Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 02, 2018 | Jul. 01, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | SPX FLOW, Inc. | ||
Entity Central Index Key | 1,641,991 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 42,492,776 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 1,510 |
CONSOLIDATED AND COMBINED STATE
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Revenues | $ 1,951.5 | $ 1,996 | $ 2,388.5 |
Costs and expenses: | |||
Cost of products sold | 1,335.1 | 1,371.4 | 1,596.3 |
Selling, general and administrative | 460.4 | 465.2 | 549.1 |
Intangible amortization | 17.6 | 20 | 23.4 |
Impairment of goodwill and intangible assets | 0 | 442.2 | 22.7 |
Special charges | 19.3 | 79.8 | 42.6 |
Operating income (loss) | 119.1 | (382.6) | 154.4 |
Other income (expense), net | 1.3 | (3.4) | 0.9 |
Related party interest expense, net | 0 | 0 | (2.2) |
Interest expense, net | (62.5) | (57.1) | (15.9) |
Loss on early extinguishment of debt | 0 | (38.9) | 0 |
Income (loss) before income taxes | 57.9 | (482) | 137.2 |
Income tax benefit (provision) | (11.1) | 101 | (49.8) |
Net income (loss) | 46.8 | (381) | 87.4 |
Less: Net income (loss) attributable to noncontrolling interests | 0.4 | 0.8 | (0.1) |
Net income (loss) attributable to SPX FLOW, Inc. | $ 46.4 | $ (381.8) | $ 87.5 |
Basic and diluted income per share of common stock: | |||
Basic income (loss) per share of common stock (in dollars per share) | $ 1.11 | $ (9.23) | $ 2.14 |
Diluted income (loss) per share of common stock (in dollars per share) | $ 1.10 | $ (9.23) | $ 2.14 |
Weighted-average number of common shares outstanding - basic (in shares) | 41,799 | 41,345 | 40,863 |
Weighted-average number of common shares outstanding - diluted (in shares) | 42,183 | 41,345 | 40,960 |
CONSOLIDATED AND COMBINED STAT3
CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 46.8 | $ (381) | $ 87.4 |
Other comprehensive income (loss), net: | |||
Pension liability adjustment, net of tax provision of $0.0 in 2015 | 0 | 0 | (0.1) |
Foreign currency translation adjustments | 149.3 | (139.8) | (165) |
Other comprehensive income (loss), net | 149.3 | (139.8) | (165.1) |
Total comprehensive income (loss) | 196.1 | (520.8) | (77.7) |
Less: Total comprehensive income (loss) attributable to noncontrolling interests | 1.1 | (0.3) | (1.7) |
Total comprehensive income (loss) attributable to SPX FLOW, Inc. | $ 195 | $ (520.5) | $ (76) |
CONSOLIDATED AND COMBINED STAT4
CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Statement of Comprehensive Income [Abstract] | |
Pension liability adjustment, tax provision | $ 0 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and equivalents | $ 263.7 | $ 215.1 |
Accounts receivable, net | 439.1 | 446.9 |
Inventories, net | 293.9 | 272.4 |
Other current assets | 50 | 72.8 |
Total current assets | 1,046.7 | 1,007.2 |
Property, plant and equipment: | ||
Land | 35.1 | 36.1 |
Buildings and leasehold improvements | 238.3 | 242.4 |
Machinery and equipment | 461.6 | 420.8 |
Property, plant and equipment, gross | 735 | 699.3 |
Accumulated depreciation | (374.1) | (322) |
Property, plant and equipment, net | 360.9 | 377.3 |
Goodwill | 771.3 | 722.5 |
Intangibles, net | 350.3 | 344.3 |
Other assets | 159.8 | 151.9 |
TOTAL ASSETS | 2,689 | 2,603.2 |
Current liabilities: | ||
Accounts payable | 219.4 | 203.8 |
Accrued expenses | 389.6 | 329.9 |
Income taxes payable | 21.6 | 10.8 |
Short-term debt | 24.2 | 27.7 |
Current maturities of long-term debt | 20.5 | 20.2 |
Total current liabilities | 675.3 | 592.4 |
Long-term debt | 850.9 | 1,060.9 |
Deferred and other income taxes | 63.3 | 62.2 |
Other long-term liabilities | 125.5 | 125.5 |
Total long-term liabilities | 1,039.7 | 1,248.6 |
Commitments and contingent liabilities (Note 13) | ||
Mezzanine equity | 22.2 | 20.1 |
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, $0.01 par value, 300,000,000 shares authorized, 42,690,342 issued and 42,405,222 outstanding at December 31, 2017, and 42,092,393 issued and 41,920,477 outstanding at December 31, 2016 | 0.4 | 0.4 |
Paid-in capital | 1,650.9 | 1,640.4 |
Accumulated deficit | (327.5) | (373.9) |
Accumulated other comprehensive loss | (372.8) | (521.4) |
Common stock in treasury (285,120 shares at December 31, 2017, and 171,916 shares at December 31, 2016) | (8.9) | (4.9) |
Total SPX FLOW, Inc. shareholders' equity | 942.1 | 740.6 |
Noncontrolling interests | 9.7 | 1.5 |
Total equity | 951.8 | 742.1 |
TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY | $ 2,689 | $ 2,603.2 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
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) | 42,690,342 | 42,092,393 |
Common stock, shares outstanding (in shares) | 42,405,222 | 41,920,477 |
Treasury stock, shares (in shares) | 285,120 | 171,916 |
CONSOLIDATED AND COMBINED STAT7
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) | Accumulated Other Comprehensive Loss | Common Stock in Treasury | Former Parent Company Investment | Noncontrolling Interests |
Beginning balance (in shares) at Dec. 31, 2014 | 0 | ||||||||
Beginning balance at Dec. 31, 2014 | $ 1,938.8 | $ 1,925.4 | $ 0 | $ 0 | $ 0 | $ (219.2) | $ 0 | $ 2,144.6 | $ 13.4 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | 87.4 | 87.5 | 21.1 | 66.4 | (0.1) | ||||
Other comprehensive income (loss), net | (165.1) | (163.5) | (163.5) | (1.6) | |||||
Net transfers to parent | (592.3) | (592.3) | (592.3) | ||||||
Reclassification of former parent company investment to common stock and paid-in capital (in shares) | 41,300,000 | ||||||||
Reclassification of former parent company investment to common stock and paid-in capital | $ 0.4 | 1,618.3 | (1,618.7) | ||||||
Incentive plan activity (in shares) | 100,000 | ||||||||
Incentive plan activity | 1.7 | 1.7 | 1.7 | ||||||
Stock-based compensation expense | 5.4 | 5.4 | 5.4 | ||||||
Restricted stock and restricted stock unit vesting, including related tax provision of $3.6 and $5.6 and net of tax withholdings | (5.1) | (5.1) | (3.7) | (1.4) | |||||
Dividends attributable to noncontrolling interests | (0.2) | (0.2) | |||||||
Ending balance (in shares) at Dec. 31, 2015 | 41,400,000 | ||||||||
Ending balance at Dec. 31, 2015 | 1,270.6 | 1,259.1 | $ 0.4 | 1,621.7 | 21.1 | (382.7) | (1.4) | 0 | 11.5 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | (381) | (381.8) | (381.8) | 0 | 0.8 | ||||
Other comprehensive income (loss), net | (139.8) | (138.7) | (138.7) | (1.1) | |||||
Incentive plan activity (in shares) | 300,000 | ||||||||
Incentive plan activity | 6.5 | 6.5 | 6.5 | ||||||
Stock-based compensation expense | 18.7 | 18.7 | 18.7 | ||||||
Restricted stock and restricted stock unit vesting, including related tax provision of $3.6 and $5.6 and net of tax withholdings (in shares) | 200,000 | ||||||||
Restricted stock and restricted stock unit vesting, including related tax provision of $3.6 and $5.6 and net of tax withholdings | (10) | (10) | (6.5) | (3.5) | |||||
Adjustment to mezzanine equity and reclassification to (from) noncontrolling interests | (20.1) | (13.2) | (13.2) | (6.9) | |||||
Dividends attributable to noncontrolling interests | $ (2.8) | (2.8) | |||||||
Ending balance (in shares) at Dec. 31, 2016 | 41,920,477 | 41,900,000 | |||||||
Ending balance at Dec. 31, 2016 | $ 742.1 | 740.6 | $ 0.4 | 1,640.4 | (373.9) | (521.4) | (4.9) | 0 | 1.5 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | 46.8 | 46.4 | 46.4 | 0 | 0.4 | ||||
Other comprehensive income (loss), net | 149.3 | 148.6 | 148.6 | 0.7 | |||||
Incentive plan activity (in shares) | 200,000 | ||||||||
Incentive plan activity | 5.7 | 5.7 | 5.7 | ||||||
Stock-based compensation expense | 15.9 | 15.9 | 15.9 | ||||||
Restricted stock and restricted stock unit vesting, including related tax provision of $3.6 and $5.6 and net of tax withholdings (in shares) | 300,000 | ||||||||
Restricted stock and restricted stock unit vesting, including related tax provision of $3.6 and $5.6 and net of tax withholdings | (7.3) | (7.3) | (3.3) | (4) | |||||
Adjustment to mezzanine equity and reclassification to (from) noncontrolling interests | 0.4 | (7.8) | (7.8) | 8.2 | |||||
Dividends attributable to noncontrolling interests | $ (1.1) | (1.1) | |||||||
Ending balance (in shares) at Dec. 31, 2017 | 42,405,222 | 42,400,000 | |||||||
Ending balance at Dec. 31, 2017 | $ 951.8 | $ 942.1 | $ 0.4 | $ 1,650.9 | $ (327.5) | $ (372.8) | $ (8.9) | $ 0 | $ 9.7 |
CONSOLIDATED AND COMBINED STAT8
CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Stockholders' Equity [Abstract] | ||
Income tax benefit (expense) | $ (5.6) | $ 3.6 |
CONSOLIDATED AND COMBINED STAT9
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from (used in) operating activities: | |||
Net income (loss) | $ 46.8 | $ (381) | $ 87.4 |
Adjustments to reconcile net income (loss) to net cash from (used in) operating activities: | |||
Special charges | 19.3 | 79.8 | 42.6 |
Impairment of goodwill and intangible assets | 0 | 442.2 | 22.7 |
Deferred income taxes | (31.9) | (102) | (25.4) |
Depreciation and amortization | 61.2 | 64.7 | 61.9 |
Pension and other employee benefits | 6.3 | 10.9 | 11.3 |
Stock-based compensation | 15.9 | 18.9 | 5.4 |
Gain on asset sales and other, net | (2.9) | (2.5) | (8) |
Loss on early extinguishment of debt | 0 | 38.9 | 0 |
Changes in operating assets and liabilities: | |||
Accounts receivable and other assets | 48.6 | 22.9 | 47.4 |
Inventories | 1.1 | 18.4 | (2.5) |
Accounts payable, accrued expenses and other | 78.1 | (114.3) | (14.9) |
Domestic pension payments | 0 | (65.9) | 0 |
Cash spending on restructuring actions | (37.5) | (58.9) | (14.3) |
Net cash from (used in) operating activities | 205 | (27.9) | 213.6 |
Cash flows from (used in) investing activities: | |||
Proceeds from asset sales and other, net | 37.4 | 4 | 12.5 |
Increase in restricted cash | (0.2) | 0 | (0.3) |
Capital expenditures | (19.4) | (44) | (57) |
Net cash from (used in) investing activities | 17.8 | (40) | (44.8) |
Cash flows from (used in) financing activities: | |||
Proceeds from issuance of senior notes | 0 | 600 | 0 |
Repurchases of senior notes (includes premiums paid of $36.4) | 0 | (636.4) | 0 |
Borrowings under senior credit facilities | 125.5 | 423 | 534 |
Repayments of senior credit facilities | (313.5) | (365) | (134) |
Borrowings under trade receivables financing arrangement | 124.1 | 93.4 | 34 |
Repayments of trade receivables financing arrangement | (145.3) | (72.2) | (34) |
Repayments of related party notes payable | 0 | 0 | (5.4) |
Borrowings under other financing arrangements | 9.9 | 13.5 | 6.1 |
Repayments of other financing arrangements | (13.8) | (14.6) | (7) |
Minimum withholdings paid on behalf of employees for net share settlements, net | (4) | (3.9) | (1.5) |
Payments for deferred financing fees | 0 | (15.5) | (6.2) |
Dividends paid to noncontrolling interests in subsidiary | (1.5) | (1.2) | (0.2) |
Change in former parent company investment | 0 | 0 | (453.9) |
Net cash from (used in) financing activities | (218.6) | 21.1 | (68.1) |
Change in cash and equivalents due to changes in foreign currency exchange rates | 44.4 | (34) | (21.4) |
Net change in cash and equivalents | 48.6 | (80.8) | 79.3 |
Consolidated and combined cash and equivalents, beginning of period | 215.1 | 295.9 | 216.6 |
Consolidated cash and equivalents, end of period | 263.7 | 215.1 | 295.9 |
Supplemental disclosure of cash flow information: | |||
Interest paid | 62.6 | 57.4 | 5.8 |
Income taxes paid, net of refunds of $13.7, $7.8 and $3.2 in 2017, 2016 and 2015, respectively | 12.2 | 43.4 | 35.9 |
Non-cash investing and financing activity: | |||
Debt assumed | $ 0 | $ 7.7 | $ 622.4 |
CONSOLIDATED AND COMBINED STA10
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Cash Flows [Abstract] | |||
Premiums paid to redeem debt | $ 36.4 | ||
Income tax refunds | $ 13.7 | $ 7.8 | $ 3.2 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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”). The Company engineers, designs, manufactures and markets products and solutions used to process, blend, filter, dry, meter and transport fluids with a focus on original equipment installation, including turn-key systems, modular systems and components, as well as comprehensive aftermarket components and support services. Primary component offerings include engineered pumps, valves, mixers, plate heat exchangers, dehydration and filtration technologies, and industrial tools and hydraulic units. The Company primarily serves customers in the food and beverage, power and energy and industrial end markets. Basis of Presentation Our consolidated balance sheets as of December 31, 2017 and 2016 , and financial activity presented in the consolidated statements of operations, comprehensive income (loss), equity, and cash flows for the years ended December 31, 2017 and 2016 , consist of the consolidated balances of SPX FLOW as an independent, publicly traded company as of and during the periods then ended. Our consolidated and combined statements of operations, comprehensive loss, equity, and cash flows for the year ended December 31, 2015 , were prepared on a “carve out” basis for the period prior to the Spin-Off and included adjustments for certain transactions that occurred concurrently upon completion of the Spin-Off (see Notes 8 and 12 ) as well as stand-alone results for the period subsequent to the date of the Spin-Off. These consolidated and combined financial statements were derived from the consolidated financial statements and accounting records of the former Parent and SPX FLOW and prepared in conformity with accounting principles generally accepted in the United States ("GAAP"). Consequently, the financial information included herein may not necessarily reflect our financial position, results of operations and cash flows in the future or what our financial condition, results of operations and cash flows would have been had we been an independent, publicly-traded company during the historical periods presented. The combined statement of operations prior to the Spin-Off 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. Prior to the Spin-Off and during the year ended December 31, 2015 , $81.0 of such costs were directly charged to the Company's business units and were included in selling, general and administrative expenses in the accompanying consolidated and combined statement of operations. For purposes of preparing these combined financial statements prior to the Spin-Off on a “carve out” basis, 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. Prior to the Spin-Off and in the year ended December 31, 2015 , the Company was allocated $50.7 of such general corporate and related benefit costs, which were primarily included within selling, general and administrative expenses in the accompanying consolidated and combined statement of operations. In addition to pre-Spin-Off allocation of costs associated with the former Parent's corporate functions, including the related benefit costs, the consolidated and combined financial statements include an allocation of corporate-related special charges. Costs were allocated to the Company based on direct usage when identifiable or, when not directly identifiable, on the basis of proportional revenues of the Company to the former Parent's consolidated revenues from continuing operations. Management considers the basis on which the expenses have been allocated to reasonably reflect the utilization of services provided to or the benefit received by the Company during the periods presented. The allocations may not, however, reflect the expenses the Company would have incurred if the Company had been a stand-alone company for the period presented. Pre-Spin-Off cash and equivalents held by the former Parent at the corporate level that were not specifically identifiable to the Company were not reflected in the Company's combined financial statements prior to the date of the Spin-Off. Cash transfers between the Company and the former Parent (other than related to notes receivable and payable, as discussed further below) were accounted for through former parent company investment. Cash and equivalents in the combined financial statements prior to the date of the Spin-Off represented cash and equivalents held locally by the Company's entities. The former Parent’s third-party debt and the related interest expense were not allocated to us for any of the periods presented as we were not the legal obligor of such debt. All intercompany transactions have been eliminated. All transactions between the Company and the former Parent (including its affiliates that were not part of the Spin-Off) were included in these combined financial statements prior to the date of the Spin-Off. The aggregate net effect of transactions not historically settled in cash between the Company and the former Parent was reflected in the combined statement of cash flows prior to the date of the Spin-Off as "Change in former parent company investment." In addition, prior to the Spin-Off, the Company had amounts due from and due to the former Parent (and its affiliates that were not part of the Spin-Off) supported by promissory notes. The respective interest income and interest expense amounts recognized prior to the Spin-Off were reflected in "Related party interest expense, net" within the Company's consolidated and combined statements of operations. The Company operates on a calendar year-end. Agreements with the former Parent - Post-Spin-Off In connection with the Spin-Off, we entered into a transition services agreement and other definitive agreements with the former Parent that, among other matters, set forth the terms and conditions of the Spin-Off and provided a framework for our relationship with the former Parent after the Spin-Off. A summary of the material terms of these agreements can be found in the "Certain Relationships and Related Party Transactions" section of the Information Statement of the Company, attached as Exhibit 99.1 to our registration statement on Form 10 (as filed by SPX FLOW with the U.S. Securities and Exchange Commission (the "SEC") and declared effective on September 11, 2015). Amounts recorded under the transition services agreement were not significant in 2017 or 2016. Summary of Significant Accounting Policies Our significant accounting policies are described below, as well as in other Notes that follow. Foreign Currency Translation and Transactions —The financial statements of our foreign subsidiaries are translated into U.S. dollars in accordance with the Foreign Currency Matters Topic of the Financial Accounting Standards Board Codification ("Codification" or "ASC"). Balance sheet accounts are translated at the current rate at the end of each period and income statement accounts are translated at the average rate for each period. Gains and losses on foreign currency translations are reflected as a separate component of equity and other comprehensive income (loss). Foreign currency transaction gains and losses, as well as gains and losses related to foreign currency forward contracts and currency forward embedded derivatives, are included in "Other income (expense), net," with the related net gains (losses) totaling $(4.9) , $(2.2) and $1.1 in 2017 , 2016 and 2015 , respectively. Cash Equivalents —We consider highly liquid money market investments with original maturities of three months or less at the date of purchase to be cash equivalents. Revenue Recognition —We recognize revenues from product sales upon shipment to the customer or, to a lesser extent, upon receipt by the customer, in accordance with agreed-upon customer terms. Revenues from long-term service contracts and maintenance arrangements are recognized on a straight-line basis over the agreement period. Amounts billed for shipping and handling are included in revenues. Costs incurred for shipping and handling are recorded in "Cost of products sold." Taxes assessed by governmental authorities that are directly imposed on a revenue-producing transaction between a seller and a customer are presented on a net basis (excluded from revenues) in our consolidated and combined statements of operations. We recognize revenue from long-term construction/installation contracts under the percentage-of-completion method of accounting. The percentage-of-completion is measured principally by the percentage of costs incurred to date for each contract to the estimated total costs for such contract at completion. We recognize revenues for similar short-term contracts using the completed-contract method of accounting. Provisions for any estimated losses on uncompleted long-term contracts are made in the period in which such losses are determined. In the case of customer change orders for uncompleted long-term contracts, estimated recoveries are included for work performed in forecasting ultimate profitability on certain contracts. Due to uncertainties inherent in the estimation process, it is reasonably possible that completion costs, including those arising from contract penalty provisions and final contract settlements, will be revised in the near-term. Such revisions to costs and income are recognized in the period in which the revisions are determined. Unbilled receivables arise when revenues have been recorded but the amounts have not been billed under the terms of the contracts. These amounts are recoverable from customers upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of the contract. Claims related to long-term contracts are recognized as revenue only after we have determined that collection is probable and the amount can be reliably estimated. Claims made by us involve negotiation and, in certain cases, litigation or other dispute-resolution processes. In the event we incur litigation or other dispute-resolution costs in connection with claims, such costs are expensed as incurred, although we may seek to recover these costs. Claims against us are recognized when a loss is considered probable and amounts are reasonably estimable. We recognized $267.0 , $339.7 and $490.7 in revenues under the percentage-of-completion method for the years ended December 31, 2017 , 2016 and 2015 , respectively. Costs and estimated earnings on uncompleted contracts, from their inception, and related amounts billed as of December 31, 2017 and 2016 were as follows: December 31, 2017 2016 Costs incurred on uncompleted contracts $ 1,114.4 $ 1,170.5 Estimated earnings to date 205.9 272.1 1,320.3 1,442.6 Less: Billings to date (1,345.9 ) (1,433.7 ) Net (billings in excess of revenues) unbilled receivables $ (25.6 ) $ 8.9 These amounts are included in the accompanying consolidated balance sheets at December 31, 2017 and 2016 as shown below. Amounts for billed retainages and receivables to be collected in excess of one year are not significant for the periods presented. December 31, 2017 2016 Unbilled receivables (1) $ 48.7 $ 66.1 Billings in excess of revenues on uncompleted contracts (2) (74.3 ) (57.2 ) Net (billings in excess of revenues) unbilled receivables $ (25.6 ) $ 8.9 (1) Reported as a component of "Accounts receivable, net." (2) Reported as a component of "Accrued expenses." Research and Development Costs —The Company conducts research and development activities for the purpose of developing and improving new products. The related expenditures are expensed as incurred and totaled $17.4 , $19.4 and $19.1 in 2017 , 2016 and 2015 , respectively, and are classified within selling, general and administrative expense within the consolidated and combined statements of operations. Property, Plant and Equipment —Property, plant and equipment ("PP&E") is stated at cost, less accumulated depreciation. We use the straight-line method for computing depreciation expense over the useful lives of PP&E, which do not exceed 40 years for buildings and range from 3 to 15 years for machinery and equipment. Depreciation expense, including amortization of capital leases, was $43.6 , $44.7 and $38.5 for the years ended December 31, 2017 , 2016 and 2015 , respectively. Leasehold improvements are amortized over the life of the related asset or the life of the lease, whichever is shorter. Impairments of PP&E, which represent non-cash asset write-downs, typically arise from business restructuring decisions that lead to the disposition of assets no longer required in the restructured business. For these situations, we recognize a loss when the carrying amount of an asset exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Fair values for assets subject to impairment testing are determined primarily by management, taking into consideration various factors including third-party appraisals, quoted market prices and previous experience. If an asset remains in service at the decision date, the asset is written down to its fair value, if impaired, and the net book value is depreciated over its remaining economic useful life. When we commit to a plan to sell an asset, including the initiation of a plan to locate a buyer, and it is probable that the asset will be sold within one year based on its current condition and sales price, depreciation of the asset is discontinued and the asset is classified as an asset held for sale. In addition, the asset is written down to its fair value less any selling costs, if impaired. Income Taxes —For purposes of our combined financial statements prior to the date of the Spin-Off, our income tax provision was determined as if we filed income tax returns on a stand-alone basis. The Company's tax results as presented in the consolidated and combined financial statements for the period prior to the Spin-Off may not be reflective of the results that the Company will generate in the future. In jurisdictions where the Company was included in the tax returns filed by the former Parent or its subsidiaries that were not part of the Spin-Off, any income taxes payable resulting from the related income tax provision were reflected through the date of the Spin-Off within "Former parent company investment." Deferred income tax assets and liabilities, as presented in the consolidated balance sheets, reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We periodically assess whether deferred tax assets will be realized and the adequacy of deferred tax liabilities, including the results of local, state, federal or foreign statutory tax audits or estimates and judgments used. The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017 and significantly changes existing U.S. tax law, including numerous provisions that affect businesses. The Act introduced changes that impacted U.S. corporate tax rates, certain deductions, credits and imposed a tax on the “deemed repatriation” (the “Transition Tax”) of all post-1986 earnings of foreign subsidiaries on which U.S. tax had previously been deferred. Given the widespread applicability of these changes to most U.S. companies, the Securities and Exchange Commission issued Staff Accounting Bulletin 118 (“SAB 118”) to assist registrants in addressing any uncertainty or diversity of views in applying ASC Topic 740 in the reporting period in which the Act was enacted. SAB 118 provides registrants with the option of reporting a reasonable estimate for certain income tax effects of the Act in situations in which a company does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting required under ASC Topic 740. The reasonable estimate is reported as a provisional amount in a company’s financial statements during a “measurement period”. The measurement period begins in the reporting period that includes the Act’s enactment date (the Company’s fourth quarter of 2017) and ends when a company has obtained, prepared, and analyzed the information that was needed in order to complete the accounting requirements under ASC Topic 740. During the measurement period, companies are to act in good faith to complete the accounting required under ASC Topic 740. SAB 118 provides that the measurement period should not, under any circumstances, extend for a period beyond one year from the enactment date. Appropriate disclosures will be made to address the Company’s progress toward completing the accounting required under the Act during the measurement period, as well as when the accounting is complete. Refer to Note 9 for additional discussion regarding the Company’s application of SAB 118. Derivative Financial Instruments —We use foreign currency forward contracts to manage our exposures to fluctuating currency exchange rates. Derivatives are recorded on the balance sheet and measured at fair value. For derivatives designated as hedges of the fair value of assets or liabilities, the changes in fair values of both the derivatives and the hedged items are recorded in current earnings. For derivatives designated as cash flow hedges, the effective portion of the changes in fair value of the derivatives is recorded in accumulated other comprehensive loss ("AOCL") and subsequently recognized in earnings when the hedged items impact earnings. Changes in the fair value of derivatives not designated as hedges, and the ineffective portion of cash flow hedges, are recorded in current earnings. We do not enter into financial instruments for speculative or trading purposes. For those transactions that are designated as cash flow hedges, on the date the derivative contract is entered into, we document our hedge relationship, including identification of the hedging instruments and the hedged items, as well as our risk management objectives and strategies for undertaking the hedge transaction. We also assess, both at inception and quarterly thereafter, whether such derivatives are highly effective in offsetting changes in the fair value of the hedged item. See Notes 11 and 14 for further information. Cash flows from hedging activities are included in the same category as the items being hedged, which are primarily operating activities. Goodwill and Other Intangible Assets —Consistent with the requirements of the Intangible—Goodwill and Other Topic of the Codification, the fair values of our reporting units generally are estimated using discounted cash flow projections that we believe to be reasonable under current and forecasted circumstances, the results of which form the basis for making judgments about the recoverability of carrying values of the net assets of our reporting units. Other considerations are also incorporated, including comparable industry price multiples. The financial results of many of our businesses closely follow changes in the industries and end markets that they serve. Accordingly, we consider estimates and judgments that affect the future cash flow projections, including principal methods of competition such as volume, price, service, product performance and technical innovations and estimates associated with cost improvement initiatives, capacity utilization and assumptions for inflation and blended effective tax rates. Any significant change in market conditions and estimates or judgments used to determine expected future cash flows that indicate a reduction in carrying value may give rise to impairment in the period that the change becomes known. We perform our annual goodwill impairment testing during the fourth quarter in conjunction with our annual financial planning process, with such testing based primarily on events and circumstances existing as of the end of the third quarter. In addition, we test goodwill for impairment on a more frequent basis if there are indications of potential impairment. We perform our annual trademarks impairment testing during the fourth quarter in conjunction with our annual financial planning process, or on a more frequent basis if there are indications of potential impairment. The fair values of our trademarks are determined by applying estimated royalty rates to projected revenues, with the resulting cash flows discounted at a rate of return that reflects current market conditions. The basis for these projected revenues is the annual operating plan for each of the related businesses. Investments in Unconsolidated Companies —Investments in unconsolidated companies where we exercise significant influence but do not have control are accounted for using the equity method. In determining whether we are the primary beneficiary of a variable interest entity ("VIE"), we perform a qualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties to determine which party has the power to direct the activities of the VIE that most significantly impact the entity's economic performance, and which party has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. We have interests in VIEs, primarily joint ventures, in which we are the primary beneficiary. The financial position, results of operations and cash flows of our VIEs are not material, individually or in the aggregate, in relation to our consolidated and combined financial statements. USE OF ESTIMATES The preparation of our consolidated and combined financial statements in conformity with GAAP requires us to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues (e.g., our percentage-of-completion estimates described above) and expenses during the reporting period. We evaluate these estimates and judgments on an ongoing basis and base our estimates on experience, current and expected future conditions, third-party evaluations and various other assumptions that we believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Actual results may differ from the estimates and assumptions used in the consolidated and combined financial statements and related notes. Listed below are certain significant estimates and assumptions used in the preparation of our consolidated and combined financial statements. Certain other estimates and assumptions are further explained in the related notes. Accounts Receivable Allowances— We provide allowances for estimated losses on uncollectible accounts based on our historical experience and the evaluation of the likelihood of success in collecting specific customer receivables. In addition, we maintain allowances for customer returns, discounts and invoice pricing discrepancies, with such allowances primarily based on historical experience. Summarized below is the activity for these allowance accounts. Year ended December 31, 2017 2016 2015 Balance at beginning of year $ 22.0 $ 23.6 $ 22.0 Allowances provided 20.7 17.4 15.6 Write-offs, net of recoveries, credits issued and other (17.5 ) (19.0 ) (14.0 ) Balance at end of year $ 25.2 $ 22.0 $ 23.6 Inventory— We estimate losses for excess and/or obsolete inventory and the net realizable value of inventory based on the aging and historical utilization of the inventory and the evaluation of the likelihood of recovering the inventory costs based on anticipated demand and selling price. Long-Lived Assets and Intangible Assets Subject to Amortization— We continually review whether events and circumstances subsequent to the acquisition of any long-lived assets, or intangible assets subject to amortization, have occurred that indicate the remaining estimated useful lives of those assets may warrant revision or that the remaining balance of those assets may not be fully recoverable. If events and circumstances indicate that the long-lived assets should be reviewed for possible impairment, we use projections to assess whether future cash flows on an undiscounted basis related to the assets are likely to exceed the related carrying amount. We will record an impairment charge to the extent that the carrying value of the assets exceed their fair values as determined by valuation techniques appropriate in the circumstances, which could include the use of similar projections on a discounted basis. In determining the estimated useful lives of definite-lived intangibles, we consider the nature, competitive position, life cycle position, and historical and expected future operating cash flows of each acquired asset, as well as our commitment to support these assets through continued investment and legal infringement protection. Goodwill and Indefinite-Lived Intangible Assets —We test goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter and continually assess whether a triggering event has occurred to determine whether the carrying value exceeds the implied fair value. The fair value of reporting units is based generally on discounted projected cash flows, but we also consider factors such as comparable industry price multiples. We employ cash flow projections that we believe to be reasonable under current and forecasted circumstances, the results of which form the basis for making judgments about the carrying values of the reported net assets of our reporting units. The financial results of many of our businesses closely follow changes in the industries and end markets that they serve. Accordingly, we consider estimates and judgments that affect the future cash flow projections, including principal methods of competition, such as volume, price, service, product performance and technical innovations, as well as estimates associated with cost reduction initiatives, capacity utilization and assumptions for inflation and blended effective tax rates. Actual results may differ from these estimates under different assumptions or conditions. See Note 7 for further information, including discussion of impairment charges recorded in 2016 and 2015 , and our annual impairment test performed in the fourth quarter of 2017 . Accrued Expenses— We make estimates and judgments in establishing accruals as required under GAAP. Summarized in the table below are the components of accrued expenses at December 31, 2017 and 2016 . December 31, 2017 2016 Unearned revenue (1) $ 182.3 $ 140.6 Employee benefits (2) 96.2 62.1 Warranty 13.3 10.2 Other (3) 97.8 117.0 Total $ 389.6 $ 329.9 (1) Unearned revenue includes billings in excess of revenue on uncompleted contracts accounted for under the percentage-of-completion method of revenue recognition, customer deposits and unearned amounts on service contracts. (2) Employee benefits consist of various employee-related items including, among other items, accrued bonus, vacation, payroll and payroll-related taxes. (3) Other consists of various items including, among other items, accrued commissions, accrued sales and value-added taxes, and accruals for restructuring, interest and freight costs. Legal— It is our policy to accrue for estimated losses from legal actions or claims when events exist that make the realization of the losses probable and they can be reasonably estimated. We do not discount legal obligations or reduce them by anticipated insurance recoveries. Environmental Remediation Costs— We expense costs incurred to investigate and remediate environmental issues unless they extend the economic useful lives of related assets. We record liabilities when it is probable that an obligation has been incurred and the amounts can be reasonably estimated. Our environmental accruals cover anticipated costs, including investigation, remediation and operation and maintenance of clean-up sites. Our estimates are based primarily on investigations and remediation plans established by independent consultants, regulatory agencies and potentially responsible third parties. We generally do not discount environmental obligations or reduce them by anticipated insurance recoveries. Self-Insurance— We are self-insured for certain of our workers' compensation, automobile, product, general liability and health costs and, thus, record an accrual for our retained liability. Our businesses were charged directly for their estimated share of the cost of the former Parent's equivalent self-insured programs prior to the Spin-Off, with the Company's share of the cost included in our consolidated and combined statements of operations for such period. The liability for these programs is reflected in our consolidated balance sheets as of December 31, 2017 and 2016 within "Accrued expenses." Warranty —In the normal course of business, we issue product warranties for specific products and provide for the estimated future warranty cost in the period in which the sale is recorded. We provide for the estimate of warranty cost based on contract terms and historical warranty loss experience that is periodically adjusted for recent actual experience. Because warranty estimates are forecasts that are based on the best available information, actual claims costs may differ from amounts provided. In addition, due to the seasonal fluctuations at certain of our businesses, the timing of warranty provisions and the usage of warranty accruals can vary period to period. We make adjustments to initial obligations for warranties as changes in the obligations become reasonably estimable. The following is an analysis of our product warranty accrual for the periods presented: Year ended December 31, 2017 2016 2015 Balance at beginning of year $ 10.8 $ 14.8 $ 18.4 Provisions 14.4 8.9 10.3 Usage (13.1 ) (12.2 ) (12.6 ) Currency translation adjustment 2.1 (0.7 ) (1.3 ) Balance at end of year 14.2 10.8 14.8 Less: Current portion of warranty 13.3 10.2 14.0 Non-current portion of warranty $ 0.9 $ 0.6 $ 0.8 Income Taxes— We review our income tax positions on a continuous basis and accrue for potential uncertain tax positions in accordance with the Income Taxes Topic of the Codification. Accruals for these uncertain tax positions are classified as "Deferred and other income taxes" in the accompanying consolidated balance sheets based on an expectation as to the timing of when the matter will be resolved. As events change or resolutions occur, these accruals are adjusted, such as in the case of audit settlements with taxing authorities. For tax positions where it is more likely than not that a tax benefit will be sustained, we record the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority, assuming such authority has full knowledge of all relevant information. These reviews also entail analyzing the realization of deferred tax assets. We establish a valuation allowance against deferred tax assets when, based on all available evidence, we believe that it is more likely than not that we will not realize a benefit |
