaining performance obligations totaled $5.77 billion as of June 30, 2024, with 65-75% expected to be recognized as revenue over the next 12 months[59] Note 4. Fair Value Measurements This note provides information on assets and liabilities measured at fair value, including valuation methodologies Fair Value Measurements (in thousands) | Asset/Liability | June 30, 2024 | December 31, 2023 | | :-------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $199,419 | $205,150 | | Life insurance—cash surrender value | $8,457 | $7,473 | | Contingent earn-out obligations | $85,984 | $44,222 | - Contingent earn-out obligations, valued using a probability-weighted discounted cash flow method (Level 3 input), increased significantly from $44.2 million at December 31, 2023, to $85.9 million at June 30, 2024, primarily due to new issuances and fair value adjustments[65][66] Note 5. Acquisitions This note details significant business acquisitions, including consideration paid and goodwill recognized - On February 1, 2024, Comfort Systems acquired Summit Industrial Construction, LLC for a total consideration of $359.8 million, recognizing $155.3 million in goodwill and $170.1 million in identifiable intangible assets[67][69] - On February 1, 2024, the company acquired J & S Mechanical Contractors, Inc. for a total consideration of $120.6 million, recognizing $40.7 million in goodwill and $63.3 million in identifiable intangible assets[74][75] - Other acquisitions include a plumbing service provider in North Carolina (May 2024, $40.0 million), DECCO, Inc. (October 2023, $59.8 million), and Eldeco, Inc. (February 2023, $74.0 million)[80][81][82] Note 6. Goodwill and Identifiable Intangible Assets, Net This note presents the carrying amounts of goodwill and identifiable intangible assets by segment and their amortization schedule Goodwill by Segment (in thousands) | Segment | December 31, 2023 | June 30, 2024 | Change (6M 2024) | | :----------------- | :---------------- | :------------ | :--------------- | | Mechanical Segment | $393,276 | $601,189 | +$207,913 | | Electrical Segment | $273,558 | $273,758 | +$200 | | Total | $666,834 | $874,947 | +$208,113 | Future Amortization Expense of Identifiable Intangible Assets (in thousands) | Year Ending December 31 | Amount | | :------------------------ | :----- | | 2024 (remainder) | $46,463 | | 2025 | $66,576 | | 2026 | $55,961 | | 2027 | $53,650 | | 2028 | $52,103 | | Thereafter | $206,127 | | Total | $480,880 | Note 7. Debt Obligations This note details the company's debt structure, including revolving credit facilities and notes to former owners Debt Obligations (in thousands) | Debt Type | June 30, 2024 | December 31, 2023 | | :---------------------- | :------------ | :---------------- | | Revolving credit facility | $— | $— | | Notes to former owners | $90,270 | $44,070 | | Other debt | $793 | $142 | | Total debt | $91,063 | $44,212 | | Long-term portion | $73,377 | $39,345 | - The company has an $850.0 million revolving credit facility, with no outstanding borrowings as of June 30, 2024, and $768.5 million of credit available[88] - Notes to former owners totaled $90.3 million as of June 30, 2024, with principal payments extending through 2028[94] Note 8. Leases This note provides information on operating lease assets, liabilities, and their maturity schedule Operating Lease Assets and Liabilities (in thousands) | Metric | June 30, 2024 | December 31, 2023 | | :-------------------------- | :------------ | :---------------- | | Operating lease right-of-use assets | $226,721 | $205,712 | | Total operating lease liabilities | $235,283 | $212,562 | - The weighted average discount rate for operating leases was 6.0% as of June 30, 2024, with a weighted average remaining lease term of 11.3 years[97][98] Maturities of Operating Lease Liabilities (in thousands) | Year Ending December 31 | Total Lease Payments | | :------------------------ | :------------------- | | 2024 (remainder) | $20,095 | | 2025 | $37,975 | | 2026 | $34,201 | | 2027 | $29,730 | | 2028 | $25,888 | | Thereafter | $187,309 | | Total Lease Payments | $335,198 | | Less—present value discount | $(99,915) | | Present value of operating lease liabilities | $235,283 | Note 9. Commitments and Contingencies This note discloses the company's legal, insurance, and surety bond commitments and potential contingent liabilities - The company recorded a pre-tax gain of $6.8 million in the first quarter of 2023 from legal developments and settlements related to customer disputes and subcontract obligations[104] - The company is substantially self-insured for workers' compensation, employer's liability, auto liability, general liability, and employee group health claims, with estimated losses reviewed quarterly by a third-party actuary[108][109][110] - Surety bonds are required for 10% to 20% of the company's business, and strong surety relationships are maintained[107] Note 10. Stockholders' Equity This note details changes in stockholders' equity, including shares used in EPS calculations and repurchase activities Shares Used in Computing EPS (in thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Shares used in computing EPS—basic | 35,746 | 35,822 | 35,742 | 35,817 | | Shares used in computing EPS—diluted | 35,828 | 35,906 | 35,828 | 35,907 | - During the six months ended June 30, 2024, the company repurchased less than 0.1 million shares for approximately $11.1 million at an average price of $305.23 per share under its stock repurchase program[115] Note 11. Segment Information This note provides disaggregated financial information for the company's mechanical and electrical operating segments Segment Revenue and Gross Profit (in thousands) | Segment | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue: | | | | | | Mechanical Segment | $1,451,679 | $975,923 | $2,636,688 | $1,894,538 | | Electrical Segment | $358,611 | $320,507 | $710,618 | $576,532 | | Gross Profit: | | | | | | Mechanical Segment | $278,972 | $173,481 | $496,684 | $337,548 | | Electrical