Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 01, 2016 | Oct. 28, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | SPX FLOW, Inc. | |
Entity Central Index Key | 1,641,991 | |
Document Type | 10-Q | |
Document Period End Date | Oct. 1, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 41,896,501 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED AND COMB
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2016 | Sep. 26, 2015 | Oct. 01, 2016 | Sep. 26, 2015 | |
Income Statement [Abstract] | ||||
Revenues | $ 466.8 | $ 589.5 | $ 1,500.6 | $ 1,775.8 |
Costs and expenses: | ||||
Cost of products sold | 320.7 | 391.6 | 1,028.5 | 1,178.4 |
Selling, general and administrative | 107.4 | 135.9 | 359.8 | 418 |
Intangible amortization | 4.4 | 5.8 | 15.8 | 17.7 |
Impairment of goodwill and intangible assets | 0 | 15 | 426.4 | 15 |
Special charges, net | 12.5 | 34.6 | 64.3 | 41.7 |
Operating income (loss) | 21.8 | 6.6 | (394.2) | 105 |
Other income (expense), net | 0.2 | (2.2) | (2.4) | 2.1 |
Related party interest income (expense), net | 0 | 7.4 | 0 | (2.2) |
Other interest expense, net | (14.2) | (0.3) | (42.9) | (1) |
Loss on early extinguishment of debt | (38.9) | 0 | (38.9) | 0 |
Income (loss) before income taxes | (31.1) | 11.5 | (478.4) | 103.9 |
Income tax benefit (provision) | 26.9 | (15.7) | 89.8 | (38.3) |
Net income (loss) | (4.2) | (4.2) | (388.6) | 65.6 |
Less: Net income (loss) attributable to noncontrolling interests | 0.5 | (0.1) | 0 | (0.8) |
Net income (loss) attributable to SPX FLOW, Inc. | $ (4.7) | $ (4.1) | $ (388.6) | $ 66.4 |
Basic income (loss) per share of common stock (in dollars per share) | $ (0.11) | $ (0.10) | $ (9.41) | $ 1.63 |
Diluted income (loss) per share of common stock (in dollars per share) | $ (0.11) | $ (0.10) | $ (9.41) | $ 1.62 |
Weighted-average number of common shares outstanding - basic (in shares) | 41,383 | 40,809 | 41,307 | 40,809 |
Weighted-average number of common shares outstanding - diluted (in shares) | 41,383 | 40,809 | 41,307 | 40,932 |
CONDENSED CONSOLIDATED AND COM3
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2016 | Sep. 26, 2015 | Oct. 01, 2016 | Sep. 26, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (4.2) | $ (4.2) | $ (388.6) | $ 65.6 |
Other comprehensive loss, net: | ||||
Net unrealized losses on qualifying cash flow hedges, net of tax benefit of $0.0 for the nine months ended September 26, 2015 | 0 | 0 | 0 | (0.1) |
Pension liability adjustment, net of tax benefit of $0.0 for the three and nine months ended September 26, 2015 | 0 | (0.1) | 0 | (0.1) |
Foreign currency translation adjustments | (12) | (43.9) | (52.7) | (136.7) |
Other comprehensive loss, net | (12) | (44) | (52.7) | (136.9) |
Total comprehensive loss | (16.2) | (48.2) | (441.3) | (71.3) |
Less: Total comprehensive income (loss) attributable to noncontrolling interests | 1.1 | (0.9) | 0.6 | (2.5) |
Total comprehensive loss attributable to SPX FLOW, Inc. | $ (17.3) | $ (47.3) | $ (441.9) | $ (68.8) |
CONDENSED CONSOLIDATED AND COM4
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 26, 2015 | Sep. 26, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net unrealized losses on qualifying cash flow hedges, tax benefit (provision) | $ 0 | |
Pension liability adjustment, tax benefit | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Oct. 01, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and equivalents | $ 227.9 | $ 295.9 |
Accounts receivable, net | 462.2 | 483.9 |
Inventories, net | 309 | 305.2 |
Other current assets | 76.8 | 72.4 |
Total current assets | 1,075.9 | 1,157.4 |
Property, plant and equipment: | ||
Land | 37.5 | 37.7 |
Buildings and leasehold improvements | 250.7 | 224.9 |
Machinery and equipment | 432.7 | 483.9 |
Property, plant and equipment, gross | 720.9 | 746.5 |
Accumulated depreciation | (328.6) | (314.1) |
Property, plant and equipment, net | 392.3 | 432.4 |
Goodwill | 759.9 | 1,023.4 |
Intangibles, net | 379.3 | 579.4 |
Other assets | 142.6 | 111.6 |
TOTAL ASSETS | 2,750 | 3,304.2 |
Current liabilities: | ||
Accounts payable | 209.5 | 227.1 |
Accrued expenses | 365.6 | 467.3 |
Income taxes payable | 23.6 | 31.7 |
Short-term debt | 116.2 | 28 |
Current maturities of long-term debt | 20.3 | 10.3 |
Total current liabilities | 735.2 | 764.4 |
Long-term debt | 977.8 | 993.8 |
Deferred and other income taxes | 67.5 | 142 |
Other long-term liabilities | 128.6 | 133.4 |
Total long-term liabilities | 1,173.9 | 1,269.2 |
Commitments and contingent liabilities (Note 12) | ||
Mezzanine equity (Note 12) | 20.6 | 0 |
SPX FLOW, Inc. shareholders’ equity: | ||
Preferred stock, no par value, 3,000,000 shares authorized, and no shares issued and outstanding | 0 | 0 |
Common stock, par value $0.01 per share, 300,000,000 shares authorized, 42,021,611 issued and 41,868,949 outstanding at October 1, 2016, and 41,429,014 issued and 41,386,740 outstanding at December 31, 2015 | 0.4 | 0.4 |
Paid-in capital | 1,637.4 | 1,621.7 |
Retained earnings (accumulated deficit) | (378.4) | 21.1 |
Accumulated other comprehensive loss | (436) | (382.7) |
Common stock in treasury (152,662 shares at October 1, 2016, and 42,274 shares at December 31, 2015) | (4.3) | (1.4) |
Total SPX FLOW, Inc. shareholders' equity | 819.1 | 1,259.1 |
Noncontrolling interests | 1.2 | 11.5 |
Total equity | 820.3 | 1,270.6 |
TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY | $ 2,750 | $ 3,304.2 |
CONDENSED CONSOLIDATED BALANCE6
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Oct. 01, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 3,000,000 | 3,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 42,021,611 | 41,429,014 |
Common stock, shares outstanding (in shares) | 41,868,949 | 41,386,740 |
Common stock in treasury (in shares) | 152,662 | 42,274 |
CONDENSED CONSOLIDATED AND COM7
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY - USD ($) $ in Millions | Total | Total SPX FLOW, Inc. Shareholders' Equity | Common Stock | Paid-In Capital | Retained Earnings (Accumulated Deficit) | Former Parent Company Investment | Accumulated Other Comprehensive Loss | Common Stock in Treasury | Noncontrolling Interests |
Beginning balance at Dec. 31, 2014 | $ 1,938.8 | $ 1,925.4 | $ 0 | $ 0 | $ 2,144.6 | $ (219.2) | $ 13.4 | ||
Beginning balance (in shares) at Dec. 31, 2014 | 0 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | 65.6 | 66.4 | 66.4 | (0.8) | |||||
Other comprehensive loss, net | (136.9) | (135.2) | (135.2) | (1.7) | |||||
Net transfers to former parent | (597.2) | (597.2) | (597.2) | ||||||
Dividends attributable to noncontrolling interests | (0.2) | (0.2) | |||||||
Reclassification of former parent company investment to common stock and paid-in capital | $ 0.4 | 1,613.4 | (1,613.8) | ||||||
Reclassification of former parent company investment to common stock and paid-in capital (in shares) | 41,300,000 | ||||||||
Ending balance at Sep. 26, 2015 | 1,270.1 | 1,259.4 | $ 0.4 | 1,613.4 | $ 0 | (354.4) | 10.7 | ||
Ending balance (in shares) at Sep. 26, 2015 | 41,300,000 | ||||||||
Beginning balance at Dec. 31, 2015 | $ 1,270.6 | 1,259.1 | $ 0.4 | 1,621.7 | $ 21.1 | (382.7) | $ (1.4) | 11.5 | |
Beginning balance (in shares) at Dec. 31, 2015 | 41,386,740 | 41,400,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | $ (388.6) | (388.6) | (388.6) | 0 | |||||
Other comprehensive loss, net | (52.7) | (53.3) | (53.3) | 0.6 | |||||
Incentive plan activity | 5.2 | 5.2 | 5.2 | ||||||
Incentive plan activity (in shares) | 300,000 | ||||||||
Stock-based compensation expense | 14 | 14 | 14 | ||||||
Restricted stock and restricted stock unit vesting, including related tax provision of $3.2 and net of tax withholdings | (6.4) | (6.4) | (3.5) | (2.9) | |||||
Restricted stock and restricted stock unit vesting, including related tax provision of $3.2 and net of tax withholdings (in shares) | 200,000 | ||||||||
Adjustment to mezzanine equity and reclassification from noncontrolling interests | (20.6) | (10.9) | (10.9) | (9.7) | |||||
Dividends attributable to noncontrolling interests | (1.2) | (1.2) | |||||||
Ending balance at Oct. 01, 2016 | $ 820.3 | $ 819.1 | $ 0.4 | $ 1,637.4 | $ (378.4) | $ (436) | $ (4.3) | $ 1.2 | |
Ending balance (in shares) at Oct. 01, 2016 | 41,868,949 | 41,900,000 |
CONDENSED CONSOLIDATED AND COM8
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY Parenthetical $ in Millions | 9 Months Ended |
Oct. 01, 2016USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Tax benefit (expense) | $ (3.2) |
CONDENSED CONSOLIDATED AND COM9
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Oct. 01, 2016 | Sep. 26, 2015 | |
Cash flows from (used in) operating activities: | ||
Net income (loss) | $ (388.6) | $ 65.6 |
Adjustments to reconcile net income (loss) to net cash from (used in) operating activities: | ||
Special charges, net | 64.3 | 41.7 |
Impairment of goodwill and intangible assets | 426.4 | 15 |
Deferred income taxes | (100.2) | (11.2) |
Depreciation and amortization | 49.7 | 44.3 |
Stock-based compensation | 14.2 | 0 |
Pension and other employee benefits | 7.3 | 9.8 |
Gain on asset sales and other, net | (1.4) | (1.2) |
Loss on early extinguishment of debt | 38.9 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable and other assets | 30.7 | (27.2) |
Inventories | (5) | (26.9) |
Accounts payable, accrued expenses and other | (77.2) | (41.9) |
Domestic pension payments | (65.9) | 0 |
Cash spending on restructuring actions | (43.2) | (11.4) |
Net cash from (used in) operating activities | (50) | 56.6 |
Cash flows used in investing activities: | ||
Proceeds from asset sales and other, net | 2.4 | 5.3 |
Increase in restricted cash | (0.2) | (0.5) |
Capital expenditures | (37.3) | (43.1) |
Net cash used in investing activities | (35.1) | (38.3) |
Cash flows from (used in) financing activities: | ||
Proceeds from issuance of senior notes | 600 | 0 |
Repurchases of senior notes (includes premiums paid of $36.4) | (636.4) | 0 |
Borrowings under senior credit facilities | 328 | 455 |
Repayments of senior credit facilities | (260) | 0 |
Borrowings under trade receivables financing arrangement | 79.9 | 0 |
Repayments of trade receivables financing arrangement | (53.7) | 0 |
Repayments of related party notes payable | 0 | (5.4) |
Borrowings under other financing arrangements | 1.2 | 1 |
Repayments of other financing arrangements | (12.8) | (2.7) |
Minimum withholdings paid on behalf of employees for net share settlements, net | (3.2) | 0 |
Financing fees paid | (12.6) | (6.2) |
Dividends paid to noncontrolling interests in subsidiary | (1.2) | (0.2) |
Change in former parent company investment | 0 | (453.9) |
Net cash from (used in) financing activities | 29.2 | (12.4) |
Change in cash and equivalents due to changes in foreign currency exchange rates | (12.1) | (15.4) |
Net change in cash and equivalents | (68) | (9.5) |
Consolidated and combined cash and equivalents, beginning of period | 295.9 | 216.6 |
Consolidated and combined cash and equivalents, end of period | $ 227.9 | $ 207.1 |
CONDENSED CONSOLIDATED AND CO10
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Millions | 9 Months Ended |
Oct. 01, 2016USD ($) | |
Statement of Cash Flows [Abstract] | |
Premiums paid to redeem debt | $ 36.4 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Oct. 01, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION SPX FLOW, Inc. and its consolidated subsidiaries (“SPX FLOW,” ‘‘the Company,’’ “we,” “us,” or “our”) operate in three business segments and were wholly-owned by SPX Corporation (the “former Parent”) until September 26, 2015, at which time the former Parent distributed 100% of our outstanding common stock to its shareholders through a tax-free spin-off transaction (the “Spin-Off”). Basis of Presentation We prepared the condensed consolidated and combined financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “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. In our opinion, these financial statements include the adjustments (consisting only of normal and recurring items) necessary for their fair presentation. Our condensed consolidated balance sheets as of October 1, 2016 and December 31, 2015 , and financial activity presented in the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended October 1, 2016 and of equity and cash flows for the nine months ended October 1, 2016 , consist of the consolidated balances of SPX FLOW as an independent, publicly traded company as of and during the periods then ended. The basis of presentation for periods prior to the Spin-Off is discussed below. These financial statements, including the periods presented prior to the Spin-Off, have been prepared in conformity with GAAP, and the unaudited information included herein should be read in conjunction with our consolidated and combined financial statements included in our 2015 Annual Report on Form 10-K. As discussed further in Note 3 , segment results and corporate expense for the three and nine months ended September 26, 2015 have been recast to (i) reflect the reclassification of certain product line results in order to more precisely present our results by reportable segment, (ii) include stock-based compensation costs associated with segment employees in segment income, and (iii) include stock-based compensation costs associated with corporate employees in corporate expense. Certain operating cash flow amounts in the accompanying condensed combined statement of cash flows for the nine months ended September 26, 2015 have been reclassified to conform to the current year presentation. 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 and interim results are not necessarily indicative of full year results. The condensed consolidated and combined financial statements may not be indicative of the Company’s future performance. 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 2016 are April 2, July 2, and October 1, compared to the respective March 28, June 27, and September 26, 2015 dates. We had six more days in the first quarter of 2016 and will have five less days in the fourth quarter of 2016 than in the respective 2015 periods. Basis of Presentation Prior to the Spin-Off Our condensed combined statements of operations and comprehensive loss for the three and nine months ended September 26, 2015 and of equity and cash flows for the nine months ended September 26, 2015 , were prepared on a “carve out” basis and were derived from the condensed consolidated financial statements and accounting records of the former Parent and SPX FLOW for the historical periods presented. These condensed combined statements do not necessarily reflect what the results of operations, financial position, and cash flows would have been had SPX FLOW operated as an independent company for the historical periods reported. The condensed combined statements of operations for the three and nine months ended September 26, 2015 included costs for certain centralized functions and programs provided and/or administered by the former Parent that were charged directly to the former Parent’s business units, including business units of SPX FLOW. These centralized functions and programs included, but were not limited to, information technology, payroll services, shared services for accounting, supply chain and manufacturing operations, and business and health insurance coverage. During the three and nine months ended September 26, 2015 , $28.0 and $81.0 of such costs, respectively, were directly charged to the Company's business units and were included in selling, general and administrative expenses in the accompanying condensed combined statements of operations. For purposes of preparing these condensed combined statements of operations and comprehensive loss for the three and nine months ended September 26, 2015 and of equity and cash flows for the nine months ended September 26, 2015 , a portion of the former Parent’s total corporate expenses were allocated to SPX FLOW. These expense allocations included the cost of corporate functions and/or resources provided by the former Parent which included, but were not limited to, executive management, finance and accounting, legal, and human resources support, and the cost of our Charlotte, NC corporate headquarters and our Asia Pacific center in Shanghai, China, as well as related benefit costs associated with such functions, such as pension and postretirement benefits and stock-based compensation. During the three and nine months ended September 26, 2015 , the Company was allocated $14.3 and $50.7 of such general corporate and related benefit costs, respectively, which were primarily included within selling, general and administrative expenses in the accompanying condensed combined statements of operations. A detailed description of the methodology used to allocate corporate-related costs is included in our consolidated and combined financial statements included in our 2015 Annual Report on Form 10-K. |
NEW ACCOUNTING PRONOUNCEMENTS
NEW ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Oct. 01, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