USE OF ESTIMATES
USE OF ESTIMATES | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
USE OF ESTIMATES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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”). The Company engineers, designs, manufactures and markets products and solutions used to process, blend, filter, dry, meter and transport fluids with a focus on original equipment installation, including turn-key systems, modular systems and components, as well as comprehensive aftermarket components and support services. Primary component offerings include engineered pumps, valves, mixers, plate heat exchangers, dehydration and filtration technologies, and industrial tools and hydraulic units. The Company primarily serves customers in the food and beverage, power and energy and industrial end markets. Basis of Presentation Our consolidated balance sheets as of December 31, 2017 and 2016 , and financial activity presented in the consolidated statements of operations, comprehensive income (loss), equity, and cash flows for the years ended December 31, 2017 and 2016 , consist of the consolidated balances of SPX FLOW as an independent, publicly traded company as of and during the periods then ended. Our consolidated and combined statements of operations, comprehensive loss, equity, and cash flows for the year ended December 31, 2015 , were prepared on a “carve out” basis for the period prior to the Spin-Off and included adjustments for certain transactions that occurred concurrently upon completion of the Spin-Off (see Notes 8 and 12 ) as well as stand-alone results for the period subsequent to the date of the Spin-Off. These consolidated and combined financial statements were derived from the consolidated financial statements and accounting records of the former Parent and SPX FLOW and prepared in conformity with accounting principles generally accepted in the United States ("GAAP"). Consequently, the financial information included herein may not necessarily reflect our financial position, results of operations and cash flows in the future or what our financial condition, results of operations and cash flows would have been had we been an independent, publicly-traded company during the historical periods presented. The combined statement of operations prior to the Spin-Off 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. Prior to the Spin-Off and during the year ended December 31, 2015 , $81.0 of such costs were directly charged to the Company's business units and were included in selling, general and administrative expenses in the accompanying consolidated and combined statement of operations. For purposes of preparing these combined financial statements prior to the Spin-Off on a “carve out” basis, 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. Prior to the Spin-Off and in the year ended December 31, 2015 , the Company was allocated $50.7 of such general corporate and related benefit costs, which were primarily included within selling, general and administrative expenses in the accompanying consolidated and combined statement of operations. In addition to pre-Spin-Off allocation of costs associated with the former Parent's corporate functions, including the related benefit costs, the consolidated and combined financial statements include an allocation of corporate-related special charges. Costs were allocated to the Company based on direct usage when identifiable or, when not directly identifiable, on the basis of proportional revenues of the Company to the former Parent's consolidated revenues from continuing operations. Management considers the basis on which the expenses have been allocated to reasonably reflect the utilization of services provided to or the benefit received by the Company during the periods presented. The allocations may not, however, reflect the expenses the Company would have incurred if the Company had been a stand-alone company for the period presented. Pre-Spin-Off cash and equivalents held by the former Parent at the corporate level that were not specifically identifiable to the Company were not reflected in the Company's combined financial statements prior to the date of the Spin-Off. Cash transfers between the Company and the former Parent (other than related to notes receivable and payable, as discussed further below) were accounted for through former parent company investment. Cash and equivalents in the combined financial statements prior to the date of the Spin-Off represented cash and equivalents held locally by the Company's entities. The former Parent’s third-party debt and the related interest expense were not allocated to us for any of the periods presented as we were not the legal obligor of such debt. All intercompany transactions have been eliminated. All transactions between the Company and the former Parent (including its affiliates that were not part of the Spin-Off) were included in these combined financial statements prior to the date of the Spin-Off. The aggregate net effect of transactions not historically settled in cash between the Company and the former Parent was reflected in the combined statement of cash flows prior to the date of the Spin-Off as "Change in former parent company investment." In addition, prior to the Spin-Off, the Company had amounts due from and due to the former Parent (and its affiliates that were not part of the Spin-Off) supported by promissory notes. The respective interest income and interest expense amounts recognized prior to the Spin-Off were reflected in "Related party interest expense, net" within the Company's consolidated and combined statements of operations. The Company operates on a calendar year-end. Agreements with the former Parent - Post-Spin-Off In connection with the Spin-Off, we entered into a transition services agreement and other definitive agreements with the former Parent that, among other matters, set forth the terms and conditions of the Spin-Off and provided a framework for our relationship with the former Parent after the Spin-Off. A summary of the material terms of these agreements can be found in the "Certain Relationships and Related Party Transactions" section of the Information Statement of the Company, attached as Exhibit 99.1 to our registration statement on Form 10 (as filed by SPX FLOW with the U.S. Securities and Exchange Commission (the "SEC") and declared effective on September 11, 2015). Amounts recorded under the transition services agreement were not significant in 2017 or 2016. Summary of Significant Accounting Policies Our significant accounting policies are described below, as well as in other Notes that follow. Foreign Currency Translation and Transactions —The financial statements of our foreign subsidiaries are translated into U.S. dollars in accordance with the Foreign Currency Matters Topic of the Financial Accounting Standards Board Codification ("Codification" or "ASC"). Balance sheet accounts are translated at the current rate at the end of each period and income statement accounts are translated at the average rate for each period. Gains and losses on foreign currency translations are reflected as a separate component of equity and other comprehensive income (loss). Foreign currency transaction gains and losses, as well as gains and losses related to foreign currency forward contracts and currency forward embedded derivatives, are included in "Other income (expense), net," with the related net gains (losses) totaling $(4.9) , $(2.2) and $1.1 in 2017 , 2016 and 2015 , respectively. Cash Equivalents —We consider highly liquid money market investments with original maturities of three months or less at the date of purchase to be cash equivalents. Revenue Recognition —We recognize revenues from product sales upon shipment to the customer or, to a lesser extent, upon receipt by the customer, in accordance with agreed-upon customer terms. Revenues from long-term service contracts and maintenance arrangements are recognized on a straight-line basis over the agreement period. Amounts billed for shipping and handling are included in revenues. Costs incurred for shipping and handling are recorded in "Cost of products sold." Taxes assessed by governmental authorities that are directly imposed on a revenue-producing transaction between a seller and a customer are presented on a net basis (excluded from revenues) in our consolidated and combined statements of operations. We recognize revenue from long-term construction/installation contracts under the percentage-of-completion method of accounting. The percentage-of-completion is measured principally by the percentage of costs incurred to date for each contract to the estimated total costs for such contract at completion. We recognize revenues for similar short-term contracts using the completed-contract method of accounting. Provisions for any estimated losses on uncompleted long-term contracts are made in the period in which such losses are determined. In the case of customer change orders for uncompleted long-term contracts, estimated recoveries are included for work performed in forecasting ultimate profitability on certain contracts. Due to uncertainties inherent in the estimation process, it is reasonably possible that completion costs, including those arising from contract penalty provisions and final contract settlements, will be revised in the near-term. Such revisions to costs and income are recognized in the period in which the revisions are determined. Unbilled receivables arise when revenues have been recorded but the amounts have not been billed under the terms of the contracts. These amounts are recoverable from customers upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of the contract. Claims related to long-term contracts are recognized as revenue only after we have determined that collection is probable and the amount can be reliably estimated. Claims made by us involve negotiation and, in certain cases, litigation or other dispute-resolution processes. In the event we incur litigation or other dispute-resolution costs in connection with claims, such costs are expensed as incurred, although we may seek to recover these costs. Claims against us are recognized when a loss is considered probable and amounts are reasonably estimable. We recognized $267.0 , $339.7 and $490.7 in revenues under the percentage-of-completion method for the years ended December 31, 2017 , 2016 and 2015 , respectively. Costs and estimated earnings on uncompleted contracts, from their inception, and related amounts billed as of December 31, 2017 and 2016 were as follows: December 31, 2017 2016 Costs incurred on uncompleted contracts $ 1,114.4 $ 1,170.5 Estimated earnings to date 205.9 272.1 1,320.3 1,442.6 Less: Billings to date (1,345.9 ) (1,433.7 ) Net (billings in excess of revenues) unbilled receivables $ (25.6 ) $ 8.9 These amounts are included in the accompanying consolidated balance sheets at December 31, 2017 and 2016 as shown below. Amounts for billed retainages and receivables to be collected in excess of one year are not significant for the periods presented. December 31, 2017 2016 Unbilled receivables (1) $ 48.7 $ 66.1 Billings in excess of revenues on uncompleted contracts (2) (74.3 ) (57.2 ) Net (billings in excess of revenues) unbilled receivables $ (25.6 ) $ 8.9 (1) Reported as a component of "Accounts receivable, net." (2) Reported as a component of "Accrued expenses." Research and Development Costs —The Company conducts research and development activities for the purpose of developing and improving new products. The related expenditures are expensed as incurred and totaled $17.4 , $19.4 and $19.1 in 2017 , 2016 and 2015 , respectively, and are classified within selling, general and administrative expense within the consolidated and combined statements of operations. Property, Plant and Equipment —Property, plant and equipment ("PP&E") is stated at cost, less accumulated depreciation. We use the straight-line method for computing depreciation expense over the useful lives of PP&E, which do not exceed 40 years for buildings and range from 3 to 15 years for machinery and equipment. Depreciation expense, including amortization of capital leases, was $43.6 , $44.7 and $38.5 for the years ended December 31, 2017 , 2016 and 2015 , respectively. Leasehold improvements are amortized over the life of the related asset or the life of the lease, whichever is shorter. Impairments of PP&E, which represent non-cash asset write-downs, typically arise from business restructuring decisions that lead to the disposition of assets no longer required in the restructured business. For these situations, we recognize a loss when the carrying amount of an asset exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Fair values for assets subject to impairment testing are determined primarily by management, taking into consideration various factors including third-party appraisals, quoted market prices and previous experience. If an asset remains in service at the decision date, the asset is written down to its fair value, if impaired, and the net book value is depreciated over its remaining economic useful life. When we commit to a plan to sell an asset, including the initiation of a plan to locate a buyer, and it is probable that the asset will be sold within one year based on its current condition and sales price, depreciation of the asset is discontinued and the asset is classified as an asset held for sale. In addition, the asset is written down to its fair value less any selling costs, if impaired. Income Taxes —For purposes of our combined financial statements prior to the date of the Spin-Off, our income tax provision was determined as if we filed income tax returns on a stand-alone basis. The Company's tax results as presented in the consolidated and combined financial statements for the period prior to the Spin-Off may not be reflective of the results that the Company will generate in the future. In jurisdictions where the Company was included in the tax returns filed by the former Parent or its subsidiaries that were not part of the Spin-Off, any income taxes payable resulting from the related income tax provision were reflected through the date of the Spin-Off within "Former parent company investment." Deferred income tax assets and liabilities, as presented in the consolidated balance sheets, reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We periodically assess whether deferred tax assets will be realized and the adequacy of deferred tax liabilities, including the results of local, state, federal or foreign statutory tax audits or estimates and judgments used. The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017 and significantly changes existing U.S. tax law, including numerous provisions that affect businesses. The Act introduced changes that impacted U.S. corporate tax rates, certain deductions, credits and imposed a tax on the “deemed repatriation” (the “Transition Tax”) of all post-1986 earnings of foreign subsidiaries on which U.S. tax had previously been deferred. Given the widespread applicability of these changes to most U.S. companies, the Securities and Exchange Commission issued Staff Accounting Bulletin 118 (“SAB 118”) to assist registrants in addressing any uncertainty or diversity of views in applying ASC Topic 740 in the reporting period in which the Act was enacted. SAB 118 provides registrants with the option of reporting a reasonable estimate for certain income tax effects of the Act in situations in which a company does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting required under ASC Topic 740. The reasonable estimate is reported as a provisional amount in a company’s financial statements during a “measurement period”. The measurement period begins in the reporting period that includes the Act’s enactment date (the Company’s fourth quarter of 2017) and ends when a company has obtained, prepared, and analyzed the information that was needed in order to complete the accounting requirements under ASC Topic 740. During the measurement period, companies are to act in good faith to complete the accounting required under ASC Topic 740. SAB 118 provides that the measurement period should not, under any circumstances, extend for a period beyond one year from the enactment date. Appropriate disclosures will be made to address the Company’s progress toward completing the accounting required under the Act during the measurement period, as well as when the accounting is complete. Refer to Note 9 for additional discussion regarding the Company’s application of SAB 118. Derivative Financial Instruments —We use foreign currency forward contracts to manage our exposures to fluctuating currency exchange rates. Derivatives are recorded on the balance sheet and measured at fair value. For derivatives designated as hedges of the fair value of assets or liabilities, the changes in fair values of both the derivatives and the hedged items are recorded in current earnings. For derivatives designated as cash flow hedges, the effective portion of the changes in fair value of the derivatives is recorded in accumulated other comprehensive loss ("AOCL") and subsequently recognized in earnings when the hedged items impact earnings. Changes in the fair value of derivatives not designated as hedges, and the ineffective portion of cash flow hedges, are recorded in current earnings. We do not enter into financial instruments for speculative or trading purposes. For those transactions that are designated as cash flow hedges, on the date the derivative contract is entered into, we document our hedge relationship, including identification of the hedging instruments and the hedged items, as well as our risk management objectives and strategies for undertaking the hedge transaction. We also assess, both at inception and quarterly thereafter, whether such derivatives are highly effective in offsetting changes in the fair value of the hedged item. See Notes 11 and 14 for further information. Cash flows from hedging activities are included in the same category as the items being hedged, which are primarily operating activities. Goodwill and Other Intangible Assets —Consistent with the requirements of the Intangible—Goodwill and Other Topic of the Codification, the fair values of our reporting units generally are estimated using discounted cash flow projections that we believe to be reasonable under current and forecasted circumstances, the results of which form the basis for making judgments about the recoverability of carrying values of the net assets of our reporting units. Other considerations are also incorporated, including comparable industry price multiples. The financial results of many of our businesses closely follow changes in the industries and end markets that they serve. Accordingly, we consider estimates and judgments that affect the future cash flow projections, including principal methods of competition such as volume, price, service, product performance and technical innovations and estimates associated with cost improvement initiatives, capacity utilization and assumptions for inflation and blended effective tax rates. Any significant change in market conditions and estimates or judgments used to determine expected future cash flows that indicate a reduction in carrying value may give rise to impairment in the period that the change becomes known. We perform our annual goodwill impairment testing during the fourth quarter in conjunction with our annual financial planning process, with such testing based primarily on events and circumstances existing as of the end of the third quarter. In addition, we test goodwill for impairment on a more frequent basis if there are indications of potential impairment. We perform our annual trademarks impairment testing during the fourth quarter in conjunction with our annual financial planning process, or on a more frequent basis if there are indications of potential impairment. The fair values of our trademarks are determined by applying estimated royalty rates to projected revenues, with the resulting cash flows discounted at a rate of return that reflects current market conditions. The basis for these projected revenues is the annual operating plan for each of the related businesses. Investments in Unconsolidated Companies —Investments in unconsolidated companies where we exercise significant influence but do not have control are accounted for using the equity method. In determining whether we are the primary beneficiary of a variable interest entity ("VIE"), we perform a qualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties to determine which party has the power to direct the activities of the VIE that most significantly impact the entity's economic performance, and which party has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. We have interests in VIEs, primarily joint ventures, in which we are the primary beneficiary. The financial position, results of operations and cash flows of our VIEs are not material, individually or in the aggregate, in relation to our consolidated and combined financial statements. USE OF ESTIMATES The preparation of our consolidated and combined financial statements in conformity with GAAP requires us to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues (e.g., our percentage-of-completion estimates described above) and expenses during the reporting period. We evaluate these estimates and judgments on an ongoing basis and base our estimates on experience, current and expected future conditions, third-party evaluations and various other assumptions that we believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Actual results may differ from the estimates and assumptions used in the consolidated and combined financial statements and related notes. Listed below are certain significant estimates and assumptions used in the preparation of our consolidated and combined financial statements. Certain other estimates and assumptions are further explained in the related notes. Accounts Receivable Allowances— We provide allowances for estimated losses on uncollectible accounts based on our historical experience and the evaluation of the likelihood of success in collecting specific customer receivables. In addition, we maintain allowances for customer returns, discounts and invoice pricing discrepancies, with such allowances primarily based on historical experience. Summarized below is the activity for these allowance accounts. Year ended December 31, 2017 2016 2015 Balance at beginning of year $ 22.0 $ 23.6 $ 22.0 Allowances provided 20.7 17.4 15.6 Write-offs, net of recoveries, credits issued and other (17.5 ) (19.0 ) (14.0 ) Balance at end of year $ 25.2 $ 22.0 $ 23.6 Inventory— We estimate losses for excess and/or obsolete inventory and the net realizable value of inventory based on the aging and historical utilization of the inventory and the evaluation of the likelihood of recovering the inventory costs based on anticipated demand and selling price. Long-Lived Assets and Intangible Assets Subject to Amortization— We continually review whether events and circumstances subsequent to the acquisition of any long-lived assets, or intangible assets subject to amortization, have occurred that indicate the remaining estimated useful lives of those assets may warrant revision or that the remaining balance of those assets may not be fully recoverable. If events and circumstances indicate that the long-lived assets should be reviewed for possible impairment, we use projections to assess whether future cash flows on an undiscounted basis related to the assets are likely to exceed the related carrying amount. We will record an impairment charge to the extent that the carrying value of the assets exceed their fair values as determined by valuation techniques appropriate in the circumstances, which could include the use of similar projections on a discounted basis. In determining the estimated useful lives of definite-lived intangibles, we consider the nature, competitive position, life cycle position, and historical and expected future operating cash flows of each acquired asset, as well as our commitment to support these assets through continued investment and legal infringement protection. Goodwill and Indefinite-Lived Intangible Assets —We test goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter and continually assess whether a triggering event has occurred to determine whether the carrying value exceeds the implied fair value. The fair value of reporting units is based generally on discounted projected cash flows, but we also consider factors such as comparable industry price multiples. We employ cash flow projections that we believe to be reasonable under current and forecasted circumstances, the results of which form the basis for making judgments about the carrying values of the reported net assets of our reporting units. The financial results of many of our businesses closely follow changes in the industries and end markets that they serve. Accordingly, we consider estimates and judgments that affect the future cash flow projections, including principal methods of competition, such as volume, price, service, product performance and technical innovations, as well as estimates associated with cost reduction initiatives, capacity utilization and assumptions for inflation and blended effective tax rates. Actual results may differ from these estimates under different assumptions or conditions. See Note 7 for further information, including discussion of impairment charges recorded in 2016 and 2015 , and our annual impairment test performed in the fourth quarter of 2017 . Accrued Expenses— We make estimates and judgments in establishing accruals as required under GAAP. Summarized in the table below are the components of accrued expenses at December 31, 2017 and 2016 . December 31, 2017 2016 Unearned revenue (1) $ 182.3 $ 140.6 Employee benefits (2) 96.2 62.1 Warranty 13.3 10.2 Other (3) 97.8 117.0 Total $ 389.6 $ 329.9 (1) Unearned revenue includes billings in excess of revenue on uncompleted contracts accounted for under the percentage-of-completion method of revenue recognition, customer deposits and unearned amounts on service contracts. (2) Employee benefits consist of various employee-related items including, among other items, accrued bonus, vacation, payroll and payroll-related taxes. (3) Other consists of various items including, among other items, accrued commissions, accrued sales and value-added taxes, and accruals for restructuring, interest and freight costs. Legal— It is our policy to accrue for estimated losses from legal actions or claims when events exist that make the realization of the losses probable and they can be reasonably estimated. We do not discount legal obligations or reduce them by anticipated insurance recoveries. Environmental Remediation Costs— We expense costs incurred to investigate and remediate environmental issues unless they extend the economic useful lives of related assets. We record liabilities when it is probable that an obligation has been incurred and the amounts can be reasonably estimated. Our environmental accruals cover anticipated costs, including investigation, remediation and operation and maintenance of clean-up sites. Our estimates are based primarily on investigations and remediation plans established by independent consultants, regulatory agencies and potentially responsible third parties. We generally do not discount environmental obligations or reduce them by anticipated insurance recoveries. Self-Insurance— We are self-insured for certain of our workers' compensation, automobile, product, general liability and health costs and, thus, record an accrual for our retained liability. Our businesses were charged directly for their estimated share of the cost of the former Parent's equivalent self-insured programs prior to the Spin-Off, with the Company's share of the cost included in our consolidated and combined statements of operations for such period. The liability for these programs is reflected in our consolidated balance sheets as of December 31, 2017 and 2016 within "Accrued expenses." Warranty —In the normal course of business, we issue product warranties for specific products and provide for the estimated future warranty cost in the period in which the sale is recorded. We provide for the estimate of warranty cost based on contract terms and historical warranty loss experience that is periodically adjusted for recent actual experience. Because warranty estimates are forecasts that are based on the best available information, actual claims costs may differ from amounts provided. In addition, due to the seasonal fluctuations at certain of our businesses, the timing of warranty provisions and the usage of warranty accruals can vary period to period. We make adjustments to initial obligations for warranties as changes in the obligations become reasonably estimable. The following is an analysis of our product warranty accrual for the periods presented: Year ended December 31, 2017 2016 2015 Balance at beginning of year $ 10.8 $ 14.8 $ 18.4 Provisions 14.4 8.9 10.3 Usage (13.1 ) (12.2 ) (12.6 ) Currency translation adjustment 2.1 (0.7 ) (1.3 ) Balance at end of year 14.2 10.8 14.8 Less: Current portion of warranty 13.3 10.2 14.0 Non-current portion of warranty $ 0.9 $ 0.6 $ 0.8 Income Taxes— We review our income tax positions on a continuous basis and accrue for potential uncertain tax positions in accordance with the Income Taxes Topic of the Codification. Accruals for these uncertain tax positions are classified as "Deferred and other income taxes" in the accompanying consolidated balance sheets based on an expectation as to the timing of when the matter will be resolved. As events change or resolutions occur, these accruals are adjusted, such as in the case of audit settlements with taxing authorities. For tax positions where it is more likely than not that a tax benefit will be sustained, we record the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority, assuming such authority has full knowledge of all relevant information. These reviews also entail analyzing the realization of deferred tax assets. We establish a valuation allowance against deferred tax assets when, based on all available evidence, we believe that it is more likely than not that we will not realize a benefit |
NEW ACCOUNTING PRONOUNCEMENTS
NEW ACCOUNTING PRONOUNCEMENTS | 12 Months Ended |
Dec. 31, 2017 | |
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. New Revenue Recognition Pronouncement In May 2014, and as subsequently amended, the Financial Accounting Standards Board (the "FASB") issued a new standard on revenue recognition that outlines a single comprehensive model for accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in accordance with the transfer of control over those goods and services. The new standard also 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 will adopt the new revenue standard in the first quarter of 2018 using the modified retrospective adoption method. Beginning in 2016 and continuing throughout 2017, our team responsible for implementing the new standard has reviewed each product line and related business strategy. The team has assessed the various changes in the criteria for revenue recognition required under the new standard, and concluded that our assessment of alternative use of sub-products within each product line as well as our enforceable rights to payment for performance completed to date in the event of customer cancellation or default, will have the most significant impact to our current revenue recognition practices. Our progress towards assessing and quantifying the impacts of the new guidance to our reportable segments is as follows: • Food and Beverage - Under existing accounting principles, we recognize revenue on certain long-term systems projects, most of which are constructed on customer sites, over time using the cost-to-cost method, and revenue on long-term service contracts on a straight-line basis over the life of the related agreements. All other revenues are recognized at a point in time when the risks and rewards of ownership transfer to the customer. Under the new guidance, we expect primarily that revenue for (1) all systems projects constructed on customer sites and service contracts will be recognized over time on a cost-to-cost basis, and (2) skids assembled in our factories, as well as customer contracts for the sale of component and aftermarket parts, will be recognized at a point in time upon transfer of control to the customer. Revenue recognition for skidded systems will, however, be project specific and dependent on contractual customer terms. • Power and Energy - Under existing accounting principles, we recognize revenue on certain long-term contracts for large pumps over time using the cost-to-cost method. We recognize all other product revenues in this segment, including revenues for most service contracts, at a point in time. In assessing the new guidance, we have determined our large pumps manufactured for use in certain customer applications generally have limited alternative use. Likewise, our larger and more complex valve products and metering systems have limited alternative use. Our contractual enforceable rights to payment for performance completed to date in the event of customer cancellation or default is contract specific for substantially all product lines in the segment. Under the new guidance, we expect to recognize revenues over time, if a contract explicitly provides an enforceable right to payment, for large pumps, large and/or complex valve products and metering systems. Revenue for service contracts will be recognized over time. Revenue for all other products will be recognized at a point in time, upon transfer of control of the product to the customer (i.e., effectively no change). Revenue for certain large pumps previously recognized over time using the cost-to-cost method will, under the new guidance, be recognized at a point in time upon transfer of control, to the extent either enforceable right to payment is not included in the contract or the pumps are determined to have alternative use. • Industrial - Under existing accounting principles, substantially all of this segment’s 2017 revenue was recognized at a point in time when the risks and rewards of ownership transferred to the customer. In assessing the new guidance, we have determined that certain large mixers constructed with unique metals, custom-enclosed heat exchangers, and certain dehydration systems have little to no alternative use. Our contractual enforceable rights to payment for performance completed to date in the event of customer cancellation or default is contract specific for substantially all product lines in this segment. Under the new guidance, we expect to recognize revenue over time, if a contract explicitly provides for enforceable right to payment, for certain mixer types, custom-enclosed heat exchanger units, unique dehydration systems and service contracts. Revenue for all other products within this segment will be recognized at a point in time, upon transfer of control of the product to the customer (i.e., effectively no change). Upon adoption, using the modified retrospective method, we expect our December 31, 2017 undelivered performance obligations (“backlog”) of $998.1 to decrease by a minor amount, representing the net revenues which would have been recognized under the new standard on executed customer contracts (“orders”) in effect on or prior to December 31, 2017. This expected minor decline in the backlog of orders as of December 31, 2017, reflects the effects of (1) an increase in the amount of revenue expected to be recognized over time, as described above for certain product lines that were previously recognized at a point in time under existing guidance, partially offset by (2) a decrease in the amount of revenue previously recognized over time under existing guidance for certain contracts in our backlog which do not contain a contractual enforceable right to payment in the event of customer cancellation or default, which will be recognized at a point in time under the new guidance. Prospectively, however, we expect the new revenue standard to increase the percentage of revenue we recognize over time, within future reporting periods, by approximately 10% , which varies by product line and which could vary in the future depending on the mix of our future orders as well as contractual terms negotiated with customers. These projected impacts, underlying contracts and accounting models are still under review by our implementation team. Other New Accounting Pronouncements In January 2016, the FASB issued an amendment to 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. We will adopt this amendment in the first quarter of 2018 and do not expect a material impact to our 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 consolidated financial statements. 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 was effective for interim and annual reporting periods beginning after December 15, 2016. We adopted this amendment during the first quarter of 2017. We recognized a tax charge of $1.3 in our income tax provision during 2017 related to the vesting of certain restricted stock shares and restricted stock units during the period which, under previous guidance, would have been recognized as a reduction of paid-in capital. Consistent with our previous policy, we have elected to continue to accrue share-based compensation cost based on the number of awards that are expected to vest (i.e., by assuming a forfeiture rate in our accrual of such cost). In October 2016, the FASB issued an amendment that requires recognition of the income tax consequences of an intra-entity transfer of assets other than inventory. Under current authoritative guidance, the tax effects of intra-entity asset transfers (intercompany sales) are deferred until the transferred asset is sold to a third party or otherwise recovered through use. This amendment requires tax expense and deferred tax asset recognition from the intra-entity sale of the asset in the seller’s tax jurisdiction when the asset transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. This update is effective for interim and annual reporting periods beginning after December 15, 2017. We will adopt this amendment in the first quarter of 2018 using modified retrospective application, and expect to record a cumulative charge of $3.9 to accumulated deficit in our consolidated financial statements. In November 2016, the FASB issued an amendment to guidance for statement of cash flow presentation, which requires that entities explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents in the statement of cash flows. Entities will also be required to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. This amendment is effective for interim and annual reporting periods beginning after December 15, 2017, with retrospective application permitted. We will adopt this amendment in the first quarter of 2018 and do not expect a material impact to our consolidated financial statements. In January 2017, the FASB issued an amendment to post-acquisition accounting for goodwill which eliminates the requirement to perform a Step 2 impairment analysis to determine the implied fair value of goodwill. Rather, goodwill impairment charges will be calculated as the amount by which a reporting unit's carrying amount exceeds its fair value. This amendment is effective for any annual or interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019, with early adoption permitted. We adopted this amendment in the first quarter of 2017 and performed our 2017 annual goodwill impairment test in accordance with the amended guidance. Refer to Note 7 for discussion of our annual goodwill impairment test. In March 2017, the FASB issued an amendment to guidance on the presentation of net periodic pension and other postretirement benefit costs. Under the new rules, entities that sponsor defined benefit plans will present service costs with other employee compensation costs within operating income (or capitalize on the balance sheet, when applicable), while other components of net benefit cost will be presented separately (in one or more line items) outside of operating income and will not be eligible for capitalization. This update is effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted if adopted in the first interim period of the early-adopt fiscal year. We adopted this amendment in the first quarter of 2017 and have accordingly reclassified non-service pension and postretirement costs from “Selling, general and administrative” expense to “Other income (expense), net” in our consolidated and combined statements of operations for the years ended December 31, 2016 and 2015, respectively, as we believe this classification provides investors a more comparative presentation of our selling, general and administrative expense and operating results from period to period. As permitted by the amended guidance, we used amounts disclosed in our employee benefit plans footnote for the years ended December 31, 2016 and 2015, respectively, as the estimation basis for applying the retrospective presentation requirements. See Note 8 for additional information related to our adoption of the amendment. In May 2017, the FASB issued an amendment to guidance to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the amended guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. The guidance is effective prospectively for all companies for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted. Our adoption of this amendment in the second quarter of 2017 did not have a material impact to our consolidated financial statements. |
