UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



x☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended~~September 30, 2017~~

October 2, 2021



¨☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission ~~file number~~File Number 1-6948

SPX CORPORATION

(Exact Name of ~~Registrant~~registrant as ~~Specified~~specified in ~~Its Charter)~~

its charter)



Delaware						38-1016240
(State or ~~Other Jurisdiction~~other jurisdiction of ~~Incorporation~~incorporation or ~~Organization)~~ organization)						(I.R.S. Employer Identification No.)

~~13320-A Ballantyne Corporate Place,~~6325 Ardrey Kell Road, Suite 400, Charlotte, North Carolina 28277

(Address of ~~Principal Executive Offices)~~principal executive offices) (Zip Code)

~~Registrant’s Telephone Number, Including Area Code~~ (980) 474-3700

(Registrant’s telephone number, including area code)

NOT APPLICABLE

(Former ~~Name, Former Address,~~name, former address, and ~~Former Fiscal Year,~~former fiscal year, if ~~Changed Since Last Report)~~changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbols(s)	Name of each exchange on which registered
Common Stock, par value $0.01	SPXC	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x☒ Yes ¨☐ No

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). x☒ Yes ¨☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

~~Large accelerated filer~~ x

~~Accelerated filer~~ ¨

~~Non-accelerated filer~~ ¨

~~Smaller reporting company~~ ¨

~~(Do not check if a smaller reporting company)~~

Emerging growth company¨

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to ~~used~~use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ¨☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨☐ Yes x☒ No.

Common shares outstanding October ~~27, 2017, 42,609,256~~

29, 2021, 45,413,380

SPX CORPORATION AND SUBSIDIARIES

FORM 10-Q INDEX

PART I—FINANCIAL INFORMATION

ITEM 1. Financial Statements

SPX CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME ~~(LOSS)~~

(Unaudited; in millions, except per share amounts)


	Three months ended				Nine months ended
	October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020
Revenues	$	285.8	$	268.3	$	870.4	$	783.1
Costs and expenses:
Cost of products sold	191.8		176.6		570.4		513.4
Selling, general and administrative	76.2		67.7		234.7		206.2
Intangible amortization	5.5		3.3		16.0		8.3
Special charges, net	0.5		0.3		1.9		1.6

Other operating (income) expense	—		—		2.7		(0.4)
Operating income	11.8		20.4		44.7		54.0

Other income, net	2.9		2.7		17.2		8.5
Interest expense	(3.5)		(4.5)		(11.1)		(14.0)
Interest income	0.2		0.1		0.4		0.2


Income from continuing operations before income taxes	11.4		18.7		51.2		48.7
Income tax provision	(3.7)		(3.1)		(9.8)		(8.4)
Income from continuing operations	7.7		15.6		41.4		40.3

Income (loss) from discontinued operations, net of tax	(31.0)		7.1		20.3		33.5
Gain (loss) on disposition of discontinued operations, net of tax	354.4		0.1		357.7		(1.2)
Income from discontinued operations, net of tax	323.4		7.2		378.0		32.3

Net income	$	331.1	$	22.8	$	419.4	$	72.6

Basic income per share of common stock:
Income from continuing operations	$	0.17	$	0.35	$	0.92	$	0.90
Income from discontinued operations	7.13		0.16		8.35		0.73
Net income per share	$	7.30	$	0.51	$	9.27	$	1.63

Weighted-average number of common shares outstanding — basic	45.331		44.708		45.244		44.538

Diluted income per share of common stock:
Income from continuing operations	$	0.17	$	0.34	$	0.89	$	0.88
Income from discontinued operations	6.93		0.16		8.14		0.71
Net income per share	$	7.10	$	0.50	$	9.03	$	1.59

Weighted-average number of common shares outstanding — diluted	46.650		45.894		46.455		45.694

Comprehensive income	$	325.0	$	24.7	$	415.4	$	65.5

Three months ended Nine months ended
September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016
Revenues $ 348.5
$ 345.0
$ 1,038.8
$ 1,077.0
Costs and expenses:

Cost of products sold 263.4
264.2
789.5
815.2
Selling, general and administrative 62.9
68.5
203.9
215.6
Intangible amortization 0.2
0.8
0.5
2.6
Special charges, net 1.0
1.9
2.0
4.8
Impairment of intangible assets —
—
—
4.0
Gain on contract settlement 10.2
—
10.2
—
Gain on sale of dry cooling business —
1.7
—
18.4
Operating income 31.2
11.3
53.1
53.2

Other income (expense), net (0.3 ) 0.9
(3.1 ) 2.2
Interest expense (4.3 ) (3.8 ) (12.9 ) (11.1 )
Interest income 0.2
—
0.9
0.4
Loss on early extinguishment of debt —
(1.3 ) —
(1.3 )
Income from continuing operations before income taxes 26.8
7.1
38.0
43.4
Income tax provision (4.8 ) (0.5 ) (14.0 ) (10.1 )
Income from continuing operations 22.0
6.6
24.0
33.3

Loss from discontinued operations, net of tax —
(4.0 ) —
(12.6 )
Gain (loss) on disposition of discontinued operations, net of tax 0.3
(0.7 ) 6.7
(2.2 )
Income (loss) from discontinued operations, net of tax 0.3
(4.7 ) 6.7
(14.8 )

Net income 22.3
1.9
30.7
18.5
Less: Net loss attributable to redeemable noncontrolling interests —
—
—
(0.4 )
Net income attributable to SPX Corporation common shareholders 22.3
1.9
30.7
18.9
Adjustment related to redeemable noncontrolling interest (Note 13) —
—
—
(18.1 )
Net income attributable to SPX Corporation common shareholders after adjustment related to redeemable noncontrolling interest $ 22.3
$ 1.9
$ 30.7
$ 0.8

Amounts attributable to SPX Corporation common shareholders after adjustment related to redeemable noncontrolling interest:

Income from continuing operations, net of tax $ 22.0
$ 6.6
$ 24.0
$ 15.6
Income (loss) from discontinued operations, net of tax 0.3
(4.7 ) 6.7
(14.8 )
Net income $ 22.3
$ 1.9
$ 30.7
$ 0.8

Basic income per share of common stock:

Income from continuing operations attributable to SPX Corporation common shareholders after adjustment related to redeemable noncontrolling interest $ 0.51
$ 0.16
$ 0.56
$ 0.38
Income (loss) from discontinued operations attributable to SPX Corporation common shareholders 0.01
(0.12 ) 0.16
(0.36 )
Net income per share attributable to SPX Corporation common shareholders after adjustment related to redeemable noncontrolling interest $ 0.52
$ 0.04
$ 0.72
$ 0.02

Weighted-average number of common shares outstanding — basic 42.540
41.721
42.347
41.537

Diluted income per share of common stock:

Income from continuing operations attributable to SPX Corporation common shareholders after adjustment related to redeemable noncontrolling interest $ 0.50
$ 0.16
$ 0.55
$ 0.37
Income (loss) from discontinued operations attributable to SPX Corporation common shareholders 0.01
(0.12 ) 0.15
(0.35 )
Net income per share attributable to SPX Corporation common shareholders after adjustment related to redeemable noncontrolling interest $ 0.51
$ 0.04
$ 0.70
$ 0.02

Weighted-average number of common shares outstanding — diluted 44.064
42.475
43.728
41.884

Comprehensive income (loss) $ 41.4
$ (4.9 ) $ 48.9
$ (30.6 )

The accompanying notes are an integral part of these statements.

SPX CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions, except share data)


	October 2, 2021		December 31, 2020
ASSETS
Current assets:
Cash and equivalents	$	560.1	$	68.3
Accounts receivable, net	212.1		221.0
Contract assets	23.7		32.5
Inventories, net	170.3		143.1
Other current assets (includes income taxes receivable of $2.6 and $27.3 at October 2, 2021 and December 31, 2020, respectively)	80.3		96.1


Assets of discontinued operations	—		121.6
Total current assets	1,046.5		682.6
Property, plant and equipment:
Land	14.0		12.9
Buildings and leasehold improvements	61.7		64.9
Machinery and equipment	230.2		215.6
	305.9		293.4
Accumulated depreciation	(197.9)		(183.4)
Property, plant and equipment, net	108.0		110.0
Goodwill	404.0		368.6
Intangibles, net	337.2		305.0
Other assets	590.9		609.8
Deferred income taxes	3.2		23.9
Assets of discontinued operations	—		219.1
TOTAL ASSETS	$	2,489.8	$	2,319.0
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	112.3	$	104.6
Contract liabilities	50.7		46.3
Accrued expenses	240.6		209.4
Income taxes payable	60.2		0.4
Short-term debt	2.3		101.2
Current maturities of long-term debt	11.4		7.2

Liabilities of discontinued operations	—		115.8
Total current liabilities	477.5		584.9
Long-term debt	233.9		304.0
Deferred and other income taxes	21.3		23.5
Other long-term liabilities	696.8		746.7
Liabilities of discontinued operations	—		30.7
Total long-term liabilities	952.0		1,104.9
Commitments and contingent liabilities (Note 15)	0		0
Equity:

Common stock (52,921,832 and 45,372,991 issued and outstanding at October 2, 2021, respectively, and 52,704,973 and 45,032,325 issued and outstanding at December 31, 2020, respectively)	0.5		0.5
Paid-in capital	1,328.2		1,319.9
Retained deficit	(68.7)		(488.1)
Accumulated other comprehensive income	244.5		248.5
Common stock in treasury (7,548,841 and 7,672,648 shares at October 2, 2021 and December 31, 2020, respectively)	(444.2)		(451.6)


Total equity	1,060.3		629.2
TOTAL LIABILITIES AND EQUITY	$	2,489.8	$	2,319.0

September 30,
2017 December 31,
2016
ASSETS

Current assets:

Cash and equivalents $ 87.2
$ 99.6
Accounts receivable, net 266.6
251.7
Inventories, net 165.6
145.7
Other current assets 39.6
30.6
Total current assets 559.0
527.6
Property, plant and equipment:

Land 15.6
15.4
Buildings and leasehold improvements 119.7
117.3
Machinery and equipment 335.2
329.8
470.5
462.5
Accumulated depreciation (281.7 ) (267.0 )
Property, plant and equipment, net 188.8
195.5
Goodwill 345.4
340.4
Intangibles, net 117.7
117.9
Other assets 675.0
680.5
Deferred income taxes 46.9
50.6
TOTAL ASSETS $ 1,932.8
$ 1,912.5
LIABILITIES AND EQUITY

Current liabilities:

Accounts payable $ 143.3
$ 137.6
Accrued expenses 284.3
304.3
Income taxes payable 1.4
1.7
Short-term debt 39.0
14.8
Current maturities of long-term debt 18.0
17.9
Total current liabilities 486.0
476.3
Long-term debt 311.0
323.5
Deferred and other income taxes 39.6
42.4
Other long-term liabilities 841.2
878.7
Total long-term liabilities 1,191.8
1,244.6
Commitments and contingent liabilities (Note 13)

Equity:

Common stock (51,113,497 and 42,573,512 issued and outstanding at September 30, 2017, respectively, 50,754,779 and 41,940,089 issued and outstanding at December 31, 2016, respectively) 0.5
0.5
Paid-in capital 1,305.7
1,307.9
Retained deficit (800.9 ) (831.6 )
Accumulated other comprehensive income 253.3
235.1
Common stock in treasury (8,539,985 and 8,814,690 shares at September 30, 2017 and December 31, 2016, respectively) (503.6 ) (520.3 )
Total equity 255.0
191.6
TOTAL LIABILITIES AND EQUITY $ 1,932.8
$ 1,912.5

The accompanying notes are an integral part of these statements.

SPX CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited; in millions)


	Three months ended October 2, 2021
	Common Stock		Paid-In Capital		Retained Deficit		Accum. Other Comprehensive Income		Common Stock In Treasury		SPX Corporation Shareholders’ Equity
Balance at July 3, 2021	$	0.5	$	1,321.2	$	(399.8)	$	250.6	$	(444.3)	$	728.2
Net income	—		—		331.1		—		—		331.1
Other comprehensive loss, net	—		—		—		(6.1)		—		(6.1)
Incentive plan activity	—		3.0		—		—		—		3.0
Long-term incentive compensation expense	—		4.2		—		—		—		4.2
Restricted stock unit vesting	—		(0.2)		—		—		0.1		(0.1)
Balance at October 2, 2021	$	0.5	$	1,328.2	$	(68.7)	$	244.5	$	(444.2)	$	1,060.3


	Nine months ended October 2, 2021
	Common Stock		Paid-In Capital		Retained Deficit		Accum. Other Comprehensive Income		Common Stock In Treasury		SPX Corporation Shareholders’ Equity
Balance at December 31, 2020	$	0.5	$	1,319.9	$	(488.1)	$	248.5	$	(451.6)	$	629.2
Net income	—		—		419.4		—		—		419.4
Other comprehensive loss, net	—		—		—		(4.0)		—		(4.0)
Incentive plan activity	—		9.8		—		—		—		9.8
Long-term incentive compensation expense	—		10.8		—		—		—		10.8
Restricted stock unit vesting	—		(12.3)		—		—		7.4		(4.9)
Balance at October 2, 2021	$	0.5	$	1,328.2	$	(68.7)	$	244.5	$	(444.2)	$	1,060.3


	Three months ended September 26, 2020
	Common Stock		Paid-In Capital		Retained Deficit		Accum. Other Comprehensive Income		Common Stock In Treasury		SPX Corporation Shareholders’ Equity
Balance at June 27, 2020	$	0.5	$	1,303.4	$	(535.5)	$	235.3	$	(451.6)	$	552.1

Net income	—		—		22.8		—		—		22.8
Other comprehensive income, net	—		—		—		1.9		—		1.9
Incentive plan activity	—		3.1		—		—		—		3.1
Long-term incentive compensation expense	—		3.2		—		—		—		3.2
Restricted stock unit vesting	—		—		—		—		—		—
Balance at September 26, 2020	$	0.5	$	1,309.7	$	(512.7)	$	237.2	$	(451.6)	$	583.1


	Nine months ended September 26, 2020
	Common Stock		Paid-In Capital		Retained Deficit		Accum. Other Comprehensive Income		Common Stock In Treasury		SPX Corporation Shareholders’ Equity
Balance at December 31, 2019	$	0.5	$	1,302.4	$	(584.8)	$	244.3	$	(460.0)	$	502.4
Impact of adoption of ASU 2016-13 - See Note 2	—		—		(0.5)		—		—		(0.5)
Net income	—		—		72.6		—		—		72.6
Other comprehensive loss, net	—		—		—		(7.1)		—		(7.1)
Incentive plan activity	—		10.7		—		—		—		10.7
Long-term incentive compensation expense	—		9.3		—		—		—		9.3
Restricted stock unit vesting	—		(12.7)		—		—		8.4		(4.3)
Balance at September 26, 2020	$	0.5	$	1,309.7	$	(512.7)	$	237.2	$	(451.6)	$	583.1

The accompanying notes are an integral part of these statements.

SPX CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)


	Nine months ended
	October 2, 2021		September 26, 2020
Cash flows from (used in) operating activities:
Net income	$	419.4	$	72.6
Less: Income from discontinued operations, net of tax	378.0		32.3
Income from continuing operations	41.4		40.3
Adjustments to reconcile income from continuing operations to net cash from operating activities:
Special charges, net	1.9		1.6
Gain on change in fair value of equity security	(9.0)		(7.4)


Deferred and other income taxes	1.9		13.0
Depreciation and amortization	32.1		21.6
Pension and other employee benefits	4.1		5.3
Long-term incentive compensation	9.5		9.6
Other, net	3.6		3.3
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable and other assets	62.5		51.1
Inventories	(20.1)		(24.1)
Accounts payable, accrued expenses and other	(31.5)		(101.0)
Cash spending on restructuring actions	(2.4)		(2.3)
Net cash from continuing operations	94.0		11.0
Net cash from discontinued operations	59.8		45.4
Net cash from operating activities	153.8		56.4
Cash flows from (used in) investing activities:
Proceeds from company-owned life insurance policies, net	8.2		1.1
Business acquisitions, net of cash acquired	(120.0)		(87.9)

Capital expenditures	(7.5)		(12.5)
Net cash used in continuing operations	(119.3)		(99.3)
Net cash from (used in) discontinued operations	617.9		(2.5)
Net cash from (used in) investing activities	498.6		(101.8)
Cash flows from (used in) financing activities:

Borrowings under senior credit facilities	209.1		183.9
Repayments under senior credit facilities	(343.6)		(118.9)
Borrowings under trade receivables financing arrangement	179.0		65.0
Repayments under trade receivables financing arrangement	(207.0)		(60.4)
Net repayments under other financing arrangements	(0.3)		(1.8)
Payment of contingent consideration	—		(1.5)
Minimum withholdings paid on behalf of employees for net share settlements, net of proceeds from the exercise of employee stock options	(4.0)		(1.8)




Net cash from (used in) continuing operations	(166.8)		64.5
Net cash used in discontinued operations	—		—
Net cash from (used in) financing activities	(166.8)		64.5
Change in cash and equivalents due to changes in foreign currency exchange rates	6.2		(3.1)
Net change in cash and equivalents	491.8		16.0
Consolidated cash and equivalents, beginning of period	68.3		54.7
Consolidated cash and equivalents, end of period	$	560.1	$	70.7

Nine months ended
September 30,
2017 October 1,
2016
Cash flows used in operating activities:

Net Income $ 30.7
$ 18.5
Less: Income (loss) from discontinued operations, net of tax 6.7
(14.8 )
Income from continuing operations 24.0
33.3
Adjustments to reconcile income from continuing operations to net cash used in operating activities:
0
Special charges, net 2.0
4.8
Gain on sale of dry cooling business —
(18.4 )
Impairment of intangible assets —
4.0
Loss on early extinguishment of debt —
1.3
Deferred and other income taxes (0.7 ) 6.8
Depreciation and amortization 18.9
20.2
Pension and other employee benefits 8.3
11.9
Long-term incentive compensation 10.4
10.2
Other, net 2.9
0.2
Changes in operating assets and liabilities, net of effects from divestiture:

Accounts receivable and other assets (18.0 ) 53.8
Inventories (17.2 ) (11.2 )
Accounts payable, accrued expenses and other (31.6 ) (126.4 )
Cash spending on restructuring actions (1.4 ) (1.8 )
Net cash used in continuing operations (2.4 ) (11.3 )
Net cash used in discontinued operations (6.1 ) (34.3 )
Net cash used in operating activities (8.5 ) (45.6 )
Cash flows from (used in) investing activities:

Proceeds from asset sales —
47.7
Capital expenditures (8.4 ) (7.8 )
Net cash from (used in) continuing operations (8.4 ) 39.9
Net cash used in discontinued operations —
(2.3 )
Net cash from (used in) investing activities (8.4 ) 37.6
Cash flows from (used in) financing activities:

Borrowings under senior credit facilities 46.4
56.2
Repayments under senior credit facilities (59.5 ) (60.6 )
Borrowings under trade receivables financing arrangement 70.0
44.0
Repayments under trade receivables financing arrangement (39.0 ) (44.0 )
Net repayments under other financing arrangements (7.8 ) (7.1 )
Minimum withholdings paid on behalf of employees for net share settlements, net of proceeds from the exercise of employee stock options and other (1.1 ) (1.6 )
Net cash from (used in) continuing operations 9.0
(13.1 )
Net cash from (used in) discontinued operations —
—
Net cash from (used in) financing activities 9.0
(13.1 )
Change in cash and equivalents due to changes in foreign currency exchange rates (4.5 ) 3.1
Net change in cash and equivalents (12.4 ) (18.0 )
Consolidated cash and equivalents, beginning of period 99.6
101.4
Consolidated cash and equivalents, end of period $ 87.2
$ 83.4

The accompanying notes are an integral part of these statements.

SPX CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited; in millions, except per share ~~data)~~data and asbestos-related claims)


~~(1)~~	(1) BASIS OF PRESENTATION

Unless otherwise indicated, “we,” “us” and “our” mean SPX Corporation and its consolidated subsidiaries (“SPX”).

We prepared the condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information normally required by accounting principles generally accepted in the United States (“GAAP”) can be condensed or omitted. The financial statements represent our accounts after the elimination of intercompany transactions and, in our opinion, include the adjustments (consisting only of normal and recurring items) necessary for their fair presentation.

Unless otherwise indicated, amounts provided in these Notes pertain to continuing operations only (see Note 3 for information on discontinued operations).

We account for investments in unconsolidated companies where we exercise significant influence but do not have control using the equity method. In determining whether we are the primary beneficiary of a variable interest entity (“VIE”), we perform a qualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties to determine which party has the power to direct the activities of the VIE that most significantly impact the entity’s economic performance, and which party has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. ~~We have an interest in a VIE, in which we are not the primary beneficiary, as a result~~All of ~~the sale of Balcke Dürr. See below and Note 15 for further discussion of the sale of Balcke Dürr. All other~~our VIEs are considered immaterial, individually and in aggregate, to our condensed consolidated financial statements.

Sale of ~~Dry Cooling~~Transformers Solutions Business

On ~~March 30, 2016,~~October 1, 2021, we completed the previously announced sale of ~~our dry cooling business, a business previously within our Engineered~~SPX Transformer Solutions, ~~reportable segment,~~Inc. (“Transformer Solutions”) pursuant to ~~Paharpur Cooling Towers Limited (“Paharpur”~~the terms of the Stock Purchase Agreement dated June 8, 2021 with GE-Prolec Transformers, Inc. (the “Purchaser”) and Prolec GE Internacional, S. de R.L. de C.V. We transferred all of the outstanding common stock of Transformer Solutions to the Purchaser for an aggregate cash purchase price of $645.0 (the “Transaction”). The purchase price is subject to potential adjustment based on Transformer Solutions’ cash, debt and working capital on the date the Transaction was consummated, as well as for specified transaction expenses and other specified items, with the net cash proceeds of $45.9 (net of cash transferred with the business of $3.0), resulting in a gain during the quarter ended April 2, 2016 of $17.9. The gain includes a reclassification from “Equity” of other comprehensive incomereceived totaling ~~$40.4 related to foreign currency translation.~~

During the second quarter of 2016, we reduced the gain by $1.2 in connection with adjustments to certain liabilities retained from the sale. During the third quarter of 2016, we increased the gain by $1.7 in connection with the settlement of the final working capital associated with the business.

In connection with the sale, we provided customary indemnifications to Paharpur. Accordingly, it is possible that the sales price and resulting gain for this divestiture may be materially adjusted in subsequent periods.

~~Sale of Balcke Dürr Business~~

~~On December 30, 2016, we completed~~$620.6. After the sale of ~~Balcke Dürr~~Transformer Solutions, we have only a limited presence in the power generation markets and are now focusing our efforts and investments on the HVAC and detection and measurement markets. Historically, Transformer Solutions’ operations have had a significant impact on our consolidated financial results, with revenues totaling approximately 25% of our total consolidated revenues. As we no longer have a consequential presence in the power generation markets, and given Transformer Solutions' significance to ~~a subsidiary of mutares AG (the “Buyer”) for cash proceeds of less than $0.1. In addition,~~our historical consolidated financial results, we ~~left $21.1 of cash in Balcke Dürr at the time of~~have concluded that the sale ~~and provided~~of Transformer Solutions represents a strategic shift. Accordingly, we have classified the ~~Buyer with~~business as a ~~non-interest bearing loan of $9.1, payable~~discontinued operation in ~~installments due at~~ the ~~end of 2018 and 2019. The results of Balcke Dürr are presented~~accompanying condensed consolidated financial statements for all periods presented. See Note 3 for additional details.

Change in Segment Reporting Structure

As noted above, Transformer Solutions is now being reported as a discontinued operation within the accompanying condensed consolidated financial statements. In ~~connection~~addition, the remaining operations of our former Engineered Solutions reportable segment, with annual income representing less than 5% of the ~~sale, we recorded~~total annual income of our reportable segments, are being reported within our HVAC reportable segment, as these operations are now being managed, and evaluated by our Chief Operating Decision Maker, as part of our HVAC cooling business.

Wind-Down of the SPX Heat Transfer Business

As a ~~net loss~~continuation of ~~$78.6 in~~our strategic shift away from power-generation markets, during the fourth quarter of ~~2016 to “Gain (loss)~~2020, we completed the wind-down of the SPX Heat Transfer business (“Heat Transfer”), which included providing all products and services on ~~disposition~~the business’s remaining contracts with customers. As a result, we are reporting Heat Transfer as a discontinued operation in the accompanying condensed consolidated financial statements for all periods presented. See Note 3 for additional details.

Acquisition of ~~discontinued operations,~~ULC

On September 2, 2020, we completed the acquisition of ULC Robotics (“ULC”), a leading developer of robotic systems, machine learning applications, and inspection technology for the energy, utility, and industrial markets, for cash proceeds of $89.2, net of ~~tax.” During~~cash acquired of $4.0. Under the ~~first quarter~~terms of ~~2017, we reduced~~ the ~~net loss associated~~purchase and sales agreement, the seller was eligible for additional cash consideration of up to $45.0, with payments scheduled to be made upon successful achievement of certain operational and financial performance milestones. At the ~~sale~~time of ~~Balcke Dürr by $7.2. The reduction was comprised of an additional income tax benefit recorded for~~ the sale of $8.4, partially offset by adjustments to liabilities retained in connection with the sale of $1.2. During the second quarter of 2017, we increased the net loss associated with the sale of Balcke Dürr by $0.4, with the increase resulting from adjustments to liabilities retained in connection with the sale.

The purchase agreement provided that existing parent company guarantees of approximately €79.0 and bank and surety bonds of approximately €79.0 would remain in place through each instrument’s expiration date, with such expiration dates ranging from 2017 to 2022. Balcke Dürr and the Buyer have provided us a full indemnity in the event that any of these guarantees or bonds are called. Also, Balcke Dürr has provided cash collateral of €4.0 and mutares AG has provided a guarantee of €5.0 as a security for the above indemnifications. In connection with the sale,acquisition, we recorded a liability ~~for~~of $24.3, which

represented the estimated fair value of the ~~guarantees~~contingent consideration. During the third quarter of 2021, we concluded that the operational and ~~bonds~~financial milestones noted above would not be achieved. As a result, we reversed the liability of $24.3 during the quarter, with the offset recorded to “Other operating (income) expense” (See Note 9 for further discussion of this matter). The post-acquisition operating results of ULC are reflected within our Detection and ~~an asset~~Measurement reportable segment.