NEW ACCOUNTING PRONOUNCEMENTS | NEW ACCOUNTING PRONOUNCEMENTS The following is a summary of new accounting pronouncements that apply or may apply to our business. In May 2014, and as amended in the first six months of 2016, the Financial Accounting Standards Board (the "FASB") issued a new standard on revenue recognition that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. 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, and the related cash flows. The standard is effective for interim and annual reporting periods beginning after December 15, 2017. We are currently evaluating the effect that this new standard will have on our condensed consolidated financial statements. In April 2015, the FASB issued a new standard that requires debt issuance costs related to a recognized debt liability to be reported in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This standard was adopted in the first quarter of 2016 and was applied retrospectively. The adoption of this standard did not have a material impact on our condensed consolidated financial statements. In January 2016, the FASB issued an amendment to existing guidance which revises entities’ accounting related to: (i) the classification and measurement of investments in equity securities, and (ii) the presentation of certain fair value changes for financial liabilities measured at fair value. The amendment also changes certain disclosure requirements associated with the fair value of financial instruments. The amended guidance is effective for interim and annual reporting periods beginning after December 15, 2017 and requires a modified retrospective approach to adoption. Early adoption is only permitted for a provision related to instrument-specific credit risk. We are currently evaluating the effect that this amendment will have on our condensed consolidated financial statements. In February 2016, the FASB issued a new standard which requires a lessee to recognize on its balance sheet the assets and liabilities associated with the rights and obligations created by leases with terms that exceed twelve months. Leases will continue to be classified as either financing or operating, with classification affecting the recognition, measurement and presentation of costs and cash flows arising from a lease. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2018 and requires a modified retrospective approach to adoption for lessees related to capital and operating leases existing at, or entered into after, the earliest comparative period presented in the financial statements, with certain practical expedients available. Early adoption is permitted. We are currently evaluating the effect that this new standard will have on our condensed consolidated financial statements. In March 2016, the FASB issued an amendment to clarify that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument does not, in and of itself, require de-designation of that hedging relationship provided that all other hedge accounting criteria continue to be met. The amendment is effective for interim and annual reporting periods beginning after December 15, 2016 and may be applied on either a prospective or modified retrospective basis. The impact of the adoption of this amendment on our condensed consolidated financial statements will be based on any future events that impact our hedging relationships. In March 2016, the FASB issued an amendment which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, classification of awards as either equity or liabilities, as well as classification in the statement of cash flows. This amendment is effective for prospective interim and annual reporting periods beginning after December 15, 2016. We plan on adopting this amendment at that time and are currently evaluating its effect on our condensed consolidated financial statements. In August 2016, the FASB issued an amendment that updates the guidance as to how certain cash receipts and payments should be presented and classified pertaining to, among other items, debt, contingent consideration in business combinations, proceeds from certain insurance settlements, distributions received from equity method investees, securitization transactions, and separately identifiable cash flows. The amendment is intended to reduce the existing diversity in practice and is effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted, including retrospective application. We have adopted this amendment as of October 1, 2016 and have accordingly reflected our debt prepayment premiums and extinguishment costs as financing cash outflows during the nine months then ended. |
INFORMATION ON REPORTABLE SEGME
INFORMATION ON REPORTABLE SEGMENTS, CORPORATE EXPENSE AND OTHER | 9 Months Ended |
Oct. 01, 2016 | |
Segment Reporting [Abstract] | |
INFORMATION ON REPORTABLE SEGMENTS, CORPORATE EXPENSE AND OTHER | INFORMATION ON REPORTABLE SEGMENTS, CORPORATE EXPENSE AND OTHER We are a global supplier of highly specialized, engineered solutions with operations in over 35 countries and sales in over 150 countries around the world. Many of our solutions play a role in helping to meet global demand for processed foods and beverages and power and energy, particularly in emerging markets. Beginning January 2016, we changed our internal reporting structure to more precisely present reportable segment revenue and income in certain countries where we conduct business across multiple end markets. As a result of these structural enhancements, certain product line results have been reclassified between reportable segments. Additionally, we changed our measurement of segment income to include stock-based compensation costs associated with segment employees, while stock-based compensation for corporate employees is now reported as a component of corporate expense. These changes in reportable segment revenue and income, as well as in our measurement of segment profitability, are consistent with how our chief operating decision maker ("CODM"), beginning in 2016, assesses operating performance and allocates resources. Segment results and corporate expense have been recast for all historical periods presented to reflect these changes. We have three reportable segments: Food and Beverage, Power and Energy, and Industrial. In determining our segments, we apply the threshold criteria of the Segment Reporting Topic of the Codification to operating income or loss of each segment before considering impairment and special charges, pension and postretirement expense and other indirect corporate expenses (including corporate stock-based compensation). This is consistent with the way our CODM evaluates the results of each segment. Food and Beverage The Food and Beverage reportable segment operates in a regulated, global industry with customers who demand highly engineered, turn-key solutions. Key demand drivers include dairy consumption, emerging market capacity expansion, sustainability and productivity initiatives, customer product innovation and food safety. Key products for the segment include mixing, drying, evaporation and separation systems and components, heat exchangers, and reciprocating and centrifugal pump technologies. Our core brands include Anhydro, APV, Bran+Luebbe, Gerstenberg Schroeder, LIGHTNIN, Seital, and Waukesha Cherry-Burrell. Power and Energy The Power and Energy reportable segment primarily serves customers in the oil and gas industry and, to a lesser extent, the nuclear and other conventional power industries. A large portion of the segment's revenues are concentrated in oil extraction, production and transportation at existing wells, and in pipeline applications. The underlying driver of this segment includes demand for power and energy. Key products for the segment include pumps, valves and related accessories, while the core brands include APV, Bran+Luebbe, ClydeUnion Pumps, Copes-Vulcan, Dollinger Filtration, LIGHTNIN, M&J Valve, Plenty, and Vokes. Industrial The Industrial reportable segment primarily serves customers in the chemical, air treatment, mining, pharmaceutical, marine, shipbuilding, infrastructure construction, general industrial and water treatment industries. Key demand drivers of this segment are tied to macroeconomic conditions and growth in the respective end markets we serve. Key products for the segment are air dryers, filtration equipment, mixers, pumps, hydraulic technologies and heat exchangers. Core brands include Airpel, APV, Bolting Systems, Delair, Deltech, Hankison, Jemaco, Johnson Pump, LIGHTNIN, Power Team, and Stone. Corporate Expense Corporate expense generally relates to the cost of our Charlotte, NC corporate headquarters and our Asia Pacific center in Shanghai, China for the period subsequent to the Spin-Off, and includes allocations of the cost of corporate functions and/or resources provided by the former Parent prior to the Spin-Off. A detailed description of the methodology used to allocate corporate-related costs prior to the Spin-Off can be found in our consolidated and combined financial statements included in our 2015 Annual Report on Form 10-K. Financial data for our reportable segments for the three and nine months ended October 1, 2016 and September 26, 2015 were as follows: Three months ended Nine months ended October 1, 2016 September 26, 2015 October 1, 2016 September 26, 2015 Revenues (1) : Food and Beverage $ 173.0 $ 205.9 $ 545.8 $ 650.8 Power and Energy 127.3 198.5 432.8 556.0 Industrial 166.5 185.1 522.0 569.0 Total revenues $ 466.8 $ 589.5 $ 1,500.6 $ 1,775.8 Income: Food and Beverage $ 19.6 $ 27.1 $ 56.9 $ 78.1 Power and Energy 5.5 26.5 17.7 65.5 Industrial 23.0 25.7 69.3 79.4 Total income for reportable segments 48.1 79.3 143.9 223.0 Corporate expense 13.8 14.1 45.3 50.3 Pension and postretirement expense — 9.0 2.1 11.0 Impairment of goodwill and intangible assets — 15.0 426.4 15.0 Special charges, net 12.5 34.6 64.3 41.7 Consolidated and combined operating income (loss) $ 21.8 $ 6.6 $ (394.2 ) $ 105.0 (1) We recognized revenues under the percentage-of-completion method of $72.2 and $117.0 in the three months ended October 1, 2016 and September 26, 2015 , respectively. For the nine months ended October 1, 2016 and September 26, 2015 , revenues under the percentage-of-completion method were $258.5 and $354.8 , respectively. Costs and estimated earnings in excess of billings on contracts accounted for under the percentage-of-completion method were $97.8 and $87.4 as of October 1, 2016 and December 31, 2015 , 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 $55.7 and $52.9 as of October 1, 2016 and December 31, 2015 , respectively, and are reported as a component of ‘‘Accrued expenses’’ in the condensed consolidated balance sheets. |
SPECIAL CHARGES, NET
SPECIAL CHARGES, NET | 9 Months Ended |
Oct. 01, 2016 | |
Restructuring and Related Activities [Abstract] | |
SPECIAL CHARGES, NET | SPECIAL CHARGES, NET Special charges, net, for the three and nine months ended October 1, 2016 and September 26, 2015 were as follows: Three months ended Nine months ended October 1, 2016 September 26, 2015 October 1, 2016 September 26, 2015 Food and Beverage $ 3.0 $ 21.8 $ 17.5 $ 24.5 Power and Energy (0.3 ) 8.5 12.0 10.8 Industrial 2.1 3.8 9.1 5.9 Other 7.7 0.5 25.7 0.5 Total $ 12.5 $ 34.6 $ 64.3 $ 41.7 Global Realignment Program As disclosed in our 2015 Annual Report on Form 10-K, we announced our intent to further optimize our global footprint, streamline business processes and reduce selling, general and administrative expense through a global realignment program. The realignment program is intended to reduce costs across operating sites and corporate and global functions, in part by making structural changes and process enhancements which allow us to operate more efficiently. Special charges for the three and nine months ended October 1, 2016 were substantially associated with this program and included costs associated primarily with employee termination and facility consolidation, as well as certain non-cash charges associated with fixed asset impairments. Special Charges, Net, By Reportable Segment Food and Beverage — Charges for the three months ended October 1, 2016 related primarily to severance and other costs associated with the global realignment program, including (i) the consolidation and relocation of a manufacturing facility in Germany to an existing facility in Poland and, to a lesser extent, (ii) a reorganization of the segment’s management structure. Charges for the nine months ended October 1, 2016 related primarily to severance and other costs associated with the global realignment program, including (i) the consolidation and relocation of a manufacturing facility in Germany to an existing facility in Poland and of other facilities in Europe, (ii) various other restructuring initiatives in Europe, the U.S., China and Brazil and, to a lesser extent, (iii) a reorganization of the segment’s management structure. Charges for the three and nine months ended September 26, 2015 related primarily to severance and other costs associated with (i) the consolidation and relocation of a manufacturing facility in Germany to an existing facility in Poland and of other facilities in Europe and, to a lesser extent, (ii) restructuring initiatives in South America and the U.S. Power and Energy — The credit for the three months ended October 1, 2016 related primarily to a revision of the accruals for certain 2016 restructuring initiatives, partially offset by charges related to a reorganization of the segment’s management structure. Charges for the nine months ended October 1, 2016 related primarily to severance and other costs associated with the global realignment program in the U.K., France, Germany and, to a lesser extent, North America, including actions taken to (i) reduce the cost base of the segment in response to oil price declines that began in the latter half of 2014 and continued into 2016, which has resulted in a reduction in capital spending by our customers in the oil and gas industries, and (ii) realign certain sites around core service markets. Charges for the nine months ended October 1, 2016 also included, to a lesser extent, an asset impairment charge of $1.5 related to certain long-lived assets and a reorganization of the segment's management structure. Charges for the three and nine months ended September 26, 2015 related primarily to severance and other costs associated with actions taken to (i) reduce the cost base of the segment in response to oil price declines that began in the latter half of 2014, which resulted in a reduction in capital spending by our customers in the oil and gas industries, and (ii) realign certain sites around core service markets. Industrial — Charges for the three months ended October 1, 2016 related primarily to severance and other costs associated with the global realignment program, including (i) the consolidation and relocation of a manufacturing facility in Denmark to an existing facility in Poland and of certain other facilities in Asia Pacific, and (ii) a reorganization of the segment’s management structure. Charges for the nine months ended October 1, 2016 related primarily to severance and other costs associated with the global realignment program, including (i) the consolidation and relocation of a manufacturing facility in Denmark to an existing facility in Poland and of certain other facilities in North America and Asia Pacific, (ii) various other global restructuring initiatives and, to a lesser extent, (iii) a reorganization of the segment’s management structure. Charges for the three and nine months ended September 26, 2015 related primarily to severance and other costs associated with (i) the consolidation and relocation of a manufacturing facility in Denmark to an existing facility in Poland and (ii) a reorganization of the commercial and operational structure of certain of the segment's businesses in Europe and the U.S. Other — Charges for the three months ended October 1, 2016 reflected (i) asset impairment charges of $ 5.2 related to certain corporate assets held for sale and, to a lesser extent, certain other long-lived assets, and (ii) severance and other related costs associated with the global realignment program. Charges for the nine months ended October 1, 2016 related primarily to corporate asset impairment charges of $ 17.8 , as well as severance and other related costs associated with the global realignment program. Asset impairment charges resulted primarily from management’s decision during the first quarter of 2016 to market certain corporate assets for sale. Those assets, which have an estimated fair value of approximately $ 22.0 , were marketed for sale beginning in the second quarter and, accordingly, are considered held for sale and reported as a component of "Other current assets" in the condensed consolidated balance sheet as of October 1, 2016. Charges for the three and nine months ended September 26, 2015 related primarily to an allocation of special charges associated with SPX's corporate functions and activities. Expected charges still to be incurred under actions approved as of October 1, 2016 were approximately $2.4 . The following is an analysis of our restructuring liabilities for the nine months ended October 1, 2016 and September 26, 2015 : Nine months ended October 1, 2016 September 26, 2015 Balance at beginning of year $ 32.9 $ 9.2 Special charges (1) 45.0 41.0 Utilization — cash (43.2 ) (11.4 ) Currency translation adjustment and other 0.6 (1.5 ) Balance at end of period $ 35.3 $ 37.3 (1) Amounts that impacted special charges but not the restructuring liabilities included $19.3 of asset impairment charges during the nine months ended October 1, 2016 , and $0.7 of asset impairment and non-cash charges allocated from SPX during the nine months ended September 26, 2015 . |
INVENTORIES, NET
INVENTORIES, NET | 9 Months Ended |