INFORMATION ON REPORTABLE SEGME
INFORMATION ON REPORTABLE SEGMENTS, CORPORATE EXPENSE AND OTHER | 12 Months Ended |
Dec. 31, 2017 | |
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 30 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. In 2017 , an estimated 24% of our revenues were from sales into emerging markets. 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 service costs and other indirect corporate expenses (including corporate stock-based compensation). This is consistent with the way our chief operating decision maker evaluates the results of each segment. Revenues by reportable segment and geographic area represent sales to unaffiliated customers, and no one customer or group of customers that, to our knowledge, are under common control accounted for more than 10% of our consolidated and combined revenues for any period presented. Intercompany revenues among our reportable segments are not significant. Identifiable assets by reportable segment are those used in the respective operations of each. 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. We also design and construct turn-key systems that integrate many of these products for our customers. 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. See Note 1 for a discussion of the methodology used to allocate corporate-related costs prior to the Spin-Off. Financial data for our reportable segments as of or for the years ended December 31, 2017 , 2016 and 2015 were as follows: As of or for the Year Ended December 31, 2017 2016 2015 Revenues: Food and Beverage $ 715.9 $ 728.3 $ 869.8 Power and Energy 543.2 562.7 750.2 Industrial 692.4 705.0 768.5 Total revenues $ 1,951.5 $ 1,996.0 $ 2,388.5 Income: Food and Beverage $ 74.9 $ 75.1 $ 104.4 Power and Energy 35.5 25.4 83.8 Industrial 86.1 98.8 105.0 Total income for reportable segments $ 196.5 $ 199.3 $ 293.2 Corporate expense 56.6 58.0 71.6 Pension and postretirement service costs 1.5 1.9 1.9 Impairment of goodwill and intangible assets — 442.2 22.7 Special charges 19.3 79.8 42.6 Consolidated and combined operating income (loss) $ 119.1 $ (382.6 ) $ 154.4 Capital expenditures: Food and Beverage $ 5.8 $ 25.0 $ 24.5 Power and Energy 4.3 6.3 19.1 Industrial 4.2 5.4 5.1 Other (1) 5.1 7.3 8.3 Total capital expenditures $ 19.4 $ 44.0 $ 57.0 As of or for the Year Ended December 31, 2017 2016 2015 Depreciation and amortization: Food and Beverage $ 17.0 $ 14.1 $ 16.8 Power and Energy 20.1 21.4 28.2 Industrial 14.5 16.7 14.2 Other (1) 9.6 12.5 2.7 Total depreciation and amortization $ 61.2 $ 64.7 $ 61.9 Identifiable assets: Food and Beverage $ 924.3 $ 896.4 $ 925.0 Power and Energy 928.6 873.8 1,455.0 Industrial 629.3 603.8 638.7 Other (2) 206.8 229.2 285.5 Total identifiable assets $ 2,689.0 $ 2,603.2 $ 3,304.2 Geographic areas: Revenues (3) : United States $ 693.0 $ 697.2 $ 836.5 United Kingdom 211.8 203.6 316.5 China 128.0 137.3 140.1 France 123.4 125.2 136.3 Denmark 98.0 96.7 116.0 Germany 96.2 98.6 119.0 Other 601.1 637.4 724.1 Total revenues $ 1,951.5 $ 1,996.0 $ 2,388.5 Long-lived assets: United States $ 254.4 $ 285.3 $ 312.7 Other 266.3 243.9 236.5 Total long-lived assets $ 520.7 $ 529.2 $ 549.2 (1) Relates to corporate PP&E or PP&E that is utilized by all of our reportable segments along with related depreciation expense. Depreciation reflects the cost of our Charlotte, NC corporate headquarters, amongst other corporate PP&E, which became assets of the Company in connection with the Spin-Off. (2) Relates primarily to assets (e.g., cash and PP&E) of various corporate subsidiaries. (3) Revenues are included in the above geographic areas based on the country that recorded the customer revenue. |
SPECIAL CHARGES
SPECIAL CHARGES | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
SPECIAL CHARGES | SPECIAL CHARGES As part of our business strategy, we periodically right-size and consolidate operations to improve long-term results. Additionally, from time to time, we alter our business model to better serve customer demand, discontinue lower-margin product lines and rationalize and consolidate manufacturing capacity. Our restructuring and integration decisions are based, in part, on discounted cash flows and are designed to achieve our goals of reducing structural footprint and maximizing profitability. We have executed a multi-year plan to transition our enterprise to an operating company. As part of this plan, 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 was 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 of $19.3 for 2017 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. In connection with the global realignment program, we recorded special charges of $79.8 and $42.6 in 2016 and 2015 , respectively. These special charges were primarily related to restructuring initiatives to consolidate manufacturing and sales facilities, reduce workforce, and rationalize certain product lines, as well as tangible asset impairment charges. The components of the charges have been computed based on expected cash payouts, including severance and other employee benefits based on existing severance policies, local laws, and other estimated exit costs, and our estimate of the realizable value of the affected tangible and intangible assets. Liabilities for exit costs including, among other things, severance, other employee benefit costs, and operating lease obligations on idle facilities, are measured initially at their fair value and recorded when incurred. With the exception of certain multi-year operating lease obligations and other contractual obligations, which are not material to our consolidated and combined financial statements, we anticipate that liabilities related to restructuring actions as of December 31, 2017 will be paid within one year from the period in which the action was initiated. Special charges for the years ended December 31, 2017 , 2016 and 2015 are described in more detail below and in the applicable sections that follow: Year ended December 31, 2017 2016 2015 Employee termination costs $ 11.5 $ 50.5 $ 38.5 Facility consolidation costs 2.9 9.3 2.5 Other cash costs, net — 0.3 — Non-cash asset write-downs and other 4.9 19.7 1.6 Total $ 19.3 $ 79.8 $ 42.6 Special Charges by Reportable Segment Unless otherwise noted below, charges for 2017, 2016 and 2015 relate to our global realignment program. 2017 Charges: Employee Termination Costs Facility Consolidation Costs Other Cash Costs (Recoveries), Net Non-Cash Asset Write-downs and Other Total Special Charges Food and Beverage $ 6.6 $ 1.6 $ — $ 0.5 $ 8.7 Power and Energy (0.1 ) 0.5 — — 0.4 Industrial 5.2 0.8 — — 6.0 Other (0.2 ) — — 4.4 4.2 Total $ 11.5 $ 2.9 $ — $ 4.9 $ 19.3 Food and Beverage —Charges for 2017 related primarily to (i) charges associated with the consolidation and relocation of a manufacturing facility in Germany to an existing facility in Poland and (ii) severance and other costs associated with the reorganization and consolidation of certain commercial, engineering, operational and administrative functions across all regions in which the segment operates. Once completed, these restructuring activities are expected to result in the termination of approximately 90 employees. Charges for 2017 also included an asset impairment charge of $0.5 related to certain long-lived assets of a product line which was exited and formerly based primarily in the EMEA region and $0.6 related to lease cancellation costs for a portion of the leased space of a facility in the APAC region. Power and Energy —Charges for 2017 related primarily to severance and other costs associated with (i) various locations in North America, (ii) the reorganization and consolidation of certain commercial, operational and administrative functions primarily in the EMEA and North American regions, and (iii) charges related to the consolidation of the operations of two manufacturing facilities in the U.K, offset by (iv) reversals of certain accruals previously recorded as of December 31, 2016 as improved customer order patterns and profitability of the segment during 2017 negated the need for those restructuring initiatives. Industrial —Charges for 2017 related primarily to severance and other costs associated with (i) the consolidation and relocation of the manufacturing operations of facilities in Sweden and the Netherlands to existing facilities in Poland and other locations and (ii) the reorganization and consolidation of certain commercial, engineering, operational and administrative functions across all regions in which the segment operates, partially offset by (iii) revisions of estimates for severance and other costs related to the previously planned consolidation and relocation of a manufacturing facility in the U.S. Once completed, these restructuring activities are expected to result in the termination of approximately 120 employees. Other —Charges for 2017 reflected primarily asset impairment and other related charges of $3.6 in connection with the sale of certain corporate assets during the year and of $0.8 related to certain information technology assets (the latter unrelated to the global realignment program). Expected charges still to be incurred under actions approved as of December 31, 2017 are approximately $0.5 . 2016 Charges: Employee Termination Costs Facility Consolidation Costs Other Cash Costs, Net Non-Cash Asset Write-downs and Other Total Special Charges Food and Beverage $ 16.8 $ 5.2 $ — $ 0.7 $ 22.7 Power and Energy 18.3 0.2 0.3 1.5 20.3 Industrial 5.2 3.9 — 0.1 9.2 Other 10.2 — — 17.4 27.6 Total $ 50.5 $ 9.3 $ 0.3 $ 19.7 $ 79.8 Food and Beverage —Charges for 2016 related primarily to severance and other costs, 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. These restructuring activities resulted in the termination of 225 employees. Charges for 2016 also included asset impairment charges of $0.7 related to certain tangible long-lived assets (unrelated to the global realignment program). Power and Energy —Charges for 2016 related primarily to severance and other costs in Germany, the U.K., France 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 resulted in a reduction in capital spending by our customers in the oil and gas industries, (ii) realign certain sites around core service markets and, to a lesser extent, (iii) reorganize the segment's management structure. These restructuring activities resulted in the termination of 320 employees. Charges for 2016 also included asset impairment charges of $1.5 related to certain tangible long-lived assets (unrelated to the global realignment program). Industrial —Charges for 2016 related primarily to severance and other costs, 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. These restructuring activities resulted in the termination of 69 employees. Charges for 2016 also included asset impairment charges of $0.1 related to certain tangible long-lived assets. Other —Charges for 2016 related primarily to corporate asset impairment charges of $17.4 , as well as severance and other related costs across various corporate support functions. These restructuring activities resulted in the termination of 130 employees. Asset impairment charges resulted primarily from management’s decision during the first quarter of 2016 to market certain corporate assets for sale. Those assets were marketed for sale beginning in the second quarter and, accordingly, were considered held for sale and reported as a component of "Other current assets" in the consolidated balance sheet as of December 31, 2016. Those assets were sold during 2017, as noted above. 2015 Charges: Employee Termination Costs Facility Consolidation Costs Other Cash Costs (Recoveries), Net Non-Cash Asset Write-downs and Other Total Special Charges Food and Beverage $ 25.1 $ 0.3 $ 0.1 $ 0.3 $ 25.8 Power and Energy 7.8 0.3 (0.1 ) 0.1 8.1 Industrial 3.4 1.9 — 0.7 6.0 Other 2.2 — — 0.5 2.7 Total $ 38.5 $ 2.5 $ — $ 1.6 $ 42.6 Food and Beverage —Charges for 2015 related primarily to severance and other costs associated with (i) the ongoing consolidation and relocation of a manufacturing facility in Germany to an existing facility in Poland and, to a lesser extent, (ii) restructuring initiatives in South America and the U.S. These restructuring activities resulted in the termination of 245 employees. Charges for 2015 also included asset impairment charges of $0.3 related to certain tangible long-lived assets (unrelated to the global realignment program). Power and Energy —Charges for 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 and continued throughout 2015, 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. These restructuring activities resulted in the termination of 155 employees. Charges for 2015 also included asset impairment charges of $0.1 related to certain tangible long-lived assets (unrelated to the global realignment program). Industrial —Charges for 2015 related primarily to severance and other costs associated with (i) the ongoing 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. These restructuring activities resulted in the termination of 176 employees. Charges for 2015 also included asset impairment charges of $0.7 related to certain tangible long-lived assets (unrelated to the global realignment program). Other —Charges for 2015 related primarily to (i) a restructuring of the Company's corporate development function subsequent to the Spin-Off and (ii) an allocation of special charges associated with the former Parent's corporate functions and activities prior to the Spin-Off (unrelated to the global realignment program). Charges for 2015 also included asset impairment charges of $0.5 related to certain information technology assets (unrelated to the global realignment program). See Note 1 for a discussion of the methodology used to allocate corporate-related costs prior to the Spin-Off. The following is an analysis of our restructuring liabilities for the years ended December 31, 2017 , 2016 and 2015 : December 31, 2017 2016 2015 Balance at beginning of year $ 33.6 $ 32.9 $ 9.2 Special charges (1) 14.4 60.1 41.0 Utilization — cash (37.5 ) (58.9 ) (14.3 ) Currency translation adjustment and other 1.9 (0.5 ) (3.0 ) Balance at end of year $ 12.4 $ 33.6 $ 32.9 (1) The years ended December 31, 2017 , 2016 and 2015 excluded $4.9 , $19.7 and $1.6 , respectively, of asset impairment and certain other charges that impacted special charges but not the restructuring liabilities. |
INVENTORIES, NET
INVENTORIES, NET | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORIES, NET | INVENTORIES, NET Inventories at December 31, 2017 and 2016 comprised the following: December 31, 2017 2016 Finished goods $ 92.3 $ 86.2 Work in process 99.2 74.6 Raw materials and purchased parts 108.9 117.8 Total FIFO cost 300.4 278.6 Excess of FIFO cost over LIFO inventory value (6.5 ) (6.2 ) Total inventories $ 293.9 $ 272.4 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 7% and 6% of total inventory at December 31, 2017 and 2016 , respectively. Other inventories are valued using the first-in, first-out (“FIFO”) method. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2017 | |
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 year ended December 31, 2017 , were as follows: December 31, 2016 Impairments Foreign Currency Translation and Other December 31, 2017 Food and Beverage $ 250.3 $ — $ 21.5 $ 271.8 Power and Energy (1) 256.0 — 16.4 272.4 Industrial (2) 216.2 — 10.9 227.1 Total $ 722.5 $ — $ 48.8 $ 771.3 (1) The carrying amount of goodwill included $256.5 and $241.1 of accumulated impairments as of December 31, 2017 and 2016, respectively. (2) The carrying amount of goodwill included $67.7 of accumulated impairments as of December 31, 2017 and 2016. The changes in the carrying amount of goodwill, by reportable segment for the year ended December 31, 2016 , were as follows: December 31, 2015 Impairments Foreign Currency Translation and Other (1) December 31, 2016 Food and Beverage $ 269.9 $ — $ (19.6 ) $ 250.3 Power and Energy (2) 538.9 (252.8 ) (30.1 ) 256.0 Industrial (3) 214.6 — 1.6 216.2 Total $ 1,023.4 $ (252.8 ) $ (48.1 ) $ 722.5 (1) 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 were reclassified between reportable segments. Segment results and corporate expense were recast for all historical periods presented to reflect these changes. In connection with these reclassifications, 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 $241.1 and $0.0 of accumulated impairments as of December 31, 2016 and 2015, respectively. (3) The carrying amount of goodwill included $67.7 of accumulated impairments as of December 31, 2016 and 2015. Goodwill Impairment Test - 2017 Consistent with our accounting policy stated in Note 1, we performed our annual goodwill impairment testing as of the first day of our fiscal fourth quarter of 2017. Based on improved customer order patterns and profitability of our Power and Energy reporting unit during 2017, relative to assumptions utilized in our 2016 annual goodwill impairment testing (see further discussion below), the estimated fair value of the reporting unit exceeded its carrying value by greater than 30% . The estimated fair value of each of our other reporting units also significantly exceeded its respective carrying value. Goodwill Impairment Tests and Charge - 2016 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 the end of our second quarter of 2016 (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. Consistent with our accounting policy stated in Note 1, we performed our annual goodwill impairment testing as of the first day of our fiscal fourth quarter of 2016 which indicated the estimated fair value of our Power and Energy reporting unit exceeded its carrying value by approximately 4% . The estimated fair value of each of our other reporting units significantly exceeded its respective carrying value. Other Intangibles, Net Identifiable intangible assets were as follows: December 31, 2017 December 31, 2016 Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value Intangible assets with determinable lives: Customer relationships $ 226.1 $ (121.9 ) $ 104.2 $ 209.6 $ (101.6 ) $ 108.0 Technology 94.1 (50.9 ) 43.2 84.6 (40.8 ) 43.8 Patents 6.8 (5.1 ) 1.7 6.5 (5.1 ) 1.4 Other 13.8 (11.1 ) 2.7 12.3 (9.6 ) 2.7 340.8 (189.0 ) 151.8 313.0 (157.1 ) 155.9 Trademarks with indefinite lives 198.5 — 198.5 188.4 — 188.4 Total $ 539.3 $ (189.0 ) $ 350.3 $ 501.4 $ (157.1 ) $ 344.3 Amortization expense was $17.6 , $20.0 and $23.4 for the years ended December 31, 2017 , 2016 and 2015 , respectively. Estimated amortization expense related to these intangible assets is $17.4 annually in 2018 and 2019, $17.2 in 2020, $16.9 in 2021 and $13.7 in 2022. At December 31, 2017 , the net carrying value of intangible assets with determinable lives consisted of the following by reportable segment: $75.6 in Power and Energy, $52.5 in Food and Beverage, and $23.7 in Industrial. Trademarks with indefinite lives consisted of the following by reportable segment: $101.4 in Food and Beverage, $61.3 in Industrial, and $35.8 in Power and Energy. Intangible Impairment Test - 2017 Management performed its annual indefinite-lived intangible asset impairment test, performed as of the first day of our fiscal fourth quarter of 2017. Based on the results of our annual indefinite-lived intangible asset impairment testing in 2017, we determined that the estimated fair value of each of our indefinite-lived intangible assets exceeded its respective carrying value by at least 9%. Changes in the gross carrying values of trademarks and other identifiable intangible assets during 2017 related primarily to foreign currency translation. Intangible Impairment Tests and Charges - 2016 and 2015 During 2016 , we recorded impairment charges of $115.9 related to customer relationships, $37.1 related to trademarks and $30.9 related to technology assets of certain businesses within our Power and Energy reportable segment. We also recorded an impairment charge of $5.5 related to a certain technology asset of a business within our Food and Beverage reportable segment. Other changes in the gross carrying values of trademarks and other identifiable intangible assets during 2016 related primarily to foreign currency translation. During 2015 , we recorded an impairment charge of $15.0 related to the trademarks of a business within our Power and Energy reportable segment. We also recorded an impairment charge of $7.7 related to certain technology assets and trademarks associated with a business in our Food and Beverage reportable segment. Other changes in the gross carrying values of trademarks and other identifiable intangible assets during 2015 related to foreign currency translation. For each of the above impairment tests, we determined the fair values of the identifiable intangible asset by discounting the expected cash flows from each respective asset at a rate of return that reflected current market conditions (level 3 inputs). Cash flows from customer relationships were based on projected revenues and margin driven by customer relationships, reduced by an estimated retention rate. Cash flows from trademarks were determined by applying estimated royalty rates to projected revenues of the respective products lines of the reporting unit. Cash flows from technology assets were based on projected cash flows associated with the relevant technology assets. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Defined Benefit Plans Overview —SPX FLOW sponsors a number of defined benefit pension plans and a postretirement plan. In addition, the former Parent sponsors defined benefit pension and postretirement plans. For all of these plans, changes in the fair value of plan assets and actuarial gains and losses are recognized to earnings in the fourth quarter of each year, unless earlier remeasurement is required. The remaining components of pension and postretirement expense, primarily service and interest costs and expected return on plan assets, are recorded on a quarterly basis. Pension and postretirement expense includes net periodic benefit expense associated with defined benefit pension and postretirement plans we sponsor, as well as an allocation of a portion of the net periodic benefit expense associated with the plans sponsored by the former Parent in the period prior to the Spin-Off. Plans Sponsored by SPX FLOW —We sponsor defined benefit pension plans that cover certain employees in foreign countries, principally in Europe, and we assumed certain domestic nonqualified pension and postretirement obligations from the former Parent and formed a new domestic nonqualified pension plan in connection with the Spin-Off. The formation of the new domestic nonqualified pension plan resulted in the remeasurement of such obligations as of September 26, 2015 which resulted in recognition of an actuarial loss of $7.4 during 2015, recorded as a component of “Other income (expense), net” in the accompanying consolidated and combined statements of operations. Plans Sponsored by the former Parent —Certain of the Company’s U.S. and U.K. salaried and hourly paid employees participate in defined benefit pension plans and certain U.S. salaried and hourly paid employees participate in other postretirement benefit plans, such as health and life insurance plans, that are sponsored by the former Parent. Subsequent to the Spin-Off, the former Parent remained the sponsor of these plans. As such, liabilities associated with these plans are not reflected in our consolidated balance sheets. Our consolidated and combined statement of operations for the year ended December 31, 2015 includes expense allocations related to these plans for participants who are, or were, employees of the Company, as well as an allocation of expenses for the former Parent's corporate personnel. The amount of net periodic benefit cost allocated to the Company related to the plans sponsored by the former Parent was $1.2 for the year ended December 31, 2015 , and is reflected within "Other income (expense), net" in the consolidated and combined statement of operations. See Note 1 for a discussion of the methodology used to allocate corporate-related costs prior to the Spin-Off. Clyde Union —Upon the acquisition of Clyde Union in December 2011, we assumed participation in a multiemployer benefit plan under the terms of a collective-bargaining agreement that covers Clyde Union’s domestic union-represented employees. The risks of participating in these multiemployer plans are different from single-employer plans in the following respects: • Assets contributed to the multiemployer plan by us may be used to provide benefits to employees of other participating employers; • If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers; and • If we choose to stop participating in the multiemployer plan, we may be required to pay an amount based on the underfunded status of the plan, referred to as a withdrawal liability. We participate in the following multiemployer benefit plan: Pension Fund EIN Pension Plan Number Pension Protection Act Zone Status - 2017 Financial Improvement Plan/Rehabilitation Plan Status Pending 2017 Contributions 2016 Contributions Surcharge Imposed Expiration Date of Collective Bargaining Agreement IAM 51-6031295-002 Green No $— $— No August 10, 2018 The contributions made by Clyde Union during 2017 and 2016, which were less than $0.1 in each year, were not more than 5% of the total contributions made to the IAM National Pension Fund, National Pension Plan (‘‘IAM’’). In 2011, the IAM began applying an election for funding relief which allows the IAM to amortize the investment losses incurred for the plan year ended December 31, 2008 over a period of up to 29 years (as opposed to 15 years that would otherwise have been required). Furthermore, in accordance with the election, the current asset valuation method has been updated to recognize the investment losses incurred during the 2008 plan year over a ten-year period as opposed to the previous period of five years. The plan year-end date for all our plans is December 31. Below is further discussion regarding our plans, including information on plan assets, employer contributions and benefit payments, obligations and funded status, and periodic pension and postretirement benefit expense (income). Plan assets —Our investment strategy is based on the protection and long-term growth of principal while mitigating overall investment risk. Our foreign defined benefit pension plans’ assets, with fair values of $0.7 and $3.9 at December 31, 2017 and 2016 , respectively, are invested in insurance contracts and classified as Level 3 assets in the fair value hierarchy. During 2017 and 2016 , there were no transfers between levels of the fair value hierarchy for any of our plans, and no shares of SPX FLOW or former Parent common stock were held by our defined benefit pension plans as of December 31, 2017 and 2016 . Our domestic nonqualified pension and postretirement benefit plans are unfunded and have no plan assets. Employer Contributions —Many of our foreign plan obligations are unfunded in accordance with local laws. These plans have no assets and instead are funded by us on a pay as you go basis in the form of direct benefit payments. In 2017 , we made contributions of $0.2 to our foreign plans that are funded. In addition, we made direct benefit payments of $2.6 related to our foreign plans that are unfunded. Our domestic nonqualified pension and postretirement plans are funded by us on a pay as you go basis. We made no direct benefit payments related to these plans in 2017. In 2018 , we expect to make minimum required funding contributions of $0.1 and direct benefit payments of $2.4 related to our foreign pension plans and direct benefit payments of $0.1 related to our domestic nonqualified pension and postretirement benefit plans. Estimated Future Benefit Payments —Following is a summary, as of December 31, 2017 , of the estimated future benefit payments for our foreign and domestic pension plans and our domestic postretirement plan in each of the next five fiscal years and in the aggregate for five fiscal years thereafter. Benefit payments are paid from plan assets or directly by us for our unfunded plans. Foreign Pension Benefits Domestic Pension Benefits Domestic Postretirement Benefits 2018 $ 2.6 $ — $ 0.1 2019 2.4 — 0.1 2020 2.5 6.8 0.1 2021 2.5 — 0.2 2022 2.4 — 0.1 Subsequent five years 14.2 — 0.7 The expected future benefit payments for our plans are estimated based on the same assumptions used at December 31, 2017 to measure our obligations and include benefits attributable to estimated future employee service, to the extent applicable. Obligations and Funded Status —The funded status of our pension plans is dependent upon many factors, including returns on invested assets and the level of market interest rates. The following tables show the foreign and domestic pension plans’ funded status and amounts recognized in our consolidated balance sheets: Foreign Pension Plans Domestic Pension Plan 2017 2016 2017 2016 Change in projected benefit obligation: Projected benefit obligation - beginning of year $ 50.1 $ 51.6 $ 8.3 $ 73.9 Service cost 0.7 1.1 0.7 0.7 Interest cost 0.8 1.1 0.3 0.8 Actuarial losses (gains) (1.6 ) 1.7 0.5 (1.2 ) Benefits paid (2.9 ) (2.1 ) — (65.9 ) Plan settlements (4.2 ) — — — Curtailment gains (1.1 ) (1.0 ) — — Foreign exchange and other 6.5 (2.3 ) — — Projected benefit obligation - end of year $ 48.3 $ 50.1 $ 9.8 $ 8.3 Foreign Pension Plans Domestic Pension Plan 2017 2016 2017 2016 Change in plan assets: Fair value of plan assets - beginning of year $ 3.9 $ 4.2 $ — $ — Actual return on plan assets (0.1 ) (0.4 ) — — Contributions (employer and employee) 0.2 0.3 — — Benefits paid (0.3 ) (0.1 ) — — Plan settlement (3.2 ) — — — Foreign exchange and other 0.2 (0.1 ) — — Fair value of plan assets - end of year $ 0.7 $ 3.9 $ — $ — Funded status at year-end (47.6 ) (46.2 ) (9.8 ) (8.3 ) Amounts recognized in the consolidated balance sheets consist of: Accrued expenses (2.2 ) (2.0 ) — — Other long-term liabilities (45.4 ) (44.2 ) (9.8 ) (8.3 ) Net amount recognized $ (47.6 ) $ (46.2 ) $ (9.8 ) $ (8.3 ) Amount recognized in accumulated other comprehensive loss (pre-tax) consists of net prior service costs $ 0.1 $ — $ — $ — The funded status and accumulated benefit obligation of our domestic postretirement benefit plan was $(4.3) and $(3.9) at December 31, 2017 and 2016 , respectively, with $0.1 recognized in "Accrued expenses" and $4.2 and $3.8 , respectively, recognized in "Other long-term liabilities" in the accompanying consolidated balance sheets at those dates. The accumulated benefit obligation for each foreign pension plan exceeded the fair value of its plan assets at December 31, 2017 and 2016 . The accumulated benefit obligation for all foreign pension plans was $46.5 and $47.6 at December 31, 2017 and 2016 , respectively. The accumulated benefit obligation for the domestic nonqualified pension plan was $8.7 and $7.3 at December 31, 2017 and 2016 , respectively. Components of Net Periodic Pension and Postretirement Benefit Expense (Income) —Net periodic pension benefit expense (income) for our foreign and domestic pension plans included the following components: Year ended December 31, (1) Foreign Pension Plans Domestic Pension Plan 2017 2016 2015 2017 2016 2015 (2) Service cost $ 0.7 $ 1.1 $ 1.2 $ 0.7 $ 0.7 $ 0.8 Interest cost 0.8 1.1 1.3 0.3 0.8 0.5 Expected return on plan assets (0.1 ) (0.1 ) (0.1 ) — — — Amortization of unrecognized prior service credits — — (0.1 ) — — — Curtailment gains (3) (1.1 ) (1.0 ) — — — (0.5 ) Recognized net actuarial losses (gains) (4) (1.6 ) 2.2 (2.0 ) 0.5 (1.2 ) 8.3 Total net periodic pension benefit expense (income) $ (1.3 ) $ 3.3 $ 0.3 $ 1.5 $ 0.3 $ 9.1 (1) As discussed in Note 3 and in accordance with amended guidance issued in March 2017, we have reclassified non-service pension costs from “Selling, general and administrative” expense to “Other income (expense), net” in our consolidated and combined statements of operations for the years ended December 31, 2016 and 2015, respectively, as we believe this classification provides investors a more comparative presentation of our selling, general and administrative expense and operating results from period to period. (2) We assumed this domestic nonqualified pension plan's obligations from the former Parent and formed a new plan in connection with the Spin-Off. We were allocated a portion of the costs related to this plan prior to the Spin-Off, based on an allocation methodology discussed further in Note 1. Accordingly, pension benefit expense of this plan for 2015 reflects a remeasurement of the plan’s obligations as of the Spin-Off and activity of the plan from the date of the Spin-Off through December 31, 2015. (3) Curtailment gain in 2017 is related to the cessation of accrual of future benefits by participants in a defined benefit pension plan in the Netherlands during the first quarter. The accumulated obligations for future pension payments to participants in this plan were also transferred to an insurance company at that time. Under the agreement, the insurance company irrevocably assumed the obligation to make future pension payments to the approximately 60 participants of the plan. Curtailment gains in 2016 resulted from restructuring actions that impacted a facility in France and the curtailment gain in 2015 related to the termination of a former participant in our domestic nonqualified pension plan during the fourth quarter of 2015. (4) Consists of reported actuarial losses (gains) and the difference between actual and expected returns on plan assets. Net periodic postretirement benefit expense for our domestic postretirement plans was $0.4 , $0.8 and $0.2 for the years ended December 31, 2017 , 2016 and 2015 , respectively. The postretirement benefit expense of $0.4 in 2017 was comprised of service cost of $0.1 , interest cost of $0.1 , and recognized net actuarial losses of $0.2 . The postretirement benefit expense of $0.8 in 2016 was comprised of service cost of $0.1 , interest cost of $0.2 , and recognized net actuarial losses of $0.5 . As noted above with respect to non-service pension costs, we also reclassified non-service postretirement costs from “Selling, general and administrative” expense to “Other income (expense), net” in our consolidated and combined statements of operations for the years ended December 31, 2016 and 2015, respectively. Assumptions —Actuarial assumptions used in accounting for our foreign pension plans and, for the domestic nonqualified pension plan we assumed from the former Parent for the period since the Spin-Off, were as follows: Year ended December 31, Foreign Pension Plans Domestic Pension Plan 2017 2016 2015 2017 2016 2015 Weighted-average actuarial assumptions used in determining net periodic pension expense: Discount rate 1.54 % 2.09 % 2.20 % 3.82 % 3.04 % 2.86 % Rate of increase in compensation levels 2.68 % 2.85 % 2.88 % 2.50 % 2.50 % 3.75 % Expected long-term rate of return on assets 1.82 % 1.97 % 2.29 % N/A N/A N/A Weighted-average actuarial assumptions used in determining year-end benefit obligations: Discount rate 1.51 % 1.54 % 2.09 % 3.49 % 3.82 % 3.01 % Rate of increase in compensation levels 2.50 % 2.68 % 2.85 % 2.50 % 2.50 % 2.50 % We review pension assumptions annually. Pension expense or income for the year is determined using assumptions as of the beginning of the year (except for the effects of recognizing changes in the fair value of plan assets and actuarial gains and losses in the fourth quarter of each year), while the funded status is determined using assumptions as of the end of the year. We determined assumptions and established them at the respective balance sheet date using the following principles: (i) the expected long-term rate of return on plan assets is established based on forward looking long-term expectations of asset returns over the expected period to fund participant benefits based on the target investment mix of our plans; (ii) the discount rate is determined by matching the expected projected benefit obligation cash flows for each of the plans to a yield curve that is representative of long-term, high-quality (rated AA or higher) fixed income debt instruments as of the measurement date; and (iii) the rate of increase in compensation levels is established based on our expectations of current and foreseeable future increases in compensation. In addition, we consider advice from independent actuaries. Actuarial assumptions used in accounting for our domestic postretirement plans were as follows: Year ended December 31, 2017 2016 2015 Assumed health care cost trend rates: Health care cost trend rate for next year 7.25 % 7.50 % 6.60 % Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 5.00 % 5.00 % 5.00 % Year that the rate reaches the ultimate trend rate 2027 2027 2024 Discount rate used in determining net periodic postretirement benefit expense 4.32 % 4.66 % 3.53 % Discount rate used in determining year-end postretirement benefit obligation 3.79 % 4.32 % 4.66 % The accumulated postretirement benefit obligation was determined using the terms and conditions of our plans, together with relevant actuarial assumptions and health care cost trend rates. It is our policy to review the postretirement assumptions annually. The assumptions are determined by us and are established based on our prior experience and our expectations that future rates will decline. In addition, we consider advice from independent actuaries. Defined Contribution Retirement Plan In connection with the Spin-Off, we established a defined contribution retirement plan (the ‘‘DC Plan’’) pursuant to Section 401(k) of the U.S. Internal Revenue Code to which eligible U.S. employees of the Company may voluntarily contribute. Under the DC Plan, such employees may contribute up to 50% of their compensation into the DC Plan and the Company matches a portion of participating employees’ contributions. The Company’s matching contributions are primarily made in newly issued shares of SPX FLOW common stock and are issued at the prevailing market price. The matching contributions vest with the employee immediately upon the date of the match and there are no restrictions on the resale of SPX FLOW common stock held by employees. Amounts contributed under the DC Plan for the years ended December 31, 2017 and 2016 and the period subsequent to the Spin-Off in 2015 were $5.7 , $6.5 and $1.7 , respectively. Prior to the Spin-Off, eligible employees could participate in the former Parent's defined contribution retirement plan pursuant to the above guidelines. The amount of cost directly charged to the Company related to matching contributions under the DC Plan was $4.7 for the year ended December 31, 2015. In addition, the Company was allocated $1.1 of cost for matching contributions for former Parent corporate personnel for the year ended December 31, 2015. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES For purposes of our consolidated and combined financial statements, income taxes have been calculated as if we filed income tax returns on a stand-alone basis for the period prior to the Spin-Off. The Company’s U.S. operations and certain of its non-U.S. operations historically were included in the tax returns of the former Parent or its subsidiaries that were not part of the Spin-Off. Therefore, the Company’s tax results for the period prior to the Spin-Off, as presented in the consolidated and combined financial statements, may not be reflective of the results that the Company will generate in the future. In jurisdictions where the Company was included in the tax returns filed by the former Parent or its subsidiaries that were not part of the Spin-Off, any income taxes payable resulting from the related income tax provision were reflected in combined balance sheets prior to and through the date of the Spin-Off within ‘‘Former parent company investment.’’ Income (loss) before income taxes and the provision for (benefit from) income taxes consisted of the following: Year ended December 31, 2017 2016 2015 Income (loss) before income taxes: United States $ 100.6 $ (65.5 ) $ 110.0 Foreign (42.7 ) (416.5 ) 27.2 $ 57.9 $ (482.0 ) $ 137.2 Provision for (benefit from) income taxes: Current: United States $ 26.6 $ (3.9 ) $ 55.5 Foreign 16.4 4.9 19.7 Total current 43.0 1.0 75.2 Deferred and other: United States (30.2 ) (47.4 ) (13.1 ) Foreign (1.7 ) (54.6 ) (12.3 ) Total deferred and other (31.9 ) (102.0 ) (25.4 ) Total provision (benefit) $ 11.1 $ (101.0 ) $ 49.8 The reconciliation of income tax computed at the U.S. federal statutory tax rate to our effective income tax rate was as follows: Year ended December 31, 2017 2016 2015 Tax at U.S. federal statutory rate 35.0 % 35.0 % 35.0 % State and local taxes, net of U.S. federal benefit 1.8 0.8 1.7 U.S. credits and exemptions (9.0 ) 0.2 (1.6 ) Tax rate differential on foreign earnings 9.6 (3.8 ) (5.5 ) Adjustments to uncertain tax positions (7.4 ) 0.2 (1.7 ) Changes in valuation allowance 17.5 (1.4 ) 3.8 Tax on repatriation of foreign earnings 93.9 0.2 7.3 U.S. federal rate change (123.0 ) — — Stock compensation vestings 2.2 — — Non-deductible goodwill impairment — (15.7 ) — Poland economic development incentive — 4.9 — Other (1.4 ) 0.6 (2.7 ) 19.2 % 21.0 % 36.3 % Significant components of our deferred tax assets and liabilities were as follows: As of December 31, 2017 2016 Deferred tax assets: Net operating loss and credit carryforwards $ 406.6 $ 230.8 Pension, other postretirement and postemployment benefits 10.0 12.4 Payroll and compensation 12.3 19.1 Working capital accruals 13.9 20.6 Other 49.7 43.0 Total deferred tax assets 492.5 325.9 Valuation allowance (83.6 ) (74.9 ) Net deferred tax assets 408.9 251.0 Deferred tax liabilities: Accelerated depreciation 2.4 17.7 Intangible assets recorded in acquisitions 74.1 87.7 Basis difference in affiliates 308.0 138.3 Other 7.2 5.2 Total deferred tax liabilities 391.7 248.9 $ 17.2 $ 2.1 Enactment of the Tax Cuts and Jobs Act On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (the “Act”). The Act includes numerous changes to existing tax law, including a permanent reduction in the federal corporate income tax rate from 35% to 21% . The rate reduction is effective for the Company as of January 1, 2018. As a result of the reduction in the federal corporate income tax rate, the Company has revalued its net U.S. federal deferred tax liability. The Company has substantially completed its accounting for the revaluation of its net U.S. federal deferred tax liabilities and recorded a tax benefit of approximately $17.8 in the fourth quarter of 2017, excluding the impact for rate change on earnings which were not considered indefinitely reinvested. There are certain deferred tax balances that can only be estimated at this time, so the rate change on these balances is a provisional estimate as of December 31, 2017. The Act provides a full dividends received deduction for any future dividends from non-U.S. subsidiaries to their U.S. parent company. Generally, this will allow the Company to repatriate cash more freely than under the historical U.S. tax system. To transition to this new tax regime, the Act also provided for a mandatory one-time "deemed repatriation" of accumulated post-1986 foreign earnings which have not been previously taxed. The Company recorded a provisional estimate for this transition tax of $50.4 in the fourth quarter of 2017. Previously, the Company had recorded taxes of $59.8 on earnings not indefinitely reinvested. In the fourth quarter, the Company recorded a benefit of $53.4 for the reduced tax rate on such earnings. The Company expects to pay U.S. federal tax of approximately $20.8 on the deemed repatriation after utilization of tax loss and foreign tax credit carryforwards. The Company will pay this amount over a period of up to the next nine years as a result of fiscal year-ends of certain foreign subsidiaries ending after December 31, 2017. The accounting for the transition tax as required by the Act is provisional at December 31, 2017 due to (1) anticipated guidance from the U.S. Treasury department on interpreting various provisions of the Act, (2) foreign subsidiaries with differing U.S. tax year-ends where final cash balances will not be known until November 2018 and (3) final foreign tax credit amounts from foreign subsidiaries that have not yet filed tax returns. The Act is comprehensive containing several other provisions, some of which will not materially impact the Company. Other provisions, such as the taxation of Global Intangible Low-Taxed Income (“GILTI”) and the limitation of deductions for interest expense, could have significant impact to the Company’s future tax position and cash taxes. The Company has not yet adopted an accounting policy related to the provision of deferred taxes related to GILTI. As such, the Company has not recorded any deferred taxes for GILTI. The Company anticipates future issuance of U.S. Treasury department regulations and notices that will clarify significant issues dealing with the application and computation of taxes due under the GILTI provisions. General Matters Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We periodically assess deferred tax assets to determine if they will likely be realized and the adequacy of deferred tax liabilities, incorporating the results of local, state, federal and foreign tax audits in our estimates and judgments. At December 31, 2017 , we had the following tax loss carryforwards available: tax loss carryforwards of various foreign jurisdictions of approximately $1,607.1 and state tax loss carryforwards of approximately $152.7 . Of these amounts, $1.8 expire in 2018 and $185.5 expires at various times between 2019 and 2037. The remaining carryforwards have no expiration date. Of the respective increases during 2017 in “net operating loss and credit carryforwards” deferred tax assets and “basis difference in affiliates” deferred tax liabilities reflected in the summary of components of deferred taxes above, $177.0 related to certain of our Luxembourg subsidiaries which reported net operating losses for statutory and tax purposes resulting from impairments of the carrying values of certain of their subsidiaries. These impairments created an outside basis difference that required the recording of a deferred tax liability, and which resulted in a corresponding and offsetting increase in the Company’s net operating loss carryforwards. These increases in the components of our deferred tax positions had no impact on our results of operations in 2017 or the presentation of deferred tax assets and liabilities in our consolidated balance sheet at December 31, 2017. Realization of deferred tax assets, including those associated with net operating loss and credit carryforwards, is dependent upon generating sufficient taxable income in the appropriate tax jurisdiction. We believe that it is more likely than not that we may not realize the benefit of certain of these deferred tax assets and, accordingly, have established a valuation allowance against certain of these deferred tax assets. Although realization is not assured for the remaining deferred tax assets, we believe it is more likely than not that the deferred tax assets will be realized through future taxable earnings or tax planning strategies. However, deferred tax assets could be reduced in the near term if our estimates of taxable income are significantly reduced or tax planning strategies are no longer viable. The valuation allowance increased by $8.7 in 2017 and increased by $4.6 in 2016 . Of the net changes in 2017 and 2016 , $10.2 and $6.8 were recognized as an increase in tax expense. The increase in the valuation allowance during 2017 was primarily due to current year losses carried forward and the impact of a weaker U.S. dollar on foreign currency-denominated balances, offset by previously carried forward losses which were written off during the year as a result of entity rationalization. The increase in the valuation allowance during 2016 was primarily due to current year losses carried forward, offset by the impact of a stronger U.S. dollar on foreign currency-denominated balances. The amount of income tax that we pay annually is dependent on various factors, including the timing of certain deductions. These deductions can vary from year to year and, consequently, the amount of income taxes paid in future years will vary from the amounts paid in prior years. Undistributed Foreign Earnings Generally, it has been our practice and intention to reinvest the earnings of most of our non-U.S. subsidiaries in those operations with a few limited exceptions. As previously noted, the Act made significant changes to the taxation of undistributed foreign earnings, requiring that all previously untaxed earnings and profits of our controlled foreign corporations be subjected to a one-time mandatory repatriation tax. The transition tax will substantially eliminate the basis difference that existed previously for purposes of ASC 740. However, there are limited other taxes that could continue to apply such as foreign withholding and certain state taxes. As of December 31, 2017 , we have recorded a provision of $2.3 for foreign withholding and state taxes on the earnings we expect to repatriate. However, the Company is still evaluating the full impact of the Act on our assertion to indefinitely reinvest the earnings of our other foreign operations. Since these earnings have already been subjected to U.S. federal tax they would only be potentially subject to limited other taxes, including foreign withholding and certain state taxes. During the fourth quarter of 2015, we repatriated sufficient foreign source income for U.S. tax purposes to allow us to utilize our 2015 foreign tax credit capacity and provided U.S. taxes of $4.2 related to the dividend. Unrecognized Tax Benefits As of December 31, 2017 , we had gross unrecognized tax benefits of $5.6 (net unrecognized tax benefits of $2.2 ), of which $2.2 , if recognized, would impact our effective tax rate. Similarly, at December 31, 2016 , we had gross unrecognized tax benefits of $13.9 (net unrecognized tax benefits of $5.3 ). We classify interest and penalties related to unrecognized tax benefits as a component of our income tax provision. As of December 31, 2017 , gross accrued interest totaled $0.2 (net accrued interest of $0.2 ), while the related amount as of December 31, 2016 was $1.8 (net accrued interest of $1.7 ). Our income tax provision for the years ended December 31, 2017 , 2016 and 2015 included gross interest expense (income) of $(1.5) , $0.3 and $(0.1) , respectively. There were no significant penalties recorded during any year presented. 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 $0.0 to $1.5 . The previously unrecognized tax benefits relate to transfer pricing matters. The aggregate changes in the balance of unrecognized tax benefits for the years ended December 31, 2017 , 2016 and 2015 were as follows: Year ended December 31, 2017 2016 2015 Unrecognized tax benefit - beginning of year $ 13.9 $ 25.4 $ 27.3 Gross increases - tax positions in prior period — 0.1 3.6 Gross decreases - tax positions in prior period (2.3 ) (3.8 ) (5.9 ) Gross increases - tax positions in current period 0.4 2.5 5.3 Settlements — (8.5 ) — Lapse of statute of limitations (6.4 ) (1.9 ) (4.3 ) Change due to foreign currency exchange rates — 0.1 (0.6 ) Unrecognized tax benefit - end of year $ 5.6 $ 13.9 $ 25.4 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 that were part of the Spin-Off. Because activities that gave rise to these unrecognized tax benefits related to the Company's operations, the impact of these items was recorded to "Income tax provision" within our combined statements of operations prior to the Spin-Off date, with the offset recorded to "Former parent company investment" within our combined balance sheets prior to the Spin-Off date, which were reclassified to "Paid-in capital" as of December 31, 2015. In addition, some of the Company's tax returns included the operations of the former Parent's subsidiaries that were not part of the Spin-Off. In certain of these cases, these 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 have recorded a liability for these uncertain tax positions within our 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," but instead recorded the amounts directly to "Former parent company investment" within our combined balance sheets prior to the Spin-Off date, which were reclassified to "Paid-in capital" as of December 31, 2015. Other Tax Matters During 2017 , we recorded an income tax provision of $11.1 on $57.9 of income before income taxes, resulting in an effective tax rate of 19.2% . The effective tax rate for 2017 was impacted by an income tax benefit of $71.2 related to revaluation of our net deferred tax liabilities resulting from the change in the U.S. federal tax rate, including the reduction for earnings that were not indefinitely reinvested, and income tax charges of (i) $50.4 for the deemed repatriation tax and (ii) $11.6 resulting from losses occurring in certain jurisdictions where the tax benefit of those losses is not expected to be realized. During 2016 , our effective tax rate of 21.0% was impacted by tax benefits of (i) $59.3 resulting from the $426.4 goodwill and intangible assets impairment charge recorded by our Power and Energy reporting unit during the second quarter (an effective tax rate of 13.9% ), 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 deferred income tax assets in certain jurisdictions, and (ii) $23.8 resulting from a tax incentive realized in Poland related to the expansion of our manufacturing facility in that country. During 2015 , our effective tax rate of 36.3% was impacted by tax charges of $11.7 related to dividends from foreign subsidiaries, partially offset by tax benefits of (i) $5.1 related to net changes in uncertain tax positions, (ii) $2.8 related to tax rate decreases in Italy and the U.K. and (iii) $2.0 related to foreign exchange losses recognized for income tax purposes with respect to a foreign branch. We review our income tax positions on a continuous basis and record unrecognized tax benefits 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 are 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. We believe any uncertain tax positions related to these examinations have been appropriately reflected as unrecognized tax benefits. We have various non-U.S. income tax returns under examination. The most significant of these is the examination in Germany for the 2010 through 2014 tax years. We expect this examination will conclude in 2018. We believe that any uncertain tax positions related to these examinations have been appropriately reflected as unrecognized tax benefits. 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. |
INDEBTEDNESS
INDEBTEDNESS | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
INDEBTEDNESS | INDEBTEDNESS Debt at December 31, 2017 and 2016 was comprised of the following: December 31, 2017 2016 Domestic revolving loan facility $ — $ 68.0 Term loan (1) 270.0 390.0 5.625% senior notes, due in August 2024 300.0 300.0 5.875% senior notes, due in August 2026 300.0 300.0 Trade receivables financing arrangement — 21.2 Other indebtedness (2) 35.8 42.4 Less: deferred financing fees (3) (10.2 ) (12.8 ) Total debt 895.6 1,108.8 Less: short-term debt 24.2 27.7 Less: current maturities of long-term debt 20.5 20.2 Total long-term debt $ 850.9 $ 1,060.9 (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. In October and December 2017, we made voluntary principal prepayments in the amounts of $80.0 and $20.0 , respectively, under the term loan facility. On January 31, 2018, we made an additional voluntary principal prepayment of $30.0 under this facility. As a result of the January 2018 prepayment, the outstanding principal amount on the term loan decreased to $240.0 . The payment was funded by cash on hand. There was no penalty associated with these prepayments. (2) Primarily includes capital lease obligations of $11.6 and $14.7 and balances under a purchase card program of $21.9 and $17.9 as of December 31, 2017 and 2016 , respectively. The purchase card program allows for payment beyond the normal payment terms for goods and services acquired under the program. As this arrangement extends the payment of these purchases beyond their normal payment terms through third-party lending institutions, we have classified these amounts as short-term debt. (3) Deferred financing fees were comprised of fees related to the term loan and senior notes. Debt payable during each of the five years subsequent to December 31, 2017 is $44.7 , $21.3 , $231.3 , $1.3 and $1.4 , respectively. Senior Credit Facilities On September 1, 2015, we entered into senior credit facilities with a syndicate of lenders that provide for committed senior secured financing in the aggregate initial principal amount of $1.35 billion , consisting of the following, each with a final maturity of September 24, 2020: • A term loan facility in an aggregate initial principal amount of $400.0 ; • A domestic revolving credit facility, available for loans and letters of credit, in an aggregate principal amount up to $250.0 ; • A global revolving credit facility, available for loans (and performance letters of credit and guarantees up to the equivalent of $100.0 ) in Euro, British Pound and other currencies, in an aggregate principal amount up to the equivalent of $200.0 ; • A participation multi-currency foreign credit instrument facility, available for performance letters of credit and guarantees, in an aggregate principal amount up to the equivalent of $250.0 ; and • A bilateral multi-currency foreign credit instrument facility, available for performance letters of credit and guarantees, in an aggregate principal amount up to the equivalent of $250.0 . We also may seek additional commitments, without consent from the existing lenders, to add an incremental term loan facility and/or increase the commitments in respect of the domestic revolving credit facility, the global revolving credit facility, the participation foreign credit instrument facility, and/or the bilateral foreign credit instrument facility by an aggregate principal amount not to exceed (x) $500.0 plus (y) an unlimited amount so long as, immediately after giving effect thereto, our Consolidated Senior Secured Leverage Ratio (as defined in the credit agreement generally as the ratio of consolidated total debt (excluding the face amount of undrawn letters of credit, bank undertakings, or analogous instruments and net of cash and cash equivalents in excess of $50.0 ) at the date of determination secured by liens to consolidated adjusted EBITDA, as defined in the credit agreement, for the four fiscal quarters ended most recently before such date) does not exceed 2.75 to 1.00 plus (z) an amount equal to all voluntary prepayments of the term loan facility and voluntary prepayments accompanied by permanent commitment reductions of the revolving credit facilities and foreign credit instrument facilities. We are the borrower under all of the senior credit facilities, and certain of our foreign subsidiaries are (and we may designate other foreign subsidiaries to be) borrowers under the global revolving credit facility and the foreign credit instrument facilities. All borrowings and other extensions of credit under our senior credit facilities are subject to the satisfaction of customary conditions, including absence of defaults and accuracy in material respects of representations and warranties. The interest rates applicable to loans under our senior credit facilities are, at our option, equal to either (x) an alternate base rate (the highest of (a) the federal funds effective rate plus 0.5% , (b) the prime rate of Bank of America, N.A., and (c) the one-month LIBOR rate plus 1.0% ) or (y) a reserve-adjusted LIBOR rate for dollars (Eurodollar) plus, in each case, an applicable margin percentage, which varies based on our Consolidated Leverage Ratio (as defined in the credit agreement generally as the ratio of consolidated total debt (excluding the face amount of undrawn letters of credit, bank undertakings or analogous instruments and net of cash and cash equivalents in excess of $50.0 ) at the date of determination to consolidated adjusted EBITDA, as defined in the credit agreement, for the four fiscal quarters ended most recently before such date). We may elect interest periods of one, two, three or six months (and, if consented to by all relevant lenders, nine or twelve months) for Eurodollar borrowings. The per annum fees charged and the interest rate margins applicable to Eurodollar and alternate base rate loans are discussed under “Amendment of Senior Credit Facilities” further below. The fees for bilateral foreign credit commitments are as specified under "Amendment of Senior Credit Facilities" for foreign credit commitments unless otherwise agreed with the bilateral foreign issuing lender. We also pay fronting fees on the outstanding amounts of letters of credit and foreign credit instruments (in the participation facility) at rates of 0.125% per annum and 0.250% per annum, respectively. Our senior credit facilities require mandatory prepayments in amounts equal to the net proceeds from the sale or other disposition of, including from any casualty to, or governmental taking of, property in excess of specified values (other than in the ordinary course of business and subject to other exceptions) by the Company or its subsidiary guarantors. Mandatory prepayments are applied to repay, first, amounts outstanding under any term loans and, then, amounts outstanding under the global revolving credit facility and the domestic revolving credit facility (without reducing the commitments thereunder). No prepayment is required generally to the extent the net proceeds are reinvested (or committed to be reinvested) in permitted acquisitions, permitted investments or assets to be used in our business within 360 days (and if committed to be reinvested, actually reinvested within 180 days after the end of such 360 -day period) of the receipt of such proceeds. We may voluntarily prepay loans under our senior credit facilities, in whole or in part, without premium or penalty. Any voluntary prepayment of loans is subject to reimbursement of the lenders’ breakage costs in the case of a prepayment of Eurodollar rate borrowings other than on the last day of the relevant interest period. Indebtedness under our senior credit facilities is guaranteed by: • Each existing and subsequently acquired or organized domestic material subsidiary with specified exceptions; and • The Company with respect to the obligations of our foreign borrower subsidiaries under the global revolving credit facility, the participation foreign credit instrument facility and the bilateral foreign credit instrument facility. Indebtedness under our senior credit facilities is secured by a first priority pledge and security interest in 100% of the capital stock of our domestic subsidiaries (with certain exceptions) held by the Company or its domestic subsidiary guarantors and 65% of the capital stock of our material first-tier foreign subsidiaries (with certain exceptions). Effective with an amendment to our senior credit facilities in July 2016 (“the First Amendment”), the Company and the domestic subsidiary guarantors granted 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 . 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 indebtedness under our senior credit facilities will be unsecured. Our senior credit facilities require that we maintain a consolidated interest coverage ratio, a consolidated leverage ratio, and a consolidated secured leverage ratio (all as defined in the credit agreement). See further discussion under "Amendment of Senior Credit Facilities" section below. Our senior credit facilities also contain covenants that, among other things, restrict our ability to incur additional indebtedness, grant liens, make investments, loans, guarantees, or advances, make restricted junior payments, including dividends, redemptions of capital stock, and voluntary prepayments or repurchase of certain other indebtedness, engage in mergers, acquisitions or sales of assets, enter into sale and leaseback transactions, or engage in certain transactions with affiliates, and otherwise restrict certain corporate activities. Our senior credit facilities contain customary representations, warranties, affirmative covenants and events of default. We are permitted under the senior credit facilities to repurchase our capital stock and pay cash dividends in an unlimited amount if our Consolidated Leverage Ratio, as defined in the credit agreement, is (after giving pro forma effect to such payments) less than 2.50 to 1.00. If our Consolidated Leverage Ratio is (after giving pro forma effect to such payments) greater than or equal to 2.50 to 1.00, the aggregate amount of such repurchases and dividend declarations cannot exceed (a) $100.0 in any fiscal year plus (b) an additional amount for all such repurchases and dividend declarations made after September 1, 2015 equal to the Available Amount (as defined in the credit agreement as the sum of (i) $300.0 plus (ii) a positive amount equal to 50% of cumulative Consolidated Net Income (as defined in the credit agreement, generally as consolidated net income subject to certain adjustments solely for the purposes of determining this basket) during the period from September 1, 2015, to the end of the most recent fiscal quarter preceding the date of such repurchase or dividend declaration for which financial statements have been (or were required to be) delivered (or, in case such Consolidated Net Income is a deficit, minus 100% of such deficit) plus or minus (iii) certain other amounts specified in the credit agreement). Amendment of Senior Credit Facilities In December 2016, the Company and certain of its subsidiaries entered into an amendment (the “Second Amendment”) to the Company’s existing senior credit facilities, dated as of September 1, 2015 and amended as of July 11, 2016 (the “Existing Senior Credit Facilities” and, as amended by the Second Amendment, the “Senior Credit Facilities”), by and among the Company, the foreign subsidiary borrowers party thereto, and the lenders party thereto. The Second Amendment amended the Existing Senior Credit Facilities to, among other things: • provide for a period of covenant relief through December 31, 2018 (the “Covenant Relief Period”) with the option for the Company to earlier terminate the Covenant Relief Period if the consolidated leverage ratio is less than or equal to 3.25 :1.00 and the interest coverage ratio is greater than or equal to 3.50 :1.00; • during the Covenant Relief Period, lower the additional commitments and principal available to be sought without consent from the existing lenders, to add an incremental term loan facility and/or increase the commitments in respect of the domestic revolving credit facility, the global revolving credit facility, the participation foreign credit instrument facility, and/or the bilateral foreign credit instrument facility, from $500.0 to $300.0 ; • during the Covenant Relief Period, increase the maximum consolidated leverage ratio that must be maintained by the Company from 4.00 :1.00 to (i) 4.50 :1.00 for the quarter ended December 31, 2017 and ending March 31, 2018, (ii) 4.25 :1.00 for the quarters ending June 30, 2018 and September 30, 2018 and (iii) 4.00 :1.00 for the quarter ending December 31, 2018; • during the Covenant Relief Period, decrease the minimum interest coverage ratio that must be maintained by the Company from 3.50 :1.00 to 3.00 :1.00 through the quarter ending March 31, 2018 and thereafter stepping up to (i) 3.25 :1.00 for the quarters ending June 30, 2018 and September 30, 2018 and (ii) 3.50 :1.00 for the quarter ending December 31, 2018; • during the Covenant Relief Period, require that the Company maintain a maximum consolidated secured leverage ratio of 2.50 :1.00; and • amend the per annum fees charged and the interest rate margins applicable to Eurodollar and alternate base rate loans as follows: At Any Time Other Than During the Covenant Relief Period Consolidated Leverage Ratio Domestic Revolving Commitment Fee Global Revolving Commitment Fee Letter of Credit Fee Foreign Credit Commitment Fee Foreign Credit Instrument Fee LIBOR Rate Loans ABR Loans Greater than or equal to 3.50 to 1.0 0.400% 0.400% 2.250% 0.400% 1.375% 2.250% 1.250% Between 3.00 to 1.0 and 3.50 to 1.0 0.350% 0.350% 2.000% 0.350% 1.250% 2.000% 1.000% Between 2.00 to 1.0 and 3.00 to 1.0 0.300% 0.300% 1.750% 0.300% 1.000% 1.750% 0.750% Between 1.50 to 1.0 and 2.00 to 1.0 0.275% 0.275% 1.500% 0.275% 0.875% 1.500% 0.500% Between 1.00 to 1.0 and 1.50 to 1.0 0.250% 0.250% 1.375% 0.250% 0.800% 1.375% 0.375% Less than 1.00 to 1.0 0.225% 0.225% 1.250% 0.225% 0.750% 1.250% 0.250% During the Covenant Relief Period Consolidated Leverage Ratio Domestic Revolving Commitment Fee Global Revolving Commitment Fee Letter of Credit Fee Foreign Credit Commitment Fee Foreign Credit Instrument Fee LIBOR Rate Loans ABR Loans Greater than or equal to 3.50 to 1.0 0.500% 0.500% 2.750% 0.500% 1.675% 2.750% 1.750% Between 3.00 to 1.0 and 3.50 to 1.0 0.450% 0.450% 2.500% 0.450% 1.550% 2.500% 1.500% Between 2.00 to 1.0 and 3.00 to 1.0 0.400% 0.400% 2.250% 0.400% 1.300% 2.250% 1.250% Between 1.50 to 1.0 and 2.00 to 1.0 0.375% 0.375% 2.000% 0.375% 1.175% 2.000% 1.000% Between 1.00 to 1.0 and 1.50 to 1.0 0.350% 0.350% 1.875% 0.350% 1.100% 1.875% 0.875% Less than 1.00 to 1.0 0.325% 0.325% 1.750% 0.325% 1.050% 1.750% 0.750% At December 31, 2017 , we had $443.0 of borrowing capacity under our revolving credit facilities after giving effect to $7.0 reserved for outstanding letters of credit. In addition, at December 31, 2017 , we had $313.1 of available issuance capacity under our foreign credit instrument facilities after giving effect to $186.9 reserved for outstanding bank guarantees and standby letters of credit. The weighted-average interest rate of outstanding borrowings under our senior credit facilities was approximately 4.1% and 2.8% at December 31, 2017 and 2016 , respectively. Senior Notes In August 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 the trustee of the Notes (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. Other In September 2015, we entered into a trade receivables financing arrangement under which we can borrow, on a continuous basis, up to $50.0 , depending on our trade receivables balance and other factors. The facility contains representations, warranties, covenants and indemnities customary for facilities of this type. The facility does not contain any covenants that we view as materially constraining to the activities of our business. This arrangement has a final maturity of September 21, 2018. At December 31, 2017 , we had $33.8 of available borrowing capacity under our trade receivables financing arrangement. At December 31, 2017 , in addition to the revolving lines of credit described above, we had approximately $6.3 of letters of credit outstanding under separate arrangements in China and India. At December 31, 2017 , we were in compliance with all covenants of our senior credit facilities and our senior notes. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2017 | |
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 British Pound. From time to time, we enter into forward contracts to manage the exposure on contracts with forecasted transactions denominated in non-functional currencies and to manage the risk of transaction gains and losses associated with assets/liabilities denominated in currencies other than the functional currency of certain subsidiaries ("FX forward contracts"). In addition, some of our contracts contain currency forward embedded derivatives ("FX embedded derivatives"), because the currency of exchange is not "clearly and closely" related to the functional currency of either party to the transaction. Certain of our FX forward contracts are designated as cash flow hedges. To the extent these derivatives are effective in offsetting the variability of the hedged cash flows, changes in the derivatives' fair value are not included in current earnings, but are included in AOCL. These changes in fair value are reclassified into earnings as a component of revenues or cost of products sold, as applicable, when the forecasted transaction impacts earnings. In addition, if the forecasted transaction is no longer probable, the cumulative change in the derivatives' fair value is recorded as a component of "Other income (expense), net" in the period in which the transaction is no longer considered probable of occurring. To the extent a previously designated hedging transaction is no longer an effective hedge, any ineffectiveness measured in the hedging relationship is recorded in earnings in the period in which it occurs. We had FX forward contracts with an aggregate notional amount of $44.6 and $28.0 outstanding as of December 31, 2017 and 2016 , respectively, with all such contracts scheduled to mature within one year . We also had FX embedded derivatives with an aggregate notional amount of $16.9 and $21.4 at December 31, 2017 and 2016 , respectively, with all such derivatives scheduled to mature within one year . There were no unrealized gains or losses recorded in AOCL related to FX forward contracts as of December 31, 2017 and 2016 , respectively. The net gains (losses) recorded in "Other income (expense), net" related to FX gains (losses) totaled $(4.9) , $(2.2) and $1.1 for the years ended December 31, 2017 , 2016 and 2015 , respectively. 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 consolidated balance sheets. The gross fair values of our FX forward contracts and FX embedded derivatives, in aggregate, were $2.3 and $2.9 (gross assets) and $0.0 and $0.1 (gross liabilities) at December 31, 2017 and 2016 , respectively. Concentrations of Credit Risk Financial instruments that potentially subject us to significant concentrations of credit risk consist of cash and equivalents, trade accounts receivable, and FX forward contracts. These financial instruments, other than trade accounts receivable, are placed with high-quality financial institutions throughout the world. We periodically evaluate the credit standing of these financial institutions. We maintain cash levels in bank accounts that, at times, may exceed federally-insured limits. We have not experienced, and believe we are not exposed to significant risk of, loss in these accounts. We have credit loss exposure in the event of nonperformance by counterparties to the above financial instruments, but have no other off-balance-sheet credit risk of accounting loss. We anticipate that counterparties will be able to fully satisfy their obligations under the contracts. We do not obtain collateral or other security to support financial instruments subject to credit risk, but we do monitor the credit standing of counterparties. Concentrations of credit risk arising from trade accounts receivable are due to selling to customers in a particular industry. Credit risks are mitigated by performing ongoing credit evaluations of our customers' financial conditions and obtaining collateral, advance payments, or other security when appropriate. No one customer, or group of customers that, to our knowledge, are under common control, accounted for more than 10% of our revenues for any period presented. |
EQUITY AND STOCK-BASED COMPENSA
EQUITY AND STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2017 | |