Acquisition of Sensors & Software

On November 11, 2020, we completed the acquisition of Sensors & Software Inc. (“Sensors & Software”), a leading manufacturer and distributor of ground penetrating radar products used for locating underground utilities, detecting unexploded ordinances, and geotechnical and geological investigations, for cash proceeds of $15.5, net of cash acquired of $0.3. Under the terms of the purchase and sales agreement, the seller is eligible for additional cash consideration of up to $3.9, with payment scheduled to be made upon successful achievement of a financial performance milestone during the twelve months following the date of acquisition. The estimated fair value of such contingent consideration is $0.7, which is reflected as a liability in our condensed consolidated balance sheets as of October 2, 2021 and December 31, 2020. The post-acquisition operating results of Sensors & Software are reflected within our Detection and Measurement reportable segment.

Acquisition of Sealite

On April 19, 2021, we completed the acquisition of Sealite Pty Ltd and affiliated entities, including Sealite USA, LLC (doing business as Avlite Systems) and Star2M Pty Ltd (collectively, “Sealite”). Sealite is a leader in the design and manufacture of marine and aviation Aids to Navigation products. We purchased Sealite for cash ~~collateral~~proceeds of $80.3, net of cash acquired of $2.3. The post-acquisition operating results of Sealite are reflected within our Detection and ~~indemnities provided. See Note 15~~Measurement Reportable segment.

Acquisition of ECS

On August 2, 2021, we completed the acquisition of Enterprise Control Systems Ltd (“ECS”), a leader in the design and manufacture of highly-engineered tactical datalinks and radio frequency (“RF”) countermeasures, including counter-drone and counter-IED RF jammers. We purchased ECS for ~~further details regarding these~~cash proceeds of $39.4, net of cash acquired of $5.1. Under the terms of the purchase and sales agreement, the seller is eligible for additional cash consideration of up to $16.8, with payment to be made in 2022 upon successful achievement of certain financial performance milestones. The estimated fair ~~values.~~value of such contingent consideration is $8.2, which is reflected as a liability in our condensed consolidated balance sheet as of October 2, 2021. The post-acquisition operating results of ECS are reflected within our Detection and Measurement reportable segment.

The ~~final sales price for Balcke Dürr is~~assets acquired and liabilities assumed in the Sensors & Software, Sealite and ECS transactions have been recorded at estimates of fair value as determined by management, based on information available and assumptions as to future operations and are subject to ~~adjustment based on cash~~change, primarily for the final assessment and ~~working capital existing at the closing date and is subject to agreement with the Buyer. Final agreement~~valuation of the cash and working capital amounts with the Buyer has yet to occur. Accordingly, it is possible that the sales price and resulting loss for this divestiture may be materially adjusted in subsequent periods.certain income tax amounts.

Other

Preparing financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ from these estimates. The unaudited information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2020. Interim results are not necessarily indicative of full year results. We have reclassified certain prior year amounts, including the results of discontinued operations, to conform to the current year presentation. Unless otherwise indicated, amounts provided in these Notes pertain to continuing operations only. See Note 3 for information on discontinued operations.

We establish actual interim closing dates using a fiscal calendar, which requires our businesses to close their books on the Saturday closest to the end of the first calendar quarter, with the second and third quarters being 91 days in length. Our fourth quarter ends on December 31. The interim closing dates for the first, second and third quarters of ~~2017~~2021 are April 1,3, July 13 and ~~September 30,~~October 2, compared to the respective ~~April 2, July 2~~March 28, June 27 and ~~October 1, 2016~~September 26, 2020 dates. We had ~~two fewer~~five more days in the first quarter of ~~2017~~2021 and will have ~~one more day~~six fewer days in the fourth quarter of ~~2017~~2021 than in the respective ~~2016~~2020 periods. ~~We do~~It is not ~~believe~~practicable to estimate the ~~two fewer~~impact of the five additional days ~~during the first quarter of 2017 had a material impact~~ on our consolidated operating results for the ~~first~~ nine months ~~of 2017,~~ended October 2, 2021, when compared to the consolidated operating results for the 2020 respective ~~2016~~ period.

(2)NEW ACCOUNTING PRONOUNCEMENTS

The following is a summary of new accounting pronouncements that apply or may apply to our business.

In ~~May 2014,~~June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13. ASU 2016-13 changes how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income, based on historical experience, current conditions and reasonable and supportable forecasts. The requirements of ASU 2016-13 are to be applied on a ~~new standard~~modified retrospective basis, which entails

recognizing the initial effect of adoption in retained earnings.We adopted ASU 2016-13 on ~~revenue recognition that outlines a single comprehensive model~~January 1, 2020, which resulted in an increase of our retained deficit of $0.5.

In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for ~~entities to use in~~Income Taxes (Topic 740). This ASU simplifies the accounting for ~~revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new standard contains a five-step~~income taxes by, among other things, eliminating certain existing exceptions related to the general approach ~~that entities will apply~~in ASC 740 relating to ~~determine the measurement of revenue and timing of when it is recognized, including (i) identifying the contract(s) with a customer, (ii) identifying the separate performance obligations~~franchise taxes, reducing complexity in the ~~contract, (iii) determining~~interim-period accounting for year-to-date loss limitations and changes in tax laws, and clarifying the ~~transaction price, (iv) allocating~~accounting for the ~~transaction price to separate performance obligations, and (v) recognizing revenue when (or as) each performance obligation is satisfied.~~step-up in the tax basis of goodwill. The ~~new standard requires a number of disclosures intended to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue,~~transition requirements are primarily prospective and the related cash flows. The disclosures include qualitative and quantitative information about contracts with customers, significant judgments made in applying the revenue guidance, and assets recognized from the costs to obtain or fulfill a contract. The standardeffective date is ~~effective~~ for interim and annual reporting periods beginning after December 15, 2017 and we currently plan to adopt the standard using the modified retrospective transition method. The modified retrospective transition approach will recognize any changes from the beginning of the year of initial application through retained earnings2020, with early adoption permitted. We adopted this guidance on January 1, 2021, with no restatement of comparative periods. We are continuing to assess the potential effect that the standard is expected to have on our consolidated financial statements. We believe the more significant effects on our existing accounting policies will be associated with our power transformer business. Under the new standard, revenue for our power transformers will be recognized over time, which is a change from our current accounting policy of recognizing revenue for power transformers at a point in time.

In February 2016, the FASB issued an amendment to existing guidance that requires lessees to recognize assets and liabilities for the rights and obligations created by long-term leases. In addition, this amendment requires new qualitative and quantitative disclosures about leasing arrangements. This standard is effective for annual periods beginning on or after December 15, 2018 for public business entities, and interim periods within those fiscal years. Early adoption is permitted, and adoption must be applied on a modified retrospective basis. We are currently evaluating the effect this new standard will havematerial impact on our condensed consolidated financial statements.

The London Interbank Offered Rate (“LIBOR”) is scheduled to be discontinued on June 30, 2023, with some tenors ceasing on December 31, 2021. In ~~March 2016,~~an effort to address the various challenges created by such discontinuance, the FASB issued ~~an amendment~~two amendments to existing guidance, ASU No. 2020-04 and No. 2021-01, Reference Rate Reform. The amended guidance is designed to provide relief from the accounting analysis and impacts that ~~simplifies several aspects~~may otherwise be required for modifications to agreements (e.g., loans, debt securities, derivatives, etc.) necessitated by the reference rate reform. It also provides optional expedients to enable companies to continue to apply hedge accounting to certain hedging relationships impacted by the reference rate reform. Application of the ~~accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification~~guidance in the ~~statement~~amendments is optional, is only available in certain situations, and is only available for companies to apply until December 31, 2022. We are currently evaluating the impacts of ~~cash flows. This standard is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those annual reporting periods. We adopted this~~reference rate reform and the new guidance on ~~January 1, 2017, and, thus, excess income tax benefits recognized on stock-based compensation awards are now being reflected, on a prospective basis, in~~ our condensed consolidated ~~statement~~financial statements.

(3) ACQUISITIONS AND DISCONTINUED OPERATIONS

As indicated in Note 1, on September 2, 2020, November 11, 2020, April 19, 2021 and August 2, 2021, we completed the acquisitions of ULC, Sensors & Software, Sealite and ECS, respectively. The pro forma effects of these acquisitions, to the applicable periods, are not material to the accompanying condensed consolidated results of operations.

Sale of Transformer Solutions Business

As discussed in Note 1, on October 1, 2021, we completed the sale of Transformer Solutions for net cash proceeds of $620.6. In connection with the sale, we recorded a gain of $357.7 to “Gain (loss) on disposition of discontinued operations, ~~as a component~~net of ~~the provision for income taxes (versus the previous requirement to reflect such amounts~~tax” within ~~“equity”). In accordance with this prospective adoption, we recognized income tax benefits of $0.1 and $1.3 in~~ our condensed consolidated statements of operations for the three and nine

months ended ~~September 30, 2017, respectively. In addition, we prospectively adopted~~October 2, 2021.

The final sales price for Transformer Solutions is subject to adjustment based on cash, debt and working capital existing at the ~~amendment~~closing date, as well as for specified transaction expenses and other specified items, and is subject to ~~present excess income tax benefits on share-based compensation awards as an operating activity within our condensed consolidated statement~~agreement with the Purchaser, with final agreement of ~~cash flows (versus~~these items yet to occur. Accordingly, it is possible that the ~~previous requirement to reflect such amounts as a financing activity), which resulted~~sales price and resulting gain for this divestiture may be materially adjusted in the classification of $1.3 of such income tax benefits within operating activities of the condensed consolidated statement of cash flows for the nine months ended September 30, 2017. Cash paid on employees’ behalf related to shares withheld for income taxes payable continues to be classified as a financing activity. Lastly, we elected to continue estimating stock-based compensation award forfeitures in determining the amount of compensation expense to be recognized in each period.subsequent periods.

In August 2016, the FASB issued an amendment to existing guidance to reduce diversity in practice in how certain cash receipts and cash payments are presented in the statement of cash flows. This amendment provides clarification on eight specific cash flow presentation issues. The issues include, but are not limited to, debt prepayment or extinguishment costs, settlement of zero-coupon debt, proceeds from the settlement of insurance claims, and cash receipts from payments on beneficial interests in securitization transactions. This amendment is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods. Early adoption is permitted. We are currently evaluating the effect this amendment will have on our condensed consolidated financial statements.

~~In January 2017, the FASB issued an amendment to simplify the subsequent measurement of goodwill by removing the second step of the two-step impairment test.~~

The amendment requires that an entity recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. This amendment is effective for annual reporting periods beginning after December 31, 2019, including interim periods within those annual reporting periods. Early adoption is permitted. The impact of this amendment on our consolidated financial statements will depend on the results of ~~future goodwill impairment tests.~~

In March 2017, the FASB issued an amendment to revise the presentation of net periodic pension and postretirement benefit cost. The amendment requires the service cost component to be presented separately from the other components of net periodic pension and postretirement benefit cost. Service cost will be presented with other employee compensation costs within operating income. The other components of net periodic pension and postretirement benefit cost, such as interest cost, expected return on plan assets, amortization of prior service cost/credits, and gains or losses, are required to be separately presented outside of operating income. This amendment is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual periods. The amendment to the presentation in the income statement of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost shall be applied retrospectively. Early adoption is permitted. We will adopt the standard effective January 1, 2018. The adoption is not expected to have a material impact on our condensed consolidated financial statements. See Note 9 for details of our pension and postretirement expense.

In August 2017, the FASB issued significant amendments to hedge accounting. The FASB’s new guidance will make more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. The amendments can be adopted immediately in any interim or annual period (including the current period). The mandatory effective date for calendar year-end public companies is January 1, 2019. We are currently evaluating the effect this amendment will have on our condensed consolidated financial statements.


~~(3)~~	~~DISCONTINUED OPERATIONS~~

~~As indicated in Note 1, the results of Balcke Dürr~~Transformer Solutions are presented as a discontinued operation ~~within the accompanying condensed consolidated financial statements~~for all periods presented. Major line items constituting pre-tax income and after-tax income (loss) of Transformer Solutions for the three and nine months ended October 2, 2021 and September 26, 2020 are shown below:


	Three months ended				Nine months ended
	October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020
Revenues	$	94.4	$	95.1	$	313.5	$	319.6
Costs and expenses:
Cost of product sold	81.3		78.4		258.0		253.5
Selling, general and administrative	10.3		7.0		28.4		23.0


Other income, net	—		0.2		—		0.9

Income before income tax	2.8		9.9		27.1		44.0
Income tax provision	(33.8)		(2.7)		(6.8)		(10.5)
Income (loss) from discontinued operations, net of tax	$	(31.0)	$	7.2	$	20.3	$	33.5

The assets and liabilities of Transformer Solutions have been classified as assets and liabilities of discontinued operations as of December 31, 2020. The major line items constituting Transformer Solutions assets and liabilities as of December 31, 2020 are shown below:


ASSETS

Accounts receivable, net	$	50.9
Contract assets	48.6
Inventories, net	18.9
Other current assets	3.2
Property, plant and equipment:
Land	6.5
Buildings and leasehold improvements	63.1
Machinery and equipment	141.1
	210.7
Accumulated depreciation	(131.0)
Property, plant and equipment, net	79.7
Goodwill	131.3
Other assets	8.1
Total assets - discontinued operations	$	340.7
LIABILITIES
Accounts payable	$	34.1
Contract liabilities	57.2
Accrued expenses	24.5
Deferred and other income taxes	21.6
Other long-term liabilities	9.1
Total liabilities - discontinued operations	$	146.5

Wind-Down of the Heat Transfer Business

As discussed in Note 1, ~~2016.~~ we completed the wind-down of Heat Transfer in the fourth quarter of 2020. As a result of completing the wind-down plan, we are reporting Heat Transfer as a discontinued operation for all prior periods presented.

Major ~~classes of~~ line items constituting pre-tax ~~loss~~income (loss) and after-tax ~~loss~~income (loss) of ~~Balcke Dürr~~Heat Transfer for the three and nine months ended September 26, 2020 are shown below:


	Three months ended		Nine months ended
	September 26, 2020		September 26, 2020
Revenues	$	—	$	3.2

Cost of product sold	0.1		2.6
Selling, general and administrative	(0.1)		0.1

Special charges, net	0.1		0.5

Income (loss) before income tax	(0.1)		—
Income tax provision	—		—
Income (loss) from discontinued operations, net of tax	$	(0.1)	$	—

We recognized net gain (loss) of $(3.3) and $0.0 during the three and nine months ended October 2, 2021 and net gain (loss) of $0.1 and $(1.2) during the three and nine months ended September 26, 2020 within “Gain (loss) on disposition of discontinued operations, net of tax” resulting primarily from revisions to liabilities, including income tax liabilities, retained in connection with prior businesses classified as discontinued operations.

(4) REVENUES FROM CONTRACTS

Disaggregated Revenues

We disaggregate revenue from contracts with customers by major product line and based on the timing of recognition for each of our reportable segments and our other operating segment, as we believe such disaggregation best depicts how the nature, amount, timing, and uncertainty of our revenues and cash flows are affected by economic factors, with such disaggregation presented below for the three and nine months ended October ~~1, 2016~~2, 2021 and September 26, 2020:


	Three months ended October 2, 2021
Reportable Segments and Other	HVAC		Detection and Measurement		Other		Total

Major product lines
Package and process cooling equipment and services	$	104.1	$	—	$	—	$	104.1
Boilers, comfort heating, and ventilation	75.2		—		—		75.2
Underground locators, inspection and rehabilitation equipment, and robotic systems	—		60.1		—		60.1
Communication technologies, obstruction lighting, and bus fare collection systems	—		46.3		—		46.3

South African projects	—		—		0.1		0.1
	$	179.3	$	106.4	$	0.1	$	285.8

Timing of Revenue Recognition
Revenues recognized at a point in time	$	154.1	$	94.5	$	—	$	248.6
Revenues recognized over time	25.2		11.9		0.1		37.2
	$	179.3	$	106.4	$	0.1	$	285.8



	Nine months ended October 2, 2021
Reportable Segments and Other	HVAC		Detection and Measurement		Other		Total

Major product lines
Package and process cooling equipment and services	$	317.3	$	—	$	0.2	$	317.5
Boilers, comfort heating, and ventilation	223.0		—		—		223.0
Underground locators, inspection and rehabilitation equipment, and robotic systems	—		193.4		—		193.4
Communication technologies, obstruction lighting, and bus fare collection systems	—		135.8		—		135.8

South African projects	—		—		0.7		0.7
	$	540.3	$	329.2	$	0.9	$	870.4

Timing of Revenue Recognition
Revenues recognized at a point in time	$	474.8	$	292.5	$	—	$	767.3
Revenues recognized over time	65.5		36.7		0.9		103.1
	$	540.3	$	329.2	$	0.9	$	870.4


	Three months ended September 26, 2020
Reportable Segments and Other	HVAC		Detection and Measurement		Other		Total

Major product lines
Package and process cooling equipment and services	$	107.7	$	—	$	0.2	$	107.9
Boilers, comfort heating, and ventilation	74.9		—		—		74.9
Underground locators, inspection and rehabilitation equipment, and robotic systems	—		52.0		—		52.0
Communication technologies, obstruction lighting, and bus fare collection systems	—		33.2		—		33.2
South African Projects	—		—		0.3		0.3
	$	182.6	$	85.2	$	0.5	$	268.3

Timing of Revenue Recognition
Revenues recognized at a point in time	$	160.6	$	76.2	$	—	$	236.8
Revenues recognized over time	22.0		9.0		0.5		31.5
	$	182.6	$	85.2	$	0.5	$	268.3



	Nine months ended September 26, 2020
Reportable Segments and Other	HVAC		Detection and Measurement		Other		Total

Major product lines
Package and process cooling equipment and services	$	319.4	$	—	$	0.6	$	320.0
Boilers, comfort heating, and ventilation	191.2		—		—		191.2
Underground locators, inspection and rehabilitation equipment, and robotic systems	—		148.0		—		148.0
Communication technologies, obstruction lighting, and bus fare collection systems	—		121.2		—		121.2
South African projects	—		—		2.7		2.7
	$	510.6	$	269.2	$	3.3	$	783.1

Timing of Revenue Recognition
Revenues recognized at a point in time	$	429.6	$	245.4	$	0.2	$	675.2
Revenues recognized over time	81.0		23.8		3.1		107.9
	$	510.6	$	269.2	$	3.3	$	783.1

Contract Balances

Our customers are ~~shown below:~~

Three months ended Nine months ended
October 1,
2016 October 1,
2016
Revenues $ 40.2
$ 110.4
Costs and expenses:

Cost of products sold 37.0
103.6
Selling, general and administrative 7.8
23.9
Special charges (credits), net (0.4 ) (1.0 )
Other expense, net (0.3 ) (0.5 )
Loss before taxes (4.5 ) (16.6 )
Income tax benefit 0.5
4.0
Loss from discontinued operations, net of tax $ (4.0 ) $ (12.6 )

~~The following table presents selected financial information~~invoiced for ~~Balcke Dürr that is included~~products and services at the time of delivery or based on contractual milestones, resulting in outstanding receivables with payment terms from these customers (“Contract Accounts Receivable”). In some cases, the timing of revenue recognition, particularly for revenue recognized over time, differs from when such amounts are invoiced to customers, resulting in a contract asset (revenue recognition precedes the invoicing of the related revenue amount) or a contract liability (payment from the customer precedes recognition of the related revenue amount). Contract assets and liabilities are generally classified as current. On a contract-by-contract basis, the contract assets and contract liabilities are reported net within ~~discontinued operations in the~~our condensed consolidated ~~statement~~balance sheets. Our contract balances consisted of the following as of October 2, 2021 and December 31, 2020:


Contract Balances	October 2, 2021		December 31, 2020		Change
Contract Accounts Receivable(1)	$	202.8	$	210.6	$	(7.8)
Contract Assets	23.7		32.5		(8.8)
Contract Liabilities - current	(50.7)		(46.3)		(4.4)
Contract Liabilities - non-current(2)	(5.9)		(3.4)		(2.5)
Net contract balance	$	169.9	$	193.4	$	(23.5)

___________________________

(1) Included in “Accounts receivable, net” within the accompanying condensed consolidated balance sheets.

(2) Included in “Other long-term liabilities” within the accompanying condensed consolidated balance sheets.

The $23.5 decrease in our net contract balance from December 31, 2020 to October 2, 2021 was due primarily to cash ~~flows for~~payments received from customers during the ~~nine months ended October 1, 2016:~~

Non-cash items included in loss from discontinued operations:
Depreciation and amortization $ 1.5
Capital expenditures 0.6

During the first quarter of 2017, we reduced the net loss associated with the sale of Balcke Dürr by $7.2. The reduction was comprised of an additional income tax benefit recorded for the sale of $8.4,period, partially offset by adjustments to liabilities retained in connection with the sale of $1.2. During the second quarter of 2017, we increased the net loss associated with the sale of Balcke Dürr by $0.4, with the increase resulting from adjustments to liabilities retained in connection with the sale. In addition to the adjustments to the net loss related to the Balcke Dürr sale, werevenue recognized ~~net income (losses) of $0.3 and $(0.1)~~ during the ~~three and nine months ended September 30, 2017, and $(0.7) and $(2.2) during~~period.

During the three and nine months ended October ~~1, 2016,~~2, 2021, we recognized revenues of $8.6 and $31.8, respectively, related to our contract liabilities at December 31, 2020.

Performance Obligations

As of October 2, 2021, the aggregate amount allocated to remaining performance obligations was $102.5. We expect to recognize revenue on approximately 63% and 86% of remaining performance obligations over the next 12 and 24 months, respectively, ~~resulting from revisions~~with the remaining recognized thereafter.

(5) LEASES

There have been no material changes to ~~liabilities retained from businesses discontinued prior to 2016.~~

~~For~~our operating and finance leases during the ~~three and~~ nine months ended ~~September 30, 2017 and~~ October ~~1, 2016, the table below presents a reconciliation of discontinued operations activity to the related amounts in the condensed consolidated statements of operations:~~2, 2021.

Three months ended Nine months ended
September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016
Balcke Dürr
Loss from discontinued operations $ —

$ (4.5 )
$ (2.6 )
$ (16.6 )
Income tax benefit —

0.5

9.4

4.0
Income (loss) from discontinued operations, net —

(4.0 )
6.8

(12.6 )

All other

Loss from discontinued operations (0.1 )
(0.5 )
(1.0 )
(2.3 )
Income tax (provision) benefit 0.4

(0.2 )
0.9

0.1
Income (loss) from discontinued operations, net 0.3

(0.7 )
(0.1 )
(2.2 )

Total

Loss from discontinued operations (0.1 )
(5.0 )
(3.6 )
(18.9 )
Income tax benefit 0.4

0.3

10.3

4.1
Income (loss) from discontinued operations, net $ 0.3

$ (4.7 )
$ 6.7

$ (14.8 )

~~(4)~~(6) INFORMATION ON REPORTABLE SEGMENTS AND “OTHER” OPERATING SEGMENT

We are a global supplier of highly ~~specialized~~specialized, engineered solutions with operations in over 15 countries and sales in over 100 countries around the world.

Our DBT Technologies (PTY) LTD (“DBT”) operating segment is reported within an “Other” category outside of our reportable segments. We have aggregated our other operating segments into the following ~~three~~2 reportable segments: HVAC and Detection and ~~Measurement, and Engineered Solutions.~~Measurement. The factors considered in determining our aggregated segments are the economic similarity of the businesses, the nature of products sold or services provided, production processes, types of customers, distribution methods, and regulatory environment. In determining our reportable segments, we apply the threshold criteria of the Segment Reporting Topic of the Codification. Operating income or loss for each of our operating segments is determined before considering impairment and

special charges, ~~pension and postretirement expense/income,~~ long-term incentive compensation, certain other operating income/expense, and other indirect corporate expenses. This is consistent with the way our ~~chief operating decision maker~~Chief Operating Decision Maker evaluates the results of each segment.

HVAC Reportable Segment

Our HVAC reportable segment engineers, designs, manufactures, installs and services package and process cooling equipment products for the HVAC industrial and ~~industrial~~power generation markets, as well as boilers and comfort heating and ventilation products for the residential and commercial markets. The primary distribution channels for the segment’s products are direct to customers, independent manufacturing representatives, third-party distributors, and retailers. The segment serves a customer base in North America, Europe, and ~~Asia Pacific.~~Asia.

Detection and Measurement Reportable Segment

Our Detection and Measurement reportable segment engineers, designs, manufactures, services, and installs underground pipe and cable locators, inspection and ~~inspection~~rehabilitation equipment, robotic systems, bus fare collection systems, communication technologies, and ~~specialty~~obstruction lighting. The primary distribution channels for the segment’s products are direct to customers and third-party distributors. The segment serves a global customer base, with a strong presence in North America, Europe, Africa and ~~Asia Pacific.~~Asia.

~~Engineered Solutions Reportable Segment~~Other

As noted above, “Other” consists of our South African operating segment, DBT. Our ~~Engineered Solutions reportable~~DBT operating segment engineers, designs, manufactures, installs, and services ~~transformers for the power transmission and distribution market and process cooling~~ equipment ~~and heat exchangers~~ for the industrial and power generation ~~markets. The primary distribution channels~~markets, with its efforts focused primarily on 2 large power projects in South Africa that are in the final stages of completion (see Note 15 for ~~the segment’s products are direct to customers and third-party representatives. The segment has a strong presence in North America and South Africa.~~additional details).

Corporate Expense

Corporate expense generally relates to the cost of our Charlotte, North Carolina corporate headquarters.