Oct. 01, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORIES, NET | INVENTORIES, NET Inventories at October 1, 2016 and December 31, 2015 comprised the following: October 1, 2016 December 31, 2015 Finished goods $ 87.8 $ 87.5 Work in process 97.1 88.8 Raw materials and purchased parts 130.4 135.2 Total FIFO cost 315.3 311.5 Excess of FIFO cost over LIFO inventory value (6.3 ) (6.3 ) Total inventories $ 309.0 $ 305.2 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 8% and 5% of total inventory at October 1, 2016 and December 31, 2015 , respectively. Other inventories are valued using the first-in, first-out (“FIFO”) method. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Oct. 01, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The changes in the carrying amount of goodwill by reportable segment for the nine months ended October 1, 2016 were as follows: December 31, 2015 Goodwill Resulting from Business Combinations Impairments Foreign Currency Translation and Other (1) October 1, 2016 Food and Beverage $ 269.9 $ — $ — $ 0.5 $ 270.4 Power and Energy (2) 538.9 — (252.8 ) (20.0 ) 266.1 Industrial (3) 214.6 — — 8.8 223.4 Total $ 1,023.4 $ — $ (252.8 ) $ (10.7 ) $ 759.9 (1) In connection with our recasting of historical reportable segment results in January 2016, as discussed further in Note 3 , we performed a re-allocation of reportable segment goodwill during the first quarter of 2016. This re-allocation resulted in the following changes in goodwill compared to amounts previously reported at December 31, 2015 by reportable segment: Food and Beverage goodwill reduction of $5.6 , Power and Energy goodwill reduction of $4.0 , and Industrial goodwill increase of $9.6 . (2) The carrying amount of goodwill included $250.4 and $0.0 of accumulated impairments as of October 1, 2016 and December 31, 2015 , respectively. (3) The carrying amount of goodwill included $67.7 of accumulated impairments as of October 1, 2016 and December 31, 2015 . As of the first day of our fiscal fourth quarter of 2015, we performed our annual goodwill impairment test, which indicated the estimated fair value of our Power and Energy reporting unit exceeded its carrying value by approximately 10% . The estimated fair value of each of our other reporting units significantly exceeded its respective book value. Over the course of the fourth quarter of 2015, global oil prices continued to decline, resulting in delayed customer order patterns. Based on these slower order rates at the end of the fourth quarter, we lowered the 2016 forecasted revenue and profitability of our Power and Energy segment. The combination of adverse market conditions, lower order trends, and resultant impact to our 2016 forecast subsequent to our annual goodwill impairment test led management to conclude an interim impairment test of our Power and Energy reporting unit was necessary as of December 31, 2015. The results of our interim goodwill impairment test conducted as of December 31, 2015 indicated the estimated fair value of the Power and Energy reporting unit exceeded its carrying value by approximately 3% , while the carrying value of the Power and Energy segment goodwill was $538.9 as of December 31, 2015. Our assumptions in the December 31, 2015 interim impairment test included, among others, that (i) first half 2016 order trends would remain comparable to those obtained in the fourth quarter of 2015, (ii) targeted cost savings could be executed as planned and cost savings would, in part, be realized by the end of 2016, and (iii) current and forward EBITDA multiples would remain consistent with oil and gas industry transactions observed in the preceding twelve months. During the second quarter of 2016, our Power and Energy reporting unit experienced sustained quarterly order rates below order intake levels in the fourth quarter of 2015 and operating results which were below our internal estimates. As a result of the lower order patterns and lower year-to-date earnings of the reporting unit, we revised our 2016 projections below the bottom end of the range utilized in our fourth quarter 2015 interim impairment test, leading us to conclude that an interim impairment test as of July 2, 2016 was necessary. Using revised cash flow projections as of July 2, 2016, market participant discount rates, and EBITDA multiples observed of peer companies and in recent transactions in the oil and gas industry, we determined the “step one” fair value of our Power and Energy reporting unit was below the carrying value of its net assets. In “step two” of the goodwill impairment test, we estimated the implied fair value of Power and Energy’s goodwill as of July 2, 2016, which resulted in an impairment charge related to such goodwill of $252.8 . The non-recurring fair value measurement is a "Level 3" measurement under the fair value hierarchy as further defined in Note 14. Management assessed the operating performance of each of our other reporting units and concluded that an interim impairment test as of July 2, 2016 for the other reporting units was not necessary. As of October 1, 2016, there were no indicators necessitating an interim impairment test of any of our reporting units, based on management's review of operating performance. We will perform our annual impairment testing of goodwill (and indefinite-lived intangible assets that are not amortized), during the fourth quarter in conjunction with our annual financial planning process. In performing that annual impairment testing, we will assess, among other items, order trends and the operating cash flow performance of our reporting units, including Power and Energy. Adverse changes to or a failure to achieve the updated order rates or cash flow projections included in the interim impairment test as of July 2, 2016 of our Power and Energy reporting unit, as discussed above, or further deterioration of macroeconomic conditions and/or significant declines in industry multiples, could result in future impairments, which could be material. Other Intangibles, Net Identifiable intangible assets were as follows: October 1, 2016 December 31, 2015 Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value Intangible assets with determinable lives: Customer relationships $ 219.8 $ (103.8 ) $ 116.0 $ 344.0 $ (94.1 ) $ 249.9 Technology 95.6 (42.3 ) 53.3 122.1 (38.0 ) 84.1 Patents 6.7 (5.0 ) 1.7 6.7 (4.6 ) 2.1 Other 12.8 (10.3 ) 2.5 13.0 (10.3 ) 2.7 334.9 (161.4 ) 173.5 485.8 (147.0 ) 338.8 Trademarks with indefinite lives 205.8 — 205.8 240.6 — 240.6 Total $ 540.7 $ (161.4 ) $ 379.3 $ 726.4 $ (147.0 ) $ 579.4 At October 1, 2016 , the net carrying value of intangible assets with determinable lives consisted of the following by reportable segment: $79.0 in Power and Energy, $66.0 in Food and Beverage, and $28.5 in Industrial. During the three months ended October 1, 2016 , $5.2 of technology assets were reclassified from the Industrial segment to the Food and Beverage segment in connection with the relocation of a manufacturing facility in Denmark to an existing facility in Poland, as also discussed in Note 4. Trademarks with indefinite lives consisted of the following by reportable segment: $99.5 in Food and Beverage, $60.6 in Industrial and $45.7 in Power and Energy. During the second quarter of 2016, as described in the “Goodwill” section above, we observed sustained quarterly order rates for Power and Energy below order intake levels in the fourth quarter of 2015 and operating results below our previous expectations, and thus determined an interim test of recoverability was required for the definite and indefinite-lived intangibles of that reporting segment. Based on market conditions as of July 2, 2016 and backlog positions falling below prior periods, we reduced our estimates of the expected future revenues from recorded intangible assets in the Power and Energy reporting unit. In accordance with relevant guidance, we estimated the undiscounted cash flows of our customer relationships by projecting revenues and margin driven by customer relationships, reduced by an estimated retention rate. We estimated the undiscounted cash flows of our technology assets by applying estimated royalty rates to revenues projected to result from each of such underlying assets. The undiscounted cash flows of customer relationships and technology assets were less than their respective carrying values. In “step two” of the impairment test, we discounted expected cash flows from the customer relationships and technology assets at a rate of return that reflects current market conditions. As a result, we recorded impairment charges of $115.9 related to customer relationships and $30.9 related to technology assets during the second quarter of 2016. Also during the second quarter of 2016, and as a result of the “step one” impairment test of our Power and Energy indefinite-lived trademarks, we recorded an impairment charge of $26.8 , representing the difference between fair value and carrying value. The fair value of the reporting unit’s trademarks was estimated using assumed royalty rates applied to expected future cash flows of the respective product lines of the reporting unit, discounted at a rate of return reflecting current market conditions. Other changes in the gross carrying values of trademarks and other identifiable intangible assets during the nine months ended October 1, 2016 related primarily to foreign currency translation. |
WARRANTY
WARRANTY | 9 Months Ended |
Oct. 01, 2016 | |
Product Warranties Disclosures [Abstract] | |
WARRANTY | WARRANTY The following is an analysis of our product warranty accrual for the periods presented: Nine months ended October 1, 2016 September 26, 2015 Balance at beginning of year $ 14.8 $ 18.4 Provisions 6.5 7.4 Usage (9.1 ) (8.7 ) Currency translation adjustment (0.1 ) (2.0 ) Balance at end of period 12.1 15.1 Less: Current portion of warranty 11.4 13.9 Non-current portion of warranty $ 0.7 $ 1.2 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 9 Months Ended |
Oct. 01, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Pension and postretirement expense includes net periodic benefit expense associated with defined benefit pension and postretirement plans we sponsor and, in 2015, an allocation of a portion of the net periodic benefit expense associated with defined benefit pension and postretirement plans sponsored by the former Parent. Components of Net Periodic Pension and Postretirement Benefit Expense In connection with the Spin-Off, we assumed certain domestic nonqualified pension obligations from the former Parent and formed a new nonqualified plan, resulting in the remeasurement of such obligations as of September 26, 2015 and recognition of an actuarial loss of $7.4 . This actuarial loss was recorded as a component of "Selling, general, and administrative" expense during the three and nine months ended September 26, 2015 in the accompanying condensed consolidated and combined statements of operations. In addition to the actuarial loss recognized, we recorded $0.0 and $0.2 of net periodic benefit expense related to the domestic postretirement plan we sponsor for the three and nine months ended September 26, 2015 , respectively. On July 8, 2016, we made direct benefit payments of $53.9 related to our domestic nonqualified pension plan to certain former officers of the Company, which resulted in a partial settlement and remeasurement of the plan’s remaining obligations during the third quarter of 2016. The settlement and remeasurement of this plan resulted in the recognition of a $0.8 actuarial gain during the three and nine months ended October 1, 2016 . In addition to the actuarial gain recognized, we recorded net periodic benefit expense for the domestic pension and postretirement plans we sponsor of $0.3 and $1.4 for the three and nine months ended October 1, 2016 , respectively, which was comprised of service and interest costs. The net periodic pension benefit expense for the foreign pension plans we sponsor was $0.5 and $0.8 for the three months ended October 1, 2016 and September 26, 2015 , respectively, and $1.5 and $2.2 , respectively, for the nine months then ended, and was comprised primarily of service and interest costs. Net periodic benefit cost allocated to the Company related to the plans sponsored by the former Parent was $0.8 and $1.2 for the three and nine months ended September 26, 2015 , respectively. Employer Contributions During the nine months ended October 1, 2016 , contributions to the foreign and domestic pension plans we sponsor were less than $0.1 . |
INDEBTEDNESS
INDEBTEDNESS | 9 Months Ended |
Oct. 01, 2016 | |
Debt Disclosure [Abstract] | |
INDEBTEDNESS | INDEBTEDNESS Debt at October 1, 2016 and December 31, 2015 comprised the following: October 1, 2016 December 31, 2015 Domestic revolving loan facility $ 73.0 $ — Term loan (1) 395.0 400.0 5.625% senior notes, due in August 2024 300.0 — 5.875% senior notes, due in August 2026 300.0 — 6.875% senior notes (2) — 600.0 Trade receivables financing arrangement 26.2 — Other indebtedness (3) 32.9 37.3 Less: deferred financing fees (4) (12.8 ) (5.2 ) Total debt 1,114.3 1,032.1 Less: short-term debt 116.2 28.0 Less: current maturities of long-term debt 20.3 10.3 Total long-term debt $ 977.8 $ 993.8 (1) The term loan, which had an initial principal balance of $400.0 , is repayable in quarterly installments of 5.0% annually which began with our third quarter of 2016, with the remaining balance repayable in full on September 24, 2020. (2) On August 10, 2016, we completed the redemption of all of our 6.875% senior notes due in August 2017 for a total redemption price of $636.4 . As a result of the redemption, we recorded a charge of $38.9 to "Loss on early extinguishment of debt" during the third quarter of 2016, which related to premiums paid to redeem the senior notes of $36.4 , the write-off of unamortized deferred financing fees of $1.9 , and other costs associated with the extinguishment of the senior notes of $0.6 . (3) Primarily includes capital lease obligations of $15.9 and $9.3 and balances under a purchase card program of $16.6 and $23.6 as of October 1, 2016 and December 31, 2015 , respectively. The purchase card program allows for payment beyond customary 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) Deferred financing fees were comprised of fees related to the term loan and senior notes. A detailed description of our senior credit facilities is included in our consolidated and combined financial statements included in our 2015 Annual Report on Form 10-K. Our senior notes are discussed further below. The weighted-average interest rate of outstanding borrowings under our senior credit facilities was approximately 2.6% at October 1, 2016 . At October 1, 2016 , we had $367.5 of available borrowing capacity under our revolving credit facilities after giving effect to borrowings of $73.0 under the domestic revolving loan facility and $9.5 reserved for outstanding letters of credit. At October 1, 2016 , we had no available borrowing capacity under our trade receivables financing arrangement after giving effect to borrowings of $26.2 . Our trade receivables financing arrangement provides for a total commitment of $50.0 from associated lenders, depending upon our trade receivables balance and other factors. In addition, at October 1, 2016 , we had $245.6 of available issuance capacity under our foreign credit instrument facilities after giving effect to $254.4 reserved for outstanding letters of credit. At October 1, 2016 , in addition to the revolving lines of credit described above, we had approximately $5.4 of letters of credit outstanding under separate arrangements in China and India. At October 1, 2016 , we were in compliance with all covenants of our senior credit facilities and our senior notes. Amendment of Senior Credit Facilities On July 11, 2016, the Company and certain of its subsidiaries entered into an amendment (the “First Amendment”) to the Company’s existing senior credit facilities, dated as of September 1, 2015 (the “Existing Senior Credit Facilities” and, as amended by the First Amendment, the “Senior Credit Facilities”), by and among the Company, the foreign subsidiary borrowers party thereto, the lenders party thereto, Deutsche Bank AG Deutschlandgeschäft Branch, as foreign trade facility agent, and Bank of America, N.A., as administrative agent (the “Administrative Agent”). The First Amendment amended the Existing Senior Credit Facilities to, among other things: • increase the maximum consolidated leverage ratio that must be maintained by the Company from 3.25 :1.00 (or 3.50 :1.00 for the four fiscal quarters after certain permitted acquisitions) to 4.00 :1.00; • require that the Company and the domestic subsidiary guarantors grant to the Administrative Agent valid and perfected first priority security interests in substantially all personal property assets of the Company and the domestic subsidiary guarantors (subject to certain exceptions) and valid first priority mortgages on all domestic real property owned by the Company and the domestic subsidiary guarantors having a fair market value in excess of $10.0 ; and • include an additional pricing tier of per annum fees charged and amend the interest rate margins applicable to Eurodollar and alternate base rate loans. The Senior Credit Facilities continue to provide that, if the Company’s corporate credit rating is “Baa3” or better by Moody’s or “BBB-” or better by S&P and no defaults would exist, then all collateral security will be released and the obligations under the Senior Credit Facilities will be unsecured. New Senior Notes On August 10, 2016, the Company completed its issuance of $600.0 in aggregate principal amount of senior unsecured notes comprised of one tranche of $300.0 aggregate principal amount of 5.625% senior notes due in August 2024 (the “2024 Notes”) and one tranche of $300.0 aggregate principal amount of 5.875% senior notes due in August 2026 (the “2026 Notes” and, together with the 2024 Notes, the “Notes”). The proceeds of the Notes, together with borrowings under our domestic revolving loan facility, were used to complete the tender offer and repurchase/redemption of the $600.0 outstanding principal amount of our 6.875% senior notes due in August 2017, including $36.4 of premiums paid. The Notes were issued pursuant to indentures, each dated August 10, 2016, among the Company, the subsidiary guarantors named therein and U.S. Bank National Association, as trustee (the “Indentures”). The interest payment dates for the Notes are February 15 and August 15 of each year, with interest payable in arrears. The Notes were offered in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, and to certain non-U.S. persons in transactions outside of the United States in reliance on Regulation S under the Securities Act. The Notes are redeemable, in whole or in part, at any time prior to maturity at a price equal to 100% of the principal amount thereof plus an applicable premium, plus accrued and unpaid interest. If we experience certain types of change of control transactions, we must offer to repurchase the Notes at 101% of the aggregate principal amount of the Notes repurchased, plus accrued and unpaid interest. The Notes are unsecured and rank equally with all our existing and future unsubordinated unsecured senior indebtedness, and are effectively junior to our senior credit facilities and trade receivables financing arrangement. The Notes are guaranteed by all of our existing and future domestic subsidiaries that guarantee our senior credit facilities, subject to certain exceptions. The likelihood of our domestic subsidiaries having to make payments under the guarantee is considered remote. Each of the Indentures contains covenants that limit the Company’s (and its subsidiaries’) ability to, among other things: (i) grant liens on its assets; (ii) enter into sale and leaseback transactions; and (iii) consummate mergers or transfer certain of its assets. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 9 Months Ended |