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 our 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 in the period presented prior to the Spin-Off. The following table sets forth the number of weighted-average shares outstanding used in the computation of basic and diluted income (loss) per share: Year ended December 31, 2017 2016 2015 Weighted-average shares outstanding, basic 41.799 41.345 40.863 Dilutive effect of share-based awards 0.384 — 0.097 Weighted-average shares outstanding, dilutive (1) 42.183 41.345 40.960 (1) For the year ended December 31, 2017 , 0.202 of unvested restricted stock shares/units were not included in the computation of diluted income per share because required internal performance thresholds for vesting (as discussed below) were not met. For the year ended December 31, 2016 , an aggregate of 0.802 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 period. For the year ended December 31, 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 0.236 . For the year ended December 31, 2015 , 0.474 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 below) were not met. For the years ended December 31, 2017 and 2015 , 0.358 and 0.389 , respectively, 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 - Awards Granted Prior to the Spin-Off Prior to the Spin-Off, eligible employees of the Company participated in our former Parent’s share-based compensation plan pursuant to which they were granted share-based awards of its stock. Our 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 our former Parent’s corporate employees who provided certain centralized support functions. Our former Parent's restricted stock shares, restricted stock units, and stock options were granted to eligible employees in accordance with applicable equity compensation plan documents and agreements. Subject to participants' continued employment and other plan terms and conditions, the restrictions lapse and awards generally vest over a period of time, generally one or three years. In some instances, such as death, disability, or retirement, stock may vest concurrently with or following an employee's termination. A substantial portion of such former Parent's restricted stock shares and restricted stock unit awards granted in 2014 generally vested based on performance thresholds. Eligible employees received target performance awards in 2014 in which the employee could earn between 25% and 125% of the target performance award in the event the award met the required vesting criteria. Vesting for the 2014 target performance awards was based on our former Parent's shareholder return versus the S&P Composite 1500 Industrials Index over the three -year period ended December 31, 2016. Awards granted in 2015 did not contain such target performance conditions. Each eligible non-officer employee also received awards in 2015 and 2014 that generally vested ratably over three years , subject only to the passage of time and a participant's continued employment during the vesting period. Officers of our former Parent received awards in 2015 and 2014 that generally vested ratably over three years , subject to an internal performance metric and a participant's continued employment during the vesting period. Our former Parent's restricted stock shares and restricted stock units that did not vest within the applicable vesting period were forfeited. In connection with the Spin-Off, outstanding equity-based awards granted to SPX FLOW employees under our 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 2014 and 2013, 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 related to the modification was $4.0 , of which $1.2 and $2.8 was recognized in the years ended December 31, 2016 and 2015, respectively. Stock-Based Compensation - Awards Granted Subsequent to the Spin-Off 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 1.355 unissued shares of our common stock were available for future grant as of December 31, 2017 . The Stock Plan permits the issuance of authorized but unissued shares or shares from treasury upon the vesting of restricted stock units, granting of restricted stock shares, or exercise of stock options. Each restricted stock share, restricted stock unit and stock option 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 such 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, were granted target performance awards during 2017 and 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 periods, and may be completely forfeited if the threshold performance criteria are not met. Vesting for the 2017 and 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 (the "Composite Group"), over the three -year periods from January 1, 2017 and 2016, respectively, through December 31, 2019 and 2018, respectively. In addition, certain eligible employees, including officers, were granted awards during 2017 that vest subject to attainment of stated improvements in a three-year average annual return on invested capital (as defined) measured at the conclusion of the measurement period ending December 31, 2019 (including eligible employees’ continued employment during the measurement period). These target performance and internal performance metric awards were issued as restricted stock units to eligible non-officer employees and restricted stock shares to eligible officers. Eligible non-officer employees also were granted restricted stock unit awards during 2017 and 2016 that vest ratably over three years, subject to the passage of time and the employees’ continued employment during such periods. In some instances, such as death, disability, or retirement, awards may vest concurrently with or following an employee's termination. Eligible officers were granted restricted stock share awards during 2017 and 2016 that vest subject to an internal performance metric during the first year of the award and that also contain a three -year holding period from the grant of the award whereby the holding period is generally released ratably over the three years (subject to a participant's continued employment during that period). In addition, certain eligible employees, including officers, received restricted stock unit awards during 2016 that vest subject to attainment of an annual internal performance metric measured at the conclusion of the measurement period ending December 31, 2018 (including eligible employees’ continued employment during the measurement period). Non-employee directors were granted restricted stock share awards during 2017 and 2016 that vest or vested 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 periods. Restricted stock share and unit awards granted to eligible employees during 2017 and 2016 include early retirement provisions which permit recipients to be eligible for vesting generally upon reaching the ages of 60 and 55 , respectively, and completing ten and five years of service, respectively, (and, if applicable, subject to the attainment of performance measures). Restricted stock shares and restricted stock units that do not vest within the applicable vesting periods 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. Stock-Based Compensation Expense - All Awards 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 years ended December 31, 2017 , 2016 and 2015 , we recognized compensation expense related to share-based programs in “Selling, general and administrative” expense in the accompanying consolidated and combined statements of operations as follows: Year ended December 31, 2017 2016 2015 Expense associated with individuals attributable to SPX FLOW's operations $ 15.9 $ 17.7 $ 9.6 Allocation of expense historically associated with the former Parent's corporate employees (1) — — 13.4 Expense related to modification as of Spin-Off date — 1.2 2.8 Stock-based compensation expense 15.9 18.9 25.8 Income tax benefit (5.7 ) (6.9 ) (9.5 ) Stock-based compensation expense, net of income tax benefit $ 10.2 $ 12.0 $ 16.3 (1) See Note 1 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 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 assumptions were used in determining the fair value of the awards granted on the dates indicated below (awards granted during 2015 did not contain a market condition): Annual Expected Stock Price Volatility Annual Expected Dividend Yield Risk-free Interest Rate Correlations Between Total Shareholder Return for SPX FLOW and Individual Companies in the Composite Group Minimum Average Maximum January 13, 2017 SPX FLOW 39.4 % — % 1.50 % 0.1848 0.3830 0.5057 Composite Group 28.6 % n/a 1.50 % January 4, 2016: SPX FLOW 27.5 % — % 1.31 % 0.2986 0.4563 0.5776 Composite Group 25.5 % n/a 1.31 % As SPX FLOW shares have been traded only since the Spin-Off in September 2015 (i.e., with less historical performance than the generally three-year vesting period of the related awards), annual expected stock price volatility was based on the weighted average of SPX FLOW’s historical volatility (since the Spin-Off) and the average historical volatility of the Composite Group, as of the grant dates. An expected annual dividend yield was not assumed as dividends are not currently granted on common shares by SPX FLOW. The average risk-free interest rate was based on an interpolation of the two-year and three-year daily treasury yield curve rate as of the grant dates. Annual Expected Stock Price Volatility Annual Expected Dividend Yield Risk-free Interest Rate Correlation Between Total Shareholder Return for SPX Corporation and the S&P Index January 2, 2014: SPX Corporation 33.7 % 1.02 % 0.76 % 0.7631 S&P Composite 1500 Industrials Index 19.9 % n/a 0.76 % Annual expected stock price volatility was based on the three -year SPX Corporation historical volatility. The annual expected dividend yield was based on annual expected SPX Corporation dividend payments and the stock price on the date of grant. The average risk-free interest rate was based on the one -year through three -year daily treasury yield curve rate as of the grant date. In connection with the Spin-Off, certain corporate employees of our former Parent became employees of the Company. The following table summarizes the unvested restricted stock share and restricted stock unit activity (i) from December 31, 2014 through September 26, 2015, for such Company's employees with former Parent awards before the Spin-Off, and (ii) the resulting, converted SPX FLOW awards after the Spin-Off and activity from September 26, 2015 through December 31, 2017 : Former Parent - Prior to Spin-Off: Unvested Restricted Stock Shares and Restricted Stock Units Weighted-Average Grant-Date Fair Value Per Share Outstanding at December 31, 2014 0.149 $72.93 Granted 0.075 85.47 Vested (0.035) 79.92 Forfeited and other (0.019) 63.45 Outstanding at September 26, 2015, immediately prior to Spin-Off 0.170 $79.65 SPX FLOW - Post Spin-Off: Conversion of SPX Plan awards to SPX FLOW Stock Plan awards on September 26, 2015 1.154 $53.32 Granted 0.069 26.05 Vested (0.091) 61.34 Forfeited and other (0.004) 59.93 Outstanding at December 31, 2015 1.128 $51.13 Granted 0.930 27.94 Vested (0.361) 51.13 Forfeited and other (0.422) 40.27 Outstanding at December 31, 2016 1.275 $37.89 Granted 0.486 35.18 Vested (0.358) 42.05 Forfeited and other (0.271) 49.35 Outstanding at December 31, 2017 1.132 $32.65 As of December 31, 2017 , there was $13.9 of unrecognized compensation cost related to restricted stock share and restricted stock unit compensation arrangements. We expect this cost to be recognized over a weighted-average period of 1.5 years. Stock Options On January 2, 2015, eligible employees of the Company were granted 0.034 options in SPX Corporation 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 stock options granted on January 2, 2015 was $27.06 . The fair value of each former Parent option grant was estimated using the Black-Scholes option-pricing model with the following assumptions: Annual expected SPX Corporation stock price volatility 36.53 % Annual expected SPX Corporation dividend yield 1.75 % Risk-free interest rate 1.97 % Expected life of SPX Corporation stock option (in years) 6.0 Annual expected stock price volatility was based on the six -year historical volatility of SPX Corporation stock. The annual expected dividend yield was based on annual expected SPX Corporation dividend payments and SPX Corporation's stock price on the date of grant. The average risk-free interest rate was based on the seven -year treasury constant maturity rate. The expected SPX Corporation option life was based on a three -year pro-rata vesting schedule and represents the period of time that awards are expected to be outstanding. 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 and 0.029 of forfeitures and expirations during 2017, there were 0.342 and 0.371 , respectively, of SPX FLOW stock options outstanding as of December 31, 2017 and 2016 , of which 0.310 were exercisable as of December 31, 2017 . 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 December 31, 2017 , there was no unrecognized compensation cost related to stock options. Accumulated Other Comprehensive Loss The primary component of AOCL as of December 31, 2017 and 2016 , was foreign currency translation adjustment. There were no unrealized gains or losses recorded in AOCL related to FX forward contracts as of December 31, 2017 and 2016 . Changes in AOCL for the years ended December 31, 2017 and 2016 , related solely to foreign currency translation adjustment. See the consolidated and combined statement of comprehensive income (loss) for other changes in AOCL for the year ended December 31, 2015. Common Stock in Treasury During the years ended December 31, 2017 and 2016 , "Common stock in treasury" was increased by $4.0 and $3.5 , respectively, for common stock that was surrendered by recipients of restricted stock as a means of funding the related minimum income tax withholding requirements. |
COMMITMENTS, CONTINGENT LIABILI
COMMITMENTS, CONTINGENT LIABILITIES AND OTHER MATTERS | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS, CONTINGENT LIABILITIES AND OTHER MATTERS | COMMITMENTS, CONTINGENT LIABILITIES AND OTHER MATTERS Leases We lease certain manufacturing facilities, offices, sales and service locations, machinery and equipment, vehicles and office equipment under various leasing programs accounted for as operating and capital leases, some of which include scheduled rent increases stated in the lease agreement. We do not have any significant leases that require rental payments based on contingent events nor have we received any significant lease incentive payments. Operating Leases The future minimum rental payments under operating leases with remaining non-cancelable terms in excess of one year are: Year Ending December 31, 2018 $ 22.1 2019 17.8 2020 15.2 2021 10.0 2022 7.6 Thereafter 11.6 Total minimum payments $ 84.3 Total operating lease expense, inclusive of rent based on scheduled rent increases and rent holidays recognized on a straight-line basis, was $30.6 in 2017 , $31.6 in 2016 and $31.9 in 2015 . Capital Leases Future minimum lease payments under capital lease obligations are: Year Ending December 31, 2018 $ 0.9 2019 1.7 2020 1.6 2021 1.6 2022 1.7 Thereafter 6.2 Total minimum payments 13.7 Less: interest (2.1 ) Capital lease obligations as of December 31, 2017 11.6 Less: current maturities as of December 31, 2017 0.5 Long-term portion as of December 31, 2017 $ 11.1 Our current and long-term capital lease obligations as of December 31, 2016 were $0.2 and $14.5 , respectively. Assets held through capital lease agreements at December 31, 2017 and 2016 comprise the following: December 31, 2017 2016 Buildings $ 12.8 $ 19.7 Machinery and equipment 0.2 0.2 Total 13.0 19.9 Less: accumulated depreciation (2.5 ) (5.7 ) Net book value $ 10.5 $ 14.2 Litigation and Contingent Liabilities 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 them to sell their common stock to the controlling shareholders (wholly-owned subsidiaries of SPX FLOW) upon the satisfaction of certain conditions, including the passage of time. The respective carrying values presented in "Mezzanine equity" of our consolidated balance sheets as of December 31, 2017 and 2016 are stated at 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. |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Dec. 31, 2017 | |
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 periods presented. 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 December 31, 2017 and 2016 , the gross fair values of our derivative financial assets and liabilities, in aggregate, were $2.3 and $2.9 (gross assets) and $0.0 and $0.1 (gross liabilities), respectively. As of December 31, 2017 , 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. Equity Security Investment Until June 2017, we had an investment in an equity security that was accounted for under the fair value option, but not readily marketable, and therefore which was classified as a Level 3 asset in the fair value hierarchy. In April 2017, we entered into an agreement to sell our investment in the equity security to a third party, and we received proceeds from the sale of the equity security during the second quarter of 2017. In prior periods, we based the security’s fair value on a variety of inputs, including reported trades, non-binding broker/dealer quotes, and historical trade prices of the same securities. Market indicators and industry and economic events were also considered. At December 31, 2016 , this asset had a fair value of $7.6 . The table below presents a reconciliation of our investment in the equity security measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2017 and 2016 , including net unrealized losses recorded to “Other income (expense), net." Year ended December 31, 2017 2016 Balance at beginning of year $ 7.6 $ 8.1 Unrealized losses recorded to earnings (1.4 ) (0.5 ) Proceeds received from sale of investment (6.2 ) — Balance at end of year $ — $ 7.6 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 "Accumulated deficit." Refer to Note 13 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, 2017, 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 7 for further discussion pertaining to our annual evaluation of goodwill and other intangible assets for impairment. During 2016 and 2015 , we recorded impairment charges of $189.4 and $22.7 , respectively, related to trademarks, customer relationships, and technology assets in 2016 and trademarks and technology assets in 2015 of certain businesses within our Power and Energy and Food and Beverage reportable segments as we determined that the fair values of such intangible assets were less than the carrying values. See Note 7 for additional information regarding such impairment charges. 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 December 31, 2017 and 2016 were as follows: December 31, 2017 December 31, 2016 Carrying Amount Fair Value Carrying Amount Fair Value Domestic revolving loan facility $ — $ — $ 68.0 $ 68.0 Term loan (1) 270.0 270.0 390.0 390.0 5.625% Senior notes (1) 300.0 315.0 300.0 300.0 5.875% Senior notes (1) 300.0 320.3 300.0 296.3 Trade receivables financing arrangement — — 21.2 21.2 Other indebtedness 24.2 24.2 27.7 27.7 (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 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 values of amounts outstanding under our domestic revolving loan facility, term loan, and trade receivables financing arrangement approximated carrying value due primarily to the variable-rate nature and credit spreads of these instruments, when compared to other similar instruments. • The fair values of 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 consolidated balance sheets approximate fair value due to the short-term nature of those instruments. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Allocation of General Corporate Expenses The consolidated and combined statement of operations in 2015 includes 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 the combined statement of operations for the period prior to the Spin-Off on a "carve-out" basis, a portion of the former Parent's total corporate expenses were allocated to the Company. A detailed description of the methodology used to allocate corporate-related costs is included in Note 1. Related Party Interest We recorded interest income of $26.2 for the year ended December 31, 2015 , associated with related party notes receivable outstanding during the period, with the former Parent serving as the counterparty. These related party notes were transferred to the former Parent 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 the former Parent or cancellation by the Company. We recorded interest expense of $28.4 for the year ended December 31, 2015 , associated with related party notes payable outstanding during the period, 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 were reduced by $991.3 with a corresponding increase to "Former parent company investment" during the nine months ended September 26, 2015 as a result of their extinguishment by way of capital contribution to the Company by the former Parent. The related party notes payable had a weighted-average interest rate of approximately 7.0% prior to their extinguishment. |
QUARTERLY RESULTS (UNAUDITED)
QUARTERLY RESULTS (UNAUDITED) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY RESULTS (UNAUDITED) | QUARTERLY RESULTS (UNAUDITED) First (2) Second Third Fourth (2) 2017 2016 2017 2016 2017 2016 2017 2016 Revenues $ 433.2 $ 505.0 $ 498.0 $ 528.8 $ 491.1 $ 466.8 $ 529.2 $ 495.4 Gross profit 139.1 159.2 153.0 166.8 159.1 146.1 165.2 152.5 Net income (loss) (1) (7.3 ) (32.1 ) 10.2 (352.3 ) 13.0 (4.2 ) 30.9 7.6 Less: Net income (loss) attributable to noncontrolling interests 0.1 (1.0 ) (0.1 ) 0.5 0.2 0.5 0.2 0.8 Net income (loss) attributable to SPX FLOW, Inc. $ (7.4 ) $ (31.1 ) $ 10.3 $ (352.8 ) $ 12.8 $ (4.7 ) $ 30.7 $ 6.8 Basic income (loss) per share of common stock $ (0.18 ) $ (0.75 ) $ 0.25 $ (8.52 ) $ 0.31 $ (0.11 ) $ 0.73 $ 0.16 Diluted income (loss) per share of common stock $ (0.18 ) $ (0.75 ) $ 0.24 $ (8.52 ) $ 0.30 $ (0.11 ) $ 0.72 $ 0.16 (1) During the fourth quarter of 2017 , the income tax provision was impacted by (i) an income tax benefit of $71.2 for reduction in the U.S. tax rate, including the reduction for earnings that were not indefinitely reinvested, and income tax charges of (ii) $50.4 for the deemed repatriation tax and (iii) $6.1 resulting from losses occurring in certain jurisdictions where the tax benefit of those losses is not expected to be realized. During the fourth quarter of 2016, we recorded impairment charges, net of taxes, of $10.6 , related to the trademarks of a business within our Power and Energy reportable segment and a technology asset of a business within our Food and Beverage reportable segment. During the third quarter of 2016, we recognized in Special Charges an asset impairment charge, net of taxes, of $3.3 related to certain corporate assets being marketed for sale. In addition, during the third quarter of 2016, we recorded a loss on early extinguishment of debt, net of taxes, of $24.3 , related to the redemption of all of our 6.875% senior notes due in August 2017. During the third quarter of 2016, we recorded 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. During the second quarter of 2016, we recorded impairment charges, net of taxes, of $358.4 , related to the goodwill and various intangible assets of our Power and Energy reportable segment. During the first quarter of 2016, we recognized in Special Charges an asset impairment charge, net of taxes, of $7.5 resulting primarily from management’s decision during that quarter to market certain corporate assets for sale. (2) We establish actual interim closing dates using a fiscal calendar, which requires our businesses to close their books on the Saturday closest to the end of the first calendar quarter, with the second and third quarters being 91 days in length. Our fourth quarter ends on December 31. The interim closing dates for the first, second and third quarters of 2017 were April 1, July 1 and September 30, compared to the respective April 2, July 2 and October 1, 2016 dates. This practice only affects the quarterly reporting periods and not the annual reporting period. We had two less days in the first quarter of 2017 and one more day in the fourth quarter of 2017 than in the respective 2016 periods. |
SUBSQUENT EVENT
SUBSQUENT EVENT | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSQUENT EVENT | SUBSEQUENT EVENT On January 31, 2018, we made a voluntary principal prepayment in the amount of $30.0 under our term loan facility, as described in Note 10. As a result of the prepayment, the outstanding principal amount on the term loan decreased to $240.0 . The payment was funded by cash on hand. |
BASIS OF PRESENTATION AND SUM28
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Our consolidated balance sheets as of December 31, 2017 and 2016 , and financial activity presented in the consolidated statements of operations, comprehensive income (loss), equity, and cash flows for the years ended December 31, 2017 and 2016 , consist of the consolidated balances of SPX FLOW as an independent, publicly traded company as of and during the periods then ended. Our consolidated and combined statements of operations, comprehensive loss, equity, and cash flows for the year ended December 31, 2015 , were prepared on a “carve out” basis for the period prior to the Spin-Off and included adjustments for certain transactions that occurred concurrently upon completion of the Spin-Off (see Notes 8 and 12 ) as well as stand-alone results for the period subsequent to the date of the Spin-Off. These consolidated and combined financial statements were derived from the consolidated financial statements and accounting records of the former Parent and SPX FLOW and prepared in conformity with accounting principles generally accepted in the United States ("GAAP"). |
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions —The financial statements of our foreign subsidiaries are translated into U.S. dollars in accordance with the Foreign Currency Matters Topic of the Financial Accounting Standards Board Codification ("Codification" or "ASC"). Balance sheet accounts are translated at the current rate at the end of each period and income statement accounts are translated at the average rate for each period. Gains and losses on foreign currency translations are reflected as a separate component of equity and other comprehensive income (loss). |
Cash Equivalents | Cash Equivalents —We consider highly liquid money market investments with original maturities of three months or less at the date of purchase to be cash equivalents. |
Revenue Recognition | Revenue Recognition —We recognize revenues from product sales upon shipment to the customer or, to a lesser extent, upon receipt by the customer, in accordance with agreed-upon customer terms. Revenues from long-term service contracts and maintenance arrangements are recognized on a straight-line basis over the agreement period. Amounts billed for shipping and handling are included in revenues. Costs incurred for shipping and handling are recorded in "Cost of products sold." Taxes assessed by governmental authorities that are directly imposed on a revenue-producing transaction between a seller and a customer are presented on a net basis (excluded from revenues) in our consolidated and combined statements of operations. We recognize revenue from long-term construction/installation contracts under the percentage-of-completion method of accounting. The percentage-of-completion is measured principally by the percentage of costs incurred to date for each contract to the estimated total costs for such contract at completion. We recognize revenues for similar short-term contracts using the completed-contract method of accounting. Provisions for any estimated losses on uncompleted long-term contracts are made in the period in which such losses are determined. In the case of customer change orders for uncompleted long-term contracts, estimated recoveries are included for work performed in forecasting ultimate profitability on certain contracts. Due to uncertainties inherent in the estimation process, it is reasonably possible that completion costs, including those arising from contract penalty provisions and final contract settlements, will be revised in the near-term. Such revisions to costs and income are recognized in the period in which the revisions are determined. Unbilled receivables arise when revenues have been recorded but the amounts have not been billed under the terms of the contracts. These amounts are recoverable from customers upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of the contract. Claims related to long-term contracts are recognized as revenue only after we have determined that collection is probable and the amount can be reliably estimated. Claims made by us involve negotiation and, in certain cases, litigation or other dispute-resolution processes. In the event we incur litigation or other dispute-resolution costs in connection with claims, such costs are expensed as incurred, although we may seek to recover these costs. Claims against us are recognized when a loss is considered probable and amounts are reasonably estimable. |
Research and Development Costs | Research and Development Costs —The Company conducts research and development activities for the purpose of developing and improving new products. The related expenditures are expensed as incurred and totaled $17.4 , $19.4 and $19.1 in 2017 , 2016 and 2015 , respectively, and are classified within selling, general and administrative expense within the consolidated and combined statements of operations. |
Property, Plant and Equipment | Property, Plant and Equipment —Property, plant and equipment ("PP&E") is stated at cost, less accumulated depreciation. We use the straight-line method for computing depreciation expense over the useful lives of PP&E, which do not exceed 40 years for buildings and range from 3 to 15 years for machinery and equipment. Depreciation expense, including amortization of capital leases, was $43.6 , $44.7 and $38.5 for the years ended December 31, 2017 , 2016 and 2015 , respectively. Leasehold improvements are amortized over the life of the related asset or the life of the lease, whichever is shorter. Impairments of PP&E, which represent non-cash asset write-downs, typically arise from business restructuring decisions that lead to the disposition of assets no longer required in the restructured business. For these situations, we recognize a loss when the carrying amount of an asset exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Fair values for assets subject to impairment testing are determined primarily by management, taking into consideration various factors including third-party appraisals, quoted market prices and previous experience. If an asset remains in service at the decision date, the asset is written down to its fair value, if impaired, and the net book value is depreciated over its remaining economic useful life. When we commit to a plan to sell an asset, including the initiation of a plan to locate a buyer, and it is probable that the asset will be sold within one year based on its current condition and sales price, depreciation of the asset is discontinued and the asset is classified as an asset held for sale. In addition, the asset is written down to its fair value less any selling costs, if impaired. |
Income Taxes | Income Taxes —For purposes of our combined financial statements prior to the date of the Spin-Off, our income tax provision was determined as if we filed income tax returns on a stand-alone basis. The Company's tax results as presented in the consolidated and combined financial statements for the period prior to the Spin-Off may not be reflective of the results that the Company will generate in the future. In jurisdictions where the Company was included in the tax returns filed by the former Parent or its subsidiaries that were not part of the Spin-Off, any income taxes payable resulting from the related income tax provision were reflected through the date of the Spin-Off within "Former parent company investment." Deferred income tax assets and liabilities, as presented in the consolidated balance sheets, reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We periodically assess whether deferred tax assets will be realized and the adequacy of deferred tax liabilities, including the results of local, state, federal or foreign statutory tax audits or estimates and judgments used. |
Derivative Financial Instruments | Derivative Financial Instruments —We use foreign currency forward contracts to manage our exposures to fluctuating currency exchange rates. Derivatives are recorded on the balance sheet and measured at fair value. For derivatives designated as hedges of the fair value of assets or liabilities, the changes in fair values of both the derivatives and the hedged items are recorded in current earnings. For derivatives designated as cash flow hedges, the effective portion of the changes in fair value of the derivatives is recorded in accumulated other comprehensive loss ("AOCL") and subsequently recognized in earnings when the hedged items impact earnings. Changes in the fair value of derivatives not designated as hedges, and the ineffective portion of cash flow hedges, are recorded in current earnings. We do not enter into financial instruments for speculative or trading purposes. For those transactions that are designated as cash flow hedges, on the date the derivative contract is entered into, we document our hedge relationship, including identification of the hedging instruments and the hedged items, as well as our risk management objectives and strategies for undertaking the hedge transaction. We also assess, both at inception and quarterly thereafter, whether such derivatives are highly effective in offsetting changes in the fair value of the hedged item. See Notes 11 and 14 for further information. Cash flows from hedging activities are included in the same category as the items being hedged, which are primarily operating activities. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets —Consistent with the requirements of the Intangible—Goodwill and Other Topic of the Codification, the fair values of our reporting units generally are estimated using discounted cash flow projections that we believe to be reasonable under current and forecasted circumstances, the results of which form the basis for making judgments about the recoverability of carrying values of the net assets of our reporting units. Other considerations are also incorporated, including comparable industry price multiples. The financial results of many of our businesses closely follow changes in the industries and end markets that they serve. Accordingly, we consider estimates and judgments that affect the future cash flow projections, including principal methods of competition such as volume, price, service, product performance and technical innovations and estimates associated with cost improvement initiatives, capacity utilization and assumptions for inflation and blended effective tax rates. Any significant change in market conditions and estimates or judgments used to determine expected future cash flows that indicate a reduction in carrying value may give rise to impairment in the period that the change becomes known. We perform our annual goodwill impairment testing during the fourth quarter in conjunction with our annual financial planning process, with such testing based primarily on events and circumstances existing as of the end of the third quarter. In addition, we test goodwill for impairment on a more frequent basis if there are indications of potential impairment. We perform our annual trademarks impairment testing during the fourth quarter in conjunction with our annual financial planning process, or on a more frequent basis if there are indications of potential impairment. The fair values of our trademarks are determined by applying estimated royalty rates to projected revenues, with the resulting cash flows discounted at a rate of return that reflects current market conditions. The basis for these projected revenues is the annual operating plan for each of the related businesses. |
Equity Method Investments | Investments in unconsolidated companies where we exercise significant influence but do not have control are accounted for using the equity method. |
Variable Interest Entity | In determining whether we are the primary beneficiary of a variable interest entity ("VIE"), we perform a qualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties to determine which party has the power to direct the activities of the VIE that most significantly impact the entity's economic performance, and which party has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. We have interests in VIEs, primarily joint ventures, in which we are the primary beneficiary. The financial position, results of operations and cash flows of our VIEs are not material, individually or in the aggregate, in relation to our consolidated and combined financial statements. |
Use of Estimates | USE OF ESTIMATES The preparation of our consolidated and combined financial statements in conformity with GAAP requires us to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues (e.g., our percentage-of-completion estimates described above) and expenses during the reporting period. We evaluate these estimates and judgments on an ongoing basis and base our estimates on experience, current and expected future conditions, third-party evaluations and various other assumptions that we believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Actual results may differ from the estimates and assumptions used in the consolidated and combined financial statements and related notes. |
Accounts Receivable Allowances | Accounts Receivable Allowances— We provide allowances for estimated losses on uncollectible accounts based on our historical experience and the evaluation of the likelihood of success in collecting specific customer receivables. In addition, we maintain allowances for customer returns, discounts and invoice pricing discrepancies, with such allowances primarily based on historical experience. |
Inventory | Inventory— We estimate losses for excess and/or obsolete inventory and the net realizable value of inventory based on the aging and historical utilization of the inventory and the evaluation of the likelihood of recovering the inventory costs based on anticipated demand and selling price. |
Long-Lived Assets and Intangible Assets Subject to Amortization and Goodwill and Indefinite-Lived Intangible Assets | Long-Lived Assets and Intangible Assets Subject to Amortization— We continually review whether events and circumstances subsequent to the acquisition of any long-lived assets, or intangible assets subject to amortization, have occurred that indicate the remaining estimated useful lives of those assets may warrant revision or that the remaining balance of those assets may not be fully recoverable. If events and circumstances indicate that the long-lived assets should be reviewed for possible impairment, we use projections to assess whether future cash flows on an undiscounted basis related to the assets are likely to exceed the related carrying amount. We will record an impairment charge to the extent that the carrying value of the assets exceed their fair values as determined by valuation techniques appropriate in the circumstances, which could include the use of similar projections on a discounted basis. In determining the estimated useful lives of definite-lived intangibles, we consider the nature, competitive position, life cycle position, and historical and expected future operating cash flows of each acquired asset, as well as our commitment to support these assets through continued investment and legal infringement protection. Goodwill and Indefinite-Lived Intangible Assets —We test goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter and continually assess whether a triggering event has occurred to determine whether the carrying value exceeds the implied fair value. The fair value of reporting units is based generally on discounted projected cash flows, but we also consider factors such as comparable industry price multiples. We employ cash flow projections that we believe to be reasonable under current and forecasted circumstances, the results of which form the basis for making judgments about the carrying values of the reported net assets of our reporting units. The financial results of many of our businesses closely follow changes in the industries and end markets that they serve. Accordingly, we consider estimates and judgments that affect the future cash flow projections, including principal methods of competition, such as volume, price, service, product performance and technical innovations, as well as estimates associated with cost reduction initiatives, capacity utilization and assumptions for inflation and blended effective tax rates. Actual results may differ from these estimates under different assumptions or conditions. |
Legal | Legal— It is our policy to accrue for estimated losses from legal actions or claims when events exist that make the realization of the losses probable and they can be reasonably estimated. We do not discount legal obligations or reduce them by anticipated insurance recoveries. |
Environmental Remediation Costs | Environmental Remediation Costs— We expense costs incurred to investigate and remediate environmental issues unless they extend the economic useful lives of related assets. We record liabilities when it is probable that an obligation has been incurred and the amounts can be reasonably estimated. Our environmental accruals cover anticipated costs, including investigation, remediation and operation and maintenance of clean-up sites. Our estimates are based primarily on investigations and remediation plans established by independent consultants, regulatory agencies and potentially responsible third parties. We generally do not discount environmental obligations or reduce them by anticipated insurance recoveries. |
Self-Insurance | Self-Insurance— We are self-insured for certain of our workers' compensation, automobile, product, general liability and health costs and, thus, record an accrual for our retained liability. Our businesses were charged directly for their estimated share of the cost of the former Parent's equivalent self-insured programs prior to the Spin-Off, with the Company's share of the cost included in our consolidated and combined statements of operations for such period. The liability for these programs is reflected in our consolidated balance sheets as of December 31, 2017 and 2016 within "Accrued expenses." |