Financial data for our reportable segments and our other operating segment for the three and nine months ended October 2, 2021 and September ~~30, 2017 and October 1, 2016~~26, 2020 are presented below:

Three months ended Nine months ended
September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016
Revenues: ⁽¹⁾

HVAC segment $ 119.4
$ 116.9
$ 349.8
$ 350.4
Detection and Measurement segment 66.9
52.3
185.0
167.8
Engineered Solutions segment ⁽²⁾
162.2
175.8
504.0
558.8
Consolidated revenues $ 348.5
$ 345.0
$ 1,038.8
$ 1,077.0

Income:

HVAC segment $ 15.6
$ 15.6
$ 47.5
$ 48.6
Detection and Measurement segment 16.5
7.8
45.0
30.9
Engineered Solutions segment ^{(2) (3)}
13.3
2.6
7.9
8.5
Total income for segments 45.4
26.0
100.4
88.0

Corporate expense (11.0 ) (9.6 ) (33.7 ) (29.6 )
Long-term incentive compensation expense (3.6 ) (4.1 ) (10.4 ) (10.2 )
Pension and postretirement income (expense) 1.4
(0.8 ) (1.2 ) (4.6 )
Special charges, net (1.0 ) (1.9 ) (2.0 ) (4.8 )
Impairment of intangible assets —
—
—
(4.0 )
Gain on sale of dry cooling business —
1.7
—
18.4
Consolidated operating income $ 31.2
$ 11.3
$ 53.1
$ 53.2


	Three months ended				Nine months ended
	October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020
Revenues:
HVAC reportable segment	$	179.3	$	182.6	$	540.3	$	510.6
Detection and Measurement reportable segment	106.4		85.2		329.2		269.2
Other	0.1		0.5		0.9		3.3
Consolidated revenues	$	285.8	$	268.3	$	870.4	$	783.1

Income (loss):
HVAC reportable segment	$	21.4	$	26.8	$	69.1	$	64.1
Detection and Measurement reportable segment	9.9		14.2		41.3		48.4
Other	(4.1)		(5.3)		(12.6)		(13.9)
Total income for segments	27.2		35.7		97.8		98.6

Corporate expense	(11.5)		(11.8)		(39.0)		(33.8)
Long-term incentive compensation expense	(3.4)		(3.2)		(9.5)		(9.6)

Special charges, net	(0.5)		(0.3)		(1.9)		(1.6)
Other operating income (expense)(1)	—		—		(2.7)		0.4
Consolidated operating income	$	11.8	$	20.4	$	44.7	$	54.0

___________________________

⁽¹⁾

Under the percentage-of-completion method, we recognized revenues of $67.0 and $78.3 in the three months ended September 30, 2017 and October 1, 2016, respectively. For the nine months ended September 30, 2017 and October 1, 2016, revenues under the percentage-of-completion method were $211.6 and $262.7, respectively. Costs and estimated earnings in excess of billings on uncompleted contracts accounted for under the percentage-of-completion method were $41.0 and $33.9 as of September 30, 2017 and December 31, 2016, respectively, and are reported as a component of ‘‘Accounts receivable, net’’ in the condensed consolidated balance sheets. Billings in excess of costs and estimated earnings on uncompleted contracts accounted for under the percentage-of-completion method were $19.7 and $53.3 as of September 30, 2017 and December 31, 2016, respectively, and are reported as a component of ‘‘Accrued expenses’’ in the condensed consolidated balance sheets.

(1) For the nine months ended October 2, 2021, includes a charge of $2.7 related to revisions of recorded assets for asbestos-related claims. For the nine months ended September 26, 2020, includes a gain of $0.4 related to revisions to estimates of certain liabilities retained in connection with the 2016 sale of the dry cooling business.


⁽²⁾	As further discussed in Note 13, during the second quarter of 2017, we made revisions to our expected revenues and profits on our large power projects in South Africa. As a result of these revisions, we reduced revenue and segment income by $13.5 and $22.9, respectively, for the nine months ended September 30, 2017.


⁽³⁾	During the third quarter of 2017, we settled a contract that had been suspended and then ultimately cancelled by a customer for cash proceeds of $9.0 and other consideration. In connection with the settlement, we recorded a gain of $10.2 during the quarter within our Engineered Solutions reportable segment.


~~(5)~~	~~SPECIAL CHARGES, NET~~

(7) SPECIAL CHARGES, NET

Special charges, net, for the three and nine months ended October 2, 2021 and September ~~30, 2017 and October 1, 2016~~26, 2020 are described in more detail below:


	Three months ended				Nine months ended
	October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020
HVAC reportable segment	$	—	$	—	$	0.2	$	0.5
Detection and Measurement reportable segment	—		—		0.6		0.1
Other	0.5		—		1.1		0.2
Corporate	—		0.3		—		0.8
Total	$	0.5	$	0.3	$	1.9	$	1.6

Three months ended Nine months ended
September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016
HVAC segment $ —
$ —
$ 0.4
$ —
Detection and Measurement segment —
0.3
0.3
0.5
Engineered Solutions segment 1.0
1.8
1.2
4.5
Corporate —
(0.2 ) 0.1
(0.2 )
Total $ 1.0
$ 1.9
$ 2.0
$ 4.8

HVAC ~~Segment~~ — Charges for the nine months ended ~~September 30, 2017 related primarily to severance costs associated with a restructuring action at the segment’s Cooling Americas business.~~

~~Detection and Measurement Segment~~ ~~— Charges for the nine months ended September 30, 2017~~October 2, 2021 related to severance costs associated with a restructuring action at one of the ~~segment’s communication technologies business during~~segment's heating businesses. Charges for the ~~first quarter~~nine months ended September 26, 2020 related primarily to severance costs associated with restructuring actions at one of ~~2017.~~ the segment's heating businesses and its Cooling Americas business.

Detection and Measurement — Charges for the nine months ended October 2, 2021 related to severance costs for restructuring actions at the segment's location and inspection businesses. Charges for the nine months ended September 26, 2020 related to severance costs for a restructuring action at the segment's bus fare collection systems business.

Other — Charges for the three and nine months ended October ~~1, 2016 related to~~2, 2021 included an asset impairment charge and severance costs ~~associated~~incurred in connection with ~~a restructuring action~~the wind-down activities at DBT. Charges for the ~~segment’s bus fare collection systems business.~~nine months ended September 26, 2020 included severance costs at DBT.

~~Engineered Solutions Segment~~Corporate — Charges for the three and nine months ended September ~~30, 2017~~26, 2020 related ~~primarily~~ to severance costs associated with restructuring actions at the segment’s process cooling and South African businesses. Charges for the three and nine months ended October 1, 2016 related primarily to costs incurred in connection with restructuring actions at our Heat Transfer business in order to reduce the cost base of the business in response to reduced demand. The costs incurred for the Heat Transfer business restructuring actions included asset impairment and other charges associated with the ~~discontinuance of a product line and outsourcing initiatives of $0.7 and $3.3 for the three and nine months ended October 1, 2016, respectively, as well as severance costs.~~

~~Corporate~~ — Charges for the nine months ended September 30, 2017 related to severance costs incurred in connection with the sale of Balcke Dürr. The benefits for the three and nine months ended October 1, 2016 relatedmove to a ~~reduction~~new corporate headquarters.

No significant future charges are expected to be incurred under actions approved as of ~~severance costs accrued in connection with the spin-off of SPX FLOW Inc. in the third quarter of 2015.~~October 2, 2021.

The following is an analysis of our restructuring liabilities for the nine months ended October 2, 2021 and September ~~30, 2017 and October 1, 2016:~~26, 2020:


	Nine months ended							Nine months ended
	September 30, 2017			October 1, 2016				October 2, 2021		September 26, 2020
Balance at beginning of year	$	0.9		$	1.6		Balance at beginning of year	$	1.5	$	1.7
Special charges ⁽¹⁾	2.0			1.2			Special charges (1)	1.4		1.2
Utilization — cash	(1.4		)	(1.8		)	Utilization — cash	(2.4)		(2.3)
Currency translation adjustment and other	—			(0.2		)	Currency translation adjustment and other	—		(0.2)
Balance at end of period	$	1.5		$	0.8		Balance at end of period	$	0.5	$	0.4

___________________________


⁽¹⁾	~~The nine months ended September 30, 2017 and October 1, 2016 included $0.0 and $3.6 of non-cash charges, respectively, that did not impact the restructuring liability.~~

(1) For the nine months ended October 2, 2021 and September 26, 2020, excludes $0.5 and $0.4, respectively, of non-cash charges that impacted “Special charges” but not the restructuring liabilities.


~~(6)~~	~~INVENTORIES, NET~~

(8) INVENTORIES, NET

Inventories at ~~September 30, 2017~~October 2, 2021 and December 31, ~~2016~~2020 comprised the following:


	October 2, 2021		December 31, 2020
Finished goods	$	58.1	$	49.4
Work in process	23.7		21.3
Raw materials and purchased parts	102.4		84.3
Total FIFO cost	184.2		155.0
Excess of FIFO cost over LIFO inventory value	(13.9)		(11.9)
Total inventories, net	$	170.3	$	143.1

September 30,
2017 December 31,
2016
Finished goods $ 48.3
$ 43.0
Work in process 60.3
50.0
Raw materials and purchased parts 69.1
64.9
Total FIFO cost 177.7
157.9
Excess of FIFO cost over LIFO inventory value (12.1 ) (12.2 )
Total inventories, net $ 165.6
$ 145.7

Inventories include material, labor and factory overhead costs and are reduced, when necessary, to estimated net realizable values. Certain ~~domestic~~ inventories are valued using the last-in, first-out (“LIFO”) method. These inventories were approximately ~~60%~~31% and ~~51%~~35% of total inventory at ~~September 30, 2017~~October 2, 2021 and December 31, ~~2016,~~2020, respectively. Other inventories are valued using the first-in, first-out (“FIFO”) method.


~~(7)~~	~~GOODWILL AND OTHER INTANGIBLE ASSETS~~

(9) GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The changes in the carrying amount of goodwill ~~by reportable segment,~~for the nine months ended October 2, 2021 were as follows:


	December 31, 2020		Goodwill Resulting from Business Combinations (1)		Impairments (2)		Foreign Currency Translation		October 2, 2021
HVAC reportable segment
Gross goodwill	$	492.2	$	—	$	—	$	(6.5)	$	485.7
Accumulated impairments	(340.6)		—		—		4.5		(336.1)
Goodwill	151.6		—		—		(2.0)		149.6

Detection and Measurement reportable segment
Gross goodwill	351.5		64.2		—		(3.6)		412.1
Accumulated impairments	(134.5)		—		(23.3)		0.1		(157.7)
Goodwill	217.0		64.2		(23.3)		(3.5)		254.4

Other
Gross goodwill	—		—		—		—		—
Accumulated impairments	—		—		—		—		—
Goodwill	—		—		—		—		—

Total
Gross goodwill	843.7		64.2		—		(10.1)		897.8
Accumulated impairments	(475.1)		—		(23.3)		4.6		(493.8)
Goodwill	$	368.6	$	64.2	$	(23.3)	$	(5.5)	$	404.0

___________________________

(1)Reflects (i) goodwill acquired with the Sealite and ECS acquisitions of $38.5 and $20.6, respectively, (ii) an increase in ULC's goodwill during 2021 of $3.1 resulting from revisions to the valuation of certain assets and liabilities and income tax accounts, and (iii) an increase in Sensors & Software's goodwill of $2.0 resulting from revisions to the valuation of certain assets and liabilities and income tax accounts. As indicated in Note 1, the acquired assets, including goodwill, and liabilities assumed in the Sealite, ECS and Sensors & Software acquisitions have been recorded at estimates of fair value and are subject to change upon completion of acquisition accounting.

(2)As indicated in Note 1, we concluded during the third quarter of 2021 that the operating and financial milestones related to the ULC contingent consideration would not be achieved, resulting in the reversal of the related liability of $24.3, with the offset to “Other operating (income) expense.” We also concluded that the lack of achievement of these milestones, along with lower than anticipated future cash flows, are indicators of potential impairment related to ULC’s indefinite-lived intangible assets and goodwill. As such, we tested ULC’s indefinite-lived intangible assets and goodwill for impairment during the quarter. Based on such testing, we determined that the carrying value of ULC’s net assets exceeded the implied fair value of the business. As a result, we recorded an impairment charge to “Other operating (income) expense” of $24.3 during the quarter, with $23.3 related to goodwill and the remainder to trademarks.

December 31,
2016 Impairments
Foreign
Currency
Translation
and Other
September 30,
2017
HVAC segment

Gross goodwill $ 258.5
$ —
$ 4.7
$ 263.2
Accumulated impairments (144.2 ) —
(0.5 ) (144.7 )
Goodwill 114.3
—
4.2
118.5

Detection and Measurement segment

Gross goodwill 214.4
—
2.2
216.6
Accumulated impairments (134.2 ) —
(1.8 ) (136.0 )
Goodwill 80.2
—
0.4
80.6

Engineered Solutions segment

Gross goodwill 351.4
—
6.2
357.6
Accumulated impairments (205.5 ) —
(5.8 ) (211.3 )
Goodwill 145.9
—
0.4
146.3

Total

Gross goodwill 824.3
—
13.1
837.4
Accumulated impairments (483.9 ) —
(8.1 ) (492.0 )
Goodwill $ 340.4
$ —
$ 5.0
$ 345.4

Other Intangibles, Net

Identifiable intangible assets at ~~September 30, 2017~~October 2, 2021 and December 31, ~~2016~~2020 comprised the following:


																October 2, 2021						December 31, 2020
	September 30, 2017							December 31, 2016								Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Intangible assets with determinable lives:
Intangible assets with determinable lives (1):															Intangible assets with determinable lives (1):
Customer relationships	$	1.4	$	(1.4	)	$	—	$	1.4	$	(1.4	)	$	—	Customer relationships	$	126.6	$	(23.7)	$	102.9	$	103.4	$	(16.2)	$	87.2
Technology	2.1		(0.5		)	1.6		2.1		(0.4		)	1.7		Technology	65.9		(10.5)		55.4		54.4		(6.8)		47.6
Patents	4.5		(4.5		)	—		4.5		(4.5		)	—		Patents	4.5		(4.5)		—		4.5		(4.5)		—
Other	11.8		(7.8		)	4.0		12.7		(7.4		)	5.3		Other	22.4		(16.7)		5.7		18.8		(12.5)		6.3
	19.8		(14.2		)	5.6		20.7		(13.7		)	7.0			219.4		(55.4)		164.0		181.1		(40.0)		141.1
Trademarks with indefinite lives	112.1		—			112.1		110.9		—			110.9
Total ⁽¹⁾	$	131.9	$	(14.2	)	$	117.7	$	131.6	$	(13.7	)	$	117.9
Trademarks with indefinite lives (2)															Trademarks with indefinite lives (2)	173.2		—		173.2		163.9		—		163.9
Total															Total	$	392.6	$	(55.4)	$	337.2	$	345.0	$	(40.0)	$	305.0

___________________________

⁽¹⁾

(1)The identifiable intangible assets associated with the Sealite and ECS acquisitions consist of customer backlog of $1.9 and $0.8, respectively, customer relationships of $12.1 and $12.6, respectively, technology of $6.6 and $5.8, respectively, and definite-lived trademarks of $0.0 and $1.2, respectively.

(2)Changes during the nine months ended October 2, 2021 related primarily to the acquisition of Sealite trademarks of $11.6 and, as previously discussed, the impairment charge of $1.0 related to ULC's trademarks.

In connection with the acquisitions of Sealite and ECS, which have definite-lived intangible assets as noted above, we increased our estimated annual amortization expense related to intangible assets to approximately $21.0 for the full year 2021, and $19.0 for 2022 and each of the four years thereafter.

~~Changes in the gross carrying values of “Other Intangibles, Net” during the nine months ended September 30, 2017 related to foreign currency translation.~~

At ~~September 30, 2017,~~October 2, 2021, the net carrying value of intangible assets with determinable lives consisted of ~~$4.0~~$22.4 in the HVAC reportable segment and ~~$1.6~~$141.6 in the ~~Engineered Solutions~~Detection and Measurement reportable segment. At ~~September 30, 2017,~~October 2, 2021, trademarks with indefinite lives consisted of ~~$89.4~~$105.5 in the HVAC reportable segment ~~$10.3~~and $67.7 in the Detection and Measurement ~~segment and $12.4 in the Engineered Solutions~~reportable segment.

We perform our annual goodwill impairment testing during ~~the~~the fourth quarter in conjunction with our annual financial planning process, with such testing based primarily on events and circumstances existing as of the end of the third quarter. In addition, we test goodwill for impairment on a more frequent basis if there are indications of potential impairment. A significant amount of judgment is involved in determining if an indication of impairment has occurred between annual testing dates. Such indication may include: a significant decline in expected future cash flows; a significant adverse change in legal factors or the business climate; unanticipated competition; and a more likely than not expectation of selling or disposing all, or a portion, of a reporting unit.

Based on our annual goodwill impairment testing during the fourth quarter of 2020, we concluded that the estimated fair value of each of our reporting units, exclusive of Cues, Inc. (“Cues”), Patterson-Kelley, LLC (“Patterson-Kelley”) and ULC, exceeded the carrying value of their respective net assets by over 75%. The estimated fair values of Cues and Patterson-Kelley exceeded the carrying value of their respective net assets by approximately 12% and 3%, while ULC's fair value approximates the carrying value of its net assets. The total goodwill for Cues, Patterson-Kelley and ULC was $47.9, $14.2 and $17.1, respectively, as of October 2, 2021. A change in assumptions used in valuing Cues, Patterson-Kelley, or ULC (e.g., projected revenues and profit growth rates, discount rates, industry price multiples, etc.) could result in these reporting units estimated fair value being less than the respective carrying value of their net assets. If any of these reporting units is unable to achieve its current financial forecast, we may be required to record an impairment charge in a future period related to its goodwill.

We perform our annual trademarks impairment testing during the fourth quarter, or on a more frequent basis, if there are indications of potential impairment. The fair values of our trademarks are determined by applying estimated royalty rates to projected revenues, with the resulting cash flows discounted at a rate of return that reflects current market conditions (fair value based on unobservable inputs - Level 3, as defined in Note ~~15)~~17). The primary basis for these projected revenues is the annual operating plan for each of the related businesses, which is prepared in the fourth quarter of each year.

~~In the first quarter of 2016, we recorded an impairment charge of $4.0 related to trademarks of our Heat Transfer business. No impairment charges were recorded in the first nine months of 2017.~~


~~(8)~~	~~WARRANTY~~

(10) WARRANTY

The following is an analysis of our product warranty accrual for the periods presented:


	Nine months ended
	October 2, 2021		September 26, 2020
Balance at beginning of year	$	35.3	$	31.8
Acquisitions	—		1.6
Provisions	8.0		8.2
Usage	(7.2)		(7.8)
Currency translation adjustment	—		0.1
Balance at end of period	36.1		33.9
Less: Current portion of warranty	12.1		11.9
Non-current portion of warranty	$	24.0	$	22.0

Nine months ended
September 30,
2017 October 1,
2016
Balance at beginning of year $ 35.8
$ 36.3
Provisions 9.7
10.6
Usage (11.5 ) (11.6 )
Currency translation adjustment 0.2
(0.4 )
Balance at end of period 34.2
34.9
Less: Current portion of warranty 14.2
15.7
Non-current portion of warranty $ 20.0
$ 19.2


~~(9)~~	(11) EMPLOYEE BENEFIT PLANS

In connection with the spin-off of SPX Flow, Inc. (“SPX Flow”) on September 26, 2015, participants in the SPX U.S. Pension Plan (the “U.S. Plan”) that were transferred to SPX FLOW became eligible to elect a lump-sum payment option in lieu of a future pension benefit under the U.S. Plan. During the second quarter of 2016, approximately 9%, or $25.2, of the projected benefit obligation of the U.S. Plan was settled as a result of lump-sum payments. In connection with these lump-sum payments, we remeasured the assets and liabilities of the U.S. Plan as of May 31, 2016, which resulted in a charge to net periodic pension benefit expense of $1.0 during the quarter.

During the second quarter of 2016, we made lump-sum payments to certain participants of the Supplemental Individual Account Retirement Plan (“SIARP”), settling approximately 22%, or $2.7, of the SIARP’s projected benefit obligation. In connection with these lump-sum payments, we remeasured the liabilities of the SIARP as of June 30, 2016, which resulted in a charge to net periodic pension benefit expense of $0.8 during the quarter.

In July 2014, we discontinued our sponsorship of post-65 age healthcare plans, effective January 1, 2015, which resulted in eligible retirees being transitioned to coverage in the individual healthcare insurance market that we subsidize through health reimbursement accounts. In November 2014, a lawsuit was filed challenging certain aspects of this action. In September 2017, we received a favorable ruling related to the lawsuit. During the third quarter of 2017, in connection with the favorable ruling, we reduced our unfunded liability related to postretirement benefits by $26.8. The offset for the reduction of the unfunded liability was recorded to accumulated other comprehensive income and represents unrecognized prior service credits. These unrecognized prior service credits will be recorded to net periodic postretirement benefit (income) expense over a period of approximately eight years, beginning in the fourth quarter of 2017. In addition, we remeasured our unfunded liability related to postretirement benefits, which resulted in a gain within net periodic postretirement benefit expense and a reduction of the unfunded liability of $2.6 during the third quarter of 2017.

Net periodic benefit (income) expense ~~(income)~~ for our pension and postretirement plans ~~included~~include the following components:

Domestic Pension Plans


	Three months ended				Nine months ended
	October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020
Service cost	$	—	$	—	$	—	$	—
Interest cost	2.1		2.7		6.3		8.1
Expected return on plan assets	(2.2)		(2.4)		(6.6)		(7.2)



Net periodic pension benefit (income) expense	$	(0.1)	$	0.3	$	(0.3)	$	0.9

Three months ended Nine months ended
September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016
Service cost $ 0.1
$ 0.1
$ 0.3
$ 0.3
Interest cost 3.4
3.3
10.0
10.4
Expected return on plan assets (2.5 ) (3.2 ) (7.5 ) (9.6 )
Recognized net actuarial loss —
—
—
1.8
Amortization of unrecognized prior service credits (0.1 ) (0.1 ) (0.1 ) (0.1 )
Total net periodic pension benefit expense $ 0.9
$ 0.1
$ 2.7
$ 2.8

Foreign Pension Plans


	Three months ended				Nine months ended
	October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020
Service cost	$	—	$	—	$	—	$	—
Interest cost	0.8		1.0		2.4		3.0
Expected return on plan assets	(1.4)		(1.4)		(4.2)		(4.4)

Net periodic pension benefit income	$	(0.6)	$	(0.4)	$	(1.8)	$	(1.4)

Postretirement Plans


	Three months ended				Nine months ended
	October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020
Service cost	$	—	$	—	$	—	$	—
Interest cost	0.3		0.4		0.9		1.2

Amortization of unrecognized prior service credits	(1.2)		(1.2)		(3.6)		(3.6)
Net periodic postretirement benefit income	$	(0.9)	$	(0.8)	$	(2.7)	$	(2.4)

Three months ended Nine months ended
September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016
Service cost $ —
$ —
$ —
$ —
Interest cost 1.2
1.4
3.6
4.3
Expected return on plan assets (1.6 ) (1.5 ) (4.7 ) (5.0 )
Net periodic pension benefit income $ (0.4 ) $ (0.1 ) $ (1.1 ) $ (0.7 )
Less: Net periodic pension benefit expense of discontinued operations —
0.1
—
0.1
Net periodic pension benefit income of continuing operations $ (0.4 ) $ (0.2 ) $ (1.1 ) $ (0.8 )

(12) INDEBTEDNESS

~~Postretirement Plans~~

Three months ended Nine months ended
September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016
Service cost $ —
$ —
$ —
$ —
Interest cost 0.9
1.1
2.8
3.2
Recognized net actuarial gain (2.6 ) —
(2.6 ) —
Amortization of unrecognized prior service credits (0.2 ) (0.2 ) (0.6 ) (0.6 )
Net periodic postretirement benefit (income) expense $ (1.9 ) $ 0.9
$ (0.4 ) $ 2.6


~~(10)~~	~~INDEBTEDNESS~~

The following summarizes our debt activity (both current and non-current) for the nine months ended ~~September 30, 2017:~~

December 31,
2016 Borrowings Repayments
Other⁽⁴⁾
September 30,
2017
Revolving loans $ —
$ 46.4
$ (46.4 ) $ —
$ —
Term loan ⁽¹⁾
339.6
—
(13.1 ) 0.3
326.8
Trade receivables financing arrangement ⁽²⁾
—
70.0
(39.0 ) —
31.0
Other indebtedness ⁽³⁾
16.6
25.6
(33.4 ) 1.4
10.2
Total debt 356.2
$ 142.0
$ (131.9 ) $ 1.7
368.0
Less: short-term debt 14.8
39.0
Less: current maturities of long-term debt 17.9
18.0
Total long-term debt $ 323.5
$ 311.0
October 2, 2021:


	December 31, 2020		Borrowings		Repayments		Other(5)		October 2, 2021
Revolving loans (1)	$	129.8	$	209.1	$	(338.9)	$	—	$	—
Term loan(2)	248.6		—		(4.7)		0.3		244.2




Trade receivables financing arrangement(3)	28.0		179.0		(207.0)		—		—
Other indebtedness(4)	6.0		0.6		(0.9)		(2.3)		3.4
Total debt	412.4		$	388.7	$	(551.5)	$	(2.0)	247.6


Less: short-term debt	101.2								2.3
Less: current maturities of long-term debt	7.2								11.4
Total long-term debt	$	304.0							$	233.9

___________________________

⁽¹⁾

(1)While not due for repayment until December 2024 under the terms of our senior credit agreement, we classify within current liabilities the portion of the outstanding balance that we believe will be repaid over the next year, with such amount based on an estimate of cash that is expected to be generated over such period.

(2)The term loan is repayable in quarterly installments beginning in the first quarter of 2021, with the quarterly installments equal to 0.625% of the initial term loan balance of $250.0 during 2021, 1.25% in each of the four quarters of 2022 and 2023, and 1.25% during the first three quarters of 2024. The remaining balance is payable in full on December 17, 2024. Balances are net of unamortized debt issuance costs of $1.1 and $1.4 at October 2, 2021 and December 31, 2020, respectively.

(3)Under this arrangement, we can borrow, on a continuous basis, up to $50.0, as available. Borrowings under this arrangement are collateralized by eligible trade receivables of certain of our businesses.

(4)Primarily includes balances under a purchase card program of $2.3 and $1.7 and finance lease obligations of $1.1 and $2.6 at October 2, 2021 and December 31, 2020, respectively. The purchase card program allows for payment beyond the normal payment terms for goods and services acquired under the program. As this arrangement extends the payment of these purchases beyond their normal payment terms through third-party lending institutions, we have classified these amounts as short-term debt.

(5)“Other” primarily includes debt assumed, foreign currency translation on any debt instruments denominated in currencies other than the U.S. dollar, and the impact of amortization of debt issuance costs associated with the term loan.

The term loan is repayable in quarterly installments of 1.25% of the original loan balance of $350.0. The remaining balance is repayable in full on September 24, 2020. Balances are net of unamortized debt issuance costs of $1.3 and $1.6 at September 30, 2017 and December 31, 2016, respectively.


⁽²⁾	~~Under this arrangement, we can borrow, on a continuous basis, up to $50.0, as available. At September 30, 2017, we had $18.3 of available borrowing capacity under this facility.~~

⁽³⁾

Primarily includes balances under a purchase card program of $3.6 and $3.9, capital lease obligations of $2.2 and $1.7, and borrowings under lines of credit in South Africa and China totaling $4.1 and $10.2 at September 30, 2017 and December 31, 2016, respectively. The purchase card program allows for payment beyond the normal payment terms for goods and services acquired under the program. As this arrangement extends the payment of these purchases beyond their normal payment terms through third-party lending institutions, we have classified these amounts as short-term debt.


⁽⁴⁾	“Other” primarily includes debt assumed, foreign currency translation on any debt instruments denominated in currencies other than the U.S. dollar, and the impact of amortization of debt issuance costs associated with the term loan.

Senior Credit Facilities

On March 20, 2017, we entered into an amendment to our senior credit facilities. Among other things, the amendment extended the period during which we may reinvest the net proceeds from the disposition of our dry cooling business. A detailed description of our senior credit facilities is included in our ~~2016~~2020 Annual Report on Form 10-K.