Oct. 01, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS We manufacture and sell our products in a number of countries and, as a result, are exposed to movements in foreign currency ("FX") 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 Euro, Chinese Yuan and Great Britain Pound. We had FX forward contracts with an aggregate notional amount of $41.8 and $44.7 outstanding as of October 1, 2016 and December 31, 2015 , respectively, with all such contracts scheduled to mature within one year . We also had FX embedded derivatives with an aggregate notional amount of $26.9 and $31.6 at October 1, 2016 and December 31, 2015 , respectively, with scheduled maturities of $22.6 , $3.3 and $1.0 within one , two and three years , respectively. The unrealized losses, net of tax, recorded in accumulated other comprehensive loss related to FX forward contracts were $0.0 and less than $0.1 as of October 1, 2016 and December 31, 2015 , respectively. The net gains (losses) recorded in "Other income (expense), net" related to FX gains (losses) totaled $0.1 and $(0.1) for the three months ended October 1, 2016 and September 26, 2015 , respectively, and $(2.9) and $0.1 for the nine months then ended. We enter into arrangements designed to provide the right of setoff in the event of counterparty default or insolvency, and have elected to offset the fair values of our FX forward contracts in our condensed consolidated balance sheets. The gross fair values of our FX forward contracts and FX embedded derivatives, in aggregate, were $3.3 and $2.0 (gross assets) and $1.2 and $1.5 (gross liabilities) at October 1, 2016 and December 31, 2015 , respectively. |
EQUITY AND STOCK-BASED COMPENSA
EQUITY AND STOCK-BASED COMPENSATION | 9 Months Ended |
Oct. 01, 2016 | |
Equity [Abstract] | |
EQUITY AND STOCK-BASED COMPENSATION | EQUITY AND STOCK-BASED COMPENSATION Income (Loss) Per Share Prior to the Spin-Off, SPX FLOW had no common shares outstanding. On September 26, 2015, 41.322 SPX FLOW common shares were distributed to the former Parent's shareholders in conjunction with the Spin-Off. For comparative purposes, basic shares outstanding reflect this amount in all periods presented prior to the Spin-Off. For purposes of computing dilutive shares, unvested SPX FLOW awards at the Spin-Off date were assumed to have been issued and outstanding from January 1, 2015. The resulting number of weighted-average dilutive shares has been used for the three and nine months ended September 26, 2015 . The following table sets forth the number of weighted average shares outstanding used in the computation of basic and diluted income (loss) per share: Three months ended Nine months ended October 1, 2016 September 26, 2015 October 1, 2016 September 26, 2015 Weighted-average shares outstanding, basic 41.383 40.809 41.307 40.809 Dilutive effect of share-based awards — — — 0.123 Weighted-average shares outstanding, dilutive (1) 41.383 40.809 41.307 40.932 (1) For the three and nine months ended October 1, 2016 , an aggregate of 0.747 and 0.796 , respectively, of unvested restricted stock shares, restricted stock units, and stock options outstanding were excluded from the computation of diluted loss per share as we incurred a net loss during the periods. For the three and nine months ended October 1, 2016 , the number of anti-dilutive unvested restricted stock shares and restricted stock units outstanding excluded from the computation of diluted loss per share was 0.119 and 0.290 , respectively. For the three months ended September 26, 2015 , an aggregate of 0.998 unvested restricted stock shares, restricted stock units, and stock options outstanding were excluded from the computation of diluted loss per share as we incurred a net loss during the period. For the nine months ended September 26, 2015 , 0.479 of unvested restricted stock shares/units were not included in the computation of diluted income per share because required market thresholds for vesting (as discussed in our consolidated and combined financial statements included in our 2015 Annual Report on Form 10-K) were not met. For the nine months ended September 26, 2015 , 0.396 of stock options were not included in the computation of diluted income per share because their exercise price was greater than the average market price of common shares. Stock-Based Compensation Prior to the Spin-Off, eligible employees of the Company participated in the former Parent’s share-based compensation plan pursuant to which they were granted share-based awards of the former Parent's stock. The former Parent’s share-based compensation plan included awards for restricted stock shares, restricted stock units and stock options. Compensation expense for share-based awards recorded by the Company prior to the Spin-Off includes the expense associated with the employees historically attributable to the Company’s operations, as well as an allocation of stock-based compensation expense for the former Parent’s corporate employees who provided certain centralized support functions. In connection with the Spin-Off, outstanding equity-based awards granted to SPX FLOW employees under the former Parent's plan were converted into awards of the Company using a formula designed to preserve the intrinsic value of the awards immediately prior to the Spin-Off. This conversion did not result in additional compensation expense. Additionally, certain restricted stock units granted to employees in 2013 and 2014, none of whom were named executive officers at the time, were modified at the Spin-Off date to provide a minimum vesting equivalent to 50% of the underlying units at the end of the applicable remaining service periods. Compensation expense of $0.3 and $0.9 related to the modification was recognized in the three and nine months ended October 1, 2016 , and the remaining $0.3 related to the modification will be recognized over the remaining service periods of the related awards. Since the Spin-Off, SPX FLOW stock-based compensation awards may be granted to certain eligible employees or non-employee directors under the SPX FLOW Stock Compensation Plan (the “Stock Plan”). Under the Stock Plan, up to 2.107 unissued shares of our common stock were available for future grant as of October 1, 2016 . The Stock Plan permits the issuance of authorized but unissued shares or shares from treasury upon the exercise of options, vesting of restricted stock units, or granting of restricted stock shares. Each stock option, restricted stock share and restricted stock unit granted reduces share availability under the Stock Plan by one share. Restricted stock shares or restricted stock units may be granted to certain eligible employees or non-employee directors in accordance with the Stock Plan and applicable award agreements. Subject to participants' continued service and other award terms and conditions, the restrictions lapse and awards generally vest over a period of time, generally three years (or one year for awards to non-employee directors). In some instances, such as death, disability, or retirement, awards may vest concurrently with or following an employee's termination. Approximately half of the restricted stock shares and restricted stock unit awards vest based on performance thresholds, while the remaining portion vest based on the passage of time since grant date. Eligible employees, including officers, received target performance awards primarily during the three months ended April 2, 2016 in which the employee can earn between 50% and 150% of the target performance award in the event, and to the extent, the award meets the required performance vesting criteria. Such awards are generally subject to the employees’ continued employment during the three -year vesting period, and may be completely forfeited if the threshold performance criteria are not met. Vesting for the 2016 target performance awards is based on SPX FLOW shareholder return versus the performance of a composite group of companies, as established under the awards, over the three -year period from January 1, 2016 through December 31, 2018. These performance awards were issued as restricted stock units to eligible non-officer employees and restricted stock shares to eligible officers. Eligible non-officer employees also received restricted stock unit awards primarily during the three months ended April 2, 2016 that vest ratably over three years , subject to the passage of time and the employees’ continued employment during such period. In some instances, such as death, disability, or retirement, awards may vest concurrently with or following an employee's termination. Eligible officers received restricted stock share awards in the three months ended April 2, 2016 that vest subject to an internal performance metric during the first year of the award and then also require the completion of a two -year holding period after the first year of the award (including eligible officers’ continued employment during that period), before issuance to the eligible officers. Non-employee directors received restricted stock share awards in the three months ended July 2, 2016 that vest at the close of business on the day before the date of the Company's next regular annual meeting of shareholders held after the date of the grant, subject to the passage of time and the directors' continued service during such period. Our restricted stock share and unit awards include early retirement provisions which permit recipients to be eligible for vesting generally upon reaching the age of 55 and completing five years of service. Restricted stock shares and restricted stock units that do not vest within the applicable vesting period are forfeited. Stock options may be granted to eligible employees in the form of incentive stock options or nonqualified stock options. The option price per share may be no less than the fair market value of our common stock at the close of business on the date of grant. Upon exercise, the employee has the option to surrender previously owned shares at current value in payment of the exercise price and/or for withholding tax obligations. The recognition of compensation expense for share-based awards is based on their grant-date fair values. The fair value of each award is amortized over the lesser of the award's requisite or derived service period, which is generally up to three years as noted above. For the three and nine months ended October 1, 2016 and September 26, 2015 , we recognized compensation expense related to share-based programs in “Selling, general and administrative” expense in the accompanying condensed consolidated and combined statements of operations as follows: Three months ended Nine months ended October 1, 2016 September 26, 2015 October 1, 2016 September 26, 2015 Expense associated with individuals attributable to SPX FLOW's operations $ 2.7 $ 1.7 $ 13.3 $ 5.8 Allocation of expense historically associated with the former Parent's corporate employees (1) — 2.0 — 13.4 Expense related to modification as of Spin-Off date 0.3 1.2 0.9 1.2 Stock-based compensation expense 3.0 4.9 14.2 20.4 Income tax benefit (1.1 ) (1.9 ) (5.2 ) (7.7 ) Stock-based compensation expense, net of income tax benefit $ 1.9 $ 3.0 $ 9.0 $ 12.7 (1) See Note 1 of our consolidated and combined financial statements included in our 2015 Annual Report on Form 10-K for a discussion of the methodology used to allocate corporate-related costs prior to the Spin-Off. Restricted Stock Share and Restricted Stock Unit Awards The Monte Carlo simulation model valuation technique was used to determine the fair value of our restricted stock shares and restricted stock units that contain a “market condition.” The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each restricted stock share and restricted stock unit award. The following table summarizes the unvested restricted stock share and restricted stock unit activity for the nine months ended October 1, 2016 , for the Company's employees: Unvested Restricted Stock Shares and Restricted Stock Units Weighted-Average Grant-Date Fair Value Per Share Outstanding at December 31, 2015 1.128 $51.13 Granted 0.731 27.99 Vested (0.303) 54.78 Forfeited and other (0.353) 40.49 Outstanding at October 1, 2016 1.203 $38.77 As of October 1, 2016 , there was $16.1 of unrecognized compensation cost related to SPX FLOW's restricted stock share and restricted stock unit compensation arrangements, including the effect of the modification discussed above. We expect this cost to be recognized over a weighted-average period of 1.8 years. Stock Options On January 2, 2015, eligible employees of the Company were granted 0.034 options in the former Parent's stock, all of which were outstanding (but not exercisable) from that date up to the Spin-Off. The weighted-average exercise price per share of these options was $85.87 and the maximum term of these options is 10 years . The weighted-average grant-date fair value per share of the former Parent's stock options granted on January 2, 2015 was $27.06 . The fair value of each former Parent's option grant was estimated using the Black-Scholes option-pricing model. In connection with the Spin-Off, certain corporate employees of the former Parent became employees of the Company. The number of outstanding SPX FLOW stock options, after reflecting (i) the former Parent stock options that had been granted to such corporate employees of the former Parent on January 2, 2015, and (ii) the conversion of the former Parent stock options to SPX FLOW stock options, was 0.396 . After reflecting 0.025 of forfeitures during the fourth quarter of 2015, there were 0.371 of SPX FLOW options outstanding as of October 1, 2016 and December 31, 2015 , of which 0.285 were exercisable as of October 1, 2016 . As a result of the conversion of the stock options, the weighted-average exercise price per share of the SPX FLOW stock options is $61.29 and the weighted-average grant-date fair value per share of the SPX FLOW stock options is $19.33 . Other terms of the SPX FLOW stock options are the same as those discussed above. As of October 1, 2016 , there was $0.6 of unrecognized compensation cost related to SPX FLOW stock options. We expect this cost to be recognized over a weighted-average period of 1.3 years . Accumulated Other Comprehensive Loss The primary component of accumulated other comprehensive loss as of October 1, 2016 and December 31, 2015 , was foreign currency translation adjustment. The unrealized losses, net of tax, recorded in accumulated other comprehensive loss related to FX forward contracts were $0.0 and less than $0.1 as of October 1, 2016 and December 31, 2015 , respectively. Changes in accumulated other comprehensive loss for the three and nine months ended October 1, 2016, related solely to foreign currency translation adjustment. Changes in accumulated other comprehensive loss for the three and nine months ended September 26, 2015, related primarily to foreign currency translation adjustment of $(43.1) and $(135.0) , respectively. See the condensed consolidated and combined statement of comprehensive loss for other changes in accumulated other comprehensive loss for the three and nine months ended September 26, 2015 . Common Stock in Treasury During the three and nine months ended October 1, 2016 , “Common stock in treasury” was increased by $0.2 and $2.9 , respectively, for common stock that was surrendered by recipients of restricted stock as a means of funding the related minimum income tax withholding requirements. |