Segment | $84,624 | $54,439 | $164,275 | $95,777 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition, operational results, and future outlook Introduction and Overview This section introduces Comfort Systems USA's business as a national provider of mechanical and electrical contracting services - Comfort Systems USA is a national provider of comprehensive mechanical and electrical installation, renovation, maintenance, repair, and replacement services, operating in commercial, industrial, and institutional markets[119] Nature and Economics of Our Business This section describes the project-based nature of the business, contract values, and lien rights - Approximately 91.1% of revenue is derived from project-based installation services in new or existing facilities, typically under fixed-price contracts[123] - As of June 30, 2024, the company had 8,292 projects in process with an aggregate contract value of $14.12 billion, with an average project duration of six to nine months and an average contract price of $1.7 million[127][129] - The company has legal rights to attach liens to buildings or related funding sources for unpaid services, except for some government buildings[127] Profile and Management of Our Operations This section highlights the company's operational management focus on profitability, cash flow, and talent retention - The company manages 47 operating units, emphasizing profitability, cash flow, working capital, project selection, safety, labor utilization, and backlog composition[133] - Attracting and retaining effective operating unit managers is critical due to market uniqueness, customer relationships, and high competition[134] Economic and Industry Factors This section discusses how national nonresidential construction trends and macroeconomic factors influence company performance - The company's performance is influenced by trends in the national nonresidential construction sector and macroeconomic factors such as GDP, interest rates, business investment, and government fiscal conditions[135] - Spending decisions for building construction, renovation, and system replacement are discretionary and significantly affected by economic uncertainty[136] Operating Environment and Management Emphasis This section addresses ongoing challenges like labor costs and supply constraints, alongside strong demand and competitive advantages - Despite recovering from the COVID-19 pandemic, the company continues to experience increased labor costs, supply constraints, and delivery delays, particularly for skilled labor, which are expected to persist throughout 2024[137] - The company expects strong demand in 2024, especially from manufacturing and technology customers (e.g., data centers, chip plants, food, pharmaceuticals)[137] - Competitive advantages include a strong balance sheet, an $850.0 million credit facility with $768.5 million available as of June 30, 2024, and robust surety relationships[138][139] Cyclicality and Seasonality This section explains the impact of business cycles and seasonal demand fluctuations on the construction industry - The construction industry is subject to business cycle fluctuations, and the mechanical and electrical contracting industries experience seasonality, with lower demand in the first calendar quarter and higher demand in the second and third quarters[141][142] Critical Accounting Estimates This section confirms no significant changes to critical accounting estimates for the three months ended June 30, 2024 - Management reported no significant changes to critical accounting estimates during the three months ended June 30, 2024, as compared to those disclosed in the 2023 Annual Report on Form 10-K[143] Results of Operations This section provides a detailed analysis of revenue, gross profit, expenses, and net income for the reporting periods Key Financial Performance Metrics (in thousands, except percentages) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | YoY Change | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | YoY Change | | :--------------------------------- | :------------------------------- | :------------------------------- | :--------- | :----------------------------- | :----------------------------- | :--------- | | Revenue | $1,810,290 | $1,296,430 | +39.6% | $3,347,306 | $2,471,070 | +35.5% | | Gross profit | $363,596 | $227,920 | +59.5% | $660,959 | $433,325 | +52.5% | | Gross profit margin | 20.1% | 17.6% | +2.5 pp | 19.7% | 17.5% | +2.2 pp | | SG&A | $179,537 | $136,430 | +31.6% | $342,260 | $271,462 | +26.1% | | SG&A as % of revenue | 9.9% | 10.5% | -0.6 pp | 10.2% | 11.0% | -0.8 pp | | Operating income | $184,670 | $92,082 | +100.5% | $320,130 | $162,967 | +96.4% | | Net income | $134,009 | $69,476 | +92.9% | $230,328 | $126,692 | +81.8% | - Revenue growth was driven by strong market conditions, particularly in the technology and manufacturing sectors (data centers, chip plants, food, pharmaceuticals), and contributions from recent acquisitions (Summit, J&S, DECCO, Eldeco)[148][153] - Gross profit margin improved due to higher revenues and improved operational execution, especially in the electrical segment[159][160] - SG&A as a percentage of revenue decreased due to leverage from increased revenue, despite higher compensation costs and amortization expense from acquisitions[161][162][163] - Interest expense decreased due to a lower average outstanding debt balance, while expense from changes in the fair value of contingent earn-out obligations increased significantly due to higher actual and projected earnings at Summit and J&S[166][167] Operating Segment Backlog (in thousands, except percentages) | Segment | June 30, 2024 | % | December 31, 2023 | % | June 30, 2023 | % | | :----------------- | :------------ | :- | :---------------- | :- | :------------ | :- | | Mechanical Segment | $4,486,999 | 77.7 | $4,027,927 | 78.1 | $3,156,378 | 75.4 | | Electrical Segment | $1,285,221 | 22.3 | $1,129,449 | 21.9 | $1,029,155 | 24.6 | | Total | $5,772,220 | 