~~At September 30, 2017,~~On May 24, 2021 we ~~had $35.9~~elected to reduce our participating foreign credit instrument facility and ~~$178.6 of outstanding~~bilateral foreign credit instrument facility, available for performance letters of credit ~~issued~~and guarantees, by an aggregate amount of $20.0 and $25.0, respectively. The facility reduction resulted in a write-off of deferred finance costs of $0.2, recorded to “Interest expense” in the condensed consolidated statement of operations for nine months ended October 2, 2021.

At October 2, 2021, we had $437.8 of available borrowing capacity under our revolving credit ~~and~~facilities, after giving effect to $12.2 reserved for domestic letters of credit. In addition, at October 2, 2021, we had $31.2 of available issuance capacity under our foreign credit instrument facilities after giving effect to $23.8 reserved for outstanding letters of ~~our senior credit agreement, respectively.~~credit.

The weighted-average interest rate of outstanding borrowings under our senior credit agreement was approximately ~~3.0%~~1.6% at ~~September 30, 2017.~~October 2, 2021.

At ~~September 30, 2017,~~ October 2, 2021, we were in compliance with all covenants of our senior credit agreement.

Off Balance Sheet Arrangements


~~(11)~~	~~DERIVATIVE FINANCIAL INSTRUMENTS~~

As of October 2, 2021, in connection with the sale of Transformer Solutions and pursuant to the terms of the Stock Purchase Agreement dated June 8, 2021, surety bonds totaling approximately $27.4 remained in place at the time of sale. Transformer Solutions and the Purchaser provided us an indemnity in the event that any of the bonds are called. Under the Stock Purchase Agreement, the Purchaser has 90 days to arrange for substitute surety bonds.

(13) DERIVATIVE FINANCIAL INSTRUMENTS

Interest Rate Swaps

~~During the second quarter of 2016, we entered into~~We previously maintained interest rate swap agreements ~~(“Swaps”) to hedge the interest rate risk on our variable rate term loan. These Swaps, which we designate and account for as cash flow hedges, have effective dates~~

~~beginning~~that matured in ~~January 2017 and maturities through September 2020~~March 2021 and effectively ~~convert 50% of the borrowing~~converted borrowings under ~~the variable rate term loan~~our senior credit facilities to a fixed rate of ~~1.2895%~~2.535%, plus the applicable margin. ~~These~~

In February 2020, and as a result of a December 2019 amendment that extended the maturity date of our senior credit facilities to December 17, 2024, we entered into additional interest swap agreements (“Swaps”). The Swaps have a notional amount of $245.3, cover the period from March 2021 to November 2024, and effectively convert borrowings under our senior credit facilities to a fixed rate of 1.061%, plus the applicable margin.

We have designated and are ~~amortizing Swaps; therefore, the outstanding notional value is scheduled to decline commensurate with the scheduled maturities of the term loan.~~accounting for our interest rate swap agreements as cash flow hedges. As of ~~September 30, 2017, the aggregate notional amounts of the Swaps was $164.8~~October 2, 2021 and December 31, 2020, the unrealized ~~gain,~~loss, net of tax, recorded in accumulated other comprehensive income ~~(“AOCI”~~(“AOCI”) was ~~$1.2.~~$2.2 and $5.9, respectively. In addition, ~~we have recorded a long-term asset~~as of ~~$2.3 to recognize~~October 2, 2021, the fair value of ~~these Swaps. These changes~~our interest rate swap agreements totaled $2.9, with $2.4 recorded as a current liability and the remainder in long-term liabilities, and $7.8 at December 31, 2020 (with $1.4 recorded as a current liability and the remainder in long-term liabilities). Changes in fair value of our interest rate swap agreements are reclassified into earnings as a component of interest expense, when the forecasted transaction impacts earnings.

Currency Forward Contracts

We manufacture and ~~Currency Forward Embedded Derivatives~~sell our products in a number of countries and, as a result, are exposed to movements in foreign currency exchange rates. Our objective is to preserve the economic value of non-functional currency-denominated cash flows and to minimize the impact of changes as a result of currency fluctuations. Our principal currency exposures relate to the South African Rand, British Pound Sterling (“GBP”), and Euro.

From time to time, we enter into forward contracts to manage the exposure on contracts with forecasted transactions denominated in non-functional currencies and to manage the risk of transaction gains and losses associated with assets/liabilities denominated in currencies other than the functional currency of certain subsidiaries (“FX forward contracts”). In addition, some of our contracts contain currency forward embedded derivatives (“FX embedded derivatives”), because the currency of exchange is not “clearly and closely” related to the functional currency of either party to the transaction. CertainNone of our FX forward contracts are designated as cash flow hedges. To the extent these derivatives are effective in offsetting the variability of the hedged cash flows, changes in the derivatives’ fair value are not included in current earnings, but are included in accumulated other comprehensive income (“AOCI”). These changes in fair value are reclassified into earnings as a component of revenues or cost of products sold, as applicable, when the forecasted transaction impacts earnings. In addition, if the forecasted transaction is no longer probable, the cumulative change in the derivatives’ fair value is recorded as a component of “Other income (expense), net” in the period in which the transaction is no longer considered probable of occurring. To the extent a previously designated hedging transaction is no longer an effective hedge, any ineffectiveness measured in the hedging relationship is recorded in earnings in the period in which it occurs.

We had FX forward contracts with an aggregate notional amount of ~~$6.9~~$8.6 and ~~$8.8~~$6.3 outstanding as of ~~September 30, 2017~~October 2, 2021 and December 31, ~~2016,~~2020, respectively, with all of the ~~$6.9~~$8.6 scheduled to mature within one year. We also had FX embedded derivatives with an aggregate notional amount of $0.4 and $0.9 at September 30, 2017 and December 31, 2016, respectively, with all of the $0.4 scheduled to mature within one year. There were no unrealized gains or losses recorded in AOCI related to FX forward contracts as of September 30, 2017 and December 31, 2016.

The fair value of our FX forward contracts and FX embedded derivative instruments were not material in relation to our condensed consolidated balance sheets as of September 30, 2017 and December 31, 2016.

Commodity Contracts

From time to time, we ~~enter~~enter into commodity contracts to manage the exposure on forecasted purchases of commodity raw materials. The commodity contracts relate solely to Transformer Solutions. As discussed in Note 1, on October 1, 2021, we completed the sale of Transformer Solutions. Immediately prior to the sale, we extinguished the existing commodity contracts and reclassified from AOCI a net loss of $0.6 to “Gain (loss) on disposition of discontinued operations, net of tax” within our condensed consolidated statements of operations for the three and nine months ended October 2, 2021. At ~~September 30, 2017 and~~ December 31, ~~2016,~~2020, the outstanding notional amount of commodity contracts was ~~3.7 and 4.1~~3.2 pounds of ~~copper, respectively. We designate~~copper. Prior to extinguishment, we designated and ~~account~~accounted for these contracts as cash flow hedges and, to the extent ~~these~~the commodity contracts ~~are~~were effective in offsetting the variability of the forecasted purchases, the change in fair value iswas included in AOCI. We ~~reclassify AOCI~~reclassified amounts associated with our commodity contracts ~~to cost~~out of ~~products sold~~AOCI when the forecasted transaction ~~impacts~~impacted earnings. As of ~~September 30, 2017 and~~ December 31, ~~2016,~~2020, the fair value of these contracts was ~~$0.6 (current asset) and $1.1 (current asset), respectively.~~a current asset of $2.4. Since these commodity contracts related to our Transformer Solutions business, the amount has been recorded within assets of discontinued operations in the accompanying condensed consolidated balance sheet. The unrealized ~~gains,~~gain, net of ~~tax,~~taxes, recorded in AOCI ~~were $0.6 and $0.8~~was $1.5 as of ~~September 30, 2017 and~~ December 31, ~~2016, respectively. We anticipate reclassifying the unrealized gains as of September 30, 2017 to income over the next 12 months.~~2020.


~~(12)~~	~~SHAREHOLDERS’ EQUITY AND LONG-TERM INCENTIVE COMPENSATION~~

(14) EQUITY AND LONG-TERM INCENTIVE COMPENSATION

Income Per Share

The following table sets forth the number of weighted-average shares outstanding used in the computation of basic and diluted income per share:


	Three months ended		Nine months ended
	October 2, 2021	September 26, 2020	October 2, 2021	September 26, 2020
Weighted-average number of common shares used in basic income per share	45.331	44.708	45.244	44.538
Dilutive securities — Employee stock options and restricted stock units	1.319	1.186	1.211	1.156
Weighted-average number of common shares and dilutive securities used in diluted income per share	46.650	45.894	46.455	45.694

Three months ended Nine months ended
September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016
Weighted-average number of common shares used in basic income per share 42.540
41.721
42.347
41.537
Dilutive securities — Employee stock options, restricted stock shares and restricted stock units 1.524
0.754
1.381
0.347
Weighted-average number of common shares and dilutive securities used in diluted income per share 44.064
42.475
43.728
41.884

The weighted-average number of restricted stock ~~shares/~~units and stock options excluded from the computation of diluted income per share because the assumed proceeds for these instruments exceed the average market value of the underlying common stock for the related period ~~was 0.452~~were 0.222 and ~~0.961,~~0.631, respectively, for the three months ended ~~September 30, 2017,~~October 2, 2021, and ~~0.534~~0.261 and ~~1.009, respectively,~~0.631, respectively, for the nine months ended ~~September 30, 2017.~~October 2, 2021.

The weighted-average number of restricted stock ~~shares/~~units and stock options excluded from the computation of diluted income per share because the assumed proceeds for these instruments exceed the average market value of the underlying common stock for the related period ~~was 0.992~~were 0.352 and ~~1.542,~~0.858, respectively, for the three months ended ~~October 1, 2016~~September 26, 2020, and ~~1.134~~0.346 and ~~1.346,~~0.817, respectively, for the nine months ended ~~October 1, 2016.~~September 26, 2020.

Long-Term Incentive Compensation

Long-term incentive compensation awards may be granted to certain eligible employees or non-employee directors. A detailed description of the awards granted prior to ~~2017~~2021 is included in our ~~2016~~2020 Annual Report on Form 10-K.

Awards granted on March 1 ~~2017~~, 2021 to executive officers and other members of senior management were comprised of performance stock units (“PSU’s”), stock options, and time-based restricted stock units (“RSU’s”), ~~and long-term cash awards,~~ while other eligible employees were granted ~~RSU’s~~PSU’s and ~~long-term cash awards.~~RSU’s. The PSU’s are eligible to vest at the end of a three-year performance period, with performance based on the total return of our stock over the three-year performance period against a peer group within the S&P 600 Capital Goods Index. Stock options and RSU’s vest ratably over the three-year period subsequent to the date of grant. Long-term cash awards are eligible to vest at the end of a three-year performance measurement period, with performance based on our achieving a target segment income amount over the three-year measurement period.

Effective May ~~8, 2017,~~11, 2021, we granted ~~0.024 RSU’s~~0.017 RSU's to our ~~Non-employee~~non-employee directors, which vest in their entirety immediately prior to the annual meeting of stockholders in May ~~2018.~~2022.

~~Compensation~~Compensation expense within income from continuing operations related to long-term incentive awards totaled ~~$3.6~~$3.4 and ~~$4.1~~$3.2 for the three months ended October 2, 2021 and September ~~30, 2017~~26, 2020 and ~~October 1, 2016, respectively,~~$9.5 and ~~$10.4 and $10.2~~$9.6 for the nine months ended October 2, 2021 and September ~~30, 2017 and October 1, 2016,~~26, 2020, respectively. The related tax benefit was ~~$1.4~~$0.6 and ~~$1.6~~$0.8 for the three months ended October 2, 2021 and September ~~30, 2017~~26, 2020 and ~~October 1, 2016, respectively,~~$1.6 and ~~$4.0 and $3.9~~$2.4 for the nine months ended October 2, 2021 and September ~~30, 2017 and October 1, 2016,~~26, 2020, respectively.

Accumulated Other Comprehensive Income ~~(Loss)~~

The changes in the components of accumulated other comprehensive income, net of tax, for the three months ended October 2, 2021 were as follows:


	Foreign Currency Translation Adjustment		Net Unrealized Losses on Qualifying Cash Flow Hedges(1)		Pension and Postretirement Liability Adjustment(2)		Total
Balance at beginning of period	$	240.1	$	(2.0)	$	12.5	$	250.6
Other comprehensive loss before reclassifications	(5.0)		(0.4)		—		(5.4)
Amounts reclassified from accumulated other comprehensive income (loss)	—		0.2		(0.9)		(0.7)
Current-period other comprehensive loss	(5.0)		(0.2)		(0.9)		(6.1)
Balance at end of period	$	235.1	$	(2.2)	$	11.6	$	244.5

__________________________

(1)Net of tax benefit of $0.7 as of October 2, 2021 and July 3, 2021.

(2)Net of tax provision of $4.0 and $4.3 as of October 2, 2021 and July 3, 2021, respectively. The balances as of October 2, 2021 and July 3, 2021 include unamortized prior service credits.

The changes in the components of accumulated other comprehensive income, net of tax, for the nine months ended October 2, 2021 were as follows:


	Foreign Currency Translation Adjustment		Net Unrealized Losses on Qualifying Cash Flow Hedges(1)		Pension and Postretirement Liability Adjustment(2)		Total
Balance at beginning of period	$	238.6	$	(4.4)	$	14.3	$	248.5
Other comprehensive income (loss) before reclassifications	(3.5)		3.1		—		(0.4)
Amounts reclassified from accumulated other comprehensive income (loss)	—		(0.9)		(2.7)		(3.6)
Current-period other comprehensive income (loss)	(3.5)		2.2		(2.7)		(4.0)
Balance at end of period	$	235.1	$	(2.2)	$	11.6	$	244.5

__________________________

(1)Net of tax benefit of $0.7 and $1.4 as of October 2, 2021 and December 31, 2020, respectively.

(2)Net of tax provision of $4.0 and $4.9 as of October 2, 2021 and December 31, 2020, respectively. The balances as of October 2, 2021 and December 31, 2020 include unamortized prior service credits.

The changes in the components of accumulated other comprehensive income, net of tax, for the three months ended September ~~30, 2017~~26, 2020 were as follows:


	Foreign Currency Translation Adjustment		Net Unrealized Losses on Qualifying Cash Flow Hedges(1)		Pension and Postretirement Liability Adjustment(2)		Total
Balance at beginning of period	$	227.2	$	(8.0)	$	16.1	$	235.3
Other comprehensive income before reclassifications	1.7		0.4		—		2.1
Amounts reclassified from accumulated other comprehensive income (loss)	—		0.7		(0.9)		(0.2)
Current-period other comprehensive income (loss)	1.7		1.1		(0.9)		1.9
Balance at end of period	$	228.9	$	(6.9)	$	15.2	$	237.2

__________________________

(1)Net of tax benefit of $2.2 and $2.6 as of September 26, 2020 and June 27, 2020, respectively.

(2)Net of tax provision of $5.2 and $5.5 as of September 26, 2020 and June 27, 2020, respectively. The balances as of September 26, 2020 and June 27, 2020 include unamortized prior service credits.

Foreign
Currency
Translation
Adjustment

Net Unrealized Gains
on Qualifying Cash
Flow Hedges⁽¹⁾

Pension and
Postretirement
Liability Adjustment^{(2) (3)}
Total
Balance at beginning of period $ 229.3
$ 1.3
$ 3.6
$ 234.2
Other comprehensive income before reclassifications 2.4
0.6
16.3
19.3
Amounts reclassified from accumulated other comprehensive income —
(0.1 ) (0.1 ) (0.2 )
Current-period other comprehensive income 2.4
0.5
16.2
19.1
Balance at end of period $ 231.7
$ 1.8
$ 19.8
$ 253.3

~~__________________________~~


⁽¹⁾	~~Net of tax provision of $1.1 and $0.8 as of September 30, 2017 and July 1, 2017, respectively.~~


⁽²⁾	~~As indicated in Note 9, we reduced our unfunded liability related to postretirement benefits and increased accumulated other comprehensive income (before tax effects) by $26.8.~~


⁽³⁾	Net of tax provision of $12.9 and $2.6 as of September 30, 2017 and July 1, 2017, respectively. The balances as of September 30, 2017 and July 1, 2017 represent net unamortized prior service credits.

The changes in the components of accumulated other comprehensive income, net of tax, for the nine months ended September ~~30, 2017~~26, 2020 were as follows:


	Foreign Currency Translation Adjustment		Net Unrealized Losses on Qualifying Cash Flow Hedges(1)		Pension and Postretirement Liability Adjustment(2)		Total
Balance at beginning of period	$	228.0	$	(1.6)	$	17.9	$	244.3
Other comprehensive income (loss) before reclassifications	0.9		(7.8)		—		(6.9)
Amounts reclassified from accumulated other comprehensive income (loss)	—		2.5		(2.7)		(0.2)
Current-period other comprehensive income (loss)	0.9		(5.3)		(2.7)		(7.1)
Balance at end of period	$	228.9	$	(6.9)	$	15.2	$	237.2

__________________________

Foreign
Currency
Translation
Adjustment
Net Unrealized Gains
on Qualifying Cash
Flow Hedges⁽¹⁾

Pension and
Postretirement
Liability Adjustment^{(2) (3)}
Total
Balance at beginning of period $ 229.7
$ 1.5
$ 3.9
$ 235.1
Other comprehensive income before reclassifications 2.0
1.1
16.3
19.4
Amounts reclassified from accumulated other comprehensive income —
(0.8 ) (0.4 ) (1.2 )
Current-period other comprehensive income 2.0
0.3
15.9
18.2
Balance at end of period $ 231.7
$ 1.8
$ 19.8
$ 253.3

~~_________________________~~


⁽¹⁾	(1)Net ~~of tax provision of $1.1 and $0.9 as of September 30, 2017 and December 31, 2016, respectively.~~


⁽²⁾	~~As indicated in Note 9, we reduced our unfunded liability related to postretirement benefits and increased accumulated other comprehensive income (before tax effects) by $26.8.~~


⁽³⁾	~~Net of tax provision of $12.9 and $2.7 as of September 30, 2017 and December 31, 2016. The balances as of September 30, 2017 and December 31, 2016 represent net unamortized prior service credits.~~

~~The changes in the components of accumulated other comprehensive income, net~~ of tax ~~for the three months ended October 1, 2016 were~~benefit of $2.2 and $0.5 as ~~follows:~~

Foreign
Currency
Translation
Adjustment

Net Unrealized Losses
on Qualifying Cash Flow Hedges⁽¹⁾

Pension and Postretirement
Liability Adjustment⁽²⁾
Total
Balance at beginning of period $ 239.6
$ (1.6 ) $ 4.2
$ 242.2
Other comprehensive income (loss) before reclassifications (7.2 ) 0.3
—
(6.9 )
Amounts reclassified from accumulated other comprehensive income (loss) —
0.2
(0.1 ) 0.1
Current-period other comprehensive income (loss) (7.2 ) 0.5
(0.1 ) (6.8 )
Balance at end of period $ 232.4
$ (1.1 ) $ 4.1
$ 235.4

~~___________________________~~


⁽¹⁾	~~Net of tax benefit of $0.7 and $1.0 as of October 1, 2016 and July 2, 2016, respectively.~~


⁽²⁾	~~Net of tax provision of $2.8 and $3.0 as of October 1, 2016 and July 2, 2016, respectively. The balances as of October 1, 2016 and July 2, 2016 include net unamortized prior service credits.~~

~~The changes in the components~~ of ~~accumulated other comprehensive income, net~~September 26, 2020 and December 31, 2019, respectively.

(2)Net of tax ~~for the nine months ended October 1, 2016 were~~provision of $5.2 and $6.1 as ~~follows:~~

Foreign
Currency
Translation
Adjustment
Net Unrealized Losses
on Qualifying Cash Flow Hedges⁽²⁾

Pension and
Postretirement
Liability Adjustment⁽³⁾
Total
Balance at beginning of period $ 280.6
$ (1.8 ) $ 4.5
$ 283.3
Other comprehensive loss before reclassifications (7.8 ) (1.4 ) —
(9.2 )
Amounts reclassified from accumulated other comprehensive income (loss)⁽¹⁾
(40.4 ) 2.1
(0.4 ) (38.7 )
Current-period other comprehensive income (loss) (48.2 ) 0.7
(0.4 ) (47.9 )
Balance at end of period $ 232.4
$ (1.1 ) $ 4.1
$ 235.4

~~__________________________~~


⁽¹⁾	~~In connection with the sale of our dry cooling business, we reclassified $40.4 of other comprehensive income related to foreign currency translation to “Gain on sale of dry cooling business.”~~


⁽²⁾	~~Net of tax benefit of $0.7 and $0.8 as of October 1, 2016 and December 31, 2015, respectively.~~


⁽³⁾	Net of tax provision of $2.8 and $3.1 as of October 1, 2016 and December 31, 2015, respectively. The balances as of October 1, 2016 and December 31, 2015 include net unamortized prior service credits.

of September 26, 2020 and December 31, 2019, respectively. The balances as of September 26, 2020 and December 31, 2019 include unamortized prior service credits.

The following summarizes amounts reclassified from each component of accumulated other comprehensive income for the three months ended October 2, 2021 and September ~~30, 2017 and October 1, 2016:~~26, 2020:


	Amount Reclassified from AOCI								Amount Reclassified from AOCI
	Three months ended								Three months ended
	September 30, 2017			October 1, 2016			Affected Line Item in the Condensed Consolidated Statements of Operations		October 2, 2021		September 26, 2020		Affected Line Item in the Condensed Consolidated Statements of Operations
(Gains) losses on qualifying cash flow hedges:								(Gains) losses on qualifying cash flow hedges:
FX forward contracts	$	—		$	—		Revenues

Commodity contracts	(0.2		)	0.3			Cost of products sold	Commodity contracts	$	(0.3)	$	(0.5)	Income from discontinued operations, net of tax
Swaps	—			—			Interest expense	Swaps	0.6		1.4		Interest expense
Pre-tax	(0.2		)	0.3				Pre-tax	0.3		0.9
Income taxes	0.1			(0.1		)		Income taxes	(0.1)		(0.2)
	$	(0.1	)	$	0.2				$	0.2	$	0.7

Gains on pension and postretirement items:								Gains on pension and postretirement items:
Amortization of unrecognized prior service credits	$	(0.3	)	$	(0.3	)	Selling, general and administrative
Pre-tax	(0.3		)	(0.3		)
Amortization of unrecognized prior service credits - Pre-tax								Amortization of unrecognized prior service credits - Pre-tax	$	(1.2)	$	(1.2)	Other income, net
Income taxes	0.2			0.2				Income taxes	0.3		0.3
	$	(0.1	)	$	(0.1	)			$	(0.9)	$	(0.9)

The following summarizes amounts reclassified from each component of accumulated other comprehensive income for the nine months ended October 2, 2021 and September ~~30, 2017 and October 1, 2016:~~26, 2020:


	Amount Reclassified from AOCI
	Nine months ended
	October 2, 2021		September 26, 2020		Affected Line Item in the Condensed Consolidated Statements of Operations
(Gains) losses on qualifying cash flow hedges:

Commodity contracts	$	(3.8)	$	0.1	Income from discontinued operations, net of tax
Swaps	2.6		3.2		Interest expense
Pre-tax	(1.2)		3.3
Income taxes	0.3		(0.8)
	$	(0.9)	$	2.5

Gains on pension and postretirement items:
Amortization of unrecognized prior service credits - Pre-tax	$	(3.6)	$	(3.6)	Other income, net
Income taxes	0.9		0.9
	$	(2.7)	$	(2.7)

Amount Reclassified from AOCI
Nine months ended
September 30, 2017 October 1, 2016 Affected Line Item in the Condensed
Consolidated Statements of Operations
(Gains) losses on qualifying cash flow hedges:

FX forward contracts $ —
$ 1.0
Revenues
Commodity contracts (1.6 ) 1.9
Cost of products sold
Swaps 0.3
—
Interest expense
Pre-tax (1.3 ) 2.9

Income taxes 0.5
(0.8 )
$ (0.8 ) $ 2.1

Gains on pension and postretirement items:

Amortization of unrecognized prior service credits $ (0.7 ) $ (0.7 ) Selling, general and administrative
Pre-tax (0.7 ) (0.7 )
Income taxes 0.3
0.3

$ (0.4 ) $ (0.4 )

Gain on sale of dry cooling business:

Recognition of foreign currency translation adjustment
associated with the sale of our dry cooling business $ —
$ (40.4 ) Gain on sale of dry cooling business

~~Common Stock in Treasury~~

During the nine months ended September 30, 2017 and October 1, 2016, “Common stock in treasury” was decreased by the settlement of restricted stock units issued from treasury stock of $16.7 and $18.6, respectively.