LITIGATION, CONTINGENT LIABILIT
LITIGATION, CONTINGENT LIABILITIES AND OTHER MATTERS | 9 Months Ended |
Oct. 01, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
LITIGATION, CONTINGENT LIABILITIES AND OTHER MATTERS | LITIGATION, CONTINGENT LIABILITIES AND OTHER MATTERS We are subject to litigation 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. We are subject to domestic and international environmental protection laws and regulations with respect to our business operations and are operating in compliance with, or taking action aimed at ensuring compliance with, these laws and regulations. We believe our compliance obligations with environmental protection laws and regulations should not have a material effect, individually or in the aggregate, on our financial position, results of operations or cash flows. Mezzanine Equity Independent noncontrolling shareholders in certain foreign subsidiaries of the Company have put options under their respective joint venture operating agreements that allow these minority shareholders to sell their common stock to the controlling shareholders (wholly owned subsidiaries of SPX Flow, Inc.) upon the satisfaction of certain conditions, including the passage of time. The respective carrying values presented in Mezzanine Equity of our condensed consolidated balance sheet as of October 1, 2016 are stated at the the current exercise value of the put options, irrespective of whether the options are currently exercisable. To the extent the noncontrolling interests' put option price is correlated with the estimated fair value of the subsidiary, we have used the market method to estimate such fair values. This represents a level 3 fair value measurement. None of the noncontrolling interest put options are exercisable at this time. If and when such options are exercised, we expect to settle the option value in cash. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Oct. 01, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Unrecognized Tax Benefits As of October 1, 2016 , we had gross unrecognized tax benefits of $14.8 (net unrecognized tax benefits of $5.5 ), of which $5.5 , if recognized, would impact our effective tax rate. We classify interest and penalties related to unrecognized tax benefits as a component of our income tax provision. As of October 1, 2016 , gross accrued interest totaled $1.8 (net accrued interest of $1.8 ), and there was 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 $1.0 to $3.0 . The previously unrecognized tax benefits relate to a variety of tax issues, including transfer pricing and non-U.S. income tax matters. The unrecognized tax benefits described above represent amounts that were included in tax returns filed by the Company. Historically, a portion of the Company's operations were included in tax returns filed by the former Parent or its subsidiaries that were not part of the Spin-Off. As a result, some uncertain tax positions related to the Company's operations resulted in unrecognized tax benefits that are now potential obligations of the former Parent or its subsidiaries due to the Spin-Off. Because activities that gave rise to these unrecognized tax benefits related to the Company's operations for the three and nine months ended September 26, 2015 , the impact of these items was recorded to "Income tax provision" within our condensed combined statements of operations, with the offset recorded to "Former parent company investment" within our condensed combined balance sheets prior to the Spin-Off date, which have been reclassified to "Paid-in capital" in our condensed consolidated balance sheet as of December 31, 2015 . In addition, some of the Company's tax returns previously included the operations of the former Parent's subsidiaries that were not part of the Spin-Off. In certain of these cases, the subsidiaries' activities gave rise to unrecognized tax benefits for which the Company could be potentially liable. When required under the Income Taxes Topic of the Codification, we recorded a liability for these uncertain tax positions within our condensed consolidated balance sheets. However, since the potential obligations were the result of activities associated with operations that were not part of the Spin-Off, we have not reflected any related amounts within our "Income tax provision" for the three and nine months ended September 26, 2015 , but have instead recorded the amounts directly to "Former parent company investment" within our condensed combined balance sheets prior to the Spin-Off date, which have been reclassified to "Paid-in capital" in our condensed consolidated balance sheet as of December 31, 2015 . Other Tax Matters During the three months ended October 1, 2016 , we recorded an income tax benefit of $26.9 on $31.1 of pre-tax loss, resulting in an effective tax rate of 86.5% . This compares to an income tax provision for the three months ended September 26, 2015 of $15.7 on $11.5 of pre-tax income, resulting in an effective tax rate of 136.5% . The effective tax rate for the third quarter of 2016 was impacted by an income tax benefit of $23.8 resulting from a tax incentive realized in Poland related to the expansion of our manufacturing facility in that country. The effective tax rate for the third quarter of 2016 also reflects the dilutive effect that the large annual forecasted pre-tax loss has on forecasted annual tax expense, since a significant portion of the pre-tax loss relates to the goodwill and intangible assets impairment charge recorded by our Power and Energy reporting unit in the second quarter of which a majority of the goodwill had no basis for income tax purposes. The effective tax rate for the third quarter of 2015 was impacted by tax charges of (i) $7.4 related to dividends from foreign subsidiaries, (ii) $2.6 related to changes in the jurisdictional composition of expected annual pre-tax income, and (iii) $1.2 related to pre-tax losses generated during the period for which no tax benefit was recognized. During the nine months ended October 1, 2016 , we recorded an income tax benefit of $89.8 on $478.4 of pre-tax loss, resulting in an effective tax rate of 18.8% . This compares to an income tax provision for the nine months ended September 26, 2015 of $38.3 on $103.9 of pre-tax income, resulting in an effective tax rate of 36.9% . The effective tax rate for the first nine months of 2016 was impacted by income tax benefits of (i) $47.1 resulting from the $426.4 goodwill and intangible assets impairment charge recorded by our Power and Energy reporting unit (an effective tax rate of 11.0% ), as (a) the majority of the goodwill for the Power and Energy reporting unit had no basis for income tax purposes and (b) the impairment charge resulted in the addition of a valuation allowance for certain deferred income tax assets, and (ii) $23.8 resulting from a tax incentive realized in Poland related to the expansion of our manufacturing facility in that country, as previously discussed. The effective tax rate for the first nine months of 2016 also reflects the dilutive effect that the large annual forecasted pre-tax loss has on forecasted annual tax expense, as noted above. The effective tax rate for the first nine months of 2015 was impacted by tax charges of (i) $7.4 related to dividends from foreign subsidiaries, (ii) $2.6 related to changes in the jurisdictional composition of expected annual pre-tax income, and (iii) $1.2 related to pre-tax losses generated during the period for which no tax benefit was recognized, partially offset by tax benefits of $2.0 related to FX losses recognized for income tax purposes with respect to a foreign branch. We review our income tax positions on a continuous basis and record a provision for potential uncertain positions when we determine that an uncertain position meets the criteria of the Income Taxes Topic of the Codification. As events change and resolutions occur, adjustments are made to amounts previously provided, such as in the case of audit settlements with taxing authorities. In connection with the Spin-Off, we and the former Parent entered into a Tax Matters Agreement which, among other matters, addresses the allocation of certain tax adjustments that might arise upon examination of the 2013, 2014 and the pre-Spin-Off portion of the 2015 federal income tax returns of the former Parent. None of those returns is currently under examination, and we believe any contingencies have been adequately provided for. 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 or administrative appeal. We believe any uncertain tax positions related to these examinations have been adequately provided for. We have various non-U.S. income tax returns under examination. The most significant of these 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 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 or we have not yet reached the final stages of the appeals process, the timing of the ultimate resolution and any payments that may be required for the above matters cannot be determined at this time. |
FAIR VALUE
FAIR VALUE | 9 Months Ended |
Oct. 01, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | 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 basis. There were no transfers between the three levels of the fair value hierarchy during the nine months ended October 1, 2016 and September 26, 2015 . The following section describes the valuation methodologies we use to measure different financial instruments at fair value on a recurring basis. Derivative Financial Instruments Our derivative financial assets and liabilities include FX forward contracts and FX embedded derivatives, valued using valuation models based on observable market inputs such as forward rates, 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 October 1, 2016 and December 31, 2015 , the gross fair values of our derivative financial assets and liabilities, in aggregate, were $3.3 and $2.0 (gross assets) and $1.2 and $1.5 (gross liabilities), respectively. As of October 1, 2016 , there had 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 had been no significant impact to the fair value of our derivative assets based on our evaluation of our counterparties’ credit risks. Investments in Equity Securities Certain of our investments in equity securities that are not readily marketable are accounted for under the fair value option and are classified as Level 3 assets in the fair value hierarchy, with such values determined by multidimensional pricing models. These models consider market activity based on modeling of securities with similar credit quality, duration, yield and structure. A variety of inputs are used, including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spread and reference data including market research publications. Market indicators, industry and economic events are also considered. We have not made any adjustments to the inputs obtained from the independent sources. At October 1, 2016 and December 31, 2015 , these assets had a fair value of $7.9 and $8.1 , respectively. The table below presents a reconciliation of our investment in equity securities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine months ended October 1, 2016 and September 26, 2015 , including net unrealized gains (losses) recorded to “Other income (expense), net.” Nine months ended October 1, 2016 September 26, 2015 Balance at beginning of year $ 8.1 $ 7.4 Unrealized gains (losses) recorded to earnings (0.2 ) 0.9 Balance at end of period $ 7.9 $ 8.3 Mezzanine Equity To the extent the noncontrolling interests' put option price is correlated with the estimated fair value of the subsidiary, we use the market method to estimate the fair values of noncontrolling interest put options reported in "Mezzanine equity" using unobservable inputs (Level 3) on a recurring basis. Changes to the noncontrolling interest put option values are reflected as adjustments to "Mezzanine equity" and "Retained earnings (accumulated deficit)." Refer to Note 12 for further discussion. 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 impairment would require that the asset be recorded at its fair value. At December 31, 2015 , we did not have any significant non-financial assets or liabilities that were required to be measured at fair value on a recurring or non-recurring basis. Refer to Note 6 for further discussion pertaining to our annual and interim evaluation of goodwill and other intangible assets for impairment, including the goodwill and intangible asset impairment charge recognized during the nine months ended October 1, 2016 . Indebtedness and Other The estimated fair values of other financial liabilities (excluding capital leases and deferred financing fees) not measured at fair value on a recurring basis as of October 1, 2016 and December 31, 2015 were as follows: October 1, 2016 December 31, 2015 Carrying Amount Fair Value Carrying Amount Fair Value Domestic revolving loan facility $ 73.0 $ 73.0 $ — $ — Term loan (1) 395.0 395.0 400.0 400.0 5.625% Senior notes (1) 300.0 303.0 — — 5.875% Senior notes (1) 300.0 303.8 — — 6.875% Senior notes (1) — — 600.0 637.5 Trade receivables financing arrangement 26.2 26.2 — — Other indebtedness 17.0 17.0 28.0 28.0 (1) Carrying amount reflected herein excludes related deferred financing fees. The following methods and assumptions were used in estimating the fair value of these financial instruments: • The fair values of the term loan and senior notes were determined using Level 2 inputs within the fair value hierarchy and were based on quoted market prices for the same or similar instruments or on current rates offered to us for debt with similar maturities, subordination and credit default expectations. • The fair value of our other indebtedness approximated carrying value due primarily to the short-term nature of these instruments. The carrying amounts of cash and equivalents and receivables reported in our condensed consolidated balance sheets as of October 1, 2016 and December 31, 2015 approximate fair value due to the short-term nature of those instruments. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Oct. 01, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Allocation of General Corporate Expenses The condensed combined statements of operations for the three and nine months ended September 26, 2015 include expenses for certain centralized functions and other programs provided and/or administered by the former Parent charged directly to business units of the Company. In addition, for purposes of preparing these condensed combined financial statements for periods prior to the Spin-Off on a “carve-out” basis, a portion of the former Parent's total corporate expenses have been allocated to the Company. A detailed description of the methodology used to allocate corporate-related costs is included in our consolidated and combined financial statements included in our 2015 Annual Report on Form 10-K. Related Party Interest We recorded interest income of $7.4 and $26.2 for the three and nine months ended September 26, 2015 , respectively, associated with related party notes receivable outstanding during the periods, with the former Parent serving as the counterparty. These related party notes were transferred to SPX or canceled by the Company with a corresponding decrease to "Former parent company investment" of $669.7 during the third quarter of 2015. The related party notes receivable had a weighted-average interest rate of approximately 5.0% prior to their transfer to SPX or cancellation by the Company. We recorded interest expense of $0.0 and $28.4 for the three and nine months ended September 26, 2015 , respectively, associated with related party notes payable outstanding during the periods, with the former Parent (and certain other of its affiliates that were not part of the Spin-Off) serving as counterparties. Related party notes payable of $600.5 and $390.8 were extinguished by way of capital contributions to the Company by the former Parent during the second and third quarters of 2015, respectively. The related party notes payable had a weighted-average interest rate of approximately 7.0% prior to their extinguishment. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Oct. 01, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation We prepared the condensed consolidated and combined financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “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. In our opinion, these financial statements include the adjustments (consisting only of normal and recurring items) necessary for their fair presentation. Our condensed consolidated balance sheets as of October 1, 2016 and December 31, 2015 , and financial activity presented in the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended October 1, 2016 and of equity and cash flows for the nine months ended October 1, 2016 , consist of the consolidated balances of SPX FLOW as an independent, publicly traded company as of and during the periods then ended. The basis of presentation for periods prior to the Spin-Off is discussed below. These financial statements, including the periods presented prior to the Spin-Off, have been prepared in conformity with GAAP, and the unaudited information included herein should be read in conjunction with our consolidated and combined financial statements included in our 2015 Annual Report on Form 10-K. As discussed further in Note 3 , segment results and corporate expense for the three and nine months ended September 26, 2015 have been recast to (i) reflect the reclassification of certain product line results in order to more precisely present our results by reportable segment, (ii) include stock-based compensation costs associated with segment employees in segment income, and (iii) include stock-based compensation costs associated with corporate employees in corporate expense. Certain operating cash flow amounts in the accompanying condensed combined statement of cash flows for the nine months ended September 26, 2015 have been reclassified to conform to the current year presentation. 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 and interim results are not necessarily indicative of full year results. The condensed consolidated and combined financial statements may not be indicative of the Company’s future performance. 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 2016 are April 2, July 2, and October 1, compared to the respective March 28, June 27, and September 26, 2015 dates. We had six more days in the first quarter of 2016 and will have five less days in the fourth quarter of 2016 than in the respective 2015 periods. Basis of Presentation Prior to the Spin-Off Our condensed combined statements of operations and comprehensive loss for the three and nine months ended September 26, 2015 and of equity and cash flows for the nine months ended September 26, 2015 , were prepared on a “carve out” basis and were derived from the condensed consolidated financial statements and accounting records of the former Parent and SPX FLOW for the historical periods presented. These condensed combined statements do not necessarily reflect what the results of operations, financial position, and cash flows would have been had SPX FLOW operated as an independent company for the historical periods reported. |