100.0 | $5,157,376 | 100.0 | $4,185,533 | 100.0 | - Backlog as of June 30, 2024, was $5.77 billion, representing a 37.9% increase year-over-year but a 2.4% decrease sequentially from March 31, 2024, primarily due to project completions offset by new bookings[158] Outlook This section provides management's expectations for future performance, including earnings, cash flow, and operational strategies - The company anticipates solid earnings and cash flow for 2024, driven by strong ongoing demand, particularly from manufacturing and technology customers[172] - Management is actively addressing increased labor costs, supply constraints, and delivery delays through job planning, earlier material ordering, and customer collaboration[171] Liquidity and Capital Resources This section discusses the company's cash flow, borrowing capacity, and overall financial flexibility Cash Flow and Free Cash Flow (in thousands) | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | YoY Change | | :------------------------------------ | :----------------------------- | :----------------------------- | :--------- | | Cash provided by operating activities | $336,415 | $252,319 | +33.3% | | Cash used in investing activities | $(282,434) | $(93,628) | +201.6% | | Cash used in financing activities | $(59,712) | $(155,898) | -61.7% | | Net increase (decrease) in cash and cash equivalents | $(5,731) | $2,793 | -305.2% | | Free cash flow | $289,908 | $213,275 | +36.0% | - Cash provided by operating activities increased by $84.1 million, primarily due to higher earnings before non-cash expenses and a $143.7 million benefit from increases in accounts payable and accrued liabilities[176] - Cash used in investing activities increased by $188.8 million, mainly due to higher cash paid for acquisitions[177] - Cash used in financing activities decreased by $96.2 million, primarily due to lower net repayments of debt in the current year[178] - The company has generated positive net free cash flow for the last twenty-five calendar years and maintains significant borrowing capacity under its credit facility, ensuring sufficient liquidity for the foreseeable future[190] - As of June 30, 2024, the company had $768.5 million of credit available under its $850.0 million revolving credit facility and $81.5 million in letters of credit outstanding[182] Item 3. Quantitative and Qualitative Disclosures about Market Risk This section details the company's exposure to market risks, primarily interest rate risk, and outlines its risk management strategies - The company's primary market risk exposure is related to potential adverse changes in interest rates, particularly under its revolving credit facility, which had no outstanding borrowings as of June 30, 2024[195][196] - The valuation of contingent earn-out payments is determined using a probability-weighted discounted cash flow method, reflecting contractual terms and assumptions about future cash flows and discount rates[198] Item 4. Controls and Procedures This section confirms the effectiveness of disclosure controls and procedures and reports no material changes in internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2024[199] - There were no material changes in the company's internal control over financial reporting during the three months ended June 30, 2024[200] PART II—OTHER INFORMATION This part covers legal proceedings, risk factors, equity sales, other information, and exhibits for Comfort Systems USA, Inc Item 1. Legal Proceedings This section addresses legal and regulatory claims, noting accruals for probable losses and no material impact on financial results - The company is subject to legal and regulatory claims in the normal course of business, with accruals made for probable losses, which management believes will not materially affect financial results[202][204] - A pre-tax gain of $6.8 million was recorded in the first quarter of 2023 from legal developments and settlements[203] Item 1A. Risk Factors This section refers readers to the Annual Report on Form 10-K for a comprehensive discussion of potential business risks - Readers are directed to the Annual Report on Form 10-K for the year ended December 31, 2023, for a detailed discussion of risk factors that could materially affect the company's business, financial condition, or future results[205] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports no unregistered equity sales and details the company's stock repurchase program for the quarter - No unregistered sales of equity securities occurred during the period[206] - During the six months ended June 30, 2024, the company repurchased less than 0.1 million shares for approximately $11.1 million at an average price of $305.23 per share[208] Issuer Purchases of Equity Securities (Quarter Ended June 30, 2024) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :---------------- | :------------------------------- | :--------------------------- | | April 1 - April 30 | — | $— | | May 1 - May 31 | 13,650 | $307.97 | | June 1 - June 30 | 21,347 | $311.09 | | Total Quarter | 34,997 | $309.87 | Item 5. Other Information This section confirms no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers - No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2024[212] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including corporate documents and certifications - The exhibits include corporate organizational documents (Certificate of Incorporation, Bylaws), certifications from the Chief Executive Officer and Chief Financial Officer (pursuant to Sections 302 and 906 of Sarbanes-Oxley Act), and Inline XBRL documents[214][215] Signatures This section contains the required signatures of the Registrant's authorized officers, certifying the report's filing - The report was signed on July 25, 2024, by Brian E. Lane (President, Chief Executive Officer and Director), William George (Executive Vice President and Chief Financial Officer), and Julie S. Shaeff (Senior Vice President and Chief Accounting Officer)[217][218]