~~Changes in Equity~~

~~A summary of the changes in equity for the three months ended September 30, 2017 and October 1, 2016 is provided below:~~

September 30, 2017 October 1, 2016

SPX
Corporation
Shareholders’
Equity

Noncontrolling
Interests

Total
Equity

SPX
Corporation
Shareholders’
Equity

Noncontrolling
Interests

Total
Equity
Equity, beginning of period $ 208.7
$ —
$ 208.7
$ 272.6
$ —
$ 272.6
Net income 22.3
—
22.3
1.9
—
1.9
Net unrealized gains on qualifying cash flow hedges, net of tax provision of $0.3 for the three months ended September 30, 2017 and October 1, 2016 0.5
—
0.5
0.5
—
0.5
Pension and postretirement liability adjustment, net of tax (provision) benefit of $(10.3) and $0.2 for the three months ended September 30, 2017 and October 1, 2016, respectively 16.2
—
16.2
(0.1 ) —
(0.1 )
Foreign currency translation adjustments 2.4
—
2.4
(7.2 ) —
(7.2 )
Total comprehensive income (loss), net 41.4
—
41.4
(4.9 ) —
(4.9 )
Incentive plan activity 2.0
—
2.0
2.2
—
2.2
Long-term incentive compensation expense 3.0
—
3.0
3.5
—
3.5
Restricted stock and restricted stock unit vesting, net of tax withholdings, and related tax benefit of $0.0 for the three months ended September 30, 2017 and October 1, 2016 (0.1 ) —
(0.1 ) —
—
—
Equity, end of period $ 255.0
$ —
$ 255.0
$ 273.4
$ —
$ 273.4
(15) CONTINGENT LIABILITIES AND OTHER MATTERS

~~A summary of the changes in equity for the nine months ended September 30, 2017 and October 1, 2016 is provided below:~~

September 30, 2017 October 1, 2016
SPX
Corporation
Shareholders’
Equity Noncontrolling
Interests Total
Equity SPX
Corporation
Shareholders’
Equity Noncontrolling
Interests Total
Equity
Equity, beginning of period $ 191.6
$ —
$ 191.6
$ 345.4
$ (37.1 ) $ 308.3
Net income (loss) 30.7
—
30.7
18.9
(0.4 ) 18.5
Net unrealized gains on qualifying cash flow hedges, net of tax provision of $0.2 and $0.1 for the nine months ended September 30, 2017 and October 1, 2016, respectively 0.3
—
0.3
0.7
—
0.7
Pension and postretirement liability adjustment, net of tax (provision) benefit of $(10.2) and $0.3 for the nine months ended September 30, 2017 and October 1, 2016, respectively 15.9
—
15.9
(0.4 ) —
(0.4 )
Foreign currency translation adjustments 2.0
—
2.0
(48.2 ) (1.2 ) (49.4 )
Total comprehensive income (loss), net 48.9
—
48.9
(29.0 ) (1.6 ) (30.6 )
Incentive plan activity 9.4
—
9.4
6.8
—
6.8
Long-term incentive compensation expense 8.8
—
8.8
9.4
—
9.4
Restricted stock and restricted stock unit vesting, net of tax withholdings, and related tax provision of $0.0 and $1.5 for the nine months ended September 30, 2017 and October 1, 2016, respectively (3.7 ) —
(3.7 ) (3.2 ) —
(3.2 )
Adjustment related to redeemable noncontrolling interest (see Note 13) —
—
—
(56.0 ) 38.7
(17.3 )
Equity, end of period $ 255.0
$ —
$ 255.0
$ 273.4
$ —
$ 273.4


~~(13)~~	~~CONTINGENT LIABILITIES AND OTHER MATTERS~~

General

Numerous claims, complaints and proceedings arising in the ordinary course of business have been asserted or are pending against us or certain of our subsidiaries (collectively, “claims”). These claims relate to litigation matters (e.g., class actions, derivative lawsuits and contracts, intellectual property and competitive claims), environmental matters, product liability matters (predominately associated with alleged exposure to asbestos-containing materials), and other risk management matters (e.g., general liability, automobile, and workers’ compensation claims). Additionally, we may become subject to other claims of which we are currently unaware, which may be significant, or the claims of which we are aware may result in our incurring significantly greater loss than we anticipate. While we (and our subsidiaries) maintain property, cargo, auto, product, general liability, environmental, and directors’ and officers’ liability insurance and have acquired rights under similar policies in connection with acquisitions that we believe cover a significant portion of these claims, this insurance may be insufficient or unavailable (e.g., in the case of insurer insolvency) to protect us against potential loss exposures. Also, while we believe we are entitled to indemnification from third parties for some of these claims, these rights may be insufficient or unavailable to protect us against potential loss exposures.

Our recorded liabilities related to these matters totaled ~~$646.7 (including $602.0 for asbestos product liability matters)~~$540.4 and ~~$653.5 (including $605.6 for asbestos product liability matters)~~$575.7 at ~~September 30, 2017~~October 2, 2021 and December 31, ~~2016,~~2020, respectively. Of these amounts, ~~$613.8~~$469.5 and ~~$621.0~~$499.8 are included in “Other long-term liabilities” within our condensed consolidated balance sheets at ~~September 30, 2017~~October 2, 2021 and December 31, ~~2016,~~2020, respectively, with the remainder included in “Accrued expenses.” The liabilities we record for these ~~claims~~matters are based on a number of assumptions, including historical claims and payment ~~experience and, with respect to asbestos claims, actuarial estimates of the future period during which additional claims are reasonably foreseeable.~~experience. While we base our assumptions on facts currently known to us, they entail inherently subjective judgments and uncertainties. As a result, our current assumptions for estimating these liabilities may not prove accurate, and we may be required to adjust these liabilities in the future, which could result in charges to earnings. These variances relative to current expectations could have a material impact on our financial position and results of operations.

Our asbestos-related claims are typical in certain of the industries in which we operate or pertain to legacy businesses we no longer operate. It is not unusual in these cases for ~~fifty~~50 or more corporate entities to be named as defendants. We vigorously defend these claims, many of which are dismissed without payment, and the significant majority of costs related to these claims have historically been paid pursuant to our insurance arrangements. ~~During~~Our recorded assets and liabilities related to asbestos-related claims were as follows at October 2, 2021 and December 31, 2020:


	October 2, 2021		December 31, 2020
Insurance recovery assets (1)	$	453.9	$	496.4
Liabilities for claims (2)	499.4		535.2

__________________________

(1)Of these amounts, $403.9 and $446.4 are included in “Other assets” at October 2, 2021 and December 31, 2020, respectively, while the ~~three months ended September 30, 2017~~remainder is included in “Other current assets.”

(2)Of these amounts, $444.8 and $479.9 are included in “Other long-term liabilities” at October 2, 2021 and ~~October 1, 2016, our payments~~December 31, 2020, respectively, while the remainder is included in “Accrued expenses.”

The liabilities we record for asbestos-related ~~matters, net~~claims are based on a number of ~~insurance recoveries, were $4.7~~assumptions. In estimating our liabilities for asbestos-related claims, we consider, among other things, the following:

• The number of pending claims by disease type and ~~$0.0, respectively. During~~jurisdiction.

• Historical information by disease type and jurisdiction with regard to:

◦ Average number of claims settled with payment (versus dismissed without payment); and

◦ Average claim settlement amounts.

• The period over which we can reasonably project asbestos-related claims (currently projecting through 2057).

The following table presents information regarding activity for the asbestos-related claims for the nine months ended October 2, 2021 and September ~~30, 2017, our insurance recoveries~~26, 2020:


	Nine months ended	Nine months ended
	October 2, 2021	September 26, 2020
Pending claims, beginning of period	9,782	11,079
Claims filed	2,044	1,730
Claims resolved	(1,797)	(2,651)
Pending claims, end of period	10,029	10,158

The assets we record for asbestos-related ~~matters, net~~claims represent amounts that we believe we are or will be entitled to recover under agreements we have with insurance companies. The amount of ~~payments, were $3.1, which included cash proceeds received during~~these assets are based on a number of assumptions, including the ~~first quarter~~continued solvency of ~~2017~~the insurers and our legal interpretation of ~~$8.5 related~~our rights for recovery under the agreements we have with the insurers. Our current assumptions for estimating these assets may not prove accurate, and we may be required to adjust these assets in the future. These variances relative to current expectations could have a ~~settlement reached with an insurance carrier.~~ material impact on our financial position and results of operations.

During the nine months ended October ~~1, 2016,~~2, 2021 and September 26, 2020, our (receipts) payments for asbestos-related ~~matters,~~claims, net of respective insurance recoveries of $39.8 and $23.3, were ~~$3.0.~~$(2.2) and $15.8, respectively. The nine months ended October 2, 2021 includes insurance proceeds of $15.0, associated with the settlement of an asbestos insurance coverage matter. A significant increase in claims, costs and/or issues with existing insurance coverage (e.g., dispute with or insolvency of insurer(s)) could have a material adverse impact on our share of future payments related to these matters, and, as ~~such,~~a result, have a material impact on our financial position, results of operations and cash flows.

We have recorded insurance recovery assets associated with the asbestos product liability matters, with such amounts totaling $554.0 and $564.4 at September 30, 2017 and December 31, 2016, respectively, and included in “Other assets” within our condensed consolidated balance sheets. These assets represent amounts that we believe we are or will be entitled to recover under agreements we have with insurance companies. The assets we record for these insurance recoveries are based on a number of assumptions, including the continued solvency of the insurers, and are subject to a variety of uncertainties. Our current assumptions for estimating these assets may not prove accurate, and we may be required to adjust these assets in the future, which could result in additional charges to earnings. These variances relative to current expectations could have a material impact on our financial position and results of operations.

During the nine months ended ~~September 30, 2017,~~October 2, 2021, we recorded a charge of $2.7 related to ~~“Other income (expense), net”~~revisions of ~~$3.0~~recorded assets for asbestos-related claims. There were no other changes in estimates associated with ~~the settlement of a group of asbestos-related claims, while there were no such charges~~our assets and liabilities related to our asbestos product liability matters during the three and nine months ended October ~~1, 2016.~~2, 2021 and three and nine months ended September 26, 2020.

Large Power Projects in South Africa

~~The business environment surrounding our~~Overview - Since 2008, DBT has been executing contracts on two large power projects in South Africa ~~remains~~(Kusile and Medupi). Over such time, the business environment surrounding these projects has been difficult, as weDBT, along with many other contractors on the projects, have experienced delays, cost over-runs, and various other challenges associated with a complex set of contractual relationships among the end customer, prime contractors, various subcontractors (including usDBT and ~~our~~its subcontractors), and various suppliers. WeDBT has substantially completed its scope of work, with its remaining responsibilities related largely to resolution of various claims, primarily between itself and one of its prime contractors, Mitsubishi Heavy Industries Power—ZAF, or “MHI.”

The challenges related to the projects have resulted in (i) significant adjustments to our revenue and cost estimates for the projects, (ii) DBT’s submission of numerous change orders to the prime contractors, (iii) various claims and disputes between DBT and other parties involved with the projects (e.g., prime contractors, subcontractors, suppliers, etc.), and (iv) the possibility that DBT may become subject to additional claims, which could be significant. It is possible that some outstanding claims may not be resolved until after the prime contractors complete their scopes of work. Our future financial position, operating results, and cash flows could be materially impacted by the resolution of current and any future claims.

Claims by DBT - DBT has asserted claims against MHI of approximately South African Rand 1,100.0 (or $72.5). As DBT prepares these claims for dispute resolution processes, the amounts, along with the characterization, of the claims could change. Of these claims, South African Rand 566.5 (or $37.4), which is inclusive of the amounts awarded in the adjudications referred to below, are currently ~~are involved in a number of claim disputes relating~~proceeding through contractual dispute resolution processes and DBT is likely to ~~these challenges. We are~~initiate additional dispute resolution processes. DBT is also pursuing ~~various commercial alternatives for addressing these challenges, in an attempt~~several claims to ~~mitigate our overall financial exposure.~~

~~Over the last two years, we~~force MHI to abide by its contractual obligations and provide DBT with certain benefits that MHI may have implemented various controls and initiatives that have reduced the risk associated with our large power projects in South Africa, including more recent steps to accelerate the timeline for completing certain portions of

received from its customer on the projects. In addition weto existing asserted claims, DBT believes it has additional claims and rights to recovery based on its performance under the contracts with, and actions taken by, MHI. DBT is continuing to evaluate the claims and the amounts owed to it under the contracts based on MHI's failure to comply with its contractual obligations. The amounts DBT may recover for current and potential future claims against MHI are not currently known given (i) the extent of current and potential future claims by MHI against DBT (see below for further discussion) and (ii) the unpredictable nature of any dispute resolution processes that may occur in connection with these current and potential future claims. No revenue has been recorded in the accompanying condensed consolidated financial statements with respect to current or potential future claims against MHI.

On July 23, 2020, a dispute adjudication panel issued a ruling in favor of DBT on certain matters related to the Kusile and Medupi projects. The panel (i) ruled that DBT had achieved takeover on 9 of the units; (ii) ordered MHI to return $2.3 of bonds (which have ~~experienced higher than expected costs as we complete~~been subsequently returned by MHI); (iii) ruled that DBT is entitled to the return of an additional $4.5 of bonds upon the completion of certain ~~scopes~~administrative milestones; (iv) ordered MHI to pay South African Rand 18.4 (or $1.1 at the time of ~~work. Lastly, during~~ the ~~second quarter of 2017, we became aware of financial challenges facing~~ruling) in incentive payments for work performed by DBT (which MHI has subsequently paid); and (v) ruled that MHI waived its rights to assert delay damages against DBT on one of ~~our sub-contractors, which will negatively impact~~ the ~~ultimate cost~~units of the ~~related project scope. As a result of these efforts~~Kusile project. The ruling is subject to ~~accelerate certain timelines,~~MHI’s rights to seek further arbitration in the ~~higher than expected costs on certain scopes of work, and~~matter, as provided in the aforementioned sub-contractor financial challenges, we determined during the second quarter of 2017 that additional cost would be required in order to complete certain remaining portions of the projects.contracts. As such, ~~we revised our estimates of revenues, costs and profits associated with~~ the ~~projects. These revisions resulted~~incentive payments noted above have not been recorded in a charge to “Income (loss) from continuing operations before income taxes” of $22.9 during the nine months ended September 30, 2017, which is comprised of a reduction in revenue of $13.5 and an increase in cost of products sold of $9.4.

We recognize revenue associated with unapproved change orders and claims to the extent the related costs have been incurred and the amount of expected recovery is probable and reasonably estimable. At September 30, 2017, the projected revenues related to our large power projects in South Africa included approximately $29.5 related to claims and unapproved change orders. We believe these amounts are recoverable under the provisions of the related contracts and reflect our best estimate of recoverable amounts.

Although we believe that our current estimates of revenues, costs and profits relating to these projects are reasonable, it is possible that future revisions of such estimates could have a material effect on our condensed consolidated ~~financial statements.~~statements of operations.

~~Noncontrolling Interest~~

On February 22, 2021, a dispute adjudication panel issued a ruling in ~~South African Subsidiary~~

~~Our South African subsidiary,~~favor of DBT ~~Technologies (PTY) LTD (“DBT”), has a Black Economic Empowerment shareholder (the “BEE Partner”) that holds a 25.1% noncontrolling interest~~related to costs incurred in ~~DBT. Under the terms~~connection with delays on 2 units of the shareholder agreement between the BEE Partner and SPX Technologies (PTY) LTD (“SPX Technologies”), the BEE Partner had the option to put its ownership interest in DBT to SPX Technologies, the majority shareholder of DBT, at a redemption amount determined in accordanceKusile project. In connection with the terms of the shareholder agreement (the “Put Option”). The BEE Partner notified SPX Technologies of its intention to exercise the Put Option and, on July 6, 2016, an Arbitration Tribunal declared that the BEE Partner was entitled toruling, MHI paid DBT South African Rand ~~287.3~~126.6 (or $8.6 at the time of payment). This ruling is subject to MHI’s rights to seek further arbitration in ~~connection with~~ the ~~exercise of~~matter and, thus, the ~~Put Option, having~~amount awarded has not ~~considered an amount due from the BEE Partner under a promissory note of South African Rand 30.3 held by SPX Technologies. As a result, we have~~been reflected ~~the net redemption amount of South African Rand 257.0 (or $19.0 and $18.5 at September 30, 2017 and December 31, 2016, respectively) within “Accrued expenses” on~~in our condensed consolidated ~~balance sheets as~~statement of September 30, 2017 and December 31, 2016, with the related offset recorded to “Paid-in-capital” and “Accumulated other comprehensive income.” In addition, during the second quarter of 2016, we reclassified $38.7 from “Noncontrolling Interests” to “Paid-in capital.” Lastly, under the two-class method of calculating earnings per share, we reflected an adjustment of $18.1 to “Net income (loss) attributable to SPX Corporation common shareholders” for the excess redemption amount of the Put Option (i.e., the increase in the redemption amount during the second quarter of 2016 in excess of fair value) in our calculations of basic and diluted earnings per shareoperations for the nine months ended October ~~1, 2016.~~2, 2021. On July 5, 2021, DBT received notice from MHI of its intent to seek final and binding arbitration in this matter.

~~SPX Technologies disagrees~~

On April 28, 2021, a dispute adjudication panel issued a ruling in favor of DBT related to costs incurred in connection with delays on two units of the Medupi project. In connection with the ruling, MHI paid DBT South African Rand 82.0 (or $6.0 at the time of payment). This ruling is subject to MHI’s rights to seek further arbitration in the matter and, thus, the amount awarded has not been reflected in our condensed consolidated statement of operations for the nine months ended October 2, 2021.

Claims by MHI - On February 26, 2019, DBT received notification of an interim claim consisting of both direct and consequential damages from MHI alleging, among other things, that DBT (i) provided defective product and (ii) failed to meet certain project milestones. In September 2020, MHI made a demand on certain bonds issued in its favor by DBT, based solely on these alleged defects, but without further substantiation or other justification (see further discussion below). On December 30, 2020, MHI notified DBT of its intent to take these claims to binding arbitration. On June 4, 2021, in connection with the arbitration, ~~determination~~DBT received a revised version of the claim. Similar to the interim claim, we believe the vast majority of the damages summarized in the revised claim are unsubstantiated and, ~~will continue~~thus, any loss for the majority of these claims is considered remote. For the remainder of the claims in both the interim notification and the revised version, which largely appear to ~~pursue all available~~be direct in nature (approximately South African Rand 950.0 or $62.6), DBT has numerous defenses and, thus, we do not believe that DBT has a probable loss associated with these claims. As such, no loss has been recorded in the condensed consolidated financial statements with respect to these claims. DBT intends to vigorously defend itself against these claims. Although it is reasonably possible that some loss may be incurred in connection with these claims, we currently are unable to estimate the potential loss or range of potential loss associated with these claims due to the (i) lack of support provided by MHI for these claims; (ii) complexity of contractual relationships between the end customer, MHI, and DBT; (iii) legal ~~recourse~~interpretation of the contract provisions and application of South African law to the contracts; and (iv) unpredictable nature of any dispute resolution processes that may occur in ~~this matter.~~connection with these claims.

~~Patent Infringement Lawsuit~~

~~Our subsidiary, SPX Cooling Technologies, Inc. (“SPXCT”~~In April and July 2019, DBT received notifications of intent to claim liquidated damages totaling South African Rand 407.2 (or $26.9)~~, is a defendant in a legal action brought by Baltimore Aircoil Company (“BAC”)~~ from MHI alleging that DBT failed to meet certain project milestones related to the construction of the filters for both the Kusile and Medupi projects. DBT has numerous defenses against these claims and, thus, we do not believe that DBT has a ~~SPXCT product infringes United States Patent No. 7,107,782, entitled “Evaporative Heat Exchanger and Method.” BAC filed suit on July 16, 2013~~probable loss associated with these claims. As such, no loss has been recorded in the ~~United States District Court for~~condensed consolidated financial statements with respect to these claims. Although it is reasonably possible that some loss may be incurred in connection with these claims, we currently are unable to estimate the ~~District~~potential loss or range of ~~Maryland (the “District Court”~~potential loss.

MHI has made other claims against DBT totaling South African Rand 176.2 (or $11.6) ~~seeking monetary damages~~. DBT has numerous defenses against these claims and, ~~injunctive relief.~~

~~On November 4, 2016, the jury for the trial~~thus, we do not believe that DBT has a probable loss associated with these claims. As such, no loss has been recorded in the ~~District Court found~~condensed consolidated financial statements with respect to these claims.

Bonds Issued in Favor of MHI - DBT is obligated with respect to bonds issued by banks in favor of ~~SPXCT.~~ MHI. In September of 2020, MHI made a demand, and received payment of South African Rand 239.6 (or $14.3 at the time of payment), on certain of these bonds. In May 2021, MHI made an additional demand, and received payment of South African Rand 178.7 (or $12.5 at the time of payment), on certain of the remaining bonds at such time. In both cases, we funded the payment as required under the terms of the bonds and our senior credit agreement. In its demands, MHI purported that DBT failed to carry out its obligations to rectify certain alleged product defects and that DBT failed to meet certain project milestones. DBT denies liability for such allegations and, thus, fully intends to seek, and believes it is legally entitled to, reimbursement of the South African Rand 418.3 (or $27.6) that has been paid. However, given the extent and complexities of the claims between DBT and MHI, reimbursement of the South African Rand 418.3 (or $27.6) is unlikely to occur over the next twelve months. As such, we have reflected the South African Rand 418.3 (or $27.6) as a non-current asset within our condensed consolidated balance sheet as of October 2, 2021.

The ~~verdict~~remaining bond of $1.9 issued to MHI as a performance guarantee could be exercised by MHI for an alleged breach of DBT's obligation. In the ~~District Court is currently under appeal by BAC. We believe~~event that MHI were to receive payment on a portion, or all, of the remaining bond, we ~~will ultimately~~would be ~~successful in any future judicial processes; however,~~required to reimburse the issuing bank.

In addition to this bond, SPX Corporation has guaranteed DBT’s performance on these projects to the ~~extent we are~~prime contractors, including MHI.

Claim against Surety - On February 5, 2021, DBT received payment of $6.7 on bonds issued in support of performance by one of DBT's sub-contractors. The sub-contractor maintains a right to seek recovery of such amount and, thus, the amount received by DBT has not ~~successful, the outcome could have a material adverse effect on~~been reflected in our ~~financial position, results~~condensed consolidated statement of operations ~~and cash flows.~~for the nine months ended October 2, 2021.

Litigation Matters

We are subject to other legal matters that arise in the normal course of business. We believe these matters are either without merit or of a kind that should not have a material effect, individually or in the aggregate, on our financial position, results of operations or cash flows; however, we cannot assure you that these proceedings or claims will not have a material effect on our financial position, results of operations or cash flows.

Environmental Matters

Our operations and properties are subject to federal, state, local and foreign regulatory requirements relating to environmental protection. It is our policy to comply fully with all applicable requirements. As part of our effort to comply, we have a comprehensive environmental compliance program that includes environmental audits conducted by internal and external independent professionals, as well as regular communications with our operating units regarding environmental compliance requirements and anticipated regulations. Based on current information, we believe that our operations are in substantial compliance with applicable environmental laws and regulations, and we are not aware of any violations that could have a material effect, individually or in the aggregate, on our business, financial condition, and results of operations or cash flows. As of ~~September 30, 2017,~~October 2, 2021, we had liabilities for site investigation and/or remediation at 27 25 sites ~~(30~~(25 sites at December 31, ~~2016)~~2020) that we own or ~~control.~~control, or formerly owned and controlled. In addition, while we believe that we maintain adequate accruals to cover the costs of site investigation and/or remediation, we cannot provide assurance that new matters, developments, laws and regulations, or stricter interpretations of existing laws and regulations will not materially affect our business or operations in the future.

Our environmental accruals cover anticipated costs, including investigation, remediation, ~~and operation~~ and maintenance of clean-up sites. Our estimates are based primarily on investigations and remediation plans established by independent consultants, regulatory agencies and potentially responsible third parties. Accordingly, our estimates may change based on future developments, including new or changes in existing environmental laws or policies, differences in costs required to complete anticipated actions from estimates provided, future findings of investigation or remediation actions, or alteration to the expected remediation plans. It is our policy to revise an estimate once the revision becomes probable and the amount of change can be reasonably estimated. We generally do not discount our environmental accruals and do not reduce them by anticipated insurance recoveries. We take into account third-party indemnification from financially viable parties in determining our accruals where there is no dispute regarding the right to indemnification.

In the case of contamination at offsite, third-party disposal sites, as of ~~September 30, 2017,~~October 2, 2021, we have been notified ~~that~~that we are potentially responsible and have received other notices of potential liability pursuant to various ~~environmental laws~~environmental laws at 1411 sites at which the liability has not been settled, of which 89 sites have been active in the past few years. These laws may impose liability on certain persons that are considered jointly and severally liable for the costs of investigation and remediation of hazardous substances present at these sites, regardless of fault or legality of the original disposal. These persons include the present or former owners or operators of the site and companies that generated, disposed of or arranged for the disposal of hazardous substances at the site. We are considered a “de minimis” potentially responsible party at most of the sites, and we estimate that our aggregate liability, if any, related to these sites is not material to our condensed consolidated financial statements. We conduct extensive environmental due diligence with respect to potential acquisitions, including environmental site assessments and such further testing as we may deem warranted. If an environmental matter is identified, we estimate the cost and either establish a liability, purchase insurance or obtain an indemnity from a financially sound seller; however, in connection with our acquisitions or dispositions, we may assume or retain significant environmental liabilities, some of which we may be unaware. The potential costs related to these environmental matters and the possible impact on future operations are uncertain due in part to the complexity of government laws and regulations and their interpretations, the varying costs and effectiveness of various clean-up technologies, the uncertain level of insurance or other types of recovery, and the questionable level of our responsibility. We record a liability when it is both probable and the amount can be reasonably estimated.

In our opinion, after considering accruals established for such purposes, the cost of remedial actions for compliance with the present laws and regulations governing the protection of the environment are not expected to have a material impact, individually or in the aggregate, on our financial position, results of operations or cash flows.

Self-insured Risk Management Matters

We are self-insured for certain of our workers’ compensation, automobile, product and general liability, disability and health costs, and we believe that we maintain adequate accruals to cover our retained liability. Our accruals for risk management matters are determined by us, are based on claims filed and estimates of claims incurred but not yet reported, and generally are not discounted. We consider a number of factors, including third-party actuarial valuations, when making these determinations. We maintain third-party stop-loss insurance policies to cover certain liability costs in excess of predetermined retained amounts. The insurance may be insufficient or unavailable (e.g., because of insurer insolvency) to protect us against loss exposure.


~~(14)~~	~~INCOME TAXES~~

(16)INCOME AND OTHER TAXES

Uncertain Tax Benefits

As of ~~September 30, 2017,~~October 2, 2021, we had gross unrecognized tax benefits of ~~$32.6~~$7.3 (net unrecognized tax benefits of ~~$21.2)~~$6.4). OfAll of these net unrecognized tax benefits ~~$16.3~~ would impact our effective tax rate from continuing operations if recognized.

We classify interest and penalties related to unrecognized tax benefits as a component of our income tax provision. As of ~~September 30, 2017,~~October 2, 2021, gross accrued interest totaled ~~$4.2~~$3.1 (net accrued interest of ~~$2.8)~~$2.5). As of ~~September 30, 2017,~~October 2, 2021, we had no accrual for penalties included in our unrecognized tax benefits.

Based on the outcome of certain examinations or as a result of the expiration of statutes of limitations for certain jurisdictions, we believe that within the next 12 months it is reasonably possible that our previously unrecognized tax benefits could decrease by up to ~~$4.0. The~~$5.0. The previously unrecognized tax benefits relate to a variety of tax matters ~~relating to deemed income inclusions,~~including transfer pricing and various state matters.

Other Tax Matters

For the three months ended ~~September 30, 2017,~~October 2, 2021, we recorded an income tax ~~provision~~provision of ~~$4.8~~$3.7 on ~~$26.8~~$11.4 of pre-tax income from continuing operations, resulting in an effective ~~tax~~ rate of ~~17.9%~~32.5%. This compares toto an income tax provision for the three months ended ~~October 1, 2016~~September 26, 2020 of~~$0.5~~ $3.1 on ~~$7.1~~$18.7 of pre-tax income from continuing operations, resulting in an effective ~~tax~~ rate of ~~7.0%~~16.6%. The most significant ~~items~~item impacting the income tax provision for the third quarter of ~~2017 were (i) $5.0~~2021 was $0.7 of ~~foreign losses generated during the period for which no tax benefit was recognized, as future realization of any such tax benefit is considered unlikely, and (ii) $4.1 of tax benefits~~expense related to ~~various audit settlements, statute expirations, and other adjustments~~the revaluation of certain deferred tax liabilities due to ~~liabilities for uncertain~~an enacted tax ~~positions.~~rate increase. The most significant ~~items~~item impacting the income tax provision for the third quarter of ~~2016 were the $1.7 of additional gain that~~2020 was ~~recorded during the quarter on the sale of the dry cooling business, for which no income taxes were provided, and $0.7~~ $1.2 of tax benefits related to ~~various audit settlements, statute expirations,~~our U.S. tax credits and ~~other adjustments to liabilities for uncertain tax positions.~~incentives.