New Accounting Pronouncements | In May 2014, and as amended in the first six months of 2016, the Financial Accounting Standards Board (the "FASB") issued a new standard on revenue recognition that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. 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, and the related cash flows. The standard is effective for interim and annual reporting periods beginning after December 15, 2017. We are currently evaluating the effect that this new standard will have on our condensed consolidated financial statements. In April 2015, the FASB issued a new standard that requires debt issuance costs related to a recognized debt liability to be reported in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This standard was adopted in the first quarter of 2016 and was applied retrospectively. The adoption of this standard did not have a material impact on our condensed consolidated financial statements. In January 2016, the FASB issued an amendment to existing guidance which revises entities’ accounting related to: (i) the classification and measurement of investments in equity securities, and (ii) the presentation of certain fair value changes for financial liabilities measured at fair value. The amendment also changes certain disclosure requirements associated with the fair value of financial instruments. The amended guidance is effective for interim and annual reporting periods beginning after December 15, 2017 and requires a modified retrospective approach to adoption. Early adoption is only permitted for a provision related to instrument-specific credit risk. We are currently evaluating the effect that this amendment will have on our condensed consolidated financial statements. In February 2016, the FASB issued a new standard which requires a lessee to recognize on its balance sheet the assets and liabilities associated with the rights and obligations created by leases with terms that exceed twelve months. Leases will continue to be classified as either financing or operating, with classification affecting the recognition, measurement and presentation of costs and cash flows arising from a lease. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2018 and requires a modified retrospective approach to adoption for lessees related to capital and operating leases existing at, or entered into after, the earliest comparative period presented in the financial statements, with certain practical expedients available. Early adoption is permitted. We are currently evaluating the effect that this new standard will have on our condensed consolidated financial statements. In March 2016, the FASB issued an amendment to clarify that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument does not, in and of itself, require de-designation of that hedging relationship provided that all other hedge accounting criteria continue to be met. The amendment is effective for interim and annual reporting periods beginning after December 15, 2016 and may be applied on either a prospective or modified retrospective basis. The impact of the adoption of this amendment on our condensed consolidated financial statements will be based on any future events that impact our hedging relationships. In March 2016, the FASB issued an amendment which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, classification of awards as either equity or liabilities, as well as classification in the statement of cash flows. This amendment is effective for prospective interim and annual reporting periods beginning after December 15, 2016. We plan on adopting this amendment at that time and are currently evaluating its effect on our condensed consolidated financial statements. In August 2016, the FASB issued an amendment that updates the guidance as to how certain cash receipts and payments should be presented and classified pertaining to, among other items, debt, contingent consideration in business combinations, proceeds from certain insurance settlements, distributions received from equity method investees, securitization transactions, and separately identifiable cash flows. The amendment is intended to reduce the existing diversity in practice and is effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted, including retrospective application. We have adopted this amendment as of October 1, 2016 and have accordingly reflected our debt prepayment premiums and extinguishment costs as financing cash outflows during the nine months then ended. |
INFORMATION ON REPORTABLE SEG27
INFORMATION ON REPORTABLE SEGMENTS, CORPORATE EXPENSE AND OTHER (Tables) | 9 Months Ended |
Oct. 01, 2016 | |
Segment Reporting [Abstract] | |
Schedule of financial data for reportable segments | Financial data for our reportable segments for the three and nine months ended October 1, 2016 and September 26, 2015 were as follows: Three months ended Nine months ended October 1, 2016 September 26, 2015 October 1, 2016 September 26, 2015 Revenues (1) : Food and Beverage $ 173.0 $ 205.9 $ 545.8 $ 650.8 Power and Energy 127.3 198.5 432.8 556.0 Industrial 166.5 185.1 522.0 569.0 Total revenues $ 466.8 $ 589.5 $ 1,500.6 $ 1,775.8 Income: Food and Beverage $ 19.6 $ 27.1 $ 56.9 $ 78.1 Power and Energy 5.5 26.5 17.7 65.5 Industrial 23.0 25.7 69.3 79.4 Total income for reportable segments 48.1 79.3 143.9 223.0 Corporate expense 13.8 14.1 45.3 50.3 Pension and postretirement expense — 9.0 2.1 11.0 Impairment of goodwill and intangible assets — 15.0 426.4 15.0 Special charges, net 12.5 34.6 64.3 41.7 Consolidated and combined operating income (loss) $ 21.8 $ 6.6 $ (394.2 ) $ 105.0 (1) We recognized revenues under the percentage-of-completion method of $72.2 and $117.0 in the three months ended October 1, 2016 and September 26, 2015 , respectively. For the nine months ended October 1, 2016 and September 26, 2015 , revenues under the percentage-of-completion method were $258.5 and $354.8 , respectively. Costs and estimated earnings in excess of billings on contracts accounted for under the percentage-of-completion method were $97.8 and $87.4 as of October 1, 2016 and December 31, 2015 , 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 $55.7 and $52.9 as of October 1, 2016 and December 31, 2015 , respectively, and are reported as a component of ‘‘Accrued expenses’’ in the condensed consolidated balance sheets. |
SPECIAL CHARGES, NET (Tables)
SPECIAL CHARGES, NET (Tables) | 9 Months Ended |
Oct. 01, 2016 | |
Restructuring and Related Activities [Abstract] | |
Schedule of special charges, net | Special charges, net, for the three and nine months ended October 1, 2016 and September 26, 2015 were as follows: Three months ended Nine months ended October 1, 2016 September 26, 2015 October 1, 2016 September 26, 2015 Food and Beverage $ 3.0 $ 21.8 $ 17.5 $ 24.5 Power and Energy (0.3 ) 8.5 12.0 10.8 Industrial 2.1 3.8 9.1 5.9 Other 7.7 0.5 25.7 0.5 Total $ 12.5 $ 34.6 $ 64.3 $ 41.7 |
Schedule of the analysis of restructuring liabilities | The following is an analysis of our restructuring liabilities for the nine months ended October 1, 2016 and September 26, 2015 : Nine months ended October 1, 2016 September 26, 2015 Balance at beginning of year $ 32.9 $ 9.2 Special charges (1) 45.0 41.0 Utilization — cash (43.2 ) (11.4 ) Currency translation adjustment and other 0.6 (1.5 ) Balance at end of period $ 35.3 $ 37.3 (1) Amounts that impacted special charges but not the restructuring liabilities included $19.3 of asset impairment charges during the nine months ended October 1, 2016 , and $0.7 of asset impairment and non-cash charges allocated from SPX during the nine months ended September 26, 2015 . |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 9 Months Ended |
Oct. 01, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories at October 1, 2016 and December 31, 2015 comprised the following: October 1, 2016 December 31, 2015 Finished goods $ 87.8 $ 87.5 Work in process 97.1 88.8 Raw materials and purchased parts 130.4 135.2 Total FIFO cost 315.3 311.5 Excess of FIFO cost over LIFO inventory value (6.3 ) (6.3 ) Total inventories $ 309.0 $ 305.2 |
GOODWILL AND OTHER INTANGIBLE30
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Oct. 01, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in the carrying amount of goodwill, by reportable segment | The changes in the carrying amount of goodwill by reportable segment for the nine months ended October 1, 2016 were as follows: December 31, 2015 Goodwill Resulting from Business Combinations Impairments Foreign Currency Translation and Other (1) October 1, 2016 Food and Beverage $ 269.9 $ — $ — $ 0.5 $ 270.4 Power and Energy (2) 538.9 — (252.8 ) (20.0 ) 266.1 Industrial (3) 214.6 — — 8.8 223.4 Total $ 1,023.4 $ — $ (252.8 ) $ (10.7 ) $ 759.9 (1) In connection with our recasting of historical reportable segment results in January 2016, as discussed further in Note 3 , we performed a re-allocation of reportable segment goodwill during the first quarter of 2016. This re-allocation resulted in the following changes in goodwill compared to amounts previously reported at December 31, 2015 by reportable segment: Food and Beverage goodwill reduction of $5.6 , Power and Energy goodwill reduction of $4.0 , and Industrial goodwill increase of $9.6 . (2) The carrying amount of goodwill included $250.4 and $0.0 of accumulated impairments as of October 1, 2016 and December 31, 2015 , respectively. (3) The carrying amount of goodwill included $67.7 of accumulated impairments as of October 1, 2016 and December 31, 2015 . |
Schedule of finite-lived intangible assets | Identifiable intangible assets were as follows: October 1, 2016 December 31, 2015 Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value Intangible assets with determinable lives: Customer relationships $ 219.8 $ (103.8 ) $ 116.0 $ 344.0 $ (94.1 ) $ 249.9 Technology 95.6 (42.3 ) 53.3 122.1 (38.0 ) 84.1 Patents 6.7 (5.0 ) 1.7 6.7 (4.6 ) 2.1 Other 12.8 (10.3 ) 2.5 13.0 (10.3 ) 2.7 334.9 (161.4 ) 173.5 485.8 (147.0 ) 338.8 Trademarks with indefinite lives 205.8 — 205.8 240.6 — 240.6 Total $ 540.7 $ (161.4 ) $ 379.3 $ 726.4 $ (147.0 ) $ 579.4 |
Schedule of indefinite-lived intangible assets | Identifiable intangible assets were as follows: October 1, 2016 December 31, 2015 Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value Intangible assets with determinable lives: Customer relationships $ 219.8 $ (103.8 ) $ 116.0 $ 344.0 $ (94.1 ) $ 249.9 Technology 95.6 (42.3 ) 53.3 122.1 (38.0 ) 84.1 Patents 6.7 (5.0 ) 1.7 6.7 (4.6 ) 2.1 Other 12.8 (10.3 ) 2.5 13.0 (10.3 ) 2.7 334.9 (161.4 ) 173.5 485.8 (147.0 ) 338.8 Trademarks with indefinite lives 205.8 — 205.8 240.6 — 240.6 Total $ 540.7 $ (161.4 ) $ 379.3 $ 726.4 $ (147.0 ) $ 579.4 |
WARRANTY (Tables)
WARRANTY (Tables) | 9 Months Ended |
Oct. 01, 2016 | |
Product Warranties Disclosures [Abstract] | |
Analysis of product warranty accrual | The following is an analysis of our product warranty accrual for the periods presented: Nine months ended October 1, 2016 September 26, 2015 Balance at beginning of year $ 14.8 $ 18.4 Provisions 6.5 7.4 Usage (9.1 ) (8.7 ) Currency translation adjustment (0.1 ) (2.0 ) Balance at end of period 12.1 15.1 Less: Current portion of warranty 11.4 13.9 Non-current portion of warranty $ 0.7 $ 1.2 |
INDEBTEDNESS (Tables)
INDEBTEDNESS (Tables) | 9 Months Ended |
Oct. 01, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Debt at October 1, 2016 and December 31, 2015 comprised the following: October 1, 2016 December 31, 2015 Domestic revolving loan facility $ 73.0 $ — Term loan (1) 395.0 400.0 5.625% senior notes, due in August 2024 300.0 — 5.875% senior notes, due in August 2026 300.0 — 6.875% senior notes (2) — 600.0 Trade receivables financing arrangement 26.2 — Other indebtedness (3) 32.9 37.3 Less: deferred financing fees (4) (12.8 ) (5.2 ) Total debt 1,114.3 1,032.1 Less: short-term debt 116.2 28.0 Less: current maturities of long-term debt 20.3 10.3 Total long-term debt $ 977.8 $ 993.8 (1) The term loan, which had an initial principal balance of $400.0 , is repayable in quarterly installments of 5.0% annually which began with our third quarter of 2016, with the remaining balance repayable in full on September 24, 2020. (2) On August 10, 2016, we completed the redemption of all of our 6.875% senior notes due in August 2017 for a total redemption price of $636.4 . As a result of the redemption, we recorded a charge of $38.9 to "Loss on early extinguishment of debt" during the third quarter of 2016, which related to premiums paid to redeem the senior notes of $36.4 , the write-off of unamortized deferred financing fees of $1.9 , and other costs associated with the extinguishment of the senior notes of $0.6 . (3) Primarily includes capital lease obligations of $15.9 and $9.3 and balances under a purchase card program of $16.6 and $23.6 as of October 1, 2016 and December 31, 2015 , respectively. The purchase card program allows for payment beyond customary 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) Deferred financing fees were comprised of fees related to the term loan and senior notes. |
EQUITY AND STOCK-BASED COMPEN33
EQUITY AND STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Oct. 01, 2016 | |
Equity [Abstract] | |
Schedule of weighted average shares outstanding used in computation of basic and diluted income (loss) per share | The following table sets forth the number of weighted average shares outstanding used in the computation of basic and diluted income (loss) per share: Three months ended Nine months ended October 1, 2016 September 26, 2015 October 1, 2016 September 26, 2015 Weighted-average shares outstanding, basic 41.383 40.809 41.307 40.809 Dilutive effect of share-based awards — — — 0.123 Weighted-average shares outstanding, dilutive (1) 41.383 40.809 41.307 40.932 (1) For the three and nine months ended October 1, 2016 , an aggregate of 0.747 and 0.796 , respectively, of unvested restricted stock shares, restricted stock units, and stock options outstanding were excluded from the computation of diluted loss per share as we incurred a net loss during the periods. For the three and nine months ended October 1, 2016 , the number of anti-dilutive unvested restricted stock shares and restricted stock units outstanding excluded from the computation of diluted loss per share was 0.119 and 0.290 , respectively. For the three months ended September 26, 2015 , an aggregate of 0.998 unvested restricted stock shares, restricted stock units, and stock options outstanding were excluded from the computation of diluted loss per share as we incurred a net loss during the period. For the nine months ended September 26, 2015 , 0.479 of unvested restricted stock shares/units were not included in the computation of diluted income per share because required market thresholds for vesting (as discussed in our consolidated and combined financial statements included in our 2015 Annual Report on Form 10-K) were not met. For the nine months ended September 26, 2015 , 0.396 of stock options were not included in the computation of diluted income per share because their exercise price was greater than the average market price of common shares. |
Schedule of compensation expense related to share-based programs recognized in selling, general and administrative expense | For the three and nine months ended October 1, 2016 and September 26, 2015 , we recognized compensation expense related to share-based programs in “Selling, general and administrative” expense in the accompanying condensed consolidated and combined statements of operations as follows: Three months ended Nine months ended October 1, 2016 September 26, 2015 October 1, 2016 September 26, 2015 Expense associated with individuals attributable to SPX FLOW's operations $ 2.7 $ 1.7 $ 13.3 $ 5.8 Allocation of expense historically associated with the former Parent's corporate employees (1) — 2.0 — 13.4 Expense related to modification as of Spin-Off date 0.3 1.2 0.9 1.2 Stock-based compensation expense 3.0 4.9 14.2 20.4 Income tax benefit (1.1 ) (1.9 ) (5.2 ) (7.7 ) Stock-based compensation expense, net of income tax benefit $ 1.9 $ 3.0 $ 9.0 $ 12.7 (1) See Note 1 of our consolidated and combined financial statements included in our 2015 Annual Report on Form 10-K for a discussion of the methodology used to allocate corporate-related costs prior to the Spin-Off. |