Warranty | Warranty —In the normal course of business, we issue product warranties for specific products and provide for the estimated future warranty cost in the period in which the sale is recorded. We provide for the estimate of warranty cost based on contract terms and historical warranty loss experience that is periodically adjusted for recent actual experience. Because warranty estimates are forecasts that are based on the best available information, actual claims costs may differ from amounts provided. In addition, due to the seasonal fluctuations at certain of our businesses, the timing of warranty provisions and the usage of warranty accruals can vary period to period. We make adjustments to initial obligations for warranties as changes in the obligations become reasonably estimable. |
Income Taxes | Income Taxes— We review our income tax positions on a continuous basis and accrue for potential uncertain tax positions in accordance with the Income Taxes Topic of the Codification. Accruals for these uncertain tax positions are classified as "Deferred and other income taxes" in the accompanying consolidated balance sheets based on an expectation as to the timing of when the matter will be resolved. As events change or resolutions occur, these accruals are adjusted, such as in the case of audit settlements with taxing authorities. For tax positions where it is more likely than not that a tax benefit will be sustained, we record the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority, assuming such authority has full knowledge of all relevant information. These reviews also entail analyzing the realization of deferred tax assets. We establish a valuation allowance against deferred tax assets when, based on all available evidence, we believe that it is more likely than not that we will not realize a benefit associated with such assets. |
Employee Benefit Plans | Employee Benefit Plans— Certain of our employees participate in defined benefit pension and other postretirement plans we sponsor and, prior to the date of the Spin-Off, participated in plans sponsored by the former Parent. The expense for these plans is derived from an actuarial calculation based on the plans' provisions and assumptions regarding discount rates and rates of increase in compensation levels. Discount rates for most of the plans are based on representative bond indices. Rates of increase in compensation levels are established based on expectations of current and foreseeable future increases in compensation. Independent actuaries are consulted in determining these assumptions. See Note 8 for further discussion of our accounting for pension and postretirement benefits. |
New Accounting Pronouncements | NEW ACCOUNTING PRONOUNCEMENTS The following is a summary of new accounting pronouncements that apply or may apply to our business. New Revenue Recognition Pronouncement In May 2014, and as subsequently amended, the Financial Accounting Standards Board (the "FASB") issued a new standard on revenue recognition that outlines a single comprehensive model for accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in accordance with the transfer of control over those goods and services. The new standard also 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 will adopt the new revenue standard in the first quarter of 2018 using the modified retrospective adoption method. Beginning in 2016 and continuing throughout 2017, our team responsible for implementing the new standard has reviewed each product line and related business strategy. The team has assessed the various changes in the criteria for revenue recognition required under the new standard, and concluded that our assessment of alternative use of sub-products within each product line as well as our enforceable rights to payment for performance completed to date in the event of customer cancellation or default, will have the most significant impact to our current revenue recognition practices. Our progress towards assessing and quantifying the impacts of the new guidance to our reportable segments is as follows: • Food and Beverage - Under existing accounting principles, we recognize revenue on certain long-term systems projects, most of which are constructed on customer sites, over time using the cost-to-cost method, and revenue on long-term service contracts on a straight-line basis over the life of the related agreements. All other revenues are recognized at a point in time when the risks and rewards of ownership transfer to the customer. Under the new guidance, we expect primarily that revenue for (1) all systems projects constructed on customer sites and service contracts will be recognized over time on a cost-to-cost basis, and (2) skids assembled in our factories, as well as customer contracts for the sale of component and aftermarket parts, will be recognized at a point in time upon transfer of control to the customer. Revenue recognition for skidded systems will, however, be project specific and dependent on contractual customer terms. • Power and Energy - Under existing accounting principles, we recognize revenue on certain long-term contracts for large pumps over time using the cost-to-cost method. We recognize all other product revenues in this segment, including revenues for most service contracts, at a point in time. In assessing the new guidance, we have determined our large pumps manufactured for use in certain customer applications generally have limited alternative use. Likewise, our larger and more complex valve products and metering systems have limited alternative use. Our contractual enforceable rights to payment for performance completed to date in the event of customer cancellation or default is contract specific for substantially all product lines in the segment. Under the new guidance, we expect to recognize revenues over time, if a contract explicitly provides an enforceable right to payment, for large pumps, large and/or complex valve products and metering systems. Revenue for service contracts will be recognized over time. Revenue for all other products will be recognized at a point in time, upon transfer of control of the product to the customer (i.e., effectively no change). Revenue for certain large pumps previously recognized over time using the cost-to-cost method will, under the new guidance, be recognized at a point in time upon transfer of control, to the extent either enforceable right to payment is not included in the contract or the pumps are determined to have alternative use. • Industrial - Under existing accounting principles, substantially all of this segment’s 2017 revenue was recognized at a point in time when the risks and rewards of ownership transferred to the customer. In assessing the new guidance, we have determined that certain large mixers constructed with unique metals, custom-enclosed heat exchangers, and certain dehydration systems have little to no alternative use. Our contractual enforceable rights to payment for performance completed to date in the event of customer cancellation or default is contract specific for substantially all product lines in this segment. Under the new guidance, we expect to recognize revenue over time, if a contract explicitly provides for enforceable right to payment, for certain mixer types, custom-enclosed heat exchanger units, unique dehydration systems and service contracts. Revenue for all other products within this segment will be recognized at a point in time, upon transfer of control of the product to the customer (i.e., effectively no change). Upon adoption, using the modified retrospective method, we expect our December 31, 2017 undelivered performance obligations (“backlog”) of $998.1 to decrease by a minor amount, representing the net revenues which would have been recognized under the new standard on executed customer contracts (“orders”) in effect on or prior to December 31, 2017. This expected minor decline in the backlog of orders as of December 31, 2017, reflects the effects of (1) an increase in the amount of revenue expected to be recognized over time, as described above for certain product lines that were previously recognized at a point in time under existing guidance, partially offset by (2) a decrease in the amount of revenue previously recognized over time under existing guidance for certain contracts in our backlog which do not contain a contractual enforceable right to payment in the event of customer cancellation or default, which will be recognized at a point in time under the new guidance. Prospectively, however, we expect the new revenue standard to increase the percentage of revenue we recognize over time, within future reporting periods, by approximately 10% , which varies by product line and which could vary in the future depending on the mix of our future orders as well as contractual terms negotiated with customers. These projected impacts, underlying contracts and accounting models are still under review by our implementation team. Other New Accounting Pronouncements In January 2016, the FASB issued an amendment to 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. We will adopt this amendment in the first quarter of 2018 and do not expect a material impact to our 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 consolidated financial statements. 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 was effective for interim and annual reporting periods beginning after December 15, 2016. We adopted this amendment during the first quarter of 2017. We recognized a tax charge of $1.3 in our income tax provision during 2017 related to the vesting of certain restricted stock shares and restricted stock units during the period which, under previous guidance, would have been recognized as a reduction of paid-in capital. Consistent with our previous policy, we have elected to continue to accrue share-based compensation cost based on the number of awards that are expected to vest (i.e., by assuming a forfeiture rate in our accrual of such cost). In October 2016, the FASB issued an amendment that requires recognition of the income tax consequences of an intra-entity transfer of assets other than inventory. Under current authoritative guidance, the tax effects of intra-entity asset transfers (intercompany sales) are deferred until the transferred asset is sold to a third party or otherwise recovered through use. This amendment requires tax expense and deferred tax asset recognition from the intra-entity sale of the asset in the seller’s tax jurisdiction when the asset transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. This update is effective for interim and annual reporting periods beginning after December 15, 2017. We will adopt this amendment in the first quarter of 2018 using modified retrospective application, and expect to record a cumulative charge of $3.9 to accumulated deficit in our consolidated financial statements. In November 2016, the FASB issued an amendment to guidance for statement of cash flow presentation, which requires that entities explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents in the statement of cash flows. Entities will also be required to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. This amendment is effective for interim and annual reporting periods beginning after December 15, 2017, with retrospective application permitted. We will adopt this amendment in the first quarter of 2018 and do not expect a material impact to our consolidated financial statements. In January 2017, the FASB issued an amendment to post-acquisition accounting for goodwill which eliminates the requirement to perform a Step 2 impairment analysis to determine the implied fair value of goodwill. Rather, goodwill impairment charges will be calculated as the amount by which a reporting unit's carrying amount exceeds its fair value. This amendment is effective for any annual or interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019, with early adoption permitted. We adopted this amendment in the first quarter of 2017 and performed our 2017 annual goodwill impairment test in accordance with the amended guidance. Refer to Note 7 for discussion of our annual goodwill impairment test. In March 2017, the FASB issued an amendment to guidance on the presentation of net periodic pension and other postretirement benefit costs. Under the new rules, entities that sponsor defined benefit plans will present service costs with other employee compensation costs within operating income (or capitalize on the balance sheet, when applicable), while other components of net benefit cost will be presented separately (in one or more line items) outside of operating income and will not be eligible for capitalization. This update is effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted if adopted in the first interim period of the early-adopt fiscal year. We adopted this amendment in the first quarter of 2017 and have accordingly reclassified non-service pension and postretirement costs from “Selling, general and administrative” expense to “Other income (expense), net” in our consolidated and combined statements of operations for the years ended December 31, 2016 and 2015, respectively, as we believe this classification provides investors a more comparative presentation of our selling, general and administrative expense and operating results from period to period. As permitted by the amended guidance, we used amounts disclosed in our employee benefit plans footnote for the years ended December 31, 2016 and 2015, respectively, as the estimation basis for applying the retrospective presentation requirements. See Note 8 for additional information related to our adoption of the amendment. In May 2017, the FASB issued an amendment to guidance to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the amended guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. The guidance is effective prospectively for all companies for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted. Our adoption of this amendment in the second quarter of 2017 did not have a material impact to our consolidated financial statements. |
BASIS OF PRESENTATION AND SUM29
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Costs and estimated earnings on uncompleted contracts, from their inception, and related amounts billed | Costs and estimated earnings on uncompleted contracts, from their inception, and related amounts billed as of December 31, 2017 and 2016 were as follows: December 31, 2017 2016 Costs incurred on uncompleted contracts $ 1,114.4 $ 1,170.5 Estimated earnings to date 205.9 272.1 1,320.3 1,442.6 Less: Billings to date (1,345.9 ) (1,433.7 ) Net (billings in excess of revenues) unbilled receivables $ (25.6 ) $ 8.9 These amounts are included in the accompanying consolidated balance sheets at December 31, 2017 and 2016 as shown below. Amounts for billed retainages and receivables to be collected in excess of one year are not significant for the periods presented. December 31, 2017 2016 Unbilled receivables (1) $ 48.7 $ 66.1 Billings in excess of revenues on uncompleted contracts (2) (74.3 ) (57.2 ) Net (billings in excess of revenues) unbilled receivables $ (25.6 ) $ 8.9 (1) Reported as a component of "Accounts receivable, net." (2) Reported as a component of "Accrued expenses." |
USE OF ESTIMATES (Tables)
USE OF ESTIMATES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of activity for allowance accounts | Summarized below is the activity for these allowance accounts. Year ended December 31, 2017 2016 2015 Balance at beginning of year $ 22.0 $ 23.6 $ 22.0 Allowances provided 20.7 17.4 15.6 Write-offs, net of recoveries, credits issued and other (17.5 ) (19.0 ) (14.0 ) Balance at end of year $ 25.2 $ 22.0 $ 23.6 |
Summary of accrued expenses components | Summarized in the table below are the components of accrued expenses at December 31, 2017 and 2016 . December 31, 2017 2016 Unearned revenue (1) $ 182.3 $ 140.6 Employee benefits (2) 96.2 62.1 Warranty 13.3 10.2 Other (3) 97.8 117.0 Total $ 389.6 $ 329.9 (1) Unearned revenue includes billings in excess of revenue on uncompleted contracts accounted for under the percentage-of-completion method of revenue recognition, customer deposits and unearned amounts on service contracts. (2) Employee benefits consist of various employee-related items including, among other items, accrued bonus, vacation, payroll and payroll-related taxes. (3) Other consists of various items including, among other items, accrued commissions, accrued sales and value-added taxes, and accruals for restructuring, interest and freight costs. |
Analysis of product warranty accrual | The following is an analysis of our product warranty accrual for the periods presented: Year ended December 31, 2017 2016 2015 Balance at beginning of year $ 10.8 $ 14.8 $ 18.4 Provisions 14.4 8.9 10.3 Usage (13.1 ) (12.2 ) (12.6 ) Currency translation adjustment 2.1 (0.7 ) (1.3 ) Balance at end of year 14.2 10.8 14.8 Less: Current portion of warranty 13.3 10.2 14.0 Non-current portion of warranty $ 0.9 $ 0.6 $ 0.8 |
INFORMATION ON REPORTABLE SEG31
INFORMATION ON REPORTABLE SEGMENTS, CORPORATE EXPENSE AND OTHER (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of financial data for reportable segments | Financial data for our reportable segments as of or for the years ended December 31, 2017 , 2016 and 2015 were as follows: As of or for the Year Ended December 31, 2017 2016 2015 Revenues: Food and Beverage $ 715.9 $ 728.3 $ 869.8 Power and Energy 543.2 562.7 750.2 Industrial 692.4 705.0 768.5 Total revenues $ 1,951.5 $ 1,996.0 $ 2,388.5 Income: Food and Beverage $ 74.9 $ 75.1 $ 104.4 Power and Energy 35.5 25.4 83.8 Industrial 86.1 98.8 105.0 Total income for reportable segments $ 196.5 $ 199.3 $ 293.2 Corporate expense 56.6 58.0 71.6 Pension and postretirement service costs 1.5 1.9 1.9 Impairment of goodwill and intangible assets — 442.2 22.7 Special charges 19.3 79.8 42.6 Consolidated and combined operating income (loss) $ 119.1 $ (382.6 ) $ 154.4 Capital expenditures: Food and Beverage $ 5.8 $ 25.0 $ 24.5 Power and Energy 4.3 6.3 19.1 Industrial 4.2 5.4 5.1 Other (1) 5.1 7.3 8.3 Total capital expenditures $ 19.4 $ 44.0 $ 57.0 As of or for the Year Ended December 31, 2017 2016 2015 Depreciation and amortization: Food and Beverage $ 17.0 $ 14.1 $ 16.8 Power and Energy 20.1 21.4 28.2 Industrial 14.5 16.7 14.2 Other (1) 9.6 12.5 2.7 Total depreciation and amortization $ 61.2 $ 64.7 $ 61.9 Identifiable assets: Food and Beverage $ 924.3 $ 896.4 $ 925.0 Power and Energy 928.6 873.8 1,455.0 Industrial 629.3 603.8 638.7 Other (2) 206.8 229.2 285.5 Total identifiable assets $ 2,689.0 $ 2,603.2 $ 3,304.2 Geographic areas: Revenues (3) : United States $ 693.0 $ 697.2 $ 836.5 United Kingdom 211.8 203.6 316.5 China 128.0 137.3 140.1 France 123.4 125.2 136.3 Denmark 98.0 96.7 116.0 Germany 96.2 98.6 119.0 Other 601.1 637.4 724.1 Total revenues $ 1,951.5 $ 1,996.0 $ 2,388.5 Long-lived assets: United States $ 254.4 $ 285.3 $ 312.7 Other 266.3 243.9 236.5 Total long-lived assets $ 520.7 $ 529.2 $ 549.2 (1) Relates to corporate PP&E or PP&E that is utilized by all of our reportable segments along with related depreciation expense. Depreciation reflects the cost of our Charlotte, NC corporate headquarters, amongst other corporate PP&E, which became assets of the Company in connection with the Spin-Off. (2) Relates primarily to assets (e.g., cash and PP&E) of various corporate subsidiaries. (3) Revenues are included in the above geographic areas based on the country that recorded the customer revenue. |
SPECIAL CHARGES (Tables)
SPECIAL CHARGES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of special charges, net | 2016 Charges: Employee Termination Costs Facility Consolidation Costs Other Cash Costs, Net Non-Cash Asset Write-downs and Other Total Special Charges Food and Beverage $ 16.8 $ 5.2 $ — $ 0.7 $ 22.7 Power and Energy 18.3 0.2 0.3 1.5 20.3 Industrial 5.2 3.9 — 0.1 9.2 Other 10.2 — — 17.4 27.6 Total $ 50.5 $ 9.3 $ 0.3 $ 19.7 $ 79.8 Special charges for the years ended December 31, 2017 , 2016 and 2015 are described in more detail below and in the applicable sections that follow: Year ended December 31, 2017 2016 2015 Employee termination costs $ 11.5 $ 50.5 $ 38.5 Facility consolidation costs 2.9 9.3 2.5 Other cash costs, net — 0.3 — Non-cash asset write-downs and other 4.9 19.7 1.6 Total $ 19.3 $ 79.8 $ 42.6 Special Charges by Reportable Segment Unless otherwise noted below, charges for 2017, 2016 and 2015 relate to our global realignment program. 2017 Charges: Employee Termination Costs Facility Consolidation Costs Other Cash Costs (Recoveries), Net Non-Cash Asset Write-downs and Other Total Special Charges Food and Beverage $ 6.6 $ 1.6 $ — $ 0.5 $ 8.7 Power and Energy (0.1 ) 0.5 — — 0.4 Industrial 5.2 0.8 — — 6.0 Other (0.2 ) — — 4.4 4.2 Total $ 11.5 $ 2.9 $ — $ 4.9 $ 19.3 2015 Charges: Employee Termination Costs Facility Consolidation Costs Other Cash Costs (Recoveries), Net Non-Cash Asset Write-downs and Other Total Special Charges Food and Beverage $ 25.1 $ 0.3 $ 0.1 $ 0.3 $ 25.8 Power and Energy 7.8 0.3 (0.1 ) 0.1 8.1 Industrial 3.4 1.9 — 0.7 6.0 Other 2.2 — — 0.5 2.7 Total $ 38.5 $ 2.5 $ — $ 1.6 $ 42.6 |
Schedule of the analysis of restructuring liabilities | The following is an analysis of our restructuring liabilities for the years ended December 31, 2017 , 2016 and 2015 : December 31, 2017 2016 2015 Balance at beginning of year $ 33.6 $ 32.9 $ 9.2 Special charges (1) 14.4 60.1 41.0 Utilization — cash (37.5 ) (58.9 ) (14.3 ) Currency translation adjustment and other 1.9 (0.5 ) (3.0 ) Balance at end of year $ 12.4 $ 33.6 $ 32.9 (1) The years ended December 31, 2017 , 2016 and 2015 excluded $4.9 , $19.7 and $1.6 , respectively, of asset impairment and certain other charges that impacted special charges but not the restructuring liabilities. |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories at December 31, 2017 and 2016 comprised the following: December 31, 2017 2016 Finished goods $ 92.3 $ 86.2 Work in process 99.2 74.6 Raw materials and purchased parts 108.9 117.8 Total FIFO cost 300.4 278.6 Excess of FIFO cost over LIFO inventory value (6.5 ) (6.2 ) Total inventories $ 293.9 $ 272.4 |
GOODWILL AND OTHER INTANGIBLE34
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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 year ended December 31, 2017 , were as follows: December 31, 2016 Impairments Foreign Currency Translation and Other December 31, 2017 Food and Beverage $ 250.3 $ — $ 21.5 $ 271.8 Power and Energy (1) 256.0 — 16.4 272.4 Industrial (2) 216.2 — 10.9 227.1 Total $ 722.5 $ — $ 48.8 $ 771.3 (1) The carrying amount of goodwill included $256.5 and $241.1 of accumulated impairments as of December 31, 2017 and 2016, respectively. (2) The carrying amount of goodwill included $67.7 of accumulated impairments as of December 31, 2017 and 2016. The changes in the carrying amount of goodwill, by reportable segment for the year ended December 31, 2016 , were as follows: December 31, 2015 Impairments Foreign Currency Translation and Other (1) December 31, 2016 Food and Beverage $ 269.9 $ — $ (19.6 ) $ 250.3 Power and Energy (2) 538.9 (252.8 ) (30.1 ) 256.0 Industrial (3) 214.6 — 1.6 216.2 Total $ 1,023.4 $ (252.8 ) $ (48.1 ) $ 722.5 (1) 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 were reclassified between reportable segments. Segment results and corporate expense were recast for all historical periods presented to reflect these changes. In connection with these reclassifications, 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 $241.1 and $0.0 of accumulated impairments as of December 31, 2016 and 2015, respectively. (3) The carrying amount of goodwill included $67.7 of accumulated impairments as of December 31, 2016 and 2015. |
Schedule of finite-lived intangible assets | Identifiable intangible assets were as follows: December 31, 2017 December 31, 2016 Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value Intangible assets with determinable lives: Customer relationships $ 226.1 $ (121.9 ) $ 104.2 $ 209.6 $ (101.6 ) $ 108.0 Technology 94.1 (50.9 ) 43.2 84.6 (40.8 ) 43.8 Patents 6.8 (5.1 ) 1.7 6.5 (5.1 ) 1.4 Other 13.8 (11.1 ) 2.7 12.3 (9.6 ) 2.7 340.8 (189.0 ) 151.8 313.0 (157.1 ) 155.9 Trademarks with indefinite lives 198.5 — 198.5 188.4 — 188.4 Total $ 539.3 $ (189.0 ) $ 350.3 $ 501.4 $ (157.1 ) $ 344.3 |
Schedule of indefinite-lived intangible assets | Identifiable intangible assets were as follows: December 31, 2017 December 31, 2016 Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value Intangible assets with determinable lives: Customer relationships $ 226.1 $ (121.9 ) $ 104.2 $ 209.6 $ (101.6 ) $ 108.0 Technology 94.1 (50.9 ) 43.2 84.6 (40.8 ) 43.8 Patents 6.8 (5.1 ) 1.7 6.5 (5.1 ) 1.4 Other 13.8 (11.1 ) 2.7 12.3 (9.6 ) 2.7 340.8 (189.0 ) 151.8 313.0 (157.1 ) 155.9 Trademarks with indefinite lives 198.5 — 198.5 188.4 — 188.4 Total $ 539.3 $ (189.0 ) $ 350.3 $ 501.4 $ (157.1 ) $ 344.3 |
EMPLOYEE BENEFIT PLANS EMPLOYEE
EMPLOYEE BENEFIT PLANS EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Schedule of multiemployer benefit plan | We participate in the following multiemployer benefit plan: Pension Fund EIN Pension Plan Number Pension Protection Act Zone Status - 2017 Financial Improvement Plan/Rehabilitation Plan Status Pending 2017 Contributions 2016 Contributions Surcharge Imposed Expiration Date of Collective Bargaining Agreement IAM 51-6031295-002 Green No $— $— No August 10, 2018 |
Summary of estimated future benefit payments | Following is a summary, as of December 31, 2017 , of the estimated future benefit payments for our foreign and domestic pension plans and our domestic postretirement plan in each of the next five fiscal years and in the aggregate for five fiscal years thereafter. Benefit payments are paid from plan assets or directly by us for our unfunded plans. Foreign Pension Benefits Domestic Pension Benefits Domestic Postretirement Benefits 2018 $ 2.6 $ — $ 0.1 2019 2.4 — 0.1 2020 2.5 6.8 0.1 2021 2.5 — 0.2 2022 2.4 — 0.1 Subsequent five years 14.2 — 0.7 |
Schedule of change in projected benefit obligation | The following tables show the foreign and domestic pension plans’ funded status and amounts recognized in our consolidated balance sheets: Foreign Pension Plans Domestic Pension Plan 2017 2016 2017 2016 Change in projected benefit obligation: Projected benefit obligation - beginning of year $ 50.1 $ 51.6 $ 8.3 $ 73.9 Service cost 0.7 1.1 0.7 0.7 Interest cost 0.8 1.1 0.3 0.8 Actuarial losses (gains) (1.6 ) 1.7 0.5 (1.2 ) Benefits paid (2.9 ) (2.1 ) — (65.9 ) Plan settlements (4.2 ) — — — Curtailment gains (1.1 ) (1.0 ) — — Foreign exchange and other 6.5 (2.3 ) — — Projected benefit obligation - end of year $ 48.3 $ 50.1 $ 9.8 $ 8.3 |
Schedule of change in plan assets and amounts recognized in consolidated and combined balance sheets | Foreign Pension Plans Domestic Pension Plan 2017 2016 2017 2016 Change in plan assets: Fair value of plan assets - beginning of year $ 3.9 $ 4.2 $ — $ — Actual return on plan assets (0.1 ) (0.4 ) — — Contributions (employer and employee) 0.2 0.3 — — Benefits paid (0.3 ) (0.1 ) — — Plan settlement (3.2 ) — — — Foreign exchange and other 0.2 (0.1 ) — — Fair value of plan assets - end of year $ 0.7 $ 3.9 $ — $ — Funded status at year-end (47.6 ) (46.2 ) (9.8 ) (8.3 ) Amounts recognized in the consolidated balance sheets consist of: Accrued expenses (2.2 ) (2.0 ) — — Other long-term liabilities (45.4 ) (44.2 ) (9.8 ) (8.3 ) Net amount recognized $ (47.6 ) $ (46.2 ) $ (9.8 ) $ (8.3 ) Amount recognized in accumulated other comprehensive loss (pre-tax) consists of net prior service costs $ 0.1 $ — $ — $ — |
Schedule of net periodic pension benefit expense components | Net periodic pension benefit expense (income) for our foreign and domestic pension plans included the following components: Year ended December 31, (1) Foreign Pension Plans Domestic Pension Plan 2017 2016 2015 2017 2016 2015 (2) Service cost $ 0.7 $ 1.1 $ 1.2 $ 0.7 $ 0.7 $ 0.8 Interest cost 0.8 1.1 1.3 0.3 0.8 0.5 Expected return on plan assets (0.1 ) (0.1 ) (0.1 ) — — — Amortization of unrecognized prior service credits — — (0.1 ) — — — Curtailment gains (3) (1.1 ) (1.0 ) — — — (0.5 ) Recognized net actuarial losses (gains) (4) (1.6 ) 2.2 (2.0 ) 0.5 (1.2 ) 8.3 Total net periodic pension benefit expense (income) $ (1.3 ) $ 3.3 $ 0.3 $ 1.5 $ 0.3 $ 9.1 (1) As discussed in Note 3 and in accordance with amended guidance issued in March 2017, we have reclassified non-service pension costs from “Selling, general and administrative” expense to “Other income (expense), net” in our consolidated and combined statements of operations for the years ended December 31, 2016 and 2015, respectively, as we believe this classification provides investors a more comparative presentation of our selling, general and administrative expense and operating results from period to period. (2) We assumed this domestic nonqualified pension plan's obligations from the former Parent and formed a new plan in connection with the Spin-Off. We were allocated a portion of the costs related to this plan prior to the Spin-Off, based on an allocation methodology discussed further in Note 1. Accordingly, pension benefit expense of this plan for 2015 reflects a remeasurement of the plan’s obligations as of the Spin-Off and activity of the plan from the date of the Spin-Off through December 31, 2015. (3) Curtailment gain in 2017 is related to the cessation of accrual of future benefits by participants in a defined benefit pension plan in the Netherlands during the first quarter. The accumulated obligations for future pension payments to participants in this plan were also transferred to an insurance company at that time. Under the agreement, the insurance company irrevocably assumed the obligation to make future pension payments to the approximately 60 participants of the plan. Curtailment gains in 2016 resulted from restructuring actions that impacted a facility in France and the curtailment gain in 2015 related to the termination of a former participant in our domestic nonqualified pension plan during the fourth quarter of 2015. (4) Consists of reported actuarial losses (gains) and the difference between actual and expected returns on plan assets. |
Schedule of actuarial assumptions used | Actuarial assumptions used in accounting for our foreign pension plans and, for the domestic nonqualified pension plan we assumed from the former Parent for the period since the Spin-Off, were as follows: Year ended December 31, Foreign Pension Plans Domestic Pension Plan 2017 2016 2015 2017 2016 2015 Weighted-average actuarial assumptions used in determining net periodic pension expense: Discount rate 1.54 % 2.09 % 2.20 % 3.82 % 3.04 % 2.86 % Rate of increase in compensation levels 2.68 % 2.85 % 2.88 % 2.50 % 2.50 % 3.75 % Expected long-term rate of return on assets 1.82 % 1.97 % 2.29 % N/A N/A N/A Weighted-average actuarial assumptions used in determining year-end benefit obligations: Discount rate 1.51 % 1.54 % 2.09 % 3.49 % 3.82 % 3.01 % Rate of increase in compensation levels 2.50 % 2.68 % 2.85 % 2.50 % 2.50 % 2.50 % Actuarial assumptions used in accounting for our domestic postretirement plans were as follows: Year ended December 31, 2017 2016 2015 Assumed health care cost trend rates: Health care cost trend rate for next year 7.25 % 7.50 % 6.60 % Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 5.00 % 5.00 % 5.00 % Year that the rate reaches the ultimate trend rate 2027 2027 2024 Discount rate used in determining net periodic postretirement benefit expense 4.32 % 4.66 % 3.53 % Discount rate used in determining year-end postretirement benefit obligation 3.79 % 4.32 % 4.66 % |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of income before income taxes and the provision for (benefit from) income taxes | Income (loss) before income taxes and the provision for (benefit from) income taxes consisted of the following: Year ended December 31, 2017 2016 2015 Income (loss) before income taxes: United States $ 100.6 $ (65.5 ) $ 110.0 Foreign (42.7 ) (416.5 ) 27.2 $ 57.9 $ (482.0 ) $ 137.2 Provision for (benefit from) income taxes: Current: United States $ 26.6 $ (3.9 ) $ 55.5 Foreign 16.4 4.9 19.7 Total current 43.0 1.0 75.2 Deferred and other: United States (30.2 ) (47.4 ) (13.1 ) Foreign (1.7 ) (54.6 ) (12.3 ) Total deferred and other (31.9 ) (102.0 ) (25.4 ) Total provision (benefit) $ 11.1 $ (101.0 ) $ 49.8 |
Reconciliation of income tax computed at the U.S. federal statutory tax rate to effective income tax rate | The reconciliation of income tax computed at the U.S. federal statutory tax rate to our effective income tax rate was as follows: Year ended December 31, 2017 2016 2015 Tax at U.S. federal statutory rate 35.0 % 35.0 % 35.0 % State and local taxes, net of U.S. federal benefit 1.8 0.8 1.7 U.S. credits and exemptions (9.0 ) 0.2 (1.6 ) Tax rate differential on foreign earnings 9.6 (3.8 ) (5.5 ) Adjustments to uncertain tax positions (7.4 ) 0.2 (1.7 ) Changes in valuation allowance 17.5 (1.4 ) 3.8 Tax on repatriation of foreign earnings 93.9 0.2 7.3 U.S. federal rate change (123.0 ) — — Stock compensation vestings 2.2 — — Non-deductible goodwill impairment — (15.7 ) — Poland economic development incentive — 4.9 — Other (1.4 ) 0.6 (2.7 ) 19.2 % 21.0 % 36.3 % |
Schedule of significant components of deferred tax assets and liabilities | Significant components of our deferred tax assets and liabilities were as follows: As of December 31, 2017 2016 Deferred tax assets: Net operating loss and credit carryforwards $ 406.6 $ 230.8 Pension, other postretirement and postemployment benefits 10.0 12.4 Payroll and compensation 12.3 19.1 Working capital accruals 13.9 20.6 Other 49.7 43.0 Total deferred tax assets 492.5 325.9 Valuation allowance (83.6 ) (74.9 ) Net deferred tax assets 408.9 251.0 Deferred tax liabilities: Accelerated depreciation 2.4 17.7 Intangible assets recorded in acquisitions 74.1 87.7 Basis difference in affiliates 308.0 138.3 Other 7.2 5.2 Total deferred tax liabilities 391.7 248.9 $ 17.2 $ 2.1 |
Schedule of changes in unrecognized tax benefits | The aggregate changes in the balance of unrecognized tax benefits for the years ended December 31, 2017 , 2016 and 2015 were as follows: Year ended December 31, 2017 2016 2015 Unrecognized tax benefit - beginning of year $ 13.9 $ 25.4 $ 27.3 Gross increases - tax positions in prior period — 0.1 3.6 Gross decreases - tax positions in prior period (2.3 ) (3.8 ) (5.9 ) Gross increases - tax positions in current period 0.4 2.5 5.3 Settlements — (8.5 ) — Lapse of statute of limitations (6.4 ) (1.9 ) (4.3 ) Change due to foreign currency exchange rates — 0.1 (0.6 ) Unrecognized tax benefit - end of year $ 5.6 $ 13.9 $ 25.4 |
INDEBTEDNESS (Tables)
INDEBTEDNESS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Summary of debt | Debt at December 31, 2017 and 2016 was comprised of the following: December 31, 2017 2016 Domestic revolving loan facility $ — $ 68.0 Term loan (1) 270.0 390.0 5.625% senior notes, due in August 2024 300.0 300.0 5.875% senior notes, due in August 2026 300.0 300.0 Trade receivables financing arrangement — 21.2 Other indebtedness (2) 35.8 42.4 Less: deferred financing fees (3) (10.2 ) (12.8 ) Total debt 895.6 1,108.8 Less: short-term debt 24.2 27.7 Less: current maturities of long-term debt 20.5 20.2 Total long-term debt $ 850.9 $ 1,060.9 (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. In October and December 2017, we made voluntary principal prepayments in the amounts of $80.0 and $20.0 , respectively, under the term loan facility. On January 31, 2018, we made an additional voluntary principal prepayment of $30.0 under this facility. As a result of the January 2018 prepayment, the outstanding principal amount on the term loan decreased to $240.0 . The payment was funded by cash on hand. There was no penalty associated with these prepayments. (2) Primarily includes capital lease obligations of $11.6 and $14.7 and balances under a purchase card program of $21.9 and $17.9 as of December 31, 2017 and 2016 , respectively. The purchase card program allows for payment beyond the normal payment terms for goods and services acquired under the program. As this arrangement extends the payment of these purchases beyond their normal payment terms through third-party lending institutions, we have classified these amounts as short-term debt. (3) Deferred financing fees were comprised of fees related to the term loan and senior notes. |
Schedule of per annum fees and interest rate margins applicable to Eurodollar and alternate base rate loans | amend the per annum fees charged and the interest rate margins applicable to Eurodollar and alternate base rate loans as follows: At Any Time Other Than During the Covenant Relief Period Consolidated Leverage Ratio Domestic Revolving Commitment Fee Global Revolving Commitment Fee Letter of Credit Fee Foreign Credit Commitment Fee Foreign Credit Instrument Fee LIBOR Rate Loans ABR Loans Greater than or equal to 3.50 to 1.0 0.400% 0.400% 2.250% 0.400% 1.375% 2.250% 1.250% Between 3.00 to 1.0 and 3.50 to 1.0 0.350% 0.350% 2.000% 0.350% 1.250% 2.000% 1.000% Between 2.00 to 1.0 and 3.00 to 1.0 0.300% 0.300% 1.750% 0.300% 1.000% 1.750% 0.750% Between 1.50 to 1.0 and 2.00 to 1.0 0.275% 0.275% 1.500% 0.275% 0.875% 1.500% 0.500% Between 1.00 to 1.0 and 1.50 to 1.0 0.250% 0.250% 1.375% 0.250% 0.800% 1.375% 0.375% Less than 1.00 to 1.0 0.225% 0.225% 1.250% 0.225% 0.750% 1.250% 0.250% During the Covenant Relief Period Consolidated Leverage Ratio Domestic Revolving Commitment Fee Global Revolving Commitment Fee Letter of Credit Fee Foreign Credit Commitment Fee Foreign Credit Instrument Fee LIBOR Rate Loans ABR Loans Greater than or equal to 3.50 to 1.0 0.500% 0.500% 2.750% 0.500% 1.675% 2.750% 1.750% Between 3.00 to 1.0 and 3.50 to 1.0 0.450% 0.450% 2.500% 0.450% 1.550% 2.500% 1.500% Between 2.00 to 1.0 and 3.00 to 1.0 0.400% 0.400% 2.250% 0.400% 1.300% 2.250% 1.250% Between 1.50 to 1.0 and 2.00 to 1.0 0.375% 0.375% 2.000% 0.375% 1.175% 2.000% 1.000% Between 1.00 to 1.0 and 1.50 to 1.0 0.350% 0.350% 1.875% 0.350% 1.100% 1.875% 0.875% Less than 1.00 to 1.0 0.325% 0.325% 1.750% 0.325% 1.050% 1.750% 0.750% |
EQUITY AND STOCK-BASED COMPEN38
EQUITY AND STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Schedule of weighted average shares outstanding used in computation of basic and diluted income 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: Year ended December 31, 2017 2016 2015 Weighted-average shares outstanding, basic 41.799 41.345 40.863 Dilutive effect of share-based awards 0.384 — 0.097 Weighted-average shares outstanding, dilutive (1) 42.183 41.345 40.960 (1) For the year ended December 31, 2017 , 0.202 of unvested restricted stock shares/units were not included in the computation of diluted income per share because required internal performance thresholds for vesting (as discussed below) were not met. For the year ended December 31, 2016 , an aggregate of 0.802 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 period. For the year ended December 31, 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 0.236 . For the year ended December 31, 2015 , 0.474 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 below) were not met. For the years ended December 31, 2017 and 2015 , 0.358 and 0.389 , respectively, 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 years ended December 31, 2017 , 2016 and 2015 , we recognized compensation expense related to share-based programs in “Selling, general and administrative” expense in the accompanying consolidated and combined statements of operations as follows: Year ended December 31, 2017 2016 2015 Expense associated with individuals attributable to SPX FLOW's operations $ 15.9 $ 17.7 $ 9.6 Allocation of expense historically associated with the former Parent's corporate employees (1) — — 13.4 Expense related to modification as of Spin-Off date — 1.2 2.8 Stock-based compensation expense 15.9 18.9 25.8 Income tax benefit (5.7 ) (6.9 ) (9.5 ) Stock-based compensation expense, net of income tax benefit $ 10.2 $ 12.0 $ 16.3 (1) See Note 1 for a discussion of the methodology used to allocate corporate-related costs prior to the Spin-Off. |