For the nine months ended ~~September 30, 2017,~~October 2, 2021, we recorded an income tax provision ~~of $14.0~~of $9.8 on ~~$38.0~~$51.2 of pre-tax income from continuing operations, resulting in an effective ~~tax~~ rate of ~~36.8%~~19.1%. This compares to an income tax provision for the nine months ended ~~October 1, 2016~~September 26, 2020 of ~~$10.1~~$8.4 on ~~$43.4~~$48.7 of pre-tax income from continuing operations, resulting in an effective ~~tax~~ rate of ~~23.3%~~17.2%. The most significant items impacting the income tax provision for the first nine months of ~~2017~~2021 were (i) ~~$34.6~~a benefit of ~~foreign losses generated during the period for which no benefit was recognized, as future realization of any such tax benefit is considered unlikely, and (ii) $4.1 of tax benefits~~$2.2 related to ~~various audit settlements, statute expirations, and other adjustments to~~the resolution of certain liabilities for uncertain tax ~~positions.~~positions and interest associated with various refund claims and (ii) $1.0 of excess tax benefits associated with stock-based compensation awards that vested and/or were exercised during the period, partially offset by (iii) $1.3 of expense related to the revaluation of deferred tax liabilities due to an enacted tax rate increase. The most significant items impacting the income tax provision for the first nine months of ~~2016~~2020 were (i) ~~$0.3~~$1.5 of ~~income taxes~~excess tax benefits resulting from stock-based compensation awards that vested and/or were ~~provided in connection with the $18.4 gain that was recorded on the sale of the dry cooling business and (ii) $10.5 of foreign losses generated~~exercised during the period, ~~for which no~~(ii) the $1.2 of tax ~~benefit was recognized, as future realization~~benefits associated with U.S. tax credits and incentives noted above, and (iii) $0.5 of ~~any such~~ tax ~~benefit is considered unlikely~~.benefits associated with statute expirations in certain jurisdictions during the second quarter of 2020.

We perform reviews of our income tax positions on a continuous basis and accrue for potential uncertain positions when we determine that an uncertain position meets the criteria of the Income Taxes Topic of the Codification. Accruals for these uncertain tax positions are recorded in “Income taxes payable” and “Deferred and other income taxes” in the accompanying condensed consolidated balance sheets based on the expectation as to the timing of when the matters will be resolved. As events change and resolutions occur, these accruals are adjusted, such as in the case of audit settlements with taxing authorities.

~~We have filed~~

The Internal Revenue Service (“IRS”) concluded its audit of our 2013, 2014, 2015, 2016 and 2017 federal income tax ~~returns~~returns. In connection with such, we recorded a tax benefit of $2.2 during the three months ended July 3, 2021 related to the resolution of certain liabilities for ~~the 2014, 2015~~uncertain tax positions and ~~2016 tax years and those returns are subject to examination. With regard to all open tax years, we believe any contingencies are adequately provided for.~~interest associated with various refund claims.

State income tax returns generally are subject to examination for a period of three to five years after filing the respective tax returns. The impact on such tax returns of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. We have various state income tax returns in the process of examination. We believe any uncertain tax positions related to these examinations have been adequately provided for.

We have various foreign income tax returns under examination. The most significant of these ~~are~~is in Germany for the 2010 through 2014 tax years. We believe that any uncertain tax positions related to these examinations have been adequately provided for.

An unfavorable resolution of one or more of the above matters could have a material ~~adverse effect~~impact on our results of operations or cash flows in the quarter and year in which an adjustment is recorded or the tax is due or paid. As audits and examinations are still in process, the timing of the ultimate resolution and any payments that may be required for the above matters cannot be determined at this time.

~~(15)~~(17) FAIR VALUE

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Preference is given to observable inputs. These two types of inputs create the following fair value hierarchy:

•Level 1 — Quoted prices for identical instruments in active markets.

•Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

•Level 3 — Significant inputs to the valuation model are unobservable.

There were no changes during the periods presented to the valuation techniques we use to measure asset and liability fair values on a recurring or nonrecurring basis. There were no transfers between the three levels of the fair value hierarchy for the periods presented.

Valuation Methodologies Used to Measure Fair Value on a Non-Recurring Basis

Parent Guarantees and Bonds Associated with Balcke Dürr —~~As indicated in Note 1, in~~In connection with the 2016 sale of Balcke Dürr, existing parent company guarantees ~~of approximately €79.0~~ and bank ~~and~~ surety bonds, ofwhich totaled approximately ~~€79.0 existing~~Euro 79.0 and Euro 79.0, respectively, remained in place at the time of ~~the sale will remain in place through each instrument’s expiration date, with such expiration dates ranging from 2017 to 2022.~~ sale. These guarantees and bonds ~~provide~~provided protections for Balcke Dürr customers in regard to advance payments, performance, and warranties on projects in existence at the time of sale. In addition, certain bonds ~~relate~~related to lease obligations and foreign tax matters in existence at the time of sale. Balcke Dürr and the ~~Buyer have~~acquirer of Balcke Dürr provided us ~~a full~~an indemnity in the event that any of ~~these guarantees~~the bonds were called or ~~bonds are called.~~payments were made under the guarantees. Also, at the time of sale, Balcke Dürr ~~has~~ provided cash collateral of ~~€4.0~~Euro 4.0 and ~~mutares AG has~~the parent company of the buyer provided a guarantee of ~~€5.0~~Euro 5.0 as a security for the above ~~indemnifications. Summarized below are~~indemnifications (Euro 0.0 and Euro 1.0, respectively, at October 2, 2021). In connection with the sale, we recorded a liability ~~(related to~~for the ~~parent company~~estimated fair value of the guarantees and ~~bank~~bonds and ~~surety bonds) and~~an asset ~~(related to~~for the estimated fair value of the cash collateral and ~~guarantee provided by mutares AG) recorded at~~indemnities provided. Since the ~~time~~sale of ~~sale, along with~~Balcke Dürr, the ~~change~~guarantees have expired and bonds have been periodically returned. As of October 2, 2021, all remaining bonds have been returned. Summarized below are changes in the liability and ~~the~~ asset during the nine months ended October 2, 2021 and September ~~30, 2017.~~26, 2020.


	Nine months ended
	October 2, 2021				September 26, 2020
	Guarantees and Bonds Liability (1)		Indemnification Assets (1)		Guarantees and Bonds Liability (1)		Indemnification Assets (1)
Balance at beginning of year	$	1.8	$	—	$	2.0	$	0.3
Reduction/Amortization for the period (2)	(1.7)		—		(0.3)		(0.2)
Impact of changes in foreign currency rates	(0.1)		—		0.1		—
Balance at end of period	$	—	$	—	$	1.8	$	0.1

Nine months ended September 30, 2017
Guarantees and Bonds Liability Indemnification Assets
Balance as of December 31, 2016 ^{(1) (2)}
$ 9.9
$ 4.8
Reduction/Amortization for the period ⁽³⁾
(1.6 ) (2.0 )
Impact of changes in foreign currency rates 1.2
0.6
Balance as of September 30, 2017 ⁽²⁾
$ 9.5
$ 3.4
___________________________

~~___________________________~~

⁽¹⁾

(1)In connection with the sale, we estimated the fair value of the existing parent company guarantees and bank and surety bonds considering the probability of default by Balcke Dürr and an estimate of the amount we would be obligated to pay in the event of a default. Additionally, we estimated the fair value of the cash collateral provided by Balcke Dürr and guarantee provided by mutares AG based on the terms and conditions and relative risk associated with each of these securities (unobservable inputs - Level 3).


⁽²⁾	Balance associated with the guarantees and bonds is reflected within “Other long-term liabilities,” while the balance associated with the indemnification assets is reflected within “Other assets.”


⁽³⁾	We reduce the liability generally at the earlier of the completion of the related underlying project milestones or the expiration of the guarantees or bonds. We amortize the asset based on the expiration terms of each of the securities. We record the reduction of the liability and the amortization of the asset to “Other income (expense), net.”

~~As of September 30, 2017, the outstanding~~ parent company guarantees and bank and surety bonds ~~totaled €76.1~~considering the probability of default by Balcke Dürr and ~~€56.1, respectively. In addition,~~an estimate of the amount we would be obligated to pay in the event of a default. Additionally, we estimated the fair value of the cash collateral ~~of €4.0~~provided by Balcke Dürr and ~~the~~ guarantee provided by mutares AG based on the terms and conditions and relative risk associated with each of ~~€5.0 continue~~these securities (unobservable inputs - Level 3).

(2)We reduced the liability generally at the earlier of the completion of the related underlying project milestones or the expiration of the guarantees or bonds. We amortized the asset based on the expiration terms of each of the securities. We recorded the reduction of the liability and the amortization of the asset to ~~serve~~“Other income, net.”

Contingent Consideration for Sensors & Software and ECS Acquisitions - In connection with the acquisitions of Sensors & Software and ECS, the respective sellers are eligible for additional cash consideration of up to $3.9 and $16.8, respectively, with payment of such contingent consideration dependent upon the achievement of certain milestones. The estimated fair value of such contingent consideration is $0.7 and $8.2, respectively, with such amounts reflected as ~~security~~liabilities within our condensed consolidated balance sheets. We estimated the fair value of the contingent consideration for these acquisitions based on the ~~indemnifications noted above.~~ probability of Sensors & Software and ECS achieving the applicable milestones.

Goodwill, Indefinite-Lived Intangible and Other Long-Lived Assets —Certain of our non-financial assets are subject to impairment analysis, including long-lived assets, indefinite-lived intangible assets and goodwill. We review the carrying amounts of such assets whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable or at least annually for indefinite-lived intangible assets and goodwill. Any resulting asset impairment would require that the instrument be recorded at its fair value.

Valuation Methodologies Used to Measure Fair Value on a Recurring Basis

Derivative Financial Instruments — Our financial derivative assets and liabilities include commodity contracts (until the sale of Transformer Solutions), interest rate swaps, and FX forward ~~contracts, FX embedded derivatives and commodity~~ contracts, valued using valuation models based on observable market inputs such as forward rates, ~~interest~~interest rates, our own credit risk and the credit risk of our counterparties, which comprise investment-grade financial institutions. Based on these inputs, the derivative assets and liabilities are classified within Level 2 of the valuation hierarchy. We have not made any adjustments to the inputs obtained from the independent sources. Based on our continued ability to enter into forward contracts, we consider the markets for our fair value instruments active. We primarily use the income approach, which uses valuation techniques to convert future amounts to a single present amount.

As of ~~September 30, 2017,~~October 2, 2021, there has been no significant impact to the fair value of our derivative liabilities due to our own credit risk, as the related instruments are collateralized under our senior credit facilities. Similarly, there has been no significant impact to the fair value of our derivative assets based on our evaluation of our counterparties’ credit risks.

Equity Security — We estimate the fair value of an equity security that we hold utilizing a practical expedient under existing guidance, with such estimated fair value based on our ownership percentage applied to the net asset value of the investee as presented in the investee’s most recent audited financial statements. During the three and nine months ended

October 2, 2021 and September 26, 2020, we recorded a gain of $1.6 and $9.0, respectively and $2.1 and $7.4, respectively, to “Other income, net” to reflect an increase in the estimated fair value of the equity security. As of October 2, 2021 and December 31, 2020, the equity security had an estimated fair value of $36.0 and $27.0, respectively.

Indebtedness and Other — The estimated fair value of our debt instruments as of ~~September 30, 2017~~October 2, 2021 and December 31, ~~2016~~2020 approximated the related carrying values due primarily to the variable market-based interest rates for such instruments. ~~See~~See Note ~~10 for~~12 for further details.

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations(in millions)

FORWARD-LOOKING STATEMENTS

Some of the statements in this document and any documents incorporated by reference, including any statements as to operational and financial projections, constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our businesses’ or our industries’ actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by any forward-looking statements. Such statements may address our plans, our strategies, our prospects, changes and trends in our business and the markets in which we operate under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) or in other sections of this document. In some cases, you can identify forward-looking statements by terminology such as “may,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “project,” “potential” or “continue” or the negative of those terms or other comparable terminology. Particular risks and uncertainties facing us include economic, business and other risks stemming from our internal operations, legal and regulatory risks, and uncertainties with respect to costs of raw materials, pricing pressures, pension funding requirements, integration of acquisitions, and changes in the ~~economy.~~economy, as well as the impacts of the coronavirus disease (the “COVID-19 pandemic”) and governmental responses to stem further outbreaks of the COVID-19 pandemic, which is further discussed below and in other sections of this document. These statements are only predictions. Actual events or results may differ materially because of market conditions in our industries or other factors, and forward-looking statements should not be relied upon as a prediction of actual results. In addition, management’s estimates of future operating results are based on our current complement of businesses, which is subject to change as management selects strategic markets.

All the forward-looking statements are qualified in their entirety by reference to the factors discussed under the heading “Risk Factors” in our ~~2016~~2020 Annual Report on Form 10-K, in any subsequent filing with the ~~SEC,~~U.S. Securities and Exchange Commission, as well as in any documents incorporated by reference that describe risks, uncertainties and other factors that could cause results to differ materially from those projected in these forward-looking statements. We caution you that these risk factors may not be exhaustive. We operate in a continually changing business environment and frequently enter into new businesses and product lines. We cannot predict these new risk factors, and we cannot assess the impact, if any, of these new risk factors on our businesses or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those projected in any forward-looking statements. Accordingly, you should not rely on forward-looking statements as a prediction of actual results. We disclaim any responsibility to update or publicly revise any forward-looking statements to reflect events or circumstances that arise after the date of this document.

COVID-19 PANDEMIC, SUPPLY CHAIN DISRUPTIONS, AND OTHER ECONOMIC FACTORS

~~OVERVIEW OF OPERATING RESULTS~~

The COVID-19 pandemic had an adverse impact on our consolidated results of operations in the first half of 2020, with diminishing impacts during the second half of 2020 and during the first nine months of 2021. During the third quarter of 2021, certain of our businesses began to experience disruptions in the supply chain, which has negatively impacted their production of goods and, thus, resulted in lower absorption of manufacturing costs and delays in shipments to customers during the quarter. Our businesses are also experiencing increased costs for certain components, commodities, and services and, in some cases, labor shortages. We are taking actions to manage any additional costs and other potential impacts of these matters. We will continue to assess the actual and expected impacts and the need for further actions.

OTHER SIGNIFICANT MATTERS

•Acquisitions

◦ULC Robotics (“ULC”)

▪Acquired on September 2, 2020 for cash proceeds of $89.2, net of cash acquired of $4.0.

▪Revenues for the ~~three~~twelve months ~~ended September 30, 2017 increased by $3.5 (or 1.0%) when compared~~prior to the ~~same period in 2016, while revenues for~~date of acquisition totaled approximately $40.0.

▪Post-acquisition operating results are included within the nine months ended September 30, 2017 decreased $38.2 (or 3.5%), when compared to the same period in 2016. The increase in revenues for the three months ended September 30, 2017 was due to (i) the impact of a weaker U.S. dollar during the period and (ii) an increase in organic revenue within our Detection and Measurement reportable ~~segment~~segment.

▪The seller was eligible for additional cash consideration of up to $45.0, upon achievement of certain operating and ~~to a lesser extent, our HVAC reportable segment, partially offset by an organic revenue decline within our Engineered Solutions reportable segment. The decrease in revenues for~~financial performance milestones.

▪Contingent Consideration

•During the nine months ended September 30, 2017 was due primarily to a decline in organic revenue within our Engineered Solutions reportable segment, partially offset by increases in organic revenue within our Detection and Measurement and HVAC reportable segments. In addition, the decrease in revenues for the nine months ended September 30, 2017 was also driven by a reduction in revenue of $13.5 during the secondthird quarter of ~~2017 resulting from~~2021, we concluded that the operating and financial milestones associated with the contingent consideration would not be achieved.

•As a ~~revision~~result, we reversed the related liability of $24.3, with the offset to ~~the expected revenues and profits on the large power projects in South Africa (see~~“Other operating (income) expense.”

•See Note 131 to our condensed consolidated financial statements for additional ~~details)~~details.

▪Indefinite-Lived Intangible Assets and Goodwill

•We also concluded that the lack of achievement of the above milestones, along with lower than anticipated future cash flows, are indicators of potential impairment related to ULC’s indefinite-lived intangible assets and goodwill.

•As such, we tested ULC’s indefinite-lived intangible assets and goodwill for impairment during the quarter.

•Based on such testing, we determined that the carrying value of ULC’s net assets exceeded the implied fair value of the business.

•As a result, we recorded an impairment charge of $24.3 to “Other operating (income) expense,” with $23.3 related to goodwill and the remainder to trademarks.

•See Note 9 to our condensed consolidated financial statements for additional details.

◦Sensors & Software, Inc. (“Sensors & Software”)

▪Acquired on November 11, 2020 for cash proceeds of $15.5, net of cash acquired of $0.3.

▪Revenues for the twelve months prior to the date of acquisition totaled approximately $7.0.

▪Post-acquisition operating results are included within the Detection and Measurement reportable segment.

▪The seller is eligible for additional cash consideration of up to $3.9, upon achievement of certain financial performance milestones.

◦Sealite Pty Ltd and Affiliated Entities (“Sealite”)

▪Acquired on April 19, 2021 for cash proceeds of $80.3, net of cash acquired of $2.3.

▪Revenues for the twelve months prior to the date of acquisition totaled approximately $33.0.

▪Post-acquisition operating results are included within the Detection and Measurement reportable segment.

◦Enterprise Control Systems Ltd (“ECS”)

▪Acquired on August 2, 2021 for cash proceeds of $39.4, net of cash acquired of $5.1.

▪Revenues for the twelve months prior to the date of acquisition totaled approximately $10.9.

▪Post-acquisition operating results are included within the Detection and Measurement reportable segment.

▪The seller is eligible for additional cash consideration of up to $16.8, upon achievement of certain financial performance milestones.

•Disposition of SPX Transformer Solutions, Inc. (“Transformer Solutions”)

◦On June 8, 2021, we signed a definitive agreement to sell Transformer Solutions for cash proceeds of $645.0.

◦Transformer Solutions has been included in discontinued operations for all periods presented.

◦On October 1, 2021, we completed the sale for net cash proceeds of $620.6 and recorded a gain of $357.7 to “Gain (loss) on disposition of discontinued operations, net of tax.”

•Change in Segment Reporting Structure

◦In connection with the disposition of Transformer Solutions and its classification as a discontinued operation, we have eliminated the Engineered Solutions reportable segment.

◦The remaining operations of the former Engineered Solutions reportable segment have been reflected within our HVAC reportable segment for all periods presented.

•Large Power Projects in South Africa

◦On February 22, 2021 and April 28, 2021, our South African subsidiary, DBT, received favorable rulings from dispute adjudication panels.

▪In connection with the rulings, DBT received South African Rand 126.6 (or $8.6 at the time of payment) and South African Rand 82.0 (or $6.0 at the time of payment), respectively.

▪As the rulings are subject to further arbitration, such amounts have not been reflected in our condensed consolidated statements of operations.

▪On July 5, 2021, DBT received notice from MHI of its intent to seek final and binding arbitration in the Kusile matter.

◦In May 2021, and in connection with certain claims made against DBT, MHI made a demand and received payment of South African Rand 178.7 (or $12.5 at the time of payment) on bonds issued by a bank.

▪Under the terms of the bonds and our senior credit agreement, we were required to fund the above payment.

▪DBT denies liability for these claims and, thus, fully intends to seek, and believes it is legally entitled to, reimbursement of the South African Rand 178.7.

▪As such, the amount has been reflected as a non-current asset in our condensed consolidated balance sheet as of October 2, 2021.

◦On June 4, 2021, DBT received a revised version of an interim claim from MHI that was provided on February 26, 2019. DBT has numerous defenses and, thus, does not believe it has a probable liability associated with these claimed damages.

◦See Note 15 to our condensed consolidated financial statements for additional details.

•Cash Receipts in the Third Quarter of 2021

◦Received federal income tax refunds of $22.4.

◦Received insurance proceeds of $15.0 associated with the settlement of an asbestos insurance coverage matter.

OVERVIEW OF OPERATING RESULTS

Revenues for the three and nine months ended October 2, 2021 totaled $285.8 and $870.4, respectively, compared to $268.3 and $783.1 during the respective periods in 2020. The increase in revenues during the three and nine months ended October 2, 2021, compared to the respective prior-year periods, was due primarily to the impact of the ~~sale~~ULC, Sensors & Software, Sealite and ECS acquisitions and an increase in organic revenue. The increase in organic revenue was due primarily to higher sales of ~~the dry cooling business at the end~~heating and underground pipe and locator products, partially offset by lower sales of bus fare collection systems. During the first ~~quarter~~half of ~~2016.~~2020, sales of heating and underground pipe and locator products were impacted negatively by the COVID-19 pandemic. The decline in sales of bus fare collection systems was due primarily to the timing of large projects, as the extent of such projects can fluctuate from period to period.

During the three and nine months ended ~~September 30, 2017,~~October 2, 2021, we generated operating income of ~~$31.2~~$11.8 and ~~$53.1,~~$44.7, respectively, compared to ~~$11.3~~$20.4 and ~~$53.2~~$54.0 for the ~~same~~respective periods in ~~2016. Operating~~2020. The decrease in operating income ~~for~~during the three ~~and nine~~ months ended ~~September 30, 2017 included a gain on settlement~~October 2, 2021, compared to the respective prior-year period, was due primarily to additional amortization expense and one-time costs (e.g., charges for inventory adjusted to fair value at the acquisition date) associated with recent acquisitions and lower absorption of ~~a customer contract within~~manufacturing costs at certain of our ~~Engineered Solutions reportable segment of $10.2. Operating~~businesses due to disruptions in their supply chain.The decrease in operating income ~~for~~during the nine months ended ~~September 30, 2017 also included a charge of $22.9~~October 2, 2021, compared to the respective prior-year period, was due primarily to higher corporate expense related to ~~our large power projects~~increased investments in ~~South Africa. In addition,~~continuous improvement and other strategic initiatives and an increase in incentive compensation expense.

Cash flows from operating income for the three and nine months ended September 30, 2017 was impacted favorably by (i) the impact of organic revenue growth within our Detection and Measurement reportable segment, as the product lines in the Detection and Measurement reportable segment historically have had higher profit margins than the product lines within our other reportable segments, and (ii) cost reductions over the past year within our Detection and Measurement and Engineered Solutions reportable segments. Operating incomeactivities associated with continuing operations totaled $94.0 for the nine months ended October ~~1, 2016 included a gain on the sale~~2, 2021, compared to cash flows from operating activities of the dry cooling business of $18.4, an impairment charge of $4.0 associated with the trademarks of our Heat Transfer business, and operating losses for the dry cooling business prior to its sale at the end of the first quarter of 2016.

~~Cash flows used in continuing operations totaled $2.4~~$11.0 during the ~~first~~ nine months ~~of 2017, compared to $11.3 during the first nine months of 2016.~~ended September 26, 2020. The ~~decrease~~increase in cash flows ~~used in continuing operations~~from operating activities was due primarily to ~~additional operating~~improved cash flows ~~across~~within our ~~businesses resulting from (i) efforts to reduce working capital~~heating and ~~(ii) the impact of the sale of dry cooling~~

business, as the dry cooling business used cash in operating activities during the first quarter of 2016. In addition, we reached a settlement with an insurance carrier which resulted in the receipt of $8.5 in cash proceeds during the first quarter of 2017. These additional operating cash flows during the first nine months of 2017 were offset partially by a year-over-year increase in income tax payments ($22.4 in the first nine months of 2017, compared to $5.1 in the first nine months of 2016)underground pipe and ~~an increase in cash outflows~~locator businesses associated with ~~our large power projects~~improved profitability and decreases in ~~South Africa ($43.9 in~~working capital, as well as third quarter 2021 cash receipts related to federal tax refunds of $22.4 and insurance proceeds of $15.0 associated with the ~~first nine months~~settlement of ~~2017, compared to $20.6 in the first nine months of 2016).~~an asbestos insurance coverage matter.

RESULTS OF CONTINUING OPERATIONS

The unaudited information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements contained in our ~~2016~~2020 Annual Report on Form 10-K. Interim results are not necessarily indicative of results for the full year. We establish actual interim closing dates using a fiscal calendar, which requires our businesses to close their books on the Saturday closest to the end of the first calendar quarter, with the second and third quarters being 91 days in length. Our fourth quarter ends on December 31. The interim closing dates for the first, second and third quarters of ~~2017~~2021 are April 1,3, July 13 and ~~September 30,~~October 2, compared to the respective ~~April 2, July 2~~March 28, June 27 and ~~October 1, 2016~~September 26, 2020 dates. We had ~~two fewer~~five more days in the first quarter of ~~2017~~2021 and will have ~~one more day~~six fewer days in the fourth quarter of ~~2017~~2021 than in the respective ~~2016~~2020 periods. ~~We do~~It is not ~~believe~~practicable to estimate the ~~two fewer~~impact of the five additional days ~~during the first quarter of 2017 had a material impact~~ on our consolidated operating results for the ~~first~~ nine months ~~of 2017,~~ended October 2, 2021, when compared to the consolidated operating results for the 2020 respective ~~2016~~ period.

Cyclicality of End Markets, Seasonality and Competition — The financial results of our businesses closely follow changes in the industries in which they operate and end markets in which they serve. In addition, certain of our businesses have seasonal fluctuations. For example, our ~~boiler and~~ heating ~~and ventilation~~ businesses tend to be stronger in the third and fourth quarters, as customer buying habits are driven largely by seasonal weather patterns. In aggregate, our businesses tend to be stronger in the second half of the year.

Although our businesses operate in highly competitive markets, our competitive position cannot be determined accurately in the aggregate or by segment since none of our competitors offer all the same product lines or serve all the same markets as we do. In addition, specific reliable comparative figures are not available for many of our competitors. In most product groups, competition comes from numerous concerns, both large and small. The principal methods of competition are service, product performance, technical innovation and price. These methods vary with the type of product sold. We believe we compete effectively on the basis of each of these factors.