Summary of restricted stock share and restricted stock unit activity | The following table summarizes the unvested restricted stock share and restricted stock unit activity for the nine months ended October 1, 2016 , for the Company's employees: Unvested Restricted Stock Shares and Restricted Stock Units Weighted-Average Grant-Date Fair Value Per Share Outstanding at December 31, 2015 1.128 $51.13 Granted 0.731 27.99 Vested (0.303) 54.78 Forfeited and other (0.353) 40.49 Outstanding at October 1, 2016 1.203 $38.77 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 9 Months Ended |
Oct. 01, 2016 | |
Fair Value Disclosures [Abstract] | |
Reconciliation of investments in equity securities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) | The table below presents a reconciliation of our investment in equity securities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine months ended October 1, 2016 and September 26, 2015 , including net unrealized gains (losses) recorded to “Other income (expense), net.” Nine months ended October 1, 2016 September 26, 2015 Balance at beginning of year $ 8.1 $ 7.4 Unrealized gains (losses) recorded to earnings (0.2 ) 0.9 Balance at end of period $ 7.9 $ 8.3 |
Estimated fair values of other financial liabilities not measured at fair value on a recurring basis | The estimated fair values of other financial liabilities (excluding capital leases and deferred financing fees) not measured at fair value on a recurring basis as of October 1, 2016 and December 31, 2015 were as follows: October 1, 2016 December 31, 2015 Carrying Amount Fair Value Carrying Amount Fair Value Domestic revolving loan facility $ 73.0 $ 73.0 $ — $ — Term loan (1) 395.0 395.0 400.0 400.0 5.625% Senior notes (1) 300.0 303.0 — — 5.875% Senior notes (1) 300.0 303.8 — — 6.875% Senior notes (1) — — 600.0 637.5 Trade receivables financing arrangement 26.2 26.2 — — Other indebtedness 17.0 17.0 28.0 28.0 (1) Carrying amount reflected herein excludes related deferred financing fees. |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) $ in Millions | Sep. 26, 2015 | Sep. 26, 2015USD ($) | Oct. 01, 2016segment | Sep. 26, 2015USD ($) |
Related Party Transaction [Line Items] | ||||
Number of business segments | segment | 3 | |||
Centralized functions and programs cost | SPX | ||||
Related Party Transaction [Line Items] | ||||
Selling, general and administrative expenses | $ 28 | $ 81 | ||
Corporate expense | SPX | ||||
Related Party Transaction [Line Items] | ||||
Selling, general and administrative expenses | $ 14.3 | $ 50.7 | ||
Common Stock | SPX | ||||
Related Party Transaction [Line Items] | ||||
Percentage of common stock distributed to FLOW shareholders | 100.00% |
INFORMATION ON REPORTABLE SEG36
INFORMATION ON REPORTABLE SEGMENTS, CORPORATE EXPENSE AND OTHER - Narrative (Details) | 9 Months Ended |
Oct. 01, 2016segmentcountry | |
Segment Reporting [Abstract] | |
Number of countries in which entity operates (more than) | 35 |
Number of countries in which entity sells its products and services (more than) | 150 |
Number of reportable segments | segment | 3 |
INFORMATION ON REPORTABLE SEG37
INFORMATION ON REPORTABLE SEGMENTS, CORPORATE EXPENSE AND OTHER - Financial Data for Reportable Segments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Oct. 01, 2016 | Sep. 26, 2015 | Oct. 01, 2016 | Sep. 26, 2015 | Dec. 31, 2015 | |
Revenues: | |||||
Revenues | $ 466.8 | $ 589.5 | $ 1,500.6 | $ 1,775.8 | |
Income: | |||||
Income | 21.8 | 6.6 | (394.2) | 105 | |
Impairment of goodwill and intangible assets | 0 | 15 | 426.4 | 15 | |
Special charges, net | 12.5 | 34.6 | 64.3 | 41.7 | |
Revenues recognized under percentage of completion method | 72.2 | 117 | 258.5 | 354.8 | |
Costs and estimated earnings in excess of billings on contracts | 97.8 | 97.8 | $ 87.4 | ||
Billings in excess of costs and estimated earnings on uncompleted contracts | 55.7 | 55.7 | $ 52.9 | ||
Power and Energy | |||||
Income: | |||||
Impairment of goodwill and intangible assets | 426.4 | ||||
Reporting segments | |||||
Revenues: | |||||
Revenues | 466.8 | 589.5 | 1,500.6 | 1,775.8 | |
Income: | |||||
Income | 48.1 | 79.3 | 143.9 | 223 | |
Reporting segments | Food and Beverage | |||||
Revenues: | |||||
Revenues | 173 | 205.9 | 545.8 | 650.8 | |
Income: | |||||
Income | 19.6 | 27.1 | 56.9 | 78.1 | |
Special charges, net | 3 | 21.8 | 17.5 | 24.5 | |
Reporting segments | Power and Energy | |||||
Revenues: | |||||
Revenues | 127.3 | 198.5 | 432.8 | 556 | |
Income: | |||||
Income | 5.5 | 26.5 | 17.7 | 65.5 | |
Special charges, net | (0.3) | 8.5 | 12 | 10.8 | |
Reporting segments | Industrial | |||||
Revenues: | |||||
Revenues | 166.5 | 185.1 | 522 | 569 | |
Income: | |||||
Income | 23 | 25.7 | 69.3 | 79.4 | |
Special charges, net | 2.1 | 3.8 | 9.1 | 5.9 | |
Other | |||||
Income: | |||||
Corporate expense | 13.8 | 14.1 | 45.3 | 50.3 | |
Special charges, net | 7.7 | 0.5 | 25.7 | 0.5 | |
Segment reconciling items | |||||
Income: | |||||
Pension and postretirement expense | 0 | 9 | 2.1 | 11 | |
Impairment of goodwill and intangible assets | 0 | 15 | 426.4 | 15 | |
Special charges, net | $ 12.5 | $ 34.6 | $ 64.3 | $ 41.7 |
SPECIAL CHARGES, NET - Special
SPECIAL CHARGES, NET - Special Charges, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2016 | Sep. 26, 2015 | Oct. 01, 2016 | Sep. 26, 2015 | |
Restructuring Cost and Reserve [Line Items] | ||||
Special charges, net | $ 12.5 | $ 34.6 | $ 64.3 | $ 41.7 |
Reporting segments | Food and Beverage | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Special charges, net | 3 | 21.8 | 17.5 | 24.5 |
Reporting segments | Power and Energy | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Special charges, net | (0.3) | 8.5 | 12 | 10.8 |
Reporting segments | Industrial | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Special charges, net | 2.1 | 3.8 | 9.1 | 5.9 |
Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Special charges, net | $ 7.7 | $ 0.5 | $ 25.7 | $ 0.5 |
SPECIAL CHARGES, NET - Narrativ
SPECIAL CHARGES, NET - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Oct. 01, 2016USD ($) | Oct. 01, 2016USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||
Expected charges to be incurred | $ 2.4 | $ 2.4 |
Other | ||
Restructuring Cost and Reserve [Line Items] | ||
Fair value of assets held for sale | 22 | 22 |
Asset impairment charges | 5.2 | $ 17.8 |
Power and Energy | ||
Restructuring Cost and Reserve [Line Items] | ||
Asset impairment charge related to long-lived assets | $ 1.5 |
SPECIAL CHARGES, NET - Analysis
SPECIAL CHARGES, NET - Analysis of Restructuring Liabilities (Details) - USD ($) $ in Millions | 9 Months Ended | |
Oct. 01, 2016 | Sep. 26, 2015 | |
Restructuring Liabilities | ||
Balance at beginning of year | $ 32.9 | $ 9.2 |
Special charges | 45 | 41 |
Utilization — cash | (43.2) | (11.4) |
Currency translation adjustment and other | 0.6 | (1.5) |
Balance at end of period | 35.3 | 37.3 |
Asset impairment and non-cash charges | $ 0.7 | |
Other | ||
Restructuring Liabilities | ||
Asset impairment and non-cash charges | $ 19.3 |
INVENTORIES, NET (Details)
INVENTORIES, NET (Details) - USD ($) $ in Millions | Oct. 01, 2016 | Dec. 31, 2015 |
Inventory, Net [Abstract] | ||
Finished goods | $ 87.8 | $ 87.5 |
Work in process | 97.1 | 88.8 |
Raw materials and purchased parts | 130.4 | 135.2 |
Total FIFO cost | 315.3 | 311.5 |
Excess of FIFO cost over LIFO inventory value | (6.3) | (6.3) |
Total inventories | $ 309 | $ 305.2 |
Domestic inventories, valued using the last-in, first-out method, as a percentage of total inventory | 8.00% | 5.00% |
GOODWILL AND OTHER INTANGIBLE42
GOODWILL AND OTHER INTANGIBLE ASSETS - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 02, 2016 | Apr. 02, 2016 | Oct. 01, 2016 | Dec. 31, 2015 | |
Changes in the carrying amount of goodwill | ||||
Beginning Balance | $ 1,023.4 | $ 1,023.4 | ||
Goodwill Resulting from Business Combinations | 0 | |||
Impairments | (252.8) | |||
Foreign Currency Translation and Other | (10.7) | |||
Ending Balance | 759.9 | |||
Food and Beverage | ||||
Changes in the carrying amount of goodwill | ||||
Beginning Balance | 269.9 | 269.9 | ||
Goodwill Resulting from Business Combinations | 0 | |||
Impairments | 0 | |||
Foreign Currency Translation and Other | 0.5 | |||
Ending Balance | 270.4 | |||
Increase (decrease) in goodwill | (5.6) | |||
Power and Energy | ||||
Changes in the carrying amount of goodwill | ||||
Beginning Balance | 538.9 | 538.9 | ||
Goodwill Resulting from Business Combinations | 0 | |||
Impairments | $ (26.8) | (252.8) | ||
Foreign Currency Translation and Other | (20) | |||
Ending Balance | 266.1 | |||
Increase (decrease) in goodwill | (4) | |||
Accumulated impairment included in carrying amount of goodwill | $ 252.8 | 250.4 | $ 0 | |
Industrial | ||||
Changes in the carrying amount of goodwill | ||||
Beginning Balance | 214.6 | 214.6 | ||
Goodwill Resulting from Business Combinations | 0 | |||
Impairments | 0 | |||
Foreign Currency Translation and Other | 8.8 | |||
Ending Balance | 223.4 | |||
Increase (decrease) in goodwill | $ 9.6 | |||
Accumulated impairment included in carrying amount of goodwill | $ 67.7 | $ 67.7 |
GOODWILL AND OTHER INTANGIBLE43
GOODWILL AND OTHER INTANGIBLE ASSETS - Identifiable Intangible Assets (Details) - USD ($) $ in Millions | Oct. 01, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 334.9 | $ 485.8 |
Accumulated Amortization | (161.4) | (147) |
Net Carrying Value | 173.5 | 338.8 |
Total gross carrying value | 540.7 | 726.4 |
Total net carrying value | 379.3 | 579.4 |
Trademarks with indefinite lives | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Trademarks with indefinite lives | 205.8 | 240.6 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 219.8 | 344 |
Accumulated Amortization | (103.8) | (94.1) |
Net Carrying Value | 116 | 249.9 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 95.6 | 122.1 |
Accumulated Amortization | (42.3) | (38) |
Net Carrying Value | 53.3 | 84.1 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 6.7 | 6.7 |
Accumulated Amortization | (5) | (4.6) |
Net Carrying Value | 1.7 | 2.1 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 12.8 | 13 |
Accumulated Amortization | (10.3) | (10.3) |
Net Carrying Value | $ 2.5 | $ 2.7 |
GOODWILL AND OTHER INTANGIBLE44
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Oct. 01, 2016 | Jul. 02, 2016 | Oct. 01, 2016 | Dec. 31, 2015 | Sep. 27, 2015 | |
Goodwill [Line Items] | |||||
Goodwill | $ 759.9 | $ 759.9 | $ 1,023.4 | ||
Net carrying value of intangible assets with determinable lives | 173.5 | 173.5 | 338.8 | ||
Impairment charge | 252.8 | ||||
Trademarks with indefinite lives | |||||
Goodwill [Line Items] | |||||
Trademarks with indefinite lives | 205.8 | 205.8 | 240.6 | ||
Customer relationships | |||||
Goodwill [Line Items] | |||||
Net carrying value of intangible assets with determinable lives | 116 | 116 | 249.9 | ||
Impairment of finite-lived intangible assets | $ 115.9 | ||||
Technology | |||||
Goodwill [Line Items] | |||||
Net carrying value of intangible assets with determinable lives | 53.3 | 53.3 | $ 84.1 | ||
Impairment of finite-lived intangible assets | 30.9 | ||||
Power and Energy | |||||
Goodwill [Line Items] | |||||
Percentage by which the fair value exceeded the carrying value | 3.00% | 10.00% | |||
Goodwill | 266.1 | 266.1 | $ 538.9 | ||
Accumulated impairment included in carrying amount of goodwill | 250.4 | 252.8 | 250.4 | 0 | |
Net carrying value of intangible assets with determinable lives | 79 | 79 | |||
Impairment charge | $ 26.8 | 252.8 | |||
Power and Energy | Trademarks with indefinite lives | |||||
Goodwill [Line Items] | |||||
Trademarks with indefinite lives | 45.7 | 45.7 | |||
Food and Beverage | |||||
Goodwill [Line Items] | |||||
Goodwill | 270.4 | 270.4 | 269.9 | ||
Net carrying value of intangible assets with determinable lives | 66 | 66 | |||
Transfer of technology assets | 5.2 | ||||
Impairment charge | 0 | ||||
Food and Beverage | Trademarks with indefinite lives | |||||
Goodwill [Line Items] | |||||
Trademarks with indefinite lives | 99.5 | 99.5 | |||
Industrial | |||||
Goodwill [Line Items] | |||||
Goodwill | 223.4 | 223.4 | 214.6 | ||
Accumulated impairment included in carrying amount of goodwill | 67.7 | 67.7 | $ 67.7 | ||
Net carrying value of intangible assets with determinable lives | 28.5 | 28.5 | |||
Transfer of technology assets | (5.2) | ||||
Impairment charge | 0 | ||||
Industrial | Trademarks with indefinite lives | |||||
Goodwill [Line Items] | |||||
Trademarks with indefinite lives | $ 60.6 | $ 60.6 |
WARRANTY (Details)
WARRANTY (Details) - USD ($) $ in Millions | 9 Months Ended | |
Oct. 01, 2016 | Sep. 26, 2015 | |
Analysis of product warranty accrual | ||
Balance at beginning of year | $ 14.8 | $ 18.4 |
Provisions | 6.5 | 7.4 |
Usage | (9.1) | (8.7) |
Currency translation adjustment | (0.1) | (2) |
Balance at end of period | 12.1 | 15.1 |
Less: Current portion of warranty | 11.4 | 13.9 |
Non-current portion of warranty | $ 0.7 | $ 1.2 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Millions | Jul. 08, 2016 | Oct. 01, 2016 | Sep. 26, 2015 | Oct. 01, 2016 | Sep. 26, 2015 |
Employee Benefit Plans | |||||
Employer contribution to pension plan (less than) | $ 65.9 | $ 0 | |||
Domestic postretirement plans | |||||
Employee Benefit Plans | |||||
Net periodic pension and postretirement benefit expense | $ 0.3 | $ 0 | 1.4 | 0.2 | |
Nonqualified pension plan | |||||
Employee Benefit Plans | |||||
Actuarial gain (loss) | 0.8 | 0.8 | |||
Direct benefit payments, domestic | $ 53.9 | ||||
Foreign pension plans | |||||
Employee Benefit Plans | |||||
Net periodic pension and postretirement benefit expense | $ 0.5 | 0.8 | 1.5 | 2.2 | |
Pension plan | |||||
Employee Benefit Plans | |||||
Employer contribution to pension plan (less than) | $ 0.1 | ||||
Pension plan | SPX | |||||
Employee Benefit Plans | |||||
Net periodic pension and postretirement benefit expense | 0.8 | 1.2 | |||
Selling, general and administrative expenses | Domestic nonqualified plan | |||||
Employee Benefit Plans | |||||
Actuarial gain (loss) | $ (7.4) | $ (7.4) |
INDEBTEDNESS - Schedule of Debt
INDEBTEDNESS - Schedule of Debt (Details) - USD ($) | Aug. 10, 2016 | Oct. 01, 2016 | Sep. 26, 2015 | Oct. 01, 2016 | Sep. 26, 2015 | Dec. 31, 2015 |
Short-term Debt [Line Items] | ||||||
Short-term debt | $ 116,200,000 | $ 116,200,000 | $ 28,000,000 | |||
Other indebtedness | 32,900,000 | 32,900,000 | 37,300,000 | |||
Debt Instrument [Line Items] | ||||||
Less: deferred financing fees | (12,800,000) | (12,800,000) | (5,200,000) | |||
Long-term debt and capital lease obligations | 1,114,300,000 | 1,114,300,000 | 1,032,100,000 | |||
Less: current maturities of long-term debt | 20,300,000 | 20,300,000 | 10,300,000 | |||
Total long-term debt | 977,800,000 | 977,800,000 | 993,800,000 | |||
Loss on early extinguishment of debt | 38,900,000 | $ 0 | 38,900,000 | $ 0 | ||
Premiums paid to redeem debt | 36,400,000 | |||||
Purchase card program | ||||||
Short-term Debt [Line Items] | ||||||
Short-term debt | 26,200,000 | 26,200,000 | 0 | |||
Other indebtedness | 16,600,000 | 16,600,000 | 23,600,000 | |||
Capital lease obligations | ||||||
Short-term Debt [Line Items] | ||||||
Other indebtedness | 15,900,000 | 15,900,000 | 9,300,000 | |||
Domestic revolving loan facility | ||||||
Debt Instrument [Line Items] | ||||||
Domestic revolving loan facility | 73,000,000 | 73,000,000 | 0 | |||
Term loan | ||||||
Debt Instrument [Line Items] | ||||||
Domestic revolving loan facility | 395,000,000 | 395,000,000 | 400,000,000 | |||
Aggregate principal amount | 400,000,000 | $ 400,000,000 | ||||
Percentage of face amount repayable annually | 5.00% | |||||
Senior notes | 5.625% senior notes, due in August 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Domestic revolving loan facility | $ 300,000,000 | $ 300,000,000 | 0 | |||
Stated interest rate | 5.625% | 5.625% | ||||
Senior notes | 5.875% senior notes, due in August 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Domestic revolving loan facility | $ 300,000,000 | $ 300,000,000 | 0 | |||
Stated interest rate | 5.875% | 5.875% | ||||
Senior notes | 6.875% senior notes | ||||||
Debt Instrument [Line Items] | ||||||
Domestic revolving loan facility | $ 0 | $ 0 | $ 600,000,000 | |||
Stated interest rate | 6.875% | 6.875% | 6.875% | |||
Redemption price | $ 636,400,000 | |||||
Loss on early extinguishment of debt | $ 38,900,000 | |||||
Premiums paid to redeem debt | 36,400,000 | |||||
Write-off of unamortized deferred financing fee | 1,900,000 | |||||
Other costs associated with extinguishment of debt | $ 600,000 |
INDEBTEDNESS - Narrative (Detai
INDEBTEDNESS - Narrative (Details) | Aug. 10, 2016USD ($) | Oct. 01, 2016USD ($) | Jul. 11, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 01, 2015 |
Line of Credit Facility [Line Items] | |||||
Short-term debt | $ 116,200,000 | $ 28,000,000 | |||
Premiums paid to redeem debt | 36,400,000 | ||||
Purchase card program | |||||
Line of Credit Facility [Line Items] | |||||
Available borrowing capacity | 0 | ||||
Short-term debt | 26,200,000 | 0 | |||
Maximum borrowing amount | 50,000,000 | ||||