Schedule of assumptions used to determine fair value of awards granted | The following assumptions were used in determining the fair value of the awards granted on the dates indicated below (awards granted during 2015 did not contain a market condition): Annual Expected Stock Price Volatility Annual Expected Dividend Yield Risk-free Interest Rate Correlations Between Total Shareholder Return for SPX FLOW and Individual Companies in the Composite Group Minimum Average Maximum January 13, 2017 SPX FLOW 39.4 % — % 1.50 % 0.1848 0.3830 0.5057 Composite Group 28.6 % n/a 1.50 % January 4, 2016: SPX FLOW 27.5 % — % 1.31 % 0.2986 0.4563 0.5776 Composite Group 25.5 % n/a 1.31 % As SPX FLOW shares have been traded only since the Spin-Off in September 2015 (i.e., with less historical performance than the generally three-year vesting period of the related awards), annual expected stock price volatility was based on the weighted average of SPX FLOW’s historical volatility (since the Spin-Off) and the average historical volatility of the Composite Group, as of the grant dates. An expected annual dividend yield was not assumed as dividends are not currently granted on common shares by SPX FLOW. The average risk-free interest rate was based on an interpolation of the two-year and three-year daily treasury yield curve rate as of the grant dates. Annual Expected Stock Price Volatility Annual Expected Dividend Yield Risk-free Interest Rate Correlation Between Total Shareholder Return for SPX Corporation and the S&P Index January 2, 2014: SPX Corporation 33.7 % 1.02 % 0.76 % 0.7631 S&P Composite 1500 Industrials Index 19.9 % n/a 0.76 % |
Summary of restricted stock share and restricted stock unit activity | The following table summarizes the unvested restricted stock share and restricted stock unit activity (i) from December 31, 2014 through September 26, 2015, for such Company's employees with former Parent awards before the Spin-Off, and (ii) the resulting, converted SPX FLOW awards after the Spin-Off and activity from September 26, 2015 through December 31, 2017 : Former Parent - Prior to Spin-Off: Unvested Restricted Stock Shares and Restricted Stock Units Weighted-Average Grant-Date Fair Value Per Share Outstanding at December 31, 2014 0.149 $72.93 Granted 0.075 85.47 Vested (0.035) 79.92 Forfeited and other (0.019) 63.45 Outstanding at September 26, 2015, immediately prior to Spin-Off 0.170 $79.65 SPX FLOW - Post Spin-Off: Conversion of SPX Plan awards to SPX FLOW Stock Plan awards on September 26, 2015 1.154 $53.32 Granted 0.069 26.05 Vested (0.091) 61.34 Forfeited and other (0.004) 59.93 Outstanding at December 31, 2015 1.128 $51.13 Granted 0.930 27.94 Vested (0.361) 51.13 Forfeited and other (0.422) 40.27 Outstanding at December 31, 2016 1.275 $37.89 Granted 0.486 35.18 Vested (0.358) 42.05 Forfeited and other (0.271) 49.35 Outstanding at December 31, 2017 1.132 $32.65 |
Schedule of assumptions used to estimate fair value of each option grant | The fair value of each former Parent option grant was estimated using the Black-Scholes option-pricing model with the following assumptions: Annual expected SPX Corporation stock price volatility 36.53 % Annual expected SPX Corporation dividend yield 1.75 % Risk-free interest rate 1.97 % Expected life of SPX Corporation stock option (in years) 6.0 |
COMMITMENTS, CONTINGENT LIABI39
COMMITMENTS, CONTINGENT LIABILITIES AND OTHER MATTERS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum rental payments under operating leases | The future minimum rental payments under operating leases with remaining non-cancelable terms in excess of one year are: Year Ending December 31, 2018 $ 22.1 2019 17.8 2020 15.2 2021 10.0 2022 7.6 Thereafter 11.6 Total minimum payments $ 84.3 |
Schedule of future minimum lease payments under capital leases obligations | Future minimum lease payments under capital lease obligations are: Year Ending December 31, 2018 $ 0.9 2019 1.7 2020 1.6 2021 1.6 2022 1.7 Thereafter 6.2 Total minimum payments 13.7 Less: interest (2.1 ) Capital lease obligations as of December 31, 2017 11.6 Less: current maturities as of December 31, 2017 0.5 Long-term portion as of December 31, 2017 $ 11.1 |
Schedule of assets held through capital lease agreements | Assets held through capital lease agreements at December 31, 2017 and 2016 comprise the following: December 31, 2017 2016 Buildings $ 12.8 $ 19.7 Machinery and equipment 0.2 0.2 Total 13.0 19.9 Less: accumulated depreciation (2.5 ) (5.7 ) Net book value $ 10.5 $ 14.2 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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 the equity security measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2017 and 2016 , including net unrealized losses recorded to “Other income (expense), net." Year ended December 31, 2017 2016 Balance at beginning of year $ 7.6 $ 8.1 Unrealized losses recorded to earnings (1.4 ) (0.5 ) Proceeds received from sale of investment (6.2 ) — Balance at end of year $ — $ 7.6 |
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 December 31, 2017 and 2016 were as follows: December 31, 2017 December 31, 2016 Carrying Amount Fair Value Carrying Amount Fair Value Domestic revolving loan facility $ — $ — $ 68.0 $ 68.0 Term loan (1) 270.0 270.0 390.0 390.0 5.625% Senior notes (1) 300.0 315.0 300.0 300.0 5.875% Senior notes (1) 300.0 320.3 300.0 296.3 Trade receivables financing arrangement — — 21.2 21.2 Other indebtedness 24.2 24.2 27.7 27.7 (1) Carrying amount reflected herein excludes related deferred financing fees. |
QUARTERLY RESULTS (UNAUDITED) (
QUARTERLY RESULTS (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly results | First (2) Second Third Fourth (2) 2017 2016 2017 2016 2017 2016 2017 2016 Revenues $ 433.2 $ 505.0 $ 498.0 $ 528.8 $ 491.1 $ 466.8 $ 529.2 $ 495.4 Gross profit 139.1 159.2 153.0 166.8 159.1 146.1 165.2 152.5 Net income (loss) (1) (7.3 ) (32.1 ) 10.2 (352.3 ) 13.0 (4.2 ) 30.9 7.6 Less: Net income (loss) attributable to noncontrolling interests 0.1 (1.0 ) (0.1 ) 0.5 0.2 0.5 0.2 0.8 Net income (loss) attributable to SPX FLOW, Inc. $ (7.4 ) $ (31.1 ) $ 10.3 $ (352.8 ) $ 12.8 $ (4.7 ) $ 30.7 $ 6.8 Basic income (loss) per share of common stock $ (0.18 ) $ (0.75 ) $ 0.25 $ (8.52 ) $ 0.31 $ (0.11 ) $ 0.73 $ 0.16 Diluted income (loss) per share of common stock $ (0.18 ) $ (0.75 ) $ 0.24 $ (8.52 ) $ 0.30 $ (0.11 ) $ 0.72 $ 0.16 (1) During the fourth quarter of 2017 , the income tax provision was impacted by (i) an income tax benefit of $71.2 for reduction in the U.S. tax rate, including the reduction for earnings that were not indefinitely reinvested, and income tax charges of (ii) $50.4 for the deemed repatriation tax and (iii) $6.1 resulting from losses occurring in certain jurisdictions where the tax benefit of those losses is not expected to be realized. During the fourth quarter of 2016, we recorded impairment charges, net of taxes, of $10.6 , related to the trademarks of a business within our Power and Energy reportable segment and a technology asset of a business within our Food and Beverage reportable segment. During the third quarter of 2016, we recognized in Special Charges an asset impairment charge, net of taxes, of $3.3 related to certain corporate assets being marketed for sale. In addition, during the third quarter of 2016, we recorded a loss on early extinguishment of debt, net of taxes, of $24.3 , related to the redemption of all of our 6.875% senior notes due in August 2017. During the third quarter of 2016, we recorded 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. During the second quarter of 2016, we recorded impairment charges, net of taxes, of $358.4 , related to the goodwill and various intangible assets of our Power and Energy reportable segment. During the first quarter of 2016, we recognized in Special Charges an asset impairment charge, net of taxes, of $7.5 resulting primarily from management’s decision during that quarter to market certain corporate assets for sale. (2) We establish actual interim closing dates using a fiscal calendar, which requires our businesses to close their books on the Saturday closest to the end of the first calendar quarter, with the second and third quarters being 91 days in length. Our fourth quarter ends on December 31. The interim closing dates for the first, second and third quarters of 2017 were April 1, July 1 and September 30, compared to the respective April 2, July 2 and October 1, 2016 dates. This practice only affects the quarterly reporting periods and not the annual reporting period. We had two less days in the first quarter of 2017 and one more day in the fourth quarter of 2017 than in the respective 2016 periods. |
BASIS OF PRESENTATION AND SUM42
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Background and Basis of Presentation (Details) $ in Millions | Sep. 26, 2015 | Dec. 31, 2017segment | Dec. 31, 2015USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of business segments | segment | 3 | ||
Centralized functions and programs cost | SPX | |||
Related Party Transaction [Line Items] | |||
Selling, general and administrative expenses | $ 81 | ||
Corporate expense | SPX | |||
Related Party Transaction [Line Items] | |||
Selling, general and administrative expenses | $ 50.7 | ||
Common stock | SPX | |||
Related Party Transaction [Line Items] | |||
Percentage of common stock distributed to FLOW shareholders | 100.00% |
BASIS OF PRESENTATION AND SUM43
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Foreign Currency Translation and Transactions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Forward contracts | Other income (expense), net | |||
Derivative [Line Items] | |||
Net gains (losses) related to foreign currency gains (losses) | $ (4.9) | $ (2.2) | $ 1.1 |
BASIS OF PRESENTATION AND SUM44
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Revenues recognized under the percentage-of-completion method | $ 267 | $ 339.7 | $ 490.7 |
Costs incurred on uncompleted contracts | 1,114.4 | 1,170.5 | |
Estimated earnings to date | 205.9 | 272.1 | |
Cost incurred and estimated earnings to date on uncompleted contracts | 1,320.3 | 1,442.6 | |
Less: Billings to date | (1,345.9) | (1,433.7) | |
Net (billings in excess of revenues) unbilled receivables | (25.6) | 8.9 | |
Unbilled receivables | 48.7 | 66.1 | |
Billings in excess of revenues on uncompleted contracts | (74.3) | (57.2) | |
Net (billings in excess of revenues) unbilled receivables | $ (25.6) | $ 8.9 |
BASIS OF PRESENTATION AND SUM45
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Research and Development Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Selling, general and administrative expenses | |||
Schedule Of Research And Development Expense [Line Items] | |||
Research and development activities related expenditures | $ 17.4 | $ 19.4 | $ 19.1 |
BASIS OF PRESENTATION AND SUM46
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense, including amortization of capital leases | $ 43.6 | $ 44.7 | $ 38.5 |
Buildings | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful lives | 40 years | ||
Machinery and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful lives | 3 years | ||
Machinery and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful lives | 15 years |
USE OF ESTIMATES - Accounts Rec
USE OF ESTIMATES - Accounts Receivable Allowances (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance at beginning of year | $ 22 | $ 23.6 | $ 22 |
Allowances provided | 20.7 | 17.4 | 15.6 |
Write-offs, net of recoveries, credits issued and other | (17.5) | (19) | (14) |
Balance at end of year | $ 25.2 | $ 22 | $ 23.6 |
USE OF ESTIMATES - Accrued Expe
USE OF ESTIMATES - Accrued Expenses (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Unearned revenue | $ 182.3 | $ 140.6 | |
Employee benefits | 96.2 | 62.1 | |
Warranty | 13.3 | 10.2 | $ 14 |
Other | 97.8 | 117 | |
Total | $ 389.6 | $ 329.9 |
USE OF ESTIMATES - Warranty (De
USE OF ESTIMATES - Warranty (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Analysis of product warranty accrual | |||
Balance at beginning of year | $ 10.8 | $ 14.8 | $ 18.4 |
Provisions | 14.4 | 8.9 | 10.3 |
Usage | (13.1) | (12.2) | (12.6) |
Currency translation adjustment | 2.1 | (0.7) | (1.3) |
Balance at end of year | 14.2 | 10.8 | 14.8 |
Less: Current portion of warranty | 13.3 | 10.2 | 14 |
Non-current portion of warranty | $ 0.9 | $ 0.6 | $ 0.8 |
NEW ACCOUNTING PRONOUNCEMENTS -
NEW ACCOUNTING PRONOUNCEMENTS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Tax charge related to the vesting of certain restricted stock shares and restricted stock units | $ 1.3 | |
Accounting Standards Update 2014-09 | Pro Forma | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Undelivered performance obligations (backlog) | $ 998.1 | |
Accounting Standards Update 2014-09 | Forecast | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Percentage increase of revenue recognized | 10.00% | |
Accounting Standards Update 2016-16 | Forecast | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative catch-up charge to accumulated deficit | $ 3.9 |
INFORMATION ON REPORTABLE SEG51
INFORMATION ON REPORTABLE SEGMENTS, CORPORATE EXPENSE AND OTHER - Narratives (Details) | 12 Months Ended |
Dec. 31, 2017segmentcountry | |
Segment Reporting [Abstract] | |
Number of countries in which entity operates (more than) | 30 |
Number of countries in which entity sells its products and services (more than) | 150 |
Revenue, Major Customer [Line Items] | |
Number of reportable segments | segment | 3 |
Emerging markets | Revenue from sales | Customer concentration risk | |
Revenue, Major Customer [Line Items] | |
Percentage of concentration risk | 24.00% |
INFORMATION ON REPORTABLE SEG52
INFORMATION ON REPORTABLE SEGMENTS, CORPORATE EXPENSE AND OTHER - Financial Data for Reportable Segments (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues: | |||||||||||
Revenues | $ 529.2 | $ 491.1 | $ 498 | $ 433.2 | $ 495.4 | $ 466.8 | $ 528.8 | $ 505 | $ 1,951.5 | $ 1,996 | $ 2,388.5 |
Income: | |||||||||||
Income (loss) | 119.1 | (382.6) | 154.4 | ||||||||
Impairment of goodwill and intangible assets | 0 | 442.2 | 22.7 | ||||||||
Special charges | 19.3 | 79.8 | 42.6 | ||||||||
Capital expenditures | 19.4 | 44 | 57 | ||||||||
Depreciation and amortization | 61.2 | 64.7 | 61.9 | ||||||||
Identifiable assets | 2,689 | 2,603.2 | 2,689 | 2,603.2 | |||||||
Total long-lived assets | 520.7 | 529.2 | 520.7 | 529.2 | 549.2 | ||||||
United States | |||||||||||
Revenues: | |||||||||||
Revenues | 693 | 697.2 | 836.5 | ||||||||
Income: | |||||||||||
Total long-lived assets | 254.4 | 285.3 | 254.4 | 285.3 | 312.7 | ||||||
United Kingdom | |||||||||||
Revenues: | |||||||||||
Revenues | 211.8 | 203.6 | 316.5 | ||||||||
China | |||||||||||
Revenues: | |||||||||||
Revenues | 128 | 137.3 | 140.1 | ||||||||
France | |||||||||||
Revenues: | |||||||||||
Revenues | 123.4 | 125.2 | 136.3 | ||||||||
Denmark | |||||||||||
Revenues: | |||||||||||
Revenues | 98 | 96.7 | 116 | ||||||||
Germany | |||||||||||
Revenues: | |||||||||||
Revenues | 96.2 | 98.6 | 119 | ||||||||
Other countries | |||||||||||
Revenues: | |||||||||||
Revenues | 601.1 | 637.4 | 724.1 | ||||||||
Other | |||||||||||
Income: | |||||||||||
Total long-lived assets | 266.3 | 243.9 | 266.3 | 243.9 | 236.5 | ||||||
Power and Energy | |||||||||||
Income: | |||||||||||
Impairment of goodwill and intangible assets | 426.4 | ||||||||||
Reporting segments | |||||||||||
Revenues: | |||||||||||
Revenues | 1,951.5 | 1,996 | 2,388.5 | ||||||||
Income: | |||||||||||
Income (loss) | 196.5 | 199.3 | 293.2 | ||||||||
Capital expenditures | 19.4 | 44 | 57 | ||||||||
Depreciation and amortization | 61.2 | 64.7 | 61.9 | ||||||||
Identifiable assets | 2,689 | 2,603.2 | 2,689 | 2,603.2 | 3,304.2 | ||||||
Reporting segments | Food and Beverage | |||||||||||
Revenues: | |||||||||||
Revenues | 715.9 | 728.3 | 869.8 | ||||||||
Income: | |||||||||||
Income (loss) | 74.9 | 75.1 | 104.4 | ||||||||
Special charges | 8.7 | 22.7 | 25.8 | ||||||||
Capital expenditures | 5.8 | 25 | 24.5 | ||||||||
Depreciation and amortization | 17 | 14.1 | 16.8 | ||||||||
Identifiable assets | 924.3 | 896.4 | 924.3 | 896.4 | 925 | ||||||
Reporting segments | Power and Energy | |||||||||||
Revenues: | |||||||||||
Revenues | 543.2 | 562.7 | 750.2 | ||||||||
Income: | |||||||||||
Income (loss) | 35.5 | 25.4 | 83.8 | ||||||||
Special charges | 0.4 | 20.3 | 8.1 | ||||||||
Capital expenditures | 4.3 | 6.3 | 19.1 | ||||||||
Depreciation and amortization | 20.1 | 21.4 | 28.2 | ||||||||
Identifiable assets | 928.6 | 873.8 | 928.6 | 873.8 | 1,455 | ||||||
Reporting segments | Industrial | |||||||||||
Revenues: | |||||||||||
Revenues | 692.4 | 705 | 768.5 | ||||||||
Income: | |||||||||||
Income (loss) | 86.1 | 98.8 | 105 | ||||||||
Special charges | 6 | 9.2 | 6 | ||||||||
Capital expenditures | 4.2 | 5.4 | 5.1 | ||||||||
Depreciation and amortization | 14.5 | 16.7 | 14.2 | ||||||||
Identifiable assets | 629.3 | 603.8 | 629.3 | 603.8 | 638.7 | ||||||
Corporate | |||||||||||
Income: | |||||||||||
Corporate expense | 56.6 | 58 | 71.6 | ||||||||
Special charges | 4.2 | 27.6 | 2.7 | ||||||||
Capital expenditures | 5.1 | 7.3 | 8.3 | ||||||||
Depreciation and amortization | 9.6 | 12.5 | 2.7 | ||||||||
Identifiable assets | $ 206.8 | $ 229.2 | 206.8 | 229.2 | 285.5 | ||||||
Segment reconciling items | |||||||||||
Income: | |||||||||||
Pension and postretirement service costs | 1.5 | 1.9 | 1.9 | ||||||||
Impairment of goodwill and intangible assets | 0 | 442.2 | 22.7 | ||||||||
Special charges | $ 19.3 | $ 79.8 | $ 42.6 |
SPECIAL CHARGES - Narratives (D
SPECIAL CHARGES - Narratives (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)manufacturing_facilityemployee | Dec. 31, 2016USD ($)employee | Dec. 31, 2015USD ($)employee | |
Restructuring Cost and Reserve [Line Items] | |||
Special charges | $ 19.3 | $ 79.8 | $ 42.6 |
Expected charges to be incurred | 0.5 | ||
Other | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 4.2 | 27.6 | 2.7 |
Tangible asset impairment charges | 0.8 | ||
Asset impairment charges | 3.6 | $ 17.4 | 0.5 |
Other | Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Number of employees terminated | employee | 130 | ||
Food and Beverage | Reporting segments | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | $ 8.7 | $ 22.7 | $ 25.8 |
Number of employees terminated | employee | 90 | 225 | 245 |
Tangible asset impairment charges | $ 0.5 | $ 0.7 | $ 0.3 |
Costs related to lease cancellation | $ 0.6 | ||
Power and Energy | United Kingdom | |||
Restructuring Cost and Reserve [Line Items] | |||
Number of manufacturing facilities part of planned consolidation | manufacturing_facility | 2 | ||
Power and Energy | Reporting segments | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | $ 0.4 | $ 20.3 | $ 8.1 |
Number of employees terminated | employee | 320 | 155 | |
Tangible asset impairment charges | $ 1.5 | $ 0.1 | |
Industrial | Reporting segments | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | $ 6 | $ 9.2 | $ 6 |
Number of employees terminated | employee | 120 | 69 | 176 |
Tangible asset impairment charges | $ 0.1 | $ 0.7 |
SPECIAL CHARGES - Summary of Ch
SPECIAL CHARGES - Summary of Charges (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Cost and Reserve [Line Items] | |||
Special charges | $ 19.3 | $ 79.8 | $ 42.6 |
Reporting segments | Food and Beverage | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 8.7 | 22.7 | 25.8 |
Reporting segments | Power and Energy | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 0.4 | 20.3 | 8.1 |
Reporting segments | Industrial | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 6 | 9.2 | 6 |
Other | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 4.2 | 27.6 | 2.7 |
Employee termination costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 11.5 | 50.5 | 38.5 |
Employee termination costs | Reporting segments | Food and Beverage | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 6.6 | 16.8 | 25.1 |
Employee termination costs | Reporting segments | Power and Energy | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | (0.1) | 18.3 | 7.8 |
Employee termination costs | Reporting segments | Industrial | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 5.2 | 5.2 | 3.4 |
Employee termination costs | Other | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | (0.2) | 10.2 | 2.2 |
Facility consolidation costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 2.9 | 9.3 | 2.5 |
Facility consolidation costs | Reporting segments | Food and Beverage | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 1.6 | 5.2 | 0.3 |
Facility consolidation costs | Reporting segments | Power and Energy | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 0.5 | 0.2 | 0.3 |
Facility consolidation costs | Reporting segments | Industrial | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 0.8 | 3.9 | 1.9 |
Facility consolidation costs | Other | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 0 | 0 | 0 |
Other cash costs, net | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 0 | 0.3 | 0 |
Other cash costs, net | Reporting segments | Food and Beverage | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 0 | 0 | 0.1 |
Other cash costs, net | Reporting segments | Power and Energy | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 0 | 0.3 | (0.1) |
Other cash costs, net | Reporting segments | Industrial | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 0 | 0 | 0 |
Other cash costs, net | Other | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 0 | 0 | 0 |
Non-cash asset write-downs and other | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 4.9 | 19.7 | 1.6 |
Non-cash asset write-downs and other | Reporting segments | Food and Beverage | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 0.5 | 0.7 | 0.3 |
Non-cash asset write-downs and other | Reporting segments | Power and Energy | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 0 | 1.5 | 0.1 |
Non-cash asset write-downs and other | Reporting segments | Industrial | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | 0 | 0.1 | 0.7 |
Non-cash asset write-downs and other | Other | |||
Restructuring Cost and Reserve [Line Items] | |||
Special charges | $ 4.4 | $ 17.4 | $ 0.5 |
SPECIAL CHARGES - Analysis of R
SPECIAL CHARGES - Analysis of Restructuring Liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Liabilities | |||
Balance at beginning of year | $ 33.6 | $ 32.9 | $ 9.2 |
Special charges | 14.4 | 60.1 | 41 |
Utilization — cash | (37.5) | (58.9) | (14.3) |
Currency translation adjustment and other | 1.9 | (0.5) | (3) |
Balance at end of year | 12.4 | 33.6 | 32.9 |
Asset impairment and non-cash charges | $ 4.9 | $ 19.7 | $ 1.6 |
INVENTORIES, NET (Details)
INVENTORIES, NET (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory, Net [Abstract] | ||
Finished goods | $ 92.3 | $ 86.2 |
Work in process | 99.2 | 74.6 |
Raw materials and purchased parts | 108.9 | 117.8 |
Total FIFO cost | 300.4 | 278.6 |
Excess of FIFO cost over LIFO inventory value | (6.5) | (6.2) |
Total inventories | $ 293.9 | $ 272.4 |
Domestic inventories, valued using the last-in, first-out method, as a percentage of total inventory | 7.00% | 6.00% |
GOODWILL AND OTHER INTANGIBLE57
GOODWILL AND OTHER INTANGIBLE ASSETS - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Apr. 02, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Jul. 02, 2016 | Dec. 31, 2015 | |
Changes in the carrying amount of goodwill | |||||
Beginning Balance | $ 1,023.4 | $ 722.5 | $ 1,023.4 | ||
Impairments | 0 | (252.8) | |||
Foreign Currency Translation and Other | 48.8 | (48.1) | |||
Ending Balance | 771.3 | 722.5 | |||
Food and Beverage | |||||
Changes in the carrying amount of goodwill | |||||
Beginning Balance | 269.9 | 250.3 | 269.9 | ||
Impairments | 0 | 0 | |||
Foreign Currency Translation and Other | 21.5 | (19.6) | |||
Ending Balance | 271.8 | 250.3 | |||
Changes in goodwill from re-allocation | (5.6) | ||||
Power and Energy | |||||
Changes in the carrying amount of goodwill | |||||
Beginning Balance | 538.9 | 256 | 538.9 | ||
Impairments | 0 | (252.8) | |||
Foreign Currency Translation and Other | 16.4 | (30.1) | |||
Ending Balance | 272.4 | 256 | |||
Accumulated impairment included in carrying amount of goodwill | 256.5 | 241.1 | $ 252.8 | $ 0 | |
Changes in goodwill from re-allocation | (4) | ||||
Industrial | |||||
Changes in the carrying amount of goodwill | |||||
Beginning Balance | 214.6 | 216.2 | 214.6 | ||
Impairments | 0 | 0 | |||
Foreign Currency Translation and Other | 10.9 | 1.6 | |||
Ending Balance | 227.1 | 216.2 | |||
Accumulated impairment included in carrying amount of goodwill | $ 67.7 | $ 67.7 | $ 67.7 | ||
Changes in goodwill from re-allocation | $ 9.6 |
GOODWILL AND OTHER INTANGIBLE58
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill (Details) - Power and Energy - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Jul. 02, 2016 | Dec. 31, 2015 |
Goodwill [Line Items] | ||||
Percentage of fair value in excess of carrying value | 30.00% | 4.00% | ||
Accumulated impairment included in carrying amount of goodwill | $ 256.5 | $ 241.1 | $ 252.8 | $ 0 |
GOODWILL AND OTHER INTANGIBLE59
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Identifiable Intangible Assets (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 340.8 | $ 313 |
Accumulated Amortization | (189) | (157.1) |
Net Carrying Value | 151.8 | 155.9 |
Total gross carrying value | 539.3 | 501.4 |
Total net carrying value | 350.3 | 344.3 |
Trademarks with indefinite lives | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Trademarks with indefinite lives | 198.5 | 188.4 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 226.1 | 209.6 |
Accumulated Amortization | (121.9) | (101.6) |
Net Carrying Value | 104.2 | 108 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 94.1 | 84.6 |
Accumulated Amortization | (50.9) | (40.8) |
Net Carrying Value | 43.2 | 43.8 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 6.8 | 6.5 |
Accumulated Amortization | (5.1) | (5.1) |
Net Carrying Value | 1.7 | 1.4 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 13.8 | 12.3 |
Accumulated Amortization | (11.1) | (9.6) |
Net Carrying Value | $ 2.7 | $ 2.7 |
GOODWILL AND OTHER INTANGIBLE60
GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangibles, Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 17.6 | $ 20 | $ 23.4 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
2,018 | 17.4 | ||
2,019 | 17.4 | ||
2,020 | 17.2 | ||
2,021 | 16.9 | ||
2,022 | 13.7 | ||
Net carrying value of intangible assets with determinable lives | 151.8 | 155.9 | |
Impairments | 0 | 252.8 | |
Trademarks | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Trademarks with indefinite lives | 198.5 | 188.4 | |
Customer relationships | |||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
Net carrying value of intangible assets with determinable lives | 104.2 | 108 | |
Technology | |||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
Net carrying value of intangible assets with determinable lives | 43.2 | 43.8 | |
Power and Energy | |||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
Net carrying value of intangible assets with determinable lives | 75.6 | ||
Impairments | 0 | 252.8 | |
Power and Energy | Trademarks | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Trademarks with indefinite lives | 35.8 | ||
Impairment charge | 37.1 | 15 | |
Power and Energy | Customer relationships | |||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
Intangible asset impairment charges | 115.9 | ||
Power and Energy | Technology | |||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
Intangible asset impairment charges | 30.9 | ||
Food and Beverage | |||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
Net carrying value of intangible assets with determinable lives | 52.5 | ||
Impairments | 0 | 0 | |
Food and Beverage | Trademarks | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Trademarks with indefinite lives | 101.4 | ||
Food and Beverage | Technology | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Impairment charge | 5.5 | ||
Food and Beverage | Technology assets and trademarks | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Impairment charge | $ 7.7 | ||
Industrial | |||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
Net carrying value of intangible assets with determinable lives | 23.7 | ||
Impairments | 0 | $ 0 | |
Industrial | Trademarks | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Trademarks with indefinite lives | $ 61.3 |
EMPLOYEE BENEFIT PLANS - Plans
EMPLOYEE BENEFIT PLANS - Plans Sponsored by SPX FLOW (Details) - United States - Pension Plan - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Recognition of actuarial loss | $ 0.5 | $ (1.2) | |
Other income (expense), net | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Recognition of actuarial loss | $ 7.4 |
EMPLOYEE BENEFIT PLANS - Plan62
EMPLOYEE BENEFIT PLANS - Plans Sponsored by the former Parent (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
SPX | Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Net periodic benefit expense | $ 1.2 |
EMPLOYEE BENEFIT PLANS - Multie
EMPLOYEE BENEFIT PLANS - Multiemployer Benefit Plan (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Multiemployer Plans [Line Items] | ||
Contributions | $ 0 | $ 0 |
Percentage of total contributions (less than) | 5.00% | 5.00% |
Clyde Union | ||
Multiemployer Plans [Line Items] | ||
Contributions | $ 100,000 | $ 100,000 |
EMPLOYEE BENEFIT PLANS - Plan a
EMPLOYEE BENEFIT PLANS - Plan assets (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
United States | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plans' assets | $ 0 | $ 0 | $ 0 |
United States | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plans' assets | 0 | 0 | |
Foreign Plan | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plans' assets | 0.7 | 3.9 | $ 4.2 |
Foreign Plan | Level 3 | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plans' assets | $ 0.7 | $ 3.9 |
EMPLOYEE BENEFIT PLANS - Employ
EMPLOYEE BENEFIT PLANS - Employer Contributions (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Employer contributions | $ 0 | $ 65,900,000 | $ 0 |
Other Postretirement Benefits Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Expected benefit payments | 100,000 | ||
Foreign Plan | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer contributions | 0 | ||
Expected employer contributions | 100,000 | ||
Direct benefit payments | 2,400,000 | ||
Expected benefit payments | 2,600,000 | ||
United States | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Expected benefit payments | 100,000 | ||
United States | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Expected benefit payments | 0 | ||
Funded Plan | Foreign Plan | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer contributions | 200,000 | ||
Unfunded Plan | Foreign Plan | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer contributions | $ 2,600,000 |
EMPLOYEE BENEFIT PLANS - Estima
EMPLOYEE BENEFIT PLANS - Estimated Future Benefit Payments (Details) $ in Millions | Dec. 31, 2017USD ($) |
United States | |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |
2,018 | $ 0.1 |
Pension Plan | Foreign Plan | |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |
2,018 | 2.6 |
2,019 | 2.4 |
2,020 | 2.5 |
2,021 | 2.5 |
2,022 | 2.4 |
Subsequent five years | 14.2 |
Pension Plan | United States | |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |
2,018 | 0 |
2,019 | 0 |
2,020 | 6.8 |
2,021 | 0 |
2,022 | 0 |
Subsequent five years | 0 |
Other Postretirement Benefits Plan | |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |
2,018 | 0.1 |
2,019 | 0.1 |
2,020 | 0.1 |
2,021 | 0.2 |
2,022 | 0.1 |
Subsequent five years | $ 0.7 |
EMPLOYEE BENEFIT PLANS - Amount
EMPLOYEE BENEFIT PLANS - Amounts Recognized in Consolidated Balance Sheets (Details) - Pension Plan - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Foreign Plan | |||
Change in projected benefit obligation: | |||
Projected benefit obligation - beginning of year | $ 50.1 | $ 51.6 | |
Service cost | 0.7 | 1.1 | $ 1.2 |
Interest cost | 0.8 | 1.1 | 1.3 |
Actuarial losses (gains) | (1.6) | 1.7 | |
Benefits paid | (2.9) | (2.1) | |
Plan settlements | (4.2) | 0 | |
Curtailment gains | 1.1 | 1 | 0 |
Foreign exchange and other | 6.5 | (2.3) | |
Projected benefit obligation - end of year | 48.3 | 50.1 | 51.6 |
Change in plan assets: | |||
Fair value of plan assets - beginning of year | 3.9 | 4.2 | |
Actual return on plan assets | (0.1) | (0.4) | |
Contributions (employer and employee) | 0.2 | 0.3 | |
Benefits paid | (0.3) | (0.1) | |
Plan settlement | (3.2) | 0 | |
Foreign exchange and other | 0.2 | (0.1) | |
Fair value of plan assets - end of year | 0.7 | 3.9 | 4.2 |
Funded status at year-end | (47.6) | (46.2) | |
Amounts recognized in the consolidated balance sheets consist of: | |||
Accrued expenses | (2.2) | (2) | |
Other long-term liabilities | (45.4) | (44.2) | |
Net amount recognized | (47.6) | (46.2) | |
Amount recognized in accumulated other comprehensive loss (pre-tax) consists of net prior service costs | 0.1 | 0 | |
United States | |||
Change in projected benefit obligation: | |||
Projected benefit obligation - beginning of year | 8.3 | 73.9 | |
Service cost | 0.7 | 0.7 | 0.8 |
Interest cost | 0.3 | 0.8 | 0.5 |
Actuarial losses (gains) | 0.5 | (1.2) | |
Benefits paid | 0 | (65.9) | |
Plan settlements | 0 | 0 | |
Curtailment gains | 0 | 0 | 0.5 |
Foreign exchange and other | 0 | 0 | |
Projected benefit obligation - end of year | 9.8 | 8.3 | 73.9 |
Change in plan assets: | |||
Fair value of plan assets - beginning of year | 0 | 0 | |
Actual return on plan assets | 0 | 0 | |
Contributions (employer and employee) | 0 | 0 | |
Benefits paid | 0 | 0 | |
Plan settlement | 0 | 0 | |
Foreign exchange and other | 0 | 0 | |
Fair value of plan assets - end of year | 0 | 0 | $ 0 |
Funded status at year-end | (9.8) | (8.3) | |
Amounts recognized in the consolidated balance sheets consist of: | |||
Accrued expenses | 0 | 0 | |
Other long-term liabilities | (9.8) | (8.3) | |
Net amount recognized | (9.8) | (8.3) | |
Amount recognized in accumulated other comprehensive loss (pre-tax) consists of net prior service costs | $ 0 | $ 0 |
EMPLOYEE BENEFIT PLANS - Obliga
EMPLOYEE BENEFIT PLANS - Obligations and Funded Status (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Other Postretirement Benefits Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Funded status of plan | $ (4.3) | $ (3.9) |
Accumulated benefit obligation | 4.3 | 3.9 |
Other Postretirement Benefits Plan | Accrued expenses | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Short-term liability associated with plan | 0.1 | 0.1 |
Other Postretirement Benefits Plan | Other long-term liabilities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Long-term liability associated with plan | 4.2 | 3.8 |
Pension Plan | Foreign Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Funded status of plan | 47.6 | 46.2 |
Accumulated benefit obligation | 46.5 | 47.6 |
Pension Plan | United States | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Funded status of plan | 9.8 | 8.3 |
Accumulated benefit obligation | $ 8.7 | $ 7.3 |
EMPLOYEE BENEFIT PLANS - Schedu
EMPLOYEE BENEFIT PLANS - Schedule of Net Periodic Pension Benefit Expense (Details) - Pension Plan - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Foreign Plan | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
Service cost | $ 0.7 | $ 1.1 | $ 1.2 |
Interest cost | 0.8 | 1.1 | 1.3 |
Expected return on plan assets | (0.1) | (0.1) | (0.1) |
Amortization of unrecognized prior service credits | 0 | 0 | (0.1) |
Curtailment gains | (1.1) | (1) | 0 |
Recognized net actuarial losses (gains) | (1.6) | 2.2 | (2) |
Total net periodic pension benefit expense (income) | (1.3) | 3.3 | 0.3 |
United States | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
Service cost | 0.7 | 0.7 | 0.8 |
Interest cost | 0.3 | 0.8 | 0.5 |
Expected return on plan assets | 0 | 0 | 0 |
Amortization of unrecognized prior service credits | 0 | 0 | 0 |
Curtailment gains | 0 | 0 | (0.5) |
Recognized net actuarial losses (gains) | 0.5 | (1.2) | 8.3 |
Total net periodic pension benefit expense (income) | $ 1.5 | $ 0.3 | $ 9.1 |
EMPLOYEE BENEFIT PLANS - Compon
EMPLOYEE BENEFIT PLANS - Components of Net Periodic Pension and Postretirement Benefit Expense (Details) - Other Postretirement Benefits Plan - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Net periodic benefit expense | $ 0.4 | $ 0.8 | $ 0.2 |
Service cost | 0.1 | 0.1 | |
Interest cost | 0.1 | 0.2 | |
Recognition of actuarial gain (loss) | $ (0.2) | $ (0.5) |
EMPLOYEE BENEFIT PLANS - Assump
EMPLOYEE BENEFIT PLANS - Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pension Plan | Foreign Plan | |||
Weighted-average actuarial assumptions used in determining net periodic pension expense: | |||
Discount rate | 1.54% | 2.09% | 2.20% |
Rate of increase in compensation levels | 2.68% | 2.85% | 2.88% |
Expected long-term rate of return on assets | 1.82% | 1.97% | 2.29% |
Weighted-average actuarial assumptions used in determining year-end benefit obligations: | |||
Discount rate | 1.51% | 1.54% | 2.09% |
Rate of increase in compensation levels | 2.50% | 2.68% | 2.85% |
Assumed health care cost trend rates: | |||
Discount rate used in determining net periodic postretirement benefit expense | 1.54% | 2.09% | 2.20% |
Discount rate used in determining year-end postretirement benefit obligation | 1.51% | 1.54% | 2.09% |
Pension Plan | United States | |||
Weighted-average actuarial assumptions used in determining net periodic pension expense: | |||
Discount rate | 3.82% | 3.04% | 2.86% |
Rate of increase in compensation levels | 2.50% | 2.50% | 3.75% |
Weighted-average actuarial assumptions used in determining year-end benefit obligations: | |||
Discount rate | 3.49% | 3.82% | 3.01% |
Rate of increase in compensation levels | 2.50% | 2.50% | 2.50% |
Assumed health care cost trend rates: | |||
Discount rate used in determining net periodic postretirement benefit expense | 3.82% | 3.04% | 2.86% |
Discount rate used in determining year-end postretirement benefit obligation | 3.49% | 3.82% | 3.01% |
Other Postretirement Benefits Plan | |||
Weighted-average actuarial assumptions used in determining net periodic pension expense: | |||
Discount rate | 4.32% | 4.66% | 3.53% |
Weighted-average actuarial assumptions used in determining year-end benefit obligations: | |||
Discount rate | 3.79% | 4.32% | 4.66% |
Assumed health care cost trend rates: | |||
Health care cost trend rate for next year | 7.25% | 7.50% | 6.60% |
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 5.00% | 5.00% | 5.00% |
Discount rate used in determining net periodic postretirement benefit expense | 4.32% | 4.66% | 3.53% |
Discount rate used in determining year-end postretirement benefit obligation | 3.79% | 4.32% | 4.66% |
EMPLOYEE BENEFIT PLANS - Define
EMPLOYEE BENEFIT PLANS - Defined Contribution Retirement Plan (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Contribution Plan Disclosure [Line Items] | ||||
Percentage of compensation employees may contribute (less than) | 50.00% | |||
Cost for matching contributions | $ 1.7 | $ 5.7 | $ 6.5 | $ 4.7 |
SPX | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Cost for matching contributions | $ 1.1 |
INCOME TAXES - Income (Loss) Be
INCOME TAXES - Income (Loss) Before Income Taxes and Provision for (Benefit from) Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income (loss) before income taxes: | |||
United States | $ 100.6 | $ (65.5) | $ 110 |
Foreign | (42.7) | (416.5) | 27.2 |
Income before income taxes | 57.9 | (482) | 137.2 |
Current: | |||
United States | 26.6 | (3.9) | 55.5 |
Foreign | 16.4 | 4.9 | 19.7 |
Total current | 43 | 1 | 75.2 |
Deferred and other: | |||
United States | (30.2) | (47.4) | (13.1) |
Foreign | (1.7) | (54.6) | (12.3) |
Total deferred and other | (31.9) | (102) | (25.4) |
Total provision (benefit) | $ 11.1 | $ (101) | $ 49.8 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Income Tax (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Tax at U.S. federal statutory rate | 35.00% | 35.00% | 35.00% |
State and local taxes, net of U.S. federal benefit | 1.80% | 0.80% | 1.70% |
U.S. credits and exemptions | (9.00%) | 0.20% | (1.60%) |
Tax rate differential on foreign earnings | 9.60% | (3.80%) | (5.50%) |
Adjustments to uncertain tax positions | (7.40%) | 0.20% | (1.70%) |
Changes in valuation allowance | 17.50% | (1.40%) | 3.80% |
Tax on repatriation of foreign earnings | 93.90% | 0.20% | 7.30% |
U.S. federal rate change | (123.00%) | 0.00% | 0.00% |
Stock compensation vestings | 2.20% | 0.00% | 0.00% |
Non-deductible goodwill impairment | 0.00% | (15.70%) | 0.00% |
Poland economic development incentive | (0.00%) | 4.90% | (0.00%) |
Other | (1.40%) | 0.60% | (2.70%) |
Effective income tax rate | 19.20% | 21.00% | 36.30% |
INCOME TAXES - Components of De
INCOME TAXES - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Net operating loss and credit carryforwards | $ 406.6 | $ 230.8 |
Pension, other postretirement and postemployment benefits | 10 | 12.4 |
Payroll and compensation | 12.3 | 19.1 |
Working capital accruals | 13.9 | 20.6 |