Non-GAAP Measures — Organic revenue growth (decline) presented herein is defined as revenue growth (decline) excluding the effects of foreign currency fluctuations, acquisitions/~~divestitures,~~divestitures, and the impact of ~~the~~a reduction in revenue ~~reduction that resulted from~~during the second quarter ~~2017 revision to~~of 2021 associated with the ~~expected revenues and profits~~settlement of claims on ~~our large power projects in South Africa, which resulted in~~ a ~~reduction in revenues of $13.5 for the nine months ended September 30, 2017.~~ legacy dry cooling project. We believe this metric is a useful financial measure for investors in evaluating our operating performance for the periods presented as, when ~~read~~considered in conjunction with our revenues, it presents a useful tool to evaluate our ongoing operations and provides investors with a tool they can use to evaluate our management of assets held from period to period. In addition, organic revenue growth (decline) is one of the factors we use in internal evaluations of the overall performance of our business. This metric, however, is not a measure of financial performance under accounting principles generally accepted in the United States (“GAAP”), should not be considered a substitute for net revenue growth (decline) as determined in accordance with GAAP, and may not be comparable to similarly titled measures reported by other companies.

The following table provides selected financial information for the three and nine months ended October 2, 2021 and September ~~30, 2017 and October 1, 2016,~~26, 2020, respectively, including the reconciliation of organic revenue ~~growth (decline)~~ increase to the net revenue increase ~~(decrease)~~:

Three months ended Nine months ended
September 30,
2017 October 1,
2016 % Change September 30,
2017 October 1,
2016 % Change
Revenues $ 348.5
$ 345.0
1.0
$ 1,038.8
$ 1,077.0
(3.5 )
Gross profit 85.1
80.8
5.3
249.3
261.8
(4.8 )
% of revenues 24.4 % 23.4 %
24.0 % 24.3 %
Selling, general and administrative expense 62.9
68.5
(8.2 ) 203.9
215.6
(5.4 )
% of revenues 18.0 % 19.9 %
19.6 % 20.0 %
Intangible amortization 0.2
0.8
(75.0 ) 0.5
2.6
(80.8 )
Special charges, net 1.0
1.9
(47.4 ) 2.0
4.8
(58.3 )
Impairment of intangible assets —
—
*
—
4.0
*
Gain on contract settlement 10.2
—
*
10.2
—
*
Gain on sale of dry cooling business —
1.7
*
—
18.4
*
Other income (expense), net (0.3 ) 0.9
*
(3.1 ) 2.2
*
Interest expense, net (4.1 ) (3.8 ) 7.9
(12.0 ) (10.7 ) 12.1
Loss on early extinguishment of debt —
(1.3 ) *
—
(1.3 ) *
Income from continuing operations before income taxes 26.8
7.1
*
38.0
43.4
*
Income tax provision (4.8 ) (0.5 ) *
(14.0 ) (10.1 ) *
Income from continuing operations 22.0
6.6
*
24.0
33.3
*

Components of consolidated revenue increase (decrease):

Organic growth (decline)

0.2

(2.2 )
Foreign currency

0.8

0.6
Sale of dry cooling business —
(0.6 )
South Africa revenue revision —
(1.3 )
Net revenue increase (decrease)

1.0

(3.5 )

~~___________________________~~


	Three months ended							Nine months ended
	October 2, 2021			September 26, 2020			% Change	October 2, 2021			September 26, 2020			% Change
Revenues	$	285.8		$	268.3		6.5	$	870.4		$	783.1		11.1
Gross profit	94.0			91.7			2.5	300.0			269.7			11.2
% of revenues	32.9		%	34.2		%		34.5		%	34.4		%
Selling, general and administrative expense	76.2			67.7			12.6	234.7			206.2			13.8
% of revenues	26.7		%	25.2		%		27.0		%	26.3		%
Intangible amortization	5.5			3.3			66.7	16.0			8.3			92.8
Special charges, net	0.5			0.3			66.7	1.9			1.6			18.8
Other operating (income) expense	—			—			*	2.7			(0.4)			*


Other income, net	2.9			2.7			7.4	17.2			8.5			102.4
Interest expense, net	(3.3)			(4.4)			(25.0)	(10.7)			(13.8)			(22.5)


Income from continuing operations before income taxes	11.4			18.7			(39.0)	51.2			48.7			5.1
Income tax provision	(3.7)			(3.1)			19.4	(9.8)			(8.4)			16.7
Income from continuing operations	7.7			15.6			(50.6)	41.4			40.3			2.7

Components of revenue increase:
Organic							0.7							5.4
Foreign currency							0.7							1.0
Acquisitions							5.1							5.3
Settlement of legacy dry cooling contract							—							(0.6)
Net revenue increase							6.5							11.1

_________________________________

* Not meaningful for comparison purposes.

Revenues — For the three months ended ~~September 30, 2017,~~October 2, 2021, the increase in revenues, compared to the respective period in ~~2016,~~2020, was due primarily to ~~(i)~~ the impact of the acquisitions of Sealite, ULC, Sensors and Software, and ECS and, to a ~~weaker U.S. dollar during the period and (ii)~~lesser extent, an increase in organic revenue ~~within our Detection~~ and ~~Measurement reportable segment~~the favorable impact of foreign currency exchange rates. The increase in organic revenue was due to higher sales of cooling products in the Americas region, as well as higher sales of underground pipe and ~~to a lesser extent, our HVAC reportable segment,~~locator, communication technologies, and obstruction lighting products. These increases in organic revenue were partially offset by ~~an organic revenue decline within our Engineered Solutions reportable segment. See “Results~~lower sales of ~~Reportable Segments” for additional details.~~

cooling products in the EMEA region and bus fare collection systems. For the nine months ended ~~September 30, 2017,~~October 2, 2021, the ~~decrease~~increase in revenues, compared to the respective period in ~~2016,~~2020, was primarily due to an increase in organic revenue and the impact of the acquisitions noted above. The increase in organic revenue was due primarily to ~~a decline in organic revenue within our Engineered Solutions reportable segment,~~higher sales of heating and underground pipe and locator products, partially offset by ~~increases in organic revenue within our Detection and Measurement and HVAC reportable segments. In addition, revenues for the nine months ended September 30, 2017 were~~ lower ~~compared to the respective period in 2016, as a result~~sales of the reduction in revenue of $13.5 during the second quarter of 2017 resulting from a revision to the expected revenues and profits on the large power projects in South Africa and the sale of the dry cooling business at the end ofbus fare collection systems. During the first ~~quarter~~half of ~~2016. These declines in revenues~~

2020, sales of heating and underground pipe and locator products were ~~partially offset~~impacted negatively by the ~~impact~~COVID-19 pandemic. The decline in sales of ~~a weaker U.S. dollar during the first nine months of 2017. See “Results of Reportable Segments” for additional details.~~

~~Gross Profit~~ ~~— The increase in gross profit and gross profit as a percentage of revenues for the three months ended September 30, 2017, compared to the respective period in 2016,~~bus fare collection systems was due primarily to the ~~organic revenue increase in our Detection and Measurement reportable segment,~~timing of large projects, as the ~~product lines in the Detection~~extent of such projects can fluctuate from period-to-period.

See “Results of Reportable Segments and Measurement reportable segment historically have had higher profit margins than the product lines within our other reportable segments. The decrease in gross profit and gross profit as a percentage of revenuesOther Operating Segment” for the nine months ended September 30, 2017, compared to the respective period in 2016, was due primarily to a reduction in gross profit of $22.9 during the second quarter of 2017 resulting from a revision to the expected revenues and profits of our large power projects in South Africa, partially offset by the impact of the organic revenue growth in our Detection and Measurement reportable segment noted above.additional details.

~~Selling, General and Administrative (“SG&A”) Expense~~

Gross Profit — For the three and nine months ended ~~September 30, 2017,~~October 2, 2021, the increase in gross profit, compared to the respective periods in 2020, was due primarily to the increase in revenues noted above. The decrease in gross profit as a percentage of revenues during the three months ended October 2, 2021, compared to the respective period in 2020, was due primarily to lower absorption of manufacturing costs at the HVAC segment’s heating businesses associated with disruptions in the supply chain.

Selling, General and Administrative (“SG&A”) Expense — For the three and nine months ended October 2, 2021, the increase in SG&A expense, compared to the respective periods in ~~2016,~~2020, was due primarily to ~~(i)~~ the ~~remeasurement of our unfunded liability related to postretirement benefits, which resulted~~incremental SG&A resulting from the acquisitions noted above. In addition, SG&A expense during the nine months ended October 2, 2021 was impacted by an increase in ~~a gain within net periodic postretirement benefit~~corporate expense ~~of $2.6 (see Note 9 to our condensed consolidated financial statements for further details), (ii) the impact of the sale of the dry~~associated with additional investments in connection with continuous improvement and other strategic initiatives and an increase in incentive compensation.

~~cooling business at the end of the first quarter of 2016, and (iii) cost reductions within our Detection and Measurement and Engineered Solutions reportable segments over the past year.~~

Intangible ~~Amortization~~Amortization— For the three and nine months ended ~~September 30, 2017,~~October 2, 2021, the ~~decline~~increase in intangible amortization, compared to the respective periods in 2020, was ~~primarily~~ due to the ~~impact~~incremental amortization of $2.2 and $7.8, respectively, related to the ~~$23.9 impairment charge recorded in the fourth quarter of 2016 associated with our Heat Transfer business’s definite-lived intangible assets.~~acquisitions noted above.

Special Charges, net — Special charges, net, related primarily to restructuring initiatives to consolidate manufacturing, distribution, sales and administrative facilities, reduce workforce and rationalize certain product lines. See Note 57 to our condensed consolidated financial statements for the details of actions taken in ~~2017~~the first nine months of 2021 and ~~2016.~~2020.

~~Impairment of Intangible Assets~~Other Operating (Income) Expense — ~~For~~Other operating expense for the nine months ended October ~~1, 2016, we recorded an impairment charge of $4.0~~2, 2021 related to revisions to recorded assets for asbestos-related claims. Other operating income for the ~~trademarks~~nine months ended September 26, 2020 related to revisions to estimates of ~~our Heat Transfer business. See Note 7 to our condensed consolidated financial statements for additional details.~~

~~Gain on Contract Settlement~~—~~During the third quarter of 2017, we settled a contract that had been suspended and then ultimately cancelled by a customer for cash proceeds of $9.0 and other consideration. In~~certain liabilities retained in connection with the ~~settlement, we recorded a gain of $10.2 during the quarter.~~

~~Gain on Sale of Dry Cooling Business— On March 30,~~ 2016 ~~we completed the~~ sale of our dry cooling business for cash proceeds of $45.9 (net of cash transferred with the business of $3.0), resulting in a gain during the first quarter of 2016 of $17.9. During the second quarter of 2016, we recorded a charge of $1.2 in connection with an adjustment to certain liabilities that we retained from the sale. During the third quarter of 2016, we reached an agreement with the buyer regarding the final working capital of the dry cooling ~~business, resulting in additional cash proceeds and an increase to the gain on sale of $1.7.~~business.

Other Income, ~~(Expense),~~ net — Other ~~expense,~~income, net, for the three months ended ~~September 30, 2017~~October 2, 2021 was composed primarily of a gain of $1.6 related to a change in the estimated fair value of an equity security that we hold, a gain of $0.4 related to the sale of a trading security, and pension and postretirement income of $1.6, partially offset by foreign currency transaction losses of $0.3 and net charges of $0.2 for the parent guarantees, bonds, and related indemnification assets associated with Balcke Dürr (see Note 15 to our condensed consolidated financial statements for additional details), partially offset by equity earnings in joint ventures of $0.2.$0.8.

Other income, net, for the three months ended ~~October 1, 2016~~September 26, 2020 was composed primarily of a gain of $2.1 related to a change in the estimated fair value of an equity security that we hold and pension and postretirement income of $0.9, partially offset by foreign currency transaction ~~gains~~losses of ~~$2.5,~~$0.3.

Other income, net, for the nine months ended October 2, 2021 was composed primarily of a gain of $9.0 related to a change in the estimated fair value of an equity that security we hold, pension and postretirement income of $4.8, income derived from company-owned life insurance policies of ~~$0.5, equity earnings in joint ventures of $0.3,~~$2.7, and income of $1.7 related to a reduction of the liability associated with ~~transition services provided~~the parent company guarantees and bank surety bonds that were outstanding in connection with ~~a business disposition~~the 2016 sale of ~~$0.1,~~Balcke Dürr, partially offset by ~~losses on FX forward contracts of $2.8.~~

~~Other expense, net, for the nine months ended September 30, 2017 was composed primarily of a charge of $3.0 associated with the settlement of a group of asbestos-related claims,~~ foreign currency transaction losses of $1.5, losses on currency forward embedded derivatives (“FX embedded derivatives”) of $0.5, and net charges of $0.4 for the parent guarantees, bonds, and related indemnification assets associated with Balcke Dürr, partially offset by income derived from company-owned life insurance policies of $1.2, income associated with transition services provided in connection with business dispositions of $0.6, and equity earnings in joint ventures of $0.5.$1.1.

Other income, net, for the nine months ended ~~October 1, 2016~~September 26, 2020 was composed primarily of ~~foreign currency transaction gains~~a gain of ~~$4.0,~~$7.4 related to a change in the estimated fair value of an equity security that we hold and pension and postretirement income ~~derived from company-owned life insurance policies~~ of $2.1, equity earnings in joint ventures of $1.1, and income associated with transition services provided in connection with a business disposition of $0.6, partially offset by losses on FX forward contracts of $4.6 and losses on FX embedded derivatives of $1.2.$2.9.

Interest Expense, net — Interest expense, net, includes both interest expense and interest income. The ~~increase~~decrease in interest expense, net, during the three and nine months ended ~~September 30, 2017,~~October 2, 2021, compared to the ~~same~~respective periods in ~~2016,~~2020, was ~~primarily a~~the result of a ~~higher weighted-average~~lower average effective interest rate and ~~higher~~lower average debt balances during ~~the first nine months of 2017, compared to the same period in 2016.~~2021.

~~Loss on Early Extinguishment of Debt~~

Income Tax Provision —~~During~~ For the three months ended October 1, 2016, we reduced the issuance capacity under our foreign credit facilities by $200.0. In connection with such reduction, we recorded a charge of $1.3 associated with the write-off of the deferred financing costs related to the $200.0 of previously available issuance capacity.

~~Income Tax Provision~~ ~~— For the three months ended September 30, 2017,~~2, 2021, we recorded an income tax ~~provision~~provision of ~~$4.8~~$3.7 on ~~$26.8~~$11.4 of pre-tax income from continuing operations, resulting in an effective ~~tax~~ rate of ~~17.9%~~32.5%. This compares toto an income tax provision for the three months ended ~~October 1, 2016~~September 26, 2020 of ~~$0.5~~ $3.1 on ~~$7.1~~$18.7 of pre-tax income from continuing operations, resulting in an effective ~~tax~~ rate of ~~7.0%~~16.6%. The most significant ~~items~~item impacting the income tax provision for the third quarter of ~~2017 were (i) $5.0~~2021 was $0.7 of ~~foreign losses generated during the period for which no tax benefit was recognized, as future realization of any such tax benefit is considered unlikely, and (ii) $4.1 of tax benefits~~expense related to ~~various audit settlements, statute expirations, and other~~

~~adjustments~~the revaluation of certain deferred tax liabilities due to ~~liabilities for uncertain~~an enacted tax ~~positions.~~rate increase. The most significant ~~items~~item impacting the income tax provision for the third quarter of ~~2016 were the $1.7 of additional gain that~~2020 was ~~recorded during the quarter on the sale of the dry cooling business, for which no income taxes were provided, and $0.7~~ $1.2 of tax benefits related to ~~various audit settlements, statute expirations,~~our U.S. tax credits and ~~other adjustments to liabilities for uncertain tax positions.~~incentives.

~~RESULTS OF DISCONTINUED OPERATIONS~~

As indicated in Note 1 to our condensed consolidated financial statements, we completed the sale of Balcke Dürr on December 30, 2016 and the results of Balcke Dürr are presented as a discontinued operation for all periods presented. Major classes of line items constituting pre-tax loss and after-tax loss of Balcke Dürr for the three and nine months ended October 1, 2016 are shown below:

Three months ended Nine months ended
October 1,
2016 October 1,
2016
Revenues $ 40.2
$ 110.4
Costs and expenses:
Cost of products sold 37.0
103.6
Selling, general and administrative 7.8
23.9
Special charges (credits), net (0.4 ) (1.0 )
Other expense, net (0.3 ) (0.5 )
Loss before taxes (4.5 ) (16.6 )
Income tax benefit 0.5
4.0
Loss from discontinued operations, net of tax $ (4.0 ) $ (12.6 )

The following table presents selected financial information for Balcke Dürr that is included within discontinued operations in the condensed consolidated statement of cash flows for the nine months ended October 1, 2016:

Non-cash items included in loss from discontinued operations:
Depreciation and amortization $ 1.5
Capital expenditures 0.6

~~During the first quarter of 2017, we reduced the net loss~~benefits associated with ~~the sale~~U.S. tax credits and incentives noted above, and (iii) $0.5 of ~~Balcke Dürr by $7.2. The reduction was comprised of an additional income~~ tax ~~benefit recorded for the sale of $8.4, partially offset by adjustments to liabilities retained~~benefits associated with statute expirations in ~~connection with the sale of $1.2. During~~certain jurisdictions during the second quarter of 2017, we increased the net loss associated with the sale of Balcke Dürr by $0.4, with the increase resulting from adjustments to liabilities retained in connection with the sale. In addition to the adjustments to the net loss related to the Balcke Dürr sale, we recognized net gains (losses) of $0.3 and $(0.1) during the three and nine months ended September 30, 2017, and $(0.7) and $(2.2) during the three and nine months ended October 1, 2016, respectively, resulting from revisions to liabilities retained from businesses discontinued prior to 2016.2020.

For the three and nine months ended September 30, 2017 and October 1, 2016, the table below presents a reconciliation of discontinued operations activity to the related amounts in the condensed consolidated statements of operations:

Three months ended Nine months ended
September 30,
2017 October 1,
2016 September 30,
2017 October 1,
2016
Balcke Dürr
Loss from discontinued operations $ —
$ (4.5 ) $ (2.6 ) $ (16.6 )
Income tax benefit —
0.5
9.4
4.0
Income (loss) from discontinued operations, net —
(4.0 ) 6.8
(12.6 )

All other
Loss from discontinued operations (0.1 ) (0.5 ) (1.0 ) (2.3 )
Income tax (provision) benefit 0.4
(0.2 ) 0.9
0.1
Income (loss) from discontinued operations, net 0.3
(0.7 ) (0.1 ) (2.2 )

Total
Loss from discontinued operations (0.1 ) (5.0 ) (3.6 ) (18.9 )
Income tax benefit 0.4
0.3
10.3
4.1
Income (loss) from discontinued operations, net $ 0.3
$ (4.7 ) $ 6.7
$ (14.8 )

RESULTS OF REPORTABLE SEGMENTS AND OTHER OPERATING SEGMENT

The following information should be read in conjunction with our condensed consolidated financial statements and related notes. These results exclude the operating results of discontinued operations for all periods presented. See Note 46 to ~~the~~our condensed consolidated financial statements for a description of ~~each of~~ our reportable ~~segments.~~segments and other operating segment.

Non-GAAP Measures — Throughout the following discussion of segment results, we use “organic revenue” growth (decline) to facilitate explanation of the operating performance of our segments. Organic revenue growth (decline) is a non-GAAP financial measure and is not a substitute for revenue growth (decline). Refer to the explanation of this measure and purpose of use by management under “Results of Continuing Operations—Non-GAAP Measures.”

HVAC Reportable Segment


	Three months ended							Nine months ended
	October 2, 2021			September 26, 2020			% Change	October 2, 2021			September 26, 2020			% Change
Revenues	$	179.3		$	182.6		(1.8)	$	540.3		$	510.6		5.8
Income	21.4			26.8			(20.1)	69.1			64.1			7.8
% of revenues	11.9		%	14.7		%		12.8		%	12.6		%
Components of revenue increase (decrease):
Organic							(2.4)							6.0
Foreign currency							0.6							0.7
Settlement of legacy dry cooling contract							—							(0.9)
Net revenue increase (decrease)							(1.8)							5.8

Three months ended Nine months ended
September 30, 2017 October 1, 2016 % Change September 30, 2017 October 1, 2016 % Change
Revenues $ 119.4
$ 116.9
2.1 $ 349.8
$ 350.4
(0.2 )
Income 15.6
15.6
— 47.5
48.6
(2.3 )
% of revenues 13.1 % 13.3 % 13.6 % 13.9 %
Components of revenue increase (decrease):

Organic growth

2.0

0.2
Foreign currency

0.1

(0.4 )
Net revenue increase (decrease)

2.1

(0.2 )

Revenues — ~~For~~ For the three months ended ~~September 30, 2017,~~October 2, 2021, the decrease in revenues, compared to the respective period in 2020, was due to a net decline in organic revenue related primarily to the segment’s cooling business in the EMEA region, as this business had some large projects that contributed significant revenue to the segment’s results in the third quarter of 2020. Despite a significant increase in orders during the third quarter of 2021, organic revenue for the segment’s heating businesses was relatively flat during the quarter as production and shipments for the businesses were negatively impacted by disruptions in the supply chain.

For the nine months ended October 2, 2021, the increase in revenues, compared to the respective period in 2016, was due to an increase in organic revenue. The increase in organic revenue was primarily the result of an increase in sales of cooling products in the Americas, partially offset by a decline in sales of cooling products in Asia Pacific. During the three months ended September 30, 2017, sales of boilers and heating and ventilation products generally were comparable to the respective amounts for the three months ended October 1, 2016.

For the nine months ended September 30, 2017, the decrease in revenues, compared to the respective period in 2016, was due to the impact of a stronger U.S. dollar during the period, partially offset by an increase in organic revenue. The increase in organic revenue2020, was due primarily to an increase in ~~sales~~organic revenue for the segment’s heating businesses. Sales of heating products during the first half of 2020 were impacted negatively by (i) a warmer than normal winter and ~~ventilation products, partially offset~~(ii) the COVID-19 pandemic. In addition, and as indicated above, sales for the segment’s heating businesses during the third quarter of 2021 were negatively impacted by ~~a decline~~disruptions in ~~sales of boilers.~~the supply chain.

Income — For the three months ended September 30, 2017, the decrease in margin, compared to the respective period in 2016, was due primarily to a less profitable sales mix associated with heating and ventilation products during the third quarter of 2017.

~~For the nine months ended September 30, 2017,~~October 2, 2021, the decrease in income and margin, compared to the respective period in ~~2016, was due primarily to a less profitable sales mix associated with cooling and heating and ventilation products.~~

~~Backlog~~ ~~— The segment had backlog of $43.5 and $34.3 as of September 30, 2017 and October 1, 2016, respectively.~~

~~Detection and Measurement Reportable Segment~~

Three months ended Nine months ended
September 30, 2017 October 1, 2016 % Change September 30, 2017 October 1, 2016 % Change
Revenues $ 66.9
$ 52.3
27.9 $ 185.0
$ 167.8
10.3
Income 16.5
7.8
111.5 45.0
30.9
45.6
% of revenues 24.7 % 14.9 % 24.3 % 18.4 %
Components of revenue increase:

Organic growth

27.3

11.6
Foreign currency

0.6

(1.3 )
Net revenue increase

27.9

10.3

~~Revenues~~ — For the three and nine months ended September 30, 2017, the increase in revenues, compared to the respective periods in 2016, was due primarily to an increase in organic revenue. The increase in organic revenue was the result of an increase in sales for all of the primary product lines within the segment.

~~Income~~ ~~— For the three and nine months ended September 30, 2017, the increase in income and margin, compared to the respective periods in 2016,~~2020, was due primarily to the revenue ~~increase~~decline noted above and ~~lower SG&A expense resulting from cost reductions within our bus fare collection systems’ and communication technologies’ businesses.~~

~~Backlog~~ ~~— The segment had backlog of $73.7 and $52.6 as of September 30, 2017 and October 1, 2016, respectively.~~

~~Engineered Solutions Reportable Segment~~

Three months ended Nine months ended
September 30, 2017 October 1, 2016 % Change September 30, 2017 October 1, 2016 % Change
Revenues $ 162.2
$ 175.8
(7.7 ) $ 504.0
$ 558.8
(9.8 )
Income 13.3
2.6
411.5
7.9
8.5
(7.1 )
% of revenues 8.2 % 1.5 %
1.6 % 1.5 %
Components of revenue decrease:

Organic decline

(9.1 )

(8.0 )
Foreign currency

1.4

1.8
Sale of dry cooling business —
(1.2 )
South Africa revenue revision —
(2.4 )
Net revenue decrease

(7.7 )

(9.8 )

~~Revenues~~ ~~— For the three and nine months ended September 30, 2017, the decrease in revenues, compared to the respective period in 2016, was due primarily to~~ a decline in ~~organic revenue, partially offset by the impact of a weaker U.S. dollar versus the South African Rand during the periods. The decline in organic revenue was the result of lower sales related to~~manufacturing cost absorption at the segment’s ~~large power projects in South Africa, as these projects generally are~~heating businesses associated with disruptions in the latter stages of completion, as well as lower sales of power transformers and process cooling products. The decrease in power transformer sales was due primarily to the timing of shipments. In addition, our process cooling business has been impacted by a shift in its sales model, whereby it is now focused more on high-margin components and services and less on lower-margin large projects. In addition, the decrease in revenues forsupply chain.

For the nine months ended September 30, 2017, compared to the same period in 2016, resulted from a reduction in revenue of $13.5 during the second quarter of 2017 related to a revision to the expected revenues and profits on the segment’s large power projects in South Africa and the impact of the sale of the dry cooling business at the end of the first quarter of 2016.

~~Income— For the three months ended September 30, 2017,~~October 2, 2021, the increase in income and margin, compared to the respective period in ~~2016,~~2020, was due primarily to ~~a $10.2 gain recorded during~~ the ~~third quarter~~increase in revenues noted above.

Backlog — The segment had backlog of ~~2017, resulting from the settlement~~$204.0 and $182.6 as of ~~a contract that had been suspended~~October 2, 2021 and ~~then ultimately cancelled by a customer. In addition, income~~September 26, 2020, respectively.