Domestic revolving loan facility | |||||
Line of Credit Facility [Line Items] | |||||
Domestic revolving loan facility | 73,000,000 | 0 | |||
Foreign line of credit | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing amount | 5,400,000 | ||||
Senior credit facility | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Consolidated leverage ratio that must be maintained | 3.25 | ||||
Consolidated leverage ratio that must be maintained after certain permitted acquisitions | 3.50 | ||||
First Amendment, Existing Senior Credit Facilities | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Consolidated leverage ratio that must be maintained | 4 | ||||
First Amendment, Existing Senior Credit Facilities | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Fair market value of first priority mortgages (in excess) | $ 10,000,000 | ||||
2024 Notes and 2026 Notes | Senior notes | |||||
Line of Credit Facility [Line Items] | |||||
Aggregate principal amount | $ 600,000,000 | ||||
Purchase rights equal to the percentage of aggregate principal amounts | 100.00% | ||||
Purchase rights equal to the percentage of aggregate principal amounts when certain types of change of control transactions occur | 101.00% | ||||
2024 Notes | Senior notes | |||||
Line of Credit Facility [Line Items] | |||||
Aggregate principal amount | $ 300,000,000 | ||||
Stated interest rate | 5.625% | ||||
2026 Notes | Senior notes | |||||
Line of Credit Facility [Line Items] | |||||
Aggregate principal amount | $ 300,000,000 | ||||
Stated interest rate | 5.875% | ||||
6.875% senior notes | Senior notes | |||||
Line of Credit Facility [Line Items] | |||||
Domestic revolving loan facility | $ 0 | $ 600,000,000 | |||
Stated interest rate | 6.875% | 6.875% | |||
Repurchase/redemption of outstanding principal amount | $ 600,000,000 | ||||
Premiums paid to redeem debt | $ 36,400,000 | ||||
Secured debt | Letter of credit | |||||
Line of Credit Facility [Line Items] | |||||
Outstanding letters of credit | $ 9,500,000 | ||||
Secured debt | Foreign line of credit | |||||
Line of Credit Facility [Line Items] | |||||
Available borrowing capacity | 245,600,000 | ||||
Outstanding letters of credit | $ 254,400,000 | ||||
Secured debt | Senior credit facility | |||||
Line of Credit Facility [Line Items] | |||||
Weighted average interest rate of outstanding borrowings | 2.60% | ||||
Available borrowing capacity | $ 367,500,000 |
DERIVATIVE FINANCIAL INSTRUME49
DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 01, 2016 | Sep. 26, 2015 | Oct. 01, 2016 | Sep. 26, 2015 | Dec. 31, 2015 | |
FX forward contracts | |||||
Derivative [Line Items] | |||||
Aggregate notional amount | $ 41.8 | $ 41.8 | $ 44.7 | ||
Period contracts are scheduled to mature | 1 year | 1 year | |||
Unrealized gains (losses), net of tax, recorded in AOCI (less than in 2015) | 0 | $ 0 | $ (0.1) | ||
FX embedded derivatives | |||||
Derivative [Line Items] | |||||
Aggregate notional amount | 26.9 | 26.9 | 31.6 | ||
Derivative contracts with scheduled maturities within one year | 22.6 | 22.6 | |||
Derivative contracts with scheduled maturities within two years | 3.3 | 3.3 | |||
Derivative contracts with scheduled maturities in three years | 1 | 1 | |||
Forward contracts | |||||
Derivative [Line Items] | |||||
Fair value of derivative contract, gross assets | 3.3 | 3.3 | |||
Fair value of derivative contract, gross assets setoff | 2 | ||||
Fair value of derivative contract, gross liabilities | 1.2 | 1.2 | |||
Fair value of derivative contract, gross liabilities setoff | $ 1.5 | ||||
Forward contracts | Other income (expense), net | |||||
Derivative [Line Items] | |||||
Net gains (losses) recorded in other income (expense), net | $ 0.1 | $ (0.1) | $ (2.9) | $ 0.1 |
EQUITY AND STOCK-BASED COMPEN50
EQUITY AND STOCK-BASED COMPENSATION - Income (Loss) Per Share (Details) - shares shares in Thousands | Sep. 26, 2015 | Oct. 01, 2016 | Sep. 26, 2015 | Oct. 01, 2016 | Sep. 26, 2015 |
Equity [Abstract] | |||||
Common shares distributed to SPX shareholders (in shares) | 41,322 | ||||
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | |||||
Weighted-average shares outstanding, basic (in shares) | 41,383 | 40,809 | 41,307 | 40,809 | |
Dilutive effect of share-based awards (in shares) | 0 | 0 | 0 | 123 | |
Weighted-average shares outstanding, dilutive (in shares) | 41,383 | 40,809 | 41,307 | 40,932 | |
Restricted stock shares/Restricted stock units/Stock options | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Securities not included in computation of diluted income per share (in shares) | 747 | 998 | 796 | ||
Restricted stock shares/Restricted stock units | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Securities not included in computation of diluted income per share (in shares) | 119 | 290 | 479 | ||
Stock options | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Securities not included in computation of diluted income per share (in shares) | 396 |
EQUITY AND STOCK-BASED COMPEN51
EQUITY AND STOCK-BASED COMPENSATION - Stock-Based Compensation (Details) - USD ($) shares in Thousands, $ in Millions | Sep. 26, 2015 | Oct. 01, 2016 | Apr. 02, 2016 | Oct. 01, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award's requisite service period | 3 years | |||
Stock Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares available for future grants (up to) (in shares) | 2,107 | 2,107 | ||
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of shares equivalent to minimum vesting | 50.00% | |||
Compensation expense | $ 0.3 | $ 0.9 | ||
Unrecognized compensation cost | 0.3 | 0.3 | ||
Restricted stock units | Non-officer employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Restricted stock shares and restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost | $ 16.1 | $ 16.1 | ||
Vesting period | 3 years | 3 years | ||
Fair value assumptions, expected volatility rate, period of historical volatility | 3 years | |||
Restricted stock shares and restricted stock units | Early retirement provision | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 5 years | |||
Eligible for vesting, age | 55 years | |||
Restricted stock shares and restricted stock units | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of shares equivalent to minimum vesting | 50.00% | |||
Restricted stock shares and restricted stock units | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of shares equivalent to minimum vesting | 150.00% | |||
Restricted stock shares and restricted stock units | Non-employee directors | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 1 year | |||
Restricted stock shares | Officers | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 1 year | |||
Award's requisite service period | 2 years |
EQUITY AND STOCK-BASED COMPEN52
EQUITY AND STOCK-BASED COMPENSATION - Compensation Expense Related to Share-based Programs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2016 | Sep. 26, 2015 | Oct. 01, 2016 | Sep. 26, 2015 | |
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ 0.3 | $ 0.9 | ||
Selling, general and administrative expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 3 | $ 4.9 | 14.2 | $ 20.4 |
Income tax benefit | (1.1) | (1.9) | (5.2) | (7.7) |
Stock-based compensation expense, net of income tax benefit | 1.9 | 3 | 9 | 12.7 |
Selling, general and administrative expenses | Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | 1.2 | 1.2 | ||
Selling, general and administrative expenses | SPX FLOW | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 2.7 | 1.7 | 13.3 | 5.8 |
Selling, general and administrative expenses | SPX | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 0 | $ 2 | $ 0 | $ 13.4 |
EQUITY AND STOCK-BASED COMPEN53
EQUITY AND STOCK-BASED COMPENSATION - Restricted Stock Share and Restricted Stock Unit Awards (Details) - Restricted stock shares and restricted stock units $ / shares in Units, shares in Thousands, $ in Millions | 9 Months Ended |
Oct. 01, 2016USD ($)$ / sharesshares | |
Weighted-Average Grant-Date Fair Value Per Share | |
Unrecognized compensation cost | $ | $ 16.1 |
Weighted-average period cost expected to be recognized | 1 year 9 months 4 days |
SPX | |
Unvested Restricted Stock Shares and Restricted Stock Units | |
Outstanding at beginning of year (in shares) | shares | 1,128 |
Granted (in shares) | shares | 731 |
Vested (in shares) | shares | (303) |
Forfeited and other (in shares) | shares | (353) |
Outstanding at the end of period (in shares) | shares | 1,203 |
Weighted-Average Grant-Date Fair Value Per Share | |
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 51.13 |
Granted (in dollars per share) | $ / shares | 27.99 |
Vested (in dollars per share) | $ / shares | 54.78 |
Forfeited and other (in dollars per share) | $ / shares | 40.49 |
Outstanding at the end of period (in dollars per share) | $ / shares | $ 38.77 |
EQUITY AND STOCK-BASED COMPEN54
EQUITY AND STOCK-BASED COMPENSATION - Stock Options (Details) - Stock options - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | Jan. 02, 2015 | Dec. 31, 2015 | Oct. 01, 2016 |
SPX stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options outstanding (in shares) | 34 | ||
Weighted-average exercise price per share (in dollars per share) | $ 85.87 | ||
Maximum contractual term | 10 years | ||
Weighted-average grant-date fair value (in dollars per share) | $ 27.06 | ||
SPX FLOW stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options outstanding (in shares) | 396 | 371 | 371 |
Weighted-average exercise price per share (in dollars per share) | $ 61.29 | ||
Weighted-average grant-date fair value (in dollars per share) | $ 19.33 | ||
Number of forfeitures (in shares) | 25 | ||
Number of shares exercisable (in shares) | 285 | ||
Unrecognized compensation cost | $ 0.6 | ||
Unrecognized compensation cost, period for recognition | 1 year 3 months 29 days |
EQUITY AND STOCK-BASED COMPEN55
EQUITY AND STOCK-BASED COMPENSATION - Accumulated Other Comprehensive Loss and Stock in Treasury (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Oct. 01, 2016 | Sep. 26, 2015 | Oct. 01, 2016 | Sep. 26, 2015 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Restricted stock and restricted stock unit vesting, including related tax provision of $3.2 and net of tax withholdings | $ (6.4) | ||||
Common Stock in Treasury | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Restricted stock and restricted stock unit vesting, including related tax provision of $3.2 and net of tax withholdings | $ (0.2) | (2.9) | |||
Parent | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Unrealized gain (loss) related to FX forward contracts | $ (43.1) | $ (135) | |||
FX forward contracts | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Unrealized gains (losses), net of tax, recorded in AOCI (less than in 2015) | $ 0 | $ 0 | $ (0.1) |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Oct. 01, 2016 | Sep. 26, 2015 | Oct. 01, 2016 | Sep. 26, 2015 | Oct. 02, 2017 | |
Valuation Allowance [Line Items] | |||||
Unrecognized tax benefits | $ 14,800,000 | $ 14,800,000 | |||
Unrecognized tax benefits, net | 5,500,000 | 5,500,000 | |||
Unrecognized tax benefits that would impact effective tax rate | 5,500,000 | 5,500,000 | |||
Unrecognized tax benefits, interest on income taxes accrued | 1,800,000 | 1,800,000 | |||
Unrecognized tax benefits, interest on income taxes accrued, net | 1,800,000 | 1,800,000 | |||
Unrecognized tax benefits, accrual for penalties | 0 | 0 | |||
Reasonably possible decrease in unrecognized tax benefits (less than) | 1,000,000 | 1,000,000 | |||
Income tax provision (benefit) | (26,900,000) | $ 15,700,000 | (89,800,000) | $ 38,300,000 | |
Pre-tax income (loss) | $ (31,100,000) | $ 11,500,000 | $ (478,400,000) | $ 103,900,000 | |
Effective income tax rate | (86.50%) | 136.50% | (18.80%) | 36.90% | |
Charges related to changes in the jurisdictional composition of expected pre-tax income | $ 2,600,000 | $ 2,600,000 | |||
Charges related to pre-tax losses | (1,200,000) | (1,200,000) | |||
Impairment of goodwill and intangible assets | $ 0 | 15,000,000 | $ 426,400,000 | 15,000,000 | |
Tax benefits related to foreign exchange losses | (2,000,000) | ||||
Poland | |||||
Valuation Allowance [Line Items] | |||||
Foreign tax expense (benefit) | $ (23,800,000) | (23,800,000) | |||
Foreign | |||||
Valuation Allowance [Line Items] | |||||
Charges related to dividends | $ 7,400,000 | $ 7,400,000 | |||
Power and Energy | |||||
Valuation Allowance [Line Items] | |||||
Income tax provision (benefit) | $ (47,100,000) | ||||
Effective income tax rate | 11.00% | ||||
Impairment of goodwill and intangible assets | $ 426,400,000 | ||||
Forecast | |||||
Valuation Allowance [Line Items] | |||||
Unrecognized tax benefits | $ 3,000,000 |
FAIR VALUE - Derivative Financi
FAIR VALUE - Derivative Financial Instruments (Details) - Forward contracts - USD ($) $ in Millions | Oct. 01, 2016 | Dec. 31, 2015 |
Derivative [Line Items] | ||
Fair value of derivative contract, gross assets | $ 3.3 | |
Fair value of derivative contract, gross assets setoff | $ 2 | |
Fair value of derivative contract, gross liabilities | $ 1.2 | |
Fair value of derivative contract, gross liabilities setoff | $ 1.5 |
FAIR VALUE - Investments in Equ
FAIR VALUE - Investments in Equity Securities (Details) - USD ($) $ in Millions | 9 Months Ended | |
Oct. 01, 2016 | Sep. 26, 2015 | |
Fair Value Disclosures [Abstract] | ||
Fair value of Level 3 assets | $ 8.1 | $ 7.4 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at beginning of year | 8.1 | 7.4 |
Unrealized gains (losses) recorded to earnings | (0.2) | 0.9 |
Balance at end of period | $ 7.9 | $ 8.3 |
FAIR VALUE - Indebtedness and O
FAIR VALUE - Indebtedness and Other (Details) - USD ($) $ in Millions | Oct. 01, 2016 | Aug. 10, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other indebtedness | $ 116.2 | $ 28 | |
Purchase card program | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other indebtedness | 26.2 | 0 | |
Domestic revolving loan facility | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Domestic revolving loan facility | 73 | 0 | |
Senior notes | 5.625% senior notes, due in August 2024 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Domestic revolving loan facility | $ 300 | 0 | |
Stated interest rate | 5.625% | ||
Senior notes | 5.875% senior notes, due in August 2026 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Domestic revolving loan facility | $ 300 | 0 | |
Stated interest rate | 5.875% | ||
Senior notes | 6.875% senior notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Domestic revolving loan facility | $ 0 | 600 | |
Stated interest rate | 6.875% | 6.875% | |
Fair value, measurements, nonrecurring | Level 1 | Carrying Amount | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other indebtedness | $ 17 | 28 | |
Fair value, measurements, nonrecurring | Level 1 | Carrying Amount | Purchase card program | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other indebtedness | 26.2 | 0 | |
Fair value, measurements, nonrecurring | Level 1 | Carrying Amount | Domestic revolving loan facility | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Domestic revolving loan facility | 73 | 0 | |
Fair value, measurements, nonrecurring | Level 1 | Fair Value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other indebtedness | 17 | 28 | |
Fair value, measurements, nonrecurring | Level 1 | Fair Value | Purchase card program | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other indebtedness | 26.2 | 0 | |
Fair value, measurements, nonrecurring | Level 1 | Fair Value | Domestic revolving loan facility | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Domestic revolving loan facility | 73 | 0 | |
Fair value, measurements, nonrecurring | Level 2 | Carrying Amount | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Term loan | 395 | 400 | |
Fair value, measurements, nonrecurring | Level 2 | Carrying Amount | 5.625% senior notes, due in August 2024 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Senior notes | 300 | 0 | |
Fair value, measurements, nonrecurring | Level 2 | Carrying Amount | 5.875% senior notes, due in August 2026 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Senior notes | 300 | 0 | |
Fair value, measurements, nonrecurring | Level 2 | Carrying Amount | 6.875% senior notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Senior notes | 0 | 600 | |
Fair value, measurements, nonrecurring | Level 2 | Fair Value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Term loan | 395 | 400 | |
Fair value, measurements, nonrecurring | Level 2 | Fair Value | 5.625% senior notes, due in August 2024 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Senior notes | 303 | 0 | |
Fair value, measurements, nonrecurring | Level 2 | Fair Value | 5.875% senior notes, due in August 2026 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Senior notes | 303.8 | 0 | |
Fair value, measurements, nonrecurring | Level 2 | Fair Value | 6.875% senior notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Senior notes | $ 0 | $ 637.5 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 26, 2015 | Jun. 27, 2015 | Sep. 26, 2015 | |
Related Party Transaction [Line Items] | |||
Extinguishment of other related party notes payable | $ 390.8 | $ 600.5 | |
SPX | |||
Related Party Transaction [Line Items] | |||
Related party interest income | 7.4 | $ 26.2 | |
Extinguishment of other related party notes payable | $ 669.7 | ||
Related party notes receivable, weighted-average interest rate | 5.00% | 5.00% | |
Related party notes payable, interest expense | $ 0 | $ 28.4 | |
Related party notes payable, weighted average interest rate | 7.00% | 7.00% |