Detection and ~~margin for~~Measurement Reportable Segment


	Three months ended							Nine months ended
	October 2, 2021			September 26, 2020			% Change	October 2, 2021			September 26, 2020			% Change
Revenues	$	106.4		$	85.2		24.9	$	329.2		$	269.2		22.3
Income	9.9			14.2			(30.3)	41.3			48.4			(14.7)
% of revenues	9.3		%	16.7		%		12.5		%	18.0		%
Components of revenue increase:
Organic							7.6							5.2
Foreign currency							1.1							1.6
Acquisitions							16.2							15.5
Net revenue increase							24.9							22.3

Revenues — For the three ~~months ended September 30, 2017 were favorably impacted by cost reductions at the segment’s Heat Transfer business resulting from restructuring actions that were implemented in 2016~~ and ~~unfavorably by the organic revenue declines noted above.~~

~~For the~~ nine months ended ~~September 30, 2017,~~October 2, 2021, the increase in revenues, compared to the respective periods in 2020, was due primarily to the impact of the acquisitions of ECS, Sealite, ULC, and Sensors and Software and, to a lesser extent, organic revenue growth and the impact foreign currency exchange rates. The increase in organic revenue was primarily the result of higher sales of underground pipe and locator products and, to a lesser extent, higher sales of communication technologies and obstruction lighting products.These increases in organic revenue were offset partially by lower sales of bus fare collection systems. During the first half of 2020, sales of underground pipe and locator products were impacted negatively by the COVID-19 pandemic, while the decline in in sales of bus fare collection systems in the current-year period was due primarily to the timing of large projects, as extent of such projects can fluctuate from period to period.

Income — For the three and nine months ended October 2, 2021, the decrease in income and margin, compared to the respective ~~period~~periods in ~~2016,~~2020, was due primarily to increased amortization expense, as well as inventory step-up charges ($0.7 and $2.3 during the three and nine months ended October 2, 2021), associated with the acquisitions noted above, partially offset by the income associated with the increases in revenue noted above.

Backlog — The segment had backlog of $176.5 and $89.5 as of October 2, 2021 and September 26, 2020, respectively. Aggregate backlog related to Sensors and Software, Sealite and ECS, businesses acquired after September 26, 2020, totaled $50.2 as of October 2, 2021.

Other

Three months ended

Nine months ended

October 2, 2021

September 26, 2020

% Change

October 2, 2021

September 26, 2020

% Change

Revenues

0.1

0.5

0.9

3.3

Loss

(4.1)

(5.3)

(12.6)

(13.9)

% of revenues

_________________________________

* Not meaningful for comparison purposes.

Revenues — For the three and nine months ended October 2, 2021, the decrease in revenues, compared to the respective periods in 2020, was due to ~~a reduction in profit of $22.9 associated with a revision during~~lower sales related to the ~~second quarter of 2017 of the expected revenues and~~

~~profits of the segment’s~~ large power projects in South Africa, as these projects are in the latter stages of completion.

Loss — For the three and nine months ended October 2, 2021, the ~~organic revenue declines~~loss decreased, compared to the respective periods in 2020, as a result of the wind-down activities noted above ~~partially offset by (i)~~for the ~~$10.2 gain on~~large power projects in South Africa. The losses for all periods presented relate primarily to legal costs associated with the ~~customer contract settlement noted above, (ii)~~claims matters for the ~~cost reductions at the segment’s Heat Transfer business noted above, and (iii) improved operating efficiency within the segment’s~~large power ~~transformer business.~~projects in South Africa.

Backlog — The operating segment had a backlog of ~~$368.1~~$2.9 and ~~$435.6~~$3.9 as of October 2, 2021 and September ~~30, 2017 and October 1, 2016,~~26, 2020, respectively. ~~Portions of the segment’s backlog are long-term in nature, with the related revenues expected to be recorded through 2017 and beyond.~~

CORPORATE AND OTHER EXPENSES


	Three months ended							Nine months ended
	October 2, 2021			September 26, 2020			% Change	October 2, 2021			September 26, 2020			% Change
Total consolidated revenues	$	285.8		$	268.3		6.5	$	870.4		$	783.1		11.1
Corporate expense	11.5			11.8			(2.5)	39.0			33.8			15.4
% of revenues	4.0		%	4.4		%		4.5		%	4.3		%
Long-term incentive compensation expense	3.4			3.2			6.3	9.5			9.6			(1.0)

Three months ended Nine months ended
September 30, 2017 October 1, 2016 % Change September 30, 2017 October 1, 2016 % Change
Total consolidated revenues $ 348.5
$ 345.0
1.0
$ 1,038.8
$ 1,077.0
(3.5 )
Corporate expense 11.0
9.6
14.6
33.7
29.6
13.9
% of revenues 3.2 % 2.8 %
3.2 % 2.7 %
Long-term incentive compensation expense 3.6
4.1
(12.2 ) 10.4
10.2
2.0
Pension and postretirement (income) expense (1.4 ) 0.8
(275.0 ) 1.2
4.6
(73.9 )

Corporate Expense — Corporate expense generally relates to the cost of our Charlotte, North Carolina corporate headquarters. The increase in corporate expense ~~for~~during the ~~three and~~ nine months ended ~~September 30, 2017,~~October 2, 2021, compared to the respective periods in ~~2016,~~2020, was due primarily to ~~higher~~increased investments in continuous improvement and other strategic initiatives and an increase in incentive compensation ~~expense resulting from a year-over-year increase in profitability, as well as higher professional fees.~~expense.

Long-Term Incentive Compensation Expense — Long-term incentive compensation expense represents our consolidated expense, which we do not allocate for segment reporting purposes. For the three months ended October 2, 2021, the increase in long-term incentive compensation expense, compared to the respective period in 2020, was due to a higher amount award forfeitures during the 2020 period. The decrease in long-term incentive compensation ~~expense~~ during the ~~three~~nine months ended ~~September 30, 2017,~~October 2, 2021, compared to the respective period in ~~2016,~~2020, was due ~~primarily~~ to revisions to/finalization of the ~~impact of award forfeitures~~liability associated with the 2018 long-term cash awards during the quarter. The increase in long-term incentive compensation expense during the nine months ended September 30, 2017, compared to the respective period in 2016, was due primarily to the timing and extent of compensation expense associated with awards granted to the members of our senior management team following the spin-off of SPX FLOW Inc. in the thirdfirst quarter of ~~2015,~~2021, partially offset by the impact of ~~the third quarter 2017~~a lower amount of award forfeitures ~~noted above.~~

~~Pension and Postretirement (Income) Expense~~ ~~— Pension and postretirement (income) expense represents our consolidated expense, which we do not allocate for segment reporting purposes. The decrease in pension and postretirement expense~~ during the three months ended September 30, 2017, compared to the respective period in 2016, was due primarily to the remeasurement of our unfunded liability related to postretirement benefits, which resulted in a gain within net periodic postretirement benefit expense of $2.6 during the third quarter of 2017, partially offset by lower expected returns on assets associated with the SPX U.S. Pension Plan (the “U.S. Plan”) due to revisions to the investment strategy for the U.S. Plan during the latter half of 2016 (i.e., a higher percentage of fixed income investments). The decrease in pension and postretirement expense during the nine months ended September 30, 2017, compared to the respective period in 2016, was due primarily to the remeasurement of our unfunded liability related to postretirement benefits discussed above, the impact of charges of $1.8 during the second quarter of 2016 associated with lump-sum benefit payments during the period to certain participants of the U.S. Plan and the Supplemental Individual Account Retirement Plan, partially offset by the impact of the lower expected returns on the assets of the U.S. Plan.2021. See Note 914 to our condensed consolidated financial statements for additional ~~information on pension and postretirement expense.~~details.

LIQUIDITY AND FINANCIAL CONDITION

Listed below are the cash flows from (used in) operating, investing, and financing activities and discontinued operations, as well as the net change in cash and equivalents for the nine months ended October 2, 2021 and September ~~30, 2017 and October 1, 2016.~~26, 2020.


	Nine months ended
	October 2, 2021		September 26, 2020
Continuing operations:
Cash flows from operating activities	$	94.0	$	11.0
Cash flows used in investing activities	(119.3)		(99.3)
Cash flows from (used in) financing activities	(166.8)		64.5
Cash flows from discontinued operations	677.7		42.9
Change in cash and equivalents due to changes in foreign currency exchange rates	6.2		(3.1)
Net change in cash and equivalents	$	491.8	$	16.0

Nine months ended
September 30, 2017 October 1, 2016
Continuing operations:

Cash flows used in operating activities $ (2.4 ) $ (11.3 )
Cash flows from (used in) investing activities (8.4 ) 39.9
Cash flows from (used in) financing activities 9.0
(13.1 )
Cash flows used in discontinued operations (6.1 ) (36.6 )
Change in cash and equivalents due to changes in foreign currency exchange rates (4.5 ) 3.1
Net change in cash and equivalents $ (12.4 ) $ (18.0 )

Operating Activities — The ~~decrease~~increase in cash flows ~~used in~~from operating activities during the nine months ended ~~September 30, 2017,~~October 2, 2021, compared to the ~~same~~respective period in ~~2016,~~2020, was due primarily to ~~additional operating~~improved cash flows ~~across~~within our underground pipe and locator and heating businesses ~~resulting from (i) efforts to reduce~~associated with improved profitability and decreases in working capital, as well as third quarter 2021 cash receipts related to federal tax refunds of $22.4and ~~(ii) the impact~~insurance proceeds of the sale of dry cooling business, as the dry cooling business used cash in operating activities during the first quarter of 2016. In addition, we reached a settlement with an insurance carrier which resulted in the receipt of $8.5 in cash proceeds during the first quarter of 2017. These additional operating cash flows during the first nine months of 2017 were offset partially by a year-over-year increase in income tax payments ($22.4 in the first nine months of 2017, compared to $5.1 in the first nine months of 2016) and an increase in cash outflows$15.0 associated with ~~our large power projects in South Africa ($43.9 in~~ the ~~first nine months~~settlement of ~~2017, compared to $20.6 in the first nine months of 2016).~~an asbestos insurance coverage matter.

Investing Activities — Cash flows used in investing activities for the nine months ended ~~September 30, 2017~~October 2, 2021 were comprised primarily of cash utilized in the acquisitions of Sealite and ECS of $80.3 and $39.4, respectively, and capital expenditures of ~~$8.4.~~ $7.5, partially offset by proceeds from company-owned insurance policies of $8.2.

Cash flows ~~from~~used in investing activities for the nine months ended ~~October 1, 2016 related to proceeds from asset sales~~September 26, 2020 were comprised of ~~$47.7 (including proceeds from~~cash utilized for the ~~sale~~acquisition of ~~the dry cooling business~~ULC of ~~$47.6),~~$87.9 and capital expenditures of $12.5, partially offset by ~~capital expenditures~~proceeds from company-owned life insurance policies of ~~$7.8.~~$1.1.

Financing Activities — Cash flows from financing activities for the nine months ended September 30, 2017 related to net borrowings under our various debt instruments of $10.1, partially offset by net withholdings paid on behalf of employees for net share settlements of $1.1. Cash flows used in financing activities for the nine months ended October ~~1, 2016 related to~~2, 2021 were comprised of net repayments under our various debt instruments of ~~$11.5~~$162.8 and ~~net~~minimum withholdings paid on behalf of employees ~~for~~on long-term incentive awards, net ~~share settlements~~ of ~~$1.6.~~proceeds from options exercised, of $4.0.

~~Discontinued Operations~~ —

Cash flows ~~used in discontinued operations~~from financing activities for the nine months ended September ~~30, 2017~~26, 2020 were comprised of net borrowings under our various debt instruments of $67.8, with such net borrowings resulting primarily from borrowings utilized to fund the ULC acquisition. The impact of these net borrowings was partially offset by (i) minimum withholdings paid on behalf of employees on long-term incentive awards, net of proceeds from options exercised, of $1.8 and (ii) $1.5 related to ~~disbursements for liabilities retained~~contingent consideration paid in connection with ~~dispositions.~~the SGS acquisition.

Discontinued Operations — Cash ~~flows used in~~flows from discontinued operations for the nine months ended October ~~1, 2016~~2, 2021 include proceeds received in connection with the sale of Transformers Solutions of $620.6. In addition, cash flows from discontinued operations for the nine months ended October 2, 2021 and September 26, 2020 include cash flows from operations generated by Transformers Solutions, partially offset by cash disbursements related to ~~the operations of Balcke Dürr and, to a lesser extent, disbursements for~~ liabilities retained in connection with ~~dispositions prior to 2016.~~dispositions.

Change in Cash and Equivalents due to Changes in Foreign Currency Exchange ~~Rates~~Rates — Changes in foreign currency exchange rates did not have a significant impact on our cash and equivalents during the first nine months of ~~2017~~2021 and ~~2016.~~2020.

Borrowings and Availability

Borrowings ~~—The~~ — The following summarizes our debt activity (both current and non-current) for the nine months ended ~~September 30, 2017.~~October 2, 2021.


	December 31, 2020		Borrowings		Repayments		Other(5)		October 2, 2021
Revolving loans (1)	$	129.8	$	209.1	$	(338.9)	$	—	$	—
Term loan(2)	248.6		—		(4.7)		0.3		244.2




Trade receivables financing arrangement(3)	28.0		179.0		(207.0)		—		—
Other indebtedness(4)	6.0		0.6		(0.9)		(2.3)		3.4
Total debt	412.4		$	388.7	$	(551.5)	$	(2.0)	247.6


Less: short-term debt	101.2								2.3
Less: current maturities of long-term debt	7.2								11.4
Total long-term debt	$	304.0							$	233.9

___________________________

~~___________________________~~

⁽¹⁾


⁽²⁾	~~Under this arrangement, we can borrow, on a continuous basis, up to $50.0, as available. At September 30, 2017, we had $18.3 of available borrowing capacity under this facility.~~

⁽³⁾

Primarily includes balances under a purchase card program of $3.6 and $3.9, capital lease obligations of $2.2 and $1.7, and borrowings under lines of credit in South Africa and China of $4.1 and $10.2 at September 30, 2017 and December 31, 2016, respectively. The purchase card program allows for payment beyond the normal payment terms for goods and services acquired under the program. As this arrangement extends the payment of these purchases beyond their normal payment terms through third-party lending institutions, we have classified these amounts as short-term debt.


⁽⁴⁾	“Other” primarily includes debt assumed, foreign currency translation on any debt instruments denominated in currencies other than the U.S. dollar, and the impact of amortization of debt issuance costs associated with the term loan.

At ~~September 30, 2017,~~October 2, 2021, we were in compliance with all ~~covenant provisions~~covenants of our senior credit agreement.

Availability — At ~~September 30, 2017,~~October 2, 2021, we had ~~$314.1~~$437.8 of available borrowing capacity under our revolving credit facilities, after giving effect to ~~$35.9~~$12.2 reserved for ~~outstanding~~domestic letters of credit. ~~In addition, at September 30, 2017,~~During the second quarter of 2021, we reduced the available issuance capacity under our foreign credit instrument facilities from $100.0 to $55.0. At October 2, 2021, we had ~~$121.4~~$31.2 of available issuance capacity under our foreign credit instrument facilities after giving effect to ~~$178.6~~$23.8 reserved for outstanding letters of credit.

Financing instruments may be used from time to time including, but not limited to, public and private debt and equity offerings, operating leases, ~~capital~~finance leases and securitizations. We expect that we will continue to access these markets as appropriate to maintain liquidity and to provide sources of funds for general corporate purposes, acquisitions or to refinance existing debt.

Concentrations of Credit Risk

Financial instruments that potentially subject us to significant concentrations of credit risk consist of cash and equivalents, trade accounts receivable, insurance recovery assets associated with asbestos product liability matters, and interest rate swap and foreign currency ~~forward, and commodity~~forwards contracts. These financial instruments, other than trade accounts receivable, are placed with high-quality financial institutions and insurance companies throughout the world. We periodically evaluate the credit standing of these financial ~~institutions.~~institutions and insurance companies.

We maintain cash levels in bank accounts that, at times, may exceed federally-insured limits. We have not experienced, and believe we are not exposed to, significant risk of loss in these accounts.

We have credit loss exposure in the event of nonperformance by counterparties to the above financial instruments, but have no other off-balance-sheet credit risk of accounting loss. We anticipate, however, that counterparties will be able to fully

satisfy their obligations under the contracts. We do not obtain collateral or other security to support financial instruments subject to credit ~~risk, but we do monitor the credit standing of counterparties.~~risk.

Concentrations of credit risk arising from trade accounts receivable are due to selling to customers in a particular industry. Credit risks are mitigated by performing ongoing credit evaluations of our customers’ financial conditions and obtaining collateral, advance payments, or other security when appropriate. No one customer, or group of customers that to our knowledge are under common control, accounted for more than ~~10%~~10% of our revenues for any period presented.

Other Matters

Contractual Obligations — There have been no material changes in the amounts of our contractual obligations from those disclosed in our ~~2016~~2020 Annual Report on Form 10-K. Our total net liabilities for unrecognized tax benefits including interest were ~~$23.1~~$8.9 as of ~~September 30, 2017.~~October 2, 2021. Based on the outcome of certain examinations or as a result of the expiration of statutes of limitations for certain jurisdictions, we believe that within the next 12 months it is reasonably possible that our previously unrecognized tax benefits could decrease by up ~~to $4.0.~~to $5.0.

Contingencies and Other Matters — Numerous claims, complaints and proceedings arising in the ordinary course of business have been asserted or are pending against us or certain of our subsidiaries (collectively, “claims”). These claims relate to litigation matters (e.g., ~~class actions and~~ contracts, intellectual property, and competitive claims), environmental matters, product liability matters (predominately associated with alleged exposure to asbestos-containing materials), and other risk management matters (e.g., general liability, automobile, and workers’ compensation claims). Additionally, we may become subject to other claims of which we are currently unaware, which may be significant, or the claims of which we are aware may result in our incurring significantly greater loss than we anticipate. We accrue for these contingencies when we believe a liability is probable and can be reasonably estimated. As events change and resolutions occur, these accruals may be adjusted and could differ materially from amounts originally estimated. See Note 1315 to the condensed consolidated financial statements for a further discussion of contingencies and other matters.

Our Certificate of Incorporation provides that we shall indemnify our officers and directors to the fullest extent permitted by the Delaware General Corporation Law for any personal liability in connection with their employment or service with us. While we maintain insurance for this type of liability, the liability could exceed the amount of the insurance coverage.

In addition, you should read “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Other Matters” and “Risk Factors” in our ~~2016~~2020 Annual Report on Form 10-K, as well as similar sections in any future filings for an understanding of the risks, uncertainties, and trends facing our businesses.

Critical Accounting Policies and Use of Estimates

General — The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities. The accounting policies that we believe are most critical to the portrayal of our financial condition and results of operations, and that require our most difficult, subjective or complex judgments in estimating the effect of inherent uncertainties are discussed in our ~~2016~~2020 Annual Report on Form ~~10-K.~~10-K. We have affected no material change in either our critical accounting policies or use of estimates since the filing of our ~~2016~~2020 Annual Report on Form 10-K.

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

Management does not believe our exposure to market risk has significantly changed since December 31, ~~2016~~2020 and does not believe that such risks will result in significant adverse impacts to our financial condition, results of operations or cash flows.

ITEM 4. Controls and Procedures

SPX management, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of disclosure controls and procedures, pursuant to Exchange Act Rule 13a-15(b), as of ~~September 30, 2017.~~October 2, 2021. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of ~~September 30, 2017.~~October 2, 2021.

In connection with the evaluation by SPX management, including the Chief Executive Officer and the Chief Financial Officer, of our internal control over financial reporting, pursuant to Exchange Act Rule 13a-15(d), no changes during the quarter ended ~~September 30, 2017~~October 2, 2021 were identified that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1. Legal Proceedings

The information required by this Item is incorporated by reference from the footnotes to the condensed consolidated financial statements, specificallyNote ~~13,~~ 15, included under Part I of this Form 10-Q.

ITEM 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our ~~2016~~2020 Annual Report on Form 10-K, which could materially affect our business, financial condition or future results.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

~~ITEM 4. Mine Safety Disclosures~~

~~None.~~

ITEM 6. Exhibits



~~31.1~~2.1			Stock Purchase Agreement among SPX Corporation, SPX Transformer Solutions, Inc., GE Prolec Transformers, Inc. and Prolec GE Internacional, S. DE RL. DE CV. dated as of June 8, 2021, incorporated by reference from our Current Report on Form 8-K filed on June 9, 2021 (File no. 1-6948).

31.1			Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2			Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1			Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.1			SPX Corporation financial information from its Form 10-Q for the quarterly period ended ~~September 30, 2017,~~October 2, 2021, formatted in Inline XBRL, including: (i) Condensed Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended October 2, 2021 and September ~~30, 2017 and October 1, 2016;~~26, 2020; (ii) Condensed Consolidated Balance Sheets at ~~September 30, 2017~~October 2, 2021 and December 31, ~~2016;~~2020; (iii) Condensed Consolidated Statements of Equity for the three and nine months ended October 2, 2021 and September 26, 2020; (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended October 2, 2021 and September ~~30, 2017~~26, 2020; and ~~October 1, 2016; and (iv)~~(v) Notes to Condensed Consolidated Financial Statements.
104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in the Interactive Data Files submitted as Exhibit 101.1)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		SPX CORPORATION
		(Registrant)

Date: November ~~2, 2017~~3, 2021	By		/s/ Eugene J. Lowe, III
			President and Chief Executive Officer


Date: November ~~2, 2017~~3, 2021	By		/s/ ~~Scott W. Sproule~~James E. Harris
			Vice President, Chief Financial Officer and Treasurer

~~INDEX TO EXHIBITS~~



~~31.1~~		~~Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~

~~31.2~~	~~Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~

~~32.1~~	~~Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~

~~101.1~~	SPX Corporation financial information from its Form 10-Q for the quarterly period ended September 30, 2017, formatted in XBRL, including: (i) Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2017 and October 1, 2016; (ii) Condensed Consolidated Balance Sheets at September 30, 2017 and December 31, 2016; (iii) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and October 1, 2016; and (iv) Notes to Condensed Consolidated Financial Statements.




PART 1 – FINANCIAL INFORMATION

Item 1 – Financial Statements
Condensed Consolidated Statements of Operations and Comprehensive Income ~~(Loss)~~			3
Condensed Consolidated Balance Sheets			4
Condensed Consolidated Statements of Equity			5
Condensed Consolidated Statements of Cash Flows			56
Notes to Condensed Consolidated Financial Statements			67
Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations			2732
Item 3 – Quantitative and Qualitative Disclosures About Market Risk			3743
Item 4 – Controls and Procedures			3743

PART 2 – OTHER INFORMATION
Item 1 – Legal Proceedings			3844
Item 1A – Risk Factors			3844
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds			3844
~~Item 4 – Mine Safety Disclosures~~		38
Item 6 – Exhibits		3944

SIGNATURES			4045

~~INDEX TO EXHIBITS~~	41



	September 30, 2017			December 31, 2016
ASSETS
Current assets:
Cash and equivalents	$	87.2		$	99.6
Accounts receivable, net	266.6			251.7
Inventories, net	165.6			145.7
Other current assets	39.6			30.6
Total current assets	559.0			527.6
Property, plant and equipment:
Land	15.6			15.4
Buildings and leasehold improvements	119.7			117.3
Machinery and equipment	335.2			329.8
	470.5			462.5
Accumulated depreciation	(281.7		)	(267.0		)
Property, plant and equipment, net	188.8			195.5
Goodwill	345.4			340.4
Intangibles, net	117.7			117.9
Other assets	675.0			680.5
Deferred income taxes	46.9			50.6
TOTAL ASSETS	$	1,932.8		$	1,912.5
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	143.3		$	137.6
Accrued expenses	284.3			304.3
Income taxes payable	1.4			1.7
Short-term debt	39.0			14.8
Current maturities of long-term debt	18.0			17.9
Total current liabilities	486.0			476.3
Long-term debt	311.0			323.5
Deferred and other income taxes	39.6			42.4
Other long-term liabilities	841.2			878.7
Total long-term liabilities	1,191.8			1,244.6
Commitments and contingent liabilities (Note 13)
Equity:
Common stock (51,113,497 and 42,573,512 issued and outstanding at September 30, 2017, respectively, 50,754,779 and 41,940,089 issued and outstanding at December 31, 2016, respectively)	0.5			0.5
Paid-in capital	1,305.7			1,307.9
Retained deficit	(800.9		)	(831.6		)
Accumulated other comprehensive income	253.3			235.1
Common stock in treasury (8,539,985 and 8,814,690 shares at September 30, 2017 and December 31, 2016, respectively)	(503.6		)	(520.3		)
Total equity	255.0			191.6
TOTAL LIABILITIES AND EQUITY	$	1,932.8		$	1,912.5



	December 31, 2016			Impairments		Foreign Currency Translation and Other			September 30, 2017
HVAC segment
Gross goodwill	$	258.5		$	—	$	4.7		$	263.2
Accumulated impairments	(144.2		)	—		(0.5		)	(144.7		)
Goodwill	114.3			—		4.2			118.5

Detection and Measurement segment
Gross goodwill	214.4			—		2.2			216.6
Accumulated impairments	(134.2		)	—		(1.8		)	(136.0		)
Goodwill	80.2			—		0.4			80.6

Engineered Solutions segment
Gross goodwill	351.4			—		6.2			357.6
Accumulated impairments	(205.5		)	—		(5.8		)	(211.3		)
Goodwill	145.9			—		0.4			146.3

Total
Gross goodwill	824.3			—		13.1			837.4
Accumulated impairments	(483.9		)	—		(8.1		)	(492.0		)
Goodwill	$	340.4		$	—	$	5.0		$	345.4



	Foreign Currency Translation Adjustment		Net Unrealized Gains on Qualifying Cash Flow Hedges⁽¹⁾			Pension and Postretirement Liability Adjustment^{(2) (3)}			Total
Balance at beginning of period	$	229.3	$	1.3		$	3.6		$	234.2
Other comprehensive income before reclassifications	2.4		0.6			16.3			19.3
Amounts reclassified from accumulated other comprehensive income	—		(0.1		)	(0.1		)	(0.2		)
Current-period other comprehensive income	2.4		0.5			16.2			19.1
Balance at end of period	$	231.7	$	1.8		$	19.8		$	253.3



	Foreign Currency Translation Adjustment			Net Unrealized Losses on Qualifying Cash Flow Hedges⁽¹⁾			Pension and Postretirement Liability Adjustment⁽²⁾			Total
Balance at beginning of period	$	239.6		$	(1.6	)	$	4.2		$	242.2
Other comprehensive income (loss) before reclassifications	(7.2		)	0.3			—			(6.9		)
Amounts reclassified from accumulated other comprehensive income (loss)	—			0.2			(0.1		)	0.1
Current-period other comprehensive income (loss)	(7.2		)	0.5			(0.1		)	(6.8		)
Balance at end of period	$	232.4		$	(1.1	)	$	4.1		$	235.4



	Nine months ended September 30, 2017
	Guarantees and Bonds Liability			Indemnification Assets
Balance as of December 31, 2016 ^{(1) (2)}	$	9.9		$	4.8
Reduction/Amortization for the period ⁽³⁾	(1.6		)	(2.0		)
Impact of changes in foreign currency rates	1.2			0.6
Balance as of September 30, 2017 ⁽²⁾	$	9.5		$	3.4