Other | 49.7 | 43 |
Total deferred tax assets | 492.5 | 325.9 |
Valuation allowance | (83.6) | (74.9) |
Net deferred tax assets | 408.9 | 251 |
Deferred tax liabilities: | ||
Accelerated depreciation | 2.4 | 17.7 |
Intangible assets recorded in acquisitions | 74.1 | 87.7 |
Basis difference in affiliates | 308 | 138.3 |
Other | 7.2 | 5.2 |
Total deferred tax liabilities | 391.7 | 248.9 |
Net deferred tax assets | $ 17.2 | $ 2.1 |
INCOME TAXES - Enactment of the
INCOME TAXES - Enactment of the Tax Cuts and Jobs Act (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Tax benefit, tax cuts and job acts of 2017 | $ 17.8 | |||
Transition tax on accumulated foreign earnings, tax cuts and jobs act of 2017 | 50.4 | $ 50.4 | ||
Taxes on earnings not indefinitely reinvested | $ 59.8 | |||
Tax expense related to repatriation of certain earnings of our non-U.S. subsidiaries | $ 4.2 | |||
Transition tax for accumulated foreign earnings, income tax benefit | 53.4 | |||
Federal tax on deemed repatriation paid over the next nine years | $ 20.8 | $ 20.8 |
INCOME TAXES - General Matters
INCOME TAXES - General Matters (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Loss Carryforwards [Line Items] | ||
Tax loss carryforwards of various foreign jurisdictions | $ 1,607.1 | |
State tax loss carryforwards | 152.7 | |
Basis difference in affiliates | 308 | $ 138.3 |
Net operating loss and credit carryforwards | 406.6 | 230.8 |
Increase (decrease) in valuation allowance | 8.7 | 4.6 |
Valuation allowance increase recognized as increase in tax expense | 10.2 | $ 6.8 |
Tax Period 2018 | ||
Operating Loss Carryforwards [Line Items] | ||
Tax loss carryforwards that expire | 1.8 | |
Tax Period 2019 Through 2037 | ||
Operating Loss Carryforwards [Line Items] | ||
Tax loss carryforwards that expire | 185.5 | |
Luxembourg | ||
Operating Loss Carryforwards [Line Items] | ||
Basis difference in affiliates | 177 | |
Net operating loss and credit carryforwards | $ 177 |
INCOME TAXES - Undistributed Fo
INCOME TAXES - Undistributed Foreign Earnings (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Provision undistributed accumulated earnings of foreign subsidiary | $ 2.3 | |
Foreign withholding taxes on foreign dividends and undistributed earnings | $ 4.2 |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||||
Unrecognized tax benefits | $ 5.6 | $ 13.9 | $ 25.4 | $ 27.3 |
Unrecognized tax benefits, net | 2.2 | 5.3 | ||
Unrecognized tax benefits that would impact effective tax rate | 2.2 | |||
Unrecognized tax benefits, interest on income taxes accrued | 0.2 | 1.8 | ||
Unrecognized tax benefits, interest on income taxes accrued, net | 0.2 | 1.7 | ||
Interest (income) expense | (1.5) | $ 0.3 | $ (0.1) | |
Minimum | ||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||
Reasonably possible decrease in unrecognized tax benefits (less than) | 0 | |||
Maximum | ||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||
Reasonably possible decrease in unrecognized tax benefits (less than) | $ 1.5 |
INCOME TAXES - Changes in Balan
INCOME TAXES - Changes in Balance of Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefit - beginning of year | $ 13.9 | $ 25.4 | $ 27.3 |
Gross increases - tax positions in prior period | 0 | 0.1 | 3.6 |
Gross decreases - tax positions in prior period | (2.3) | (3.8) | (5.9) |
Gross increases - tax positions in current period | 0.4 | 2.5 | 5.3 |
Settlements | 0 | (8.5) | 0 |
Lapse of statute of limitations | (6.4) | (1.9) | (4.3) |
Change due to foreign currency exchange rates | 0 | 0.1 | (0.6) |
Unrecognized tax benefit - end of year | $ 5.6 | $ 13.9 | $ 25.4 |
INCOME TAXES - Other Tax Matter
INCOME TAXES - Other Tax Matters (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Oct. 01, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Valuation Allowance [Line Items] | |||||
Income tax expense (benefit) | $ 11.1 | $ (101) | $ 49.8 | ||
Income before income taxes | $ 57.9 | $ (482) | $ 137.2 | ||
Effective income tax rate | 19.20% | 21.00% | 36.30% | ||
Change in enacted tax rate | $ 71.2 | $ 71.2 | |||
Transition tax on accumulated foreign earnings, tax cuts and jobs act of 2017 | 50.4 | 50.4 | |||
Charges related to pre-tax losses | $ 6.1 | 11.6 | |||
Impairment of goodwill and intangible assets | 0 | $ 442.2 | $ 22.7 | ||
Foreign tax expense (benefit) | $ 16.4 | 4.9 | 19.7 | ||
Tax benefit related to net changes in uncertain tax positions | 5.1 | ||||
Tax benefit related to tax rate decrease in Italy and the U.K. | 2.8 | ||||
Tax benefit related to foreign exchange losses recognized | 2 | ||||
Poland | |||||
Valuation Allowance [Line Items] | |||||
Foreign tax expense (benefit) | $ (23.8) | (23.8) | |||
Foreign | |||||
Valuation Allowance [Line Items] | |||||
Tax expense related to dividends from foreign subsidiaries | $ 11.7 | ||||
Power and Energy | |||||
Valuation Allowance [Line Items] | |||||
Income tax expense (benefit) | $ (59.3) | ||||
Effective income tax rate | 13.90% | ||||
Impairment of goodwill and intangible assets | $ 426.4 |
INDEBTEDNESS - Schedule of Debt
INDEBTEDNESS - Schedule of Debt (Details) - USD ($) | Jan. 31, 2018 | Dec. 31, 2017 | Oct. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Aug. 31, 2016 |
Short-term Debt [Line Items] | |||||||
Short-term debt | $ 24,200,000 | $ 24,200,000 | $ 27,700,000 | ||||
Other indebtedness | 35,800,000 | 35,800,000 | 42,400,000 | ||||
Less: short-term debt | 24,200,000 | 24,200,000 | 27,700,000 | ||||
Debt Instrument [Line Items] | |||||||
Less: deferred financing fees | (10,200,000) | (10,200,000) | (12,800,000) | ||||
Total debt | 895,600,000 | 895,600,000 | 1,108,800,000 | ||||
Less: current maturities of long-term debt | 20,500,000 | 20,500,000 | 20,200,000 | ||||
Total long-term debt | 850,900,000 | 850,900,000 | 1,060,900,000 | ||||
Trade receivables financing arrangement | |||||||
Short-term Debt [Line Items] | |||||||
Short-term debt | 0 | 0 | 21,200,000 | ||||
Other indebtedness | 21,900,000 | 21,900,000 | 17,900,000 | ||||
Less: short-term debt | 0 | 0 | 21,200,000 | ||||
Capital lease obligations | |||||||
Short-term Debt [Line Items] | |||||||
Other indebtedness | 11,600,000 | 11,600,000 | 14,700,000 | ||||
Domestic revolving loan facility | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt | 0 | 0 | 68,000,000 | ||||
Term loan | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt | 270,000,000 | $ 270,000,000 | 390,000,000 | $ 400,000,000 | |||
Percentage of face amount repayable annually | 5.00% | ||||||
Voluntary prepayment amount | $ 20,000,000 | $ 80,000,000 | |||||
Term loan | Subsequent Event | |||||||
Debt Instrument [Line Items] | |||||||
Voluntary prepayment amount | $ 30,000,000 | ||||||
Principal amount | $ 240,000,000 | ||||||
Senior notes | 5.625% senior notes, due in August 2024 | |||||||
Debt Instrument [Line Items] | |||||||
Senior notes interest rate | 5.625% | 5.625% | 5.625% | ||||
Long-term debt | $ 300,000,000 | $ 300,000,000 | 300,000,000 | ||||
Principal amount | $ 300,000,000 | ||||||
Senior notes | 5.875% senior notes, due in August 2026 | |||||||
Debt Instrument [Line Items] | |||||||
Senior notes interest rate | 5.875% | 5.875% | 5.875% | ||||
Long-term debt | $ 300,000,000 | $ 300,000,000 | $ 300,000,000 | ||||
Principal amount | $ 300,000,000 |
INDEBTEDNESS - Maturities of Lo
INDEBTEDNESS - Maturities of Long-Term Debt Payable (Details) $ in Millions | Dec. 31, 2017USD ($) |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
2,018 | $ 44.7 |
2,019 | 21.3 |
2,020 | 231.3 |
2,021 | 1.3 |
2,022 | $ 1.4 |
INDEBTEDNESS - Senior Credit Fa
INDEBTEDNESS - Senior Credit Facilities (Details) - USD ($) | Sep. 01, 2015 | Jul. 31, 2016 |
First Amendment | Minimum | ||
Line of Credit Facility [Line Items] | ||
Fair market value of first priority mortgages (in excess) | $ 10,000,000 | |
Secured debt | ||
Line of Credit Facility [Line Items] | ||
Aggregate principal amount (up to) | $ 1,350,000,000 | |
Secured debt | Senior Credit Facilities | ||
Line of Credit Facility [Line Items] | ||
Benchmark of net cash and cash equivalents excluded from leverage ratio | $ 50,000,000 | |
Ratio of indebtedness to net capital | 2.75 | |
Proceeds reinvestment period | 360 days | |
Required reinvestment period | 180 days | |
Security interest in capital stock of domestic subsidiaries | 100.00% | |
Percentage of capital stock of first-tier foreign subsidiaries | 65.00% | |
Consolidated Leverage Ratio limitations on ability to repurchase capital stock and pay cash dividends | 2.5 | |
Capital stock repurchase and dividend declaration amount (equal to or less than) | $ 100,000,000 | |
Additional amount for stock repurchase and dividend declarations | $ 300,000,000 | |
Capital stock repurchase and dividend declaration, percentage of cumulative Consolidated Net Income | 50.00% | |
Capital stock repurchase and dividend declaration, deficit of Consolidated Net Income | 100.00% | |
Secured debt | Senior Credit Facilities | Federal funds effective rate | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 0.50% | |
Secured debt | Senior Credit Facilities | One-Month LIBOR | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 1.00% | |
Secured debt | Senior Credit Facilities | Maximum | ||
Line of Credit Facility [Line Items] | ||
Allowance for additional commitments (up to) | $ 500,000,000 | |
Secured debt | Term loan | ||
Line of Credit Facility [Line Items] | ||
Aggregate principal amount | 400,000,000 | |
Secured debt | Domestic revolving loan facility | ||
Line of Credit Facility [Line Items] | ||
Aggregate principal amount (up to) | 250,000,000 | |
Secured debt | Letter of credit | ||
Line of Credit Facility [Line Items] | ||
Aggregate principal amount (up to) | $ 100,000,000 | |
Fronting fee | 0.125% | |
Secured debt | Global line of credit | ||
Line of Credit Facility [Line Items] | ||
Aggregate principal amount (up to) | $ 200,000,000 | |
Secured debt | Participation foreign line of credit | ||
Line of Credit Facility [Line Items] | ||
Aggregate principal amount (up to) | 250,000,000 | |
Secured debt | Foreign line of credit | ||
Line of Credit Facility [Line Items] | ||
Aggregate principal amount (up to) | $ 250,000,000 | |
Fronting fee | 0.25% |
INDEBTEDNESS - Amendment of Sen
INDEBTEDNESS - Amendment of Senior Credit Facilities (Details) $ in Millions | Jul. 11, 2016USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2017USD ($) |
Secured debt | Letter of credit | |||
Debt Instrument [Line Items] | |||
Outstanding letters of credit issued under revolving credit and foreign credit instrument facilities | $ 7 | ||
Secured debt | Participation foreign line of credit | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | 313.1 | ||
Outstanding letters of credit issued under revolving credit and foreign credit instrument facilities | 186.9 | ||
Second Amendment | |||
Debt Instrument [Line Items] | |||
Debt covenant, maintained consolidated leverage ratio | 3.25 | ||
Debt covenant, maintained interest coverage ratio | 3.50 | ||
Second Amendment | During the Covenant Relief Period | |||
Debt Instrument [Line Items] | |||
Debt instrument covenant, commitments and principal available without consent | $ 300 | ||
Second Amendment | During the Covenant Relief Period | Maximum | |||
Debt Instrument [Line Items] | |||
Debt covenant, maintained consolidated secured leverage ratio | 2.50 | ||
Second Amendment | During Covenant Relief Period, Fiscal Quarters Ending December 31, 2017 and March 31, 2018 | Maximum | |||
Debt Instrument [Line Items] | |||
Debt covenant, maintained consolidated leverage ratio | 4.50 | ||
Second Amendment | During Covenant Relief Period, Fiscal Quarters Ending June 30, 2018 and September 30, 2018 | Maximum | |||
Debt Instrument [Line Items] | |||
Debt covenant, maintained consolidated leverage ratio | 4.25 | ||
Second Amendment | During Covenant Relief Period, Fiscal Quarters Ending June 30, 2018 and September 30, 2018 | Minimum | |||
Debt Instrument [Line Items] | |||
Debt covenant, maintained interest coverage ratio | 3.25 | ||
Second Amendment | During Covenant Relief Period, Fiscal Quarter Ending December 31, 2018 | Maximum | |||
Debt Instrument [Line Items] | |||
Debt covenant, maintained consolidated leverage ratio | 4 | ||
Second Amendment | During Covenant Relief Period, Fiscal Quarter Ending December 31, 2018 | Minimum | |||
Debt Instrument [Line Items] | |||
Debt covenant, maintained interest coverage ratio | 3.50 | ||
Second Amendment | During Covenant Relief Period, Through March 31, 2018 | Minimum | |||
Debt Instrument [Line Items] | |||
Debt covenant, maintained interest coverage ratio | 3 | ||
Senior Credit Facilities | |||
Debt Instrument [Line Items] | |||
Debt instrument covenant, commitments and principal available without consent | $ 500 | ||
Senior Credit Facilities | Secured debt | |||
Debt Instrument [Line Items] | |||
Available borrowing capacity | $ 443 | ||
Weighted-average interest rate of outstanding borrowings | 2.80% | 4.10% | |
Senior Credit Facilities | At Any Time Other Than During the Covenant Relief Period | Maximum | |||
Debt Instrument [Line Items] | |||
Debt covenant, maintained consolidated leverage ratio | 4 | ||
Senior Credit Facilities | At Any Time Other Than During the Covenant Relief Period | Minimum | |||
Debt Instrument [Line Items] | |||
Debt covenant, maintained interest coverage ratio | 3.50 |
INDEBTEDNESS - Schedule of Per
INDEBTEDNESS - Schedule of Per Annum Fees Charged and Interest Rate Margins (Details) | 1 Months Ended |
Dec. 31, 2016 | |
Secured debt | LIBOR | Greater than or equal to 3.50 to 1.0 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 2.25% |
Secured debt | LIBOR | Greater than or equal to 3.50 to 1.0 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 2.75% |
Secured debt | LIBOR | Between 3.00 to 1.0 and 3.50 to 1.0 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 2.00% |
Secured debt | LIBOR | Between 3.00 to 1.0 and 3.50 to 1.0 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 2.50% |
Secured debt | LIBOR | Between 2.00 to 1.00 and 3.00 to 1.00 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.75% |
Secured debt | LIBOR | Between 2.00 to 1.00 and 3.00 to 1.00 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 2.25% |
Secured debt | LIBOR | Between 1.50 to 1.00 and 2.00 to 1.00 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.50% |
Secured debt | LIBOR | Between 1.50 to 1.00 and 2.00 to 1.00 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 2.00% |
Secured debt | LIBOR | Between 1.00 to 1.00 and 1.50 to 1.00 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.375% |
Secured debt | LIBOR | Between 1.00 to 1.00 and 1.50 to 1.00 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.875% |
Secured debt | LIBOR | Less than 1.00 to 1.00 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.25% |
Secured debt | LIBOR | Less than 1.00 to 1.00 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.75% |
Secured debt | ABR | Greater than or equal to 3.50 to 1.0 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.25% |
Secured debt | ABR | Greater than or equal to 3.50 to 1.0 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.75% |
Secured debt | ABR | Between 3.00 to 1.0 and 3.50 to 1.0 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.00% |
Secured debt | ABR | Between 3.00 to 1.0 and 3.50 to 1.0 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.50% |
Secured debt | ABR | Between 2.00 to 1.00 and 3.00 to 1.00 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 0.75% |
Secured debt | ABR | Between 2.00 to 1.00 and 3.00 to 1.00 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.25% |
Secured debt | ABR | Between 1.50 to 1.00 and 2.00 to 1.00 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 0.50% |
Secured debt | ABR | Between 1.50 to 1.00 and 2.00 to 1.00 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.00% |
Secured debt | ABR | Between 1.00 to 1.00 and 1.50 to 1.00 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 0.375% |
Secured debt | ABR | Between 1.00 to 1.00 and 1.50 to 1.00 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 0.875% |
Secured debt | ABR | Less than 1.00 to 1.00 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 0.25% |
Secured debt | ABR | Less than 1.00 to 1.00 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 0.75% |
Domestic revolving loan facility | Greater than or equal to 3.50 to 1.0 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.40% |
Domestic revolving loan facility | Greater than or equal to 3.50 to 1.0 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.50% |
Domestic revolving loan facility | Between 3.00 to 1.0 and 3.50 to 1.0 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.35% |
Domestic revolving loan facility | Between 3.00 to 1.0 and 3.50 to 1.0 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.45% |
Domestic revolving loan facility | Between 2.00 to 1.00 and 3.00 to 1.00 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.30% |
Domestic revolving loan facility | Between 2.00 to 1.00 and 3.00 to 1.00 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.40% |
Domestic revolving loan facility | Between 1.50 to 1.00 and 2.00 to 1.00 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.275% |
Domestic revolving loan facility | Between 1.50 to 1.00 and 2.00 to 1.00 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.375% |
Domestic revolving loan facility | Between 1.00 to 1.00 and 1.50 to 1.00 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.25% |
Domestic revolving loan facility | Between 1.00 to 1.00 and 1.50 to 1.00 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.35% |
Domestic revolving loan facility | Less than 1.00 to 1.00 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.225% |
Domestic revolving loan facility | Less than 1.00 to 1.00 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.325% |
Global line of credit | Greater than or equal to 3.50 to 1.0 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.40% |
Global line of credit | Greater than or equal to 3.50 to 1.0 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.50% |
Global line of credit | Between 3.00 to 1.0 and 3.50 to 1.0 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.35% |
Global line of credit | Between 3.00 to 1.0 and 3.50 to 1.0 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.45% |
Global line of credit | Between 2.00 to 1.00 and 3.00 to 1.00 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.30% |
Global line of credit | Between 2.00 to 1.00 and 3.00 to 1.00 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.40% |
Global line of credit | Between 1.50 to 1.00 and 2.00 to 1.00 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.275% |
Global line of credit | Between 1.50 to 1.00 and 2.00 to 1.00 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.375% |
Global line of credit | Between 1.00 to 1.00 and 1.50 to 1.00 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.25% |
Global line of credit | Between 1.00 to 1.00 and 1.50 to 1.00 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.35% |
Global line of credit | Less than 1.00 to 1.00 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.225% |
Global line of credit | Less than 1.00 to 1.00 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.325% |
Letter of credit | Greater than or equal to 3.50 to 1.0 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 2.25% |
Letter of credit | Greater than or equal to 3.50 to 1.0 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 2.75% |
Letter of credit | Between 3.00 to 1.0 and 3.50 to 1.0 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 2.00% |
Letter of credit | Between 3.00 to 1.0 and 3.50 to 1.0 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 2.50% |
Letter of credit | Between 2.00 to 1.00 and 3.00 to 1.00 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 1.75% |
Letter of credit | Between 2.00 to 1.00 and 3.00 to 1.00 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 2.25% |
Letter of credit | Between 1.50 to 1.00 and 2.00 to 1.00 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 1.50% |
Letter of credit | Between 1.50 to 1.00 and 2.00 to 1.00 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 2.00% |
Letter of credit | Between 1.00 to 1.00 and 1.50 to 1.00 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 1.375% |
Letter of credit | Between 1.00 to 1.00 and 1.50 to 1.00 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 1.875% |
Letter of credit | Less than 1.00 to 1.00 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 1.25% |
Letter of credit | Less than 1.00 to 1.00 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 1.75% |
Foreign line of credit | Greater than or equal to 3.50 to 1.0 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.40% |
Instrument fee | 1.375% |
Foreign line of credit | Greater than or equal to 3.50 to 1.0 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.50% |
Instrument fee | 1.675% |
Foreign line of credit | Between 3.00 to 1.0 and 3.50 to 1.0 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.35% |
Instrument fee | 1.25% |
Foreign line of credit | Between 3.00 to 1.0 and 3.50 to 1.0 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.45% |
Instrument fee | 1.55% |
Foreign line of credit | Between 2.00 to 1.00 and 3.00 to 1.00 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.30% |
Instrument fee | 1.00% |
Foreign line of credit | Between 2.00 to 1.00 and 3.00 to 1.00 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.40% |
Instrument fee | 1.30% |
Foreign line of credit | Between 1.50 to 1.00 and 2.00 to 1.00 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.275% |
Instrument fee | 0.875% |
Foreign line of credit | Between 1.50 to 1.00 and 2.00 to 1.00 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.375% |
Instrument fee | 1.175% |
Foreign line of credit | Between 1.00 to 1.00 and 1.50 to 1.00 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.25% |
Instrument fee | 0.80% |
Foreign line of credit | Between 1.00 to 1.00 and 1.50 to 1.00 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.35% |
Instrument fee | 1.10% |
Foreign line of credit | Less than 1.00 to 1.00 | At Any Time Other Than During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.225% |
Instrument fee | 0.75% |
Foreign line of credit | Less than 1.00 to 1.00 | During the Covenant Relief Period | |
Line of Credit Facility [Line Items] | |
Commitment fee | 0.325% |
Instrument fee | 1.05% |
INDEBTEDNESS - Senior Notes and
INDEBTEDNESS - Senior Notes and Other (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Aug. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2017 | Oct. 01, 2016 | Sep. 30, 2015 | |
Debt Instrument [Line Items] | |||||
Premiums paid to redeem debt | $ 36,400,000 | ||||
Trade receivables financing arrangement | |||||
Debt Instrument [Line Items] | |||||
Financing arrangement (up to) | $ 50,000,000 | ||||
Available borrowing capacity | $ 33,800,000 | ||||
Foreign line of credit | |||||
Debt Instrument [Line Items] | |||||
Financing arrangement (up to) | $ 6,300,000 | ||||
2024 and 2026 Notes | Senior notes | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 600,000,000 | ||||
Redemption price as percentage of principal amount | 100.00% | ||||
Redemption price as a percentage of principal amount plus accrued and unpaid interest | 101.00% | ||||
5.625% senior notes, due in August 2024 | Senior notes | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 300,000,000 | ||||
Senior notes interest rate | 5.625% | 5.625% | |||
5.875% senior notes, due in August 2026 | Senior notes | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 300,000,000 | ||||
Senior notes interest rate | 5.875% | 5.875% | |||
6.875% senior notes | Senior notes | |||||
Debt Instrument [Line Items] | |||||
Senior notes interest rate | 6.875% | 6.875% | |||
Extinguishment of debt, amount | $ 600,000,000 | ||||
Premiums paid to redeem debt | $ 36,400,000 |
DERIVATIVE FINANCIAL INSTRUME88
DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Forward contracts | |||
Derivative [Line Items] | |||
Fair value of derivative contract, gross assets | $ 2,300,000 | ||
Fair value of derivative contract, gross assets setoff | $ 2,900,000 | ||
Fair value of derivative contract, gross liabilities | 0 | ||
Fair value of derivative contract, gross liabilities setoff | 100,000 | ||
Forward contracts | Other income (expense), net | |||
Derivative [Line Items] | |||
Net gains (losses) related to foreign currency gains (losses) | (4,900,000) | (2,200,000) | $ 1,100,000 |
Foreign Exchange embedded derivatives | |||
Derivative [Line Items] | |||
Aggregate notional amount | $ 16,900,000 | 21,400,000 | |
Period contracts are scheduled to mature | 1 year | ||
Foreign exchange forward contracts | |||
Derivative [Line Items] | |||
Aggregate notional amount | $ 44,600,000 | $ 28,000,000 | |
Period contracts are scheduled to mature | 1 year | 1 year | |
Unrealized losses, net of tax, recorded in AOCI | $ 0 | $ 0 |
EQUITY AND STOCK-BASED COMPEN89
EQUITY AND STOCK-BASED COMPENSATION - Income (Loss) Per Share (Details) - shares shares in Thousands | Sep. 26, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 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) | 41,799 | 41,345 | 40,863 | |
Dilutive effect of share-based awards (in shares) | 384 | 0 | 97 | |
Weighted-average shares outstanding, dilutive (in shares) | 42,183 | 41,345 | 40,960 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities not included in computation of diluted income per share (in shares) | 236 | |||
Restricted stock shares and 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) | 202 | 474 | ||
Restricted stock shares, restricted stock units and 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) | 802 | |||
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) | 358 | 389 |
EQUITY AND STOCK-BASED COMPEN90
EQUITY AND STOCK-BASED COMPENSATION - Stock-Based Compensation (Details) - USD ($) shares in Thousands, $ in Millions | Sep. 26, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 |
Stock Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unissued shares of stock available for future grants (up to) (in shares) | 1,355 | |||||
Restricted stock shares and restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 3 years | 3 years | ||||
Period of historical volatility | 3 years | 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 | 10 years | 5 years | ||||
Age upon which recipients are eligible for vesting | 60 years | 55 years | ||||
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 units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of shares equivalent to minimum vesting | 50.00% | |||||
Compensation expense | $ 4 | |||||
Stock-based compensation expense | $ 1.2 | $ 2.8 | ||||
Restricted stock units | Non-officer employee | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 3 years | 3 years | ||||
Restricted stock | Officers | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award's requisite service period | 3 years | 3 years | ||||
Minimum | Restricted stock shares and restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of shares equivalent to minimum vesting | 50.00% | 50.00% | ||||
Maximum | Restricted stock shares and restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of shares equivalent to minimum vesting | 150.00% | 150.00% | ||||
SPX | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award's requisite service period | 3 years | |||||
SPX | Restricted stock shares and restricted stock units | Non-officer employee | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 3 years | 3 years | ||||
SPX | Restricted stock shares and restricted stock units | Officers | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 3 years | 3 years | ||||
SPX | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 1 year | |||||
SPX | Minimum | Restricted stock shares and restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of shares equivalent to minimum vesting | 25.00% | |||||
SPX | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 3 years | |||||
SPX | Maximum | Restricted stock shares and restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of shares equivalent to minimum vesting | 125.00% |
EQUITY AND STOCK-BASED COMPEN91
EQUITY AND STOCK-BASED COMPENSATION - Compensation Expense Related to Share-based Programs (Details) - Selling, general and administrative expenses - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 15.9 | $ 18.9 | $ 25.8 |
Income tax benefit | (5.7) | (6.9) | (9.5) |
Stock-based compensation expense, net of income tax benefit | 10.2 | 12 | 16.3 |
Spinoff | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 0 | 1.2 | 2.8 |
SPX FLOW | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 15.9 | 17.7 | 9.6 |
SPX | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 0 | $ 0 | $ 13.4 |
EQUITY AND STOCK-BASED COMPEN92
EQUITY AND STOCK-BASED COMPENSATION - Restricted Stock Share and Restricted Stock Unit Awards, Fair Value Assumptions (Details) - Restricted stock shares and restricted stock units - $ / shares | Jan. 13, 2017 | Jan. 04, 2016 | Jan. 02, 2014 | Dec. 31, 2017 | Dec. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual Expected Stock Price Volatility | 39.40% | 27.50% | |||
Annual Expected Dividend Yield | 0.00% | 0.00% | |||
Risk-free Interest Rate | 1.50% | 1.31% | |||
Period of historical volatility | 3 years | 3 years | |||
Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Correlation Between Total Shareholder Return and Individual Companies in the Composite Group or S&P Index (in dollars per share) | $ 0.1848 | $ 0.2986 | |||
Average | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Correlation Between Total Shareholder Return and Individual Companies in the Composite Group or S&P Index (in dollars per share) | 0.3830 | 0.4563 | |||
Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Correlation Between Total Shareholder Return and Individual Companies in the Composite Group or S&P Index (in dollars per share) | $ 0.5057 | $ 0.5776 | |||
Composite Group | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual Expected Stock Price Volatility | 28.60% | 25.50% | 19.90% | ||
Risk-free Interest Rate | 1.50% | 1.31% | 0.76% | ||
SPX Corporation | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual Expected Stock Price Volatility | 33.70% | ||||
Annual Expected Dividend Yield | 1.02% | ||||
Risk-free Interest Rate | 0.76% | ||||
Correlation Between Total Shareholder Return and Individual Companies in the Composite Group or S&P Index (in dollars per share) | $ 0.7631 |
EQUITY AND STOCK-BASED COMPEN93
EQUITY AND STOCK-BASED COMPENSATION - Summary of Restricted Stock Share and Restricted Stock Unit Awards Activity (Details) - Restricted stock shares and restricted stock units - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Sep. 26, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Unvested Restricted Stock Shares and Restricted Stock Units | ||||
Outstanding at beginning of year (in shares) | 1,275 | 1,128 | ||
Conversion of SPX Plan awards for SPX FLOW Stock Plan awards (in shares) | 1,154 | |||
Granted (in shares) | 69 | 486 | 930 | |
Vested (in shares) | (91) | (358) | (361) | |
Forfeited and other (in shares) | (4) | (271) | (422) | |
Outstanding at the end of period (in shares) | 1,128 | 1,132 | 1,275 | |
Weighted-Average Grant-Date Fair Value Per Share | ||||
Outstanding at beginning of year (in dollars per share) | $ 37.89 | $ 51.13 | ||
Conversion of SPX Plan awards for SPX Flow Stock Plan awards (in dollars per share) | $ 53.32 | |||
Granted (in dollars per share) | 26.05 | 35.18 | 27.94 | |
Vested (in dollars per share) | 61.34 | 42.05 | 51.13 | |
Forfeited and other (in dollars per share) | 59.93 | 49.35 | 40.27 | |
Outstanding at the end of period (in dollars per share) | $ 51.13 | $ 32.65 | $ 37.89 | |
Unrecognized compensation cost | $ 13.9 | |||
Weighted-average period cost expected to be recognized | 1 year 6 months 15 days | |||
SPX | ||||
Unvested Restricted Stock Shares and Restricted Stock Units | ||||
Outstanding at beginning of year (in shares) | 170 | 149 | ||
Granted (in shares) | 75 | |||
Vested (in shares) | (35) | |||
Forfeited and other (in shares) | (19) | |||
Outstanding at the end of period (in shares) | 170 | |||
Weighted-Average Grant-Date Fair Value Per Share | ||||
Outstanding at beginning of year (in dollars per share) | $ 79.65 | $ 72.93 | ||
Granted (in dollars per share) | 85.47 | |||
Vested (in dollars per share) | 79.92 | |||
Forfeited and other (in dollars per share) | 63.45 | |||
Outstanding at the end of period (in dollars per share) | $ 79.65 |
EQUITY AND STOCK-BASED COMPEN94
EQUITY AND STOCK-BASED COMPENSATION - Stock Options (Details) - Stock options - USD ($) $ / shares in Units, shares in Thousands | Sep. 26, 2015 | Jan. 02, 2015 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 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 | ||||
Period of historical volatility | 6 years | ||||
Vesting period | 3 years | ||||
SPX FLOW stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options outstanding (in shares) | 342 | 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 | ||||
Conversion (in shares) | 396 | ||||
Forfeitures (in shares) | 25 | 29 | |||
Exercisable (in shares) | 310 | ||||
Unrecognized compensation cost | $ 0 |
EQUITY AND STOCK-BASED COMPEN95
EQUITY AND STOCK-BASED COMPENSATION - Stock Option, Fair Value Assumptions (Details) - SPX stock options - Stock options | Jan. 02, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Annual expected SPX Corporation stock price volatility | 36.53% |
Annual expected SPX Corporation dividend yield | 1.75% |
Risk-free interest rate | 1.97% |
Expected life of SPX Corporation stock option (in years) | 6 years |
EQUITY AND STOCK-BASED COMPEN96
EQUITY AND STOCK-BASED COMPENSATION - Accumulated Other Comprehensive Loss (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Foreign exchange forward contracts | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Unrealized losses, net of tax, recorded in AOCI | $ 0 | $ 0 |
EQUITY AND STOCK-BASED COMPEN97
EQUITY AND STOCK-BASED COMPENSATION - Common Stock in Treasury (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Common stock in treasury | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock surrendered by recipients of restricted stock | $ 4 | $ 3.5 |
COMMITMENTS, CONTINGENT LIABI98
COMMITMENTS, CONTINGENT LIABILITIES AND OTHER MATTERS - Future Minimum Rental Payments, Operating Leases (Details) $ in Millions | Dec. 31, 2017USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2,018 | $ 22.1 |
2,019 | 17.8 |
2,020 | 15.2 |
2,021 | 10 |
2,022 | 7.6 |
Thereafter | 11.6 |
Total minimum payments | $ 84.3 |
COMMITMENTS, CONTINGENT LIABI99
COMMITMENTS, CONTINGENT LIABILITIES AND OTHER MATTERS - Operating Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Total operating lease expense | $ 30.6 | $ 31.6 | $ 31.9 |
COMMITMENTS, CONTINGENT LIAB100
COMMITMENTS, CONTINGENT LIABILITIES AND OTHER MATTERS - Future Minimum Lease Payments, Capital Lease Obligations (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2,018 | $ 0.9 | |
2,019 | 1.7 | |
2,020 | 1.6 | |
2,021 | 1.6 | |
2,022 | 1.7 | |
Thereafter | 6.2 | |
Total minimum payments | 13.7 | |
Less: interest | (2.1) | |
Capital lease obligations | 11.6 | |
Less: current maturities | 0.5 | $ 0.2 |
Long-term portion | $ 11.1 | $ 14.5 |
COMMITMENTS, CONTINGENT LIAB101
COMMITMENTS, CONTINGENT LIABILITIES AND OTHER MATTERS - Capital Leases (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Commitments and Contingencies Disclosure [Abstract] | ||
Current capital lease obligations | $ 0.5 | $ 0.2 |
Long-term capital lease obligations | $ 11.1 | $ 14.5 |
COMMITMENTS, CONTINGENT LIAB102
COMMITMENTS, CONTINGENT LIABILITIES AND OTHER MATTERS - Capital Lease Agreements Assets (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Capital Leased Assets [Line Items] | ||
Total | $ 13 | $ 19.9 |
Less: accumulated depreciation | (2.5) | (5.7) |
Net book value | 10.5 | 14.2 |
Buildings | ||
Capital Leased Assets [Line Items] | ||
Total | 12.8 | 19.7 |
Machinery and equipment | ||
Capital Leased Assets [Line Items] | ||
Total | $ 0.2 | $ 0.2 |
FAIR VALUE - Derivative Financi
FAIR VALUE - Derivative Financial Instruments (Details) - Forward contracts - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Derivative [Line Items] | ||
Fair value of derivative contract, gross assets | $ 2.3 | |
Fair value of derivative contract, gross assets setoff | $ 2.9 | |
Fair value of derivative contract, gross liabilities | $ 0 | |
Fair value of derivative contract, gross liabilities setoff | $ 0.1 |
FAIR VALUE - Investments in Equ
FAIR VALUE - Investments in Equity Securities (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | ||
Fair value of Level 3 assets | $ 7.6 | $ 8.1 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at beginning of year | 7.6 | 8.1 |
Unrealized losses recorded to earnings | (1.4) | (0.5) |
Proceeds received from sale of investment | (6.2) | 0 |
Balance at end of year | $ 0 | $ 7.6 |
FAIR VALUE - Goodwill, Indefini
FAIR VALUE - Goodwill, Indefinite-Lived Intangible and Other Long-Lived Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Customer relationships, trademarks, and technology assets | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Impairment charge | $ 189.4 | |
Trademarks and technology assets | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Impairment charge | $ 22.7 |
FAIR VALUE - Indebtedness and O
FAIR VALUE - Indebtedness and Other (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Aug. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Short-term debt | $ 24.2 | $ 27.7 | |
Trade receivables financing arrangement | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Short-term debt | 0 | 21.2 | |
Domestic revolving loan facility | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt | 0 | 68 | |
Senior notes | 5.625% senior notes, due in August 2024 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt | $ 300 | 300 | |
Senior notes interest rate | 5.625% | 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] | |||
Long-term debt | $ 300 | 300 | |
Senior notes interest rate | 5.875% | 5.875% | |
Fair value, measurements, nonrecurring | Carrying Amount | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Term loan | $ 270 | 390 | |
Fair value, measurements, nonrecurring | Carrying Amount | Level 2 | Senior notes | 5.625% senior notes, due in August 2024 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Senior notes | 300 | 300 | |
Fair value, measurements, nonrecurring | Carrying Amount | Level 2 | Senior notes | 5.875% senior notes, due in August 2026 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Senior notes | 300 | 300 | |
Fair value, measurements, nonrecurring | Carrying Amount | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Short-term debt | 24.2 | 27.7 | |
Fair value, measurements, nonrecurring | Carrying Amount | Level 1 | Trade receivables financing arrangement | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Short-term debt | 0 | 21.2 | |
Fair value, measurements, nonrecurring | Carrying Amount | Level 1 | Domestic revolving loan facility | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt | 0 | 68 | |
Fair value, measurements, nonrecurring | Fair Value | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Term loan | 270 | 390 | |
Fair value, measurements, nonrecurring | Fair Value | Level 2 | Senior notes | 5.625% senior notes, due in August 2024 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Senior notes | 315 | 300 | |
Fair value, measurements, nonrecurring | Fair Value | Level 2 | Senior notes | 5.875% senior notes, due in August 2026 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Senior notes | 320.3 | 296.3 | |
Fair value, measurements, nonrecurring | Fair Value | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Short-term debt | 24.2 | 27.7 | |
Fair value, measurements, nonrecurring | Fair Value | Level 1 | Trade receivables financing arrangement | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Short-term debt | 0 | 21.2 | |
Fair value, measurements, nonrecurring | Fair Value | Level 1 | Domestic revolving loan facility | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt | $ 0 | $ 68 |
RELATED PARTY TRANSACTIONS - N
RELATED PARTY TRANSACTIONS - Narrative (Details) - SPX - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 26, 2015 | Sep. 26, 2015 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||
Related party interest income | $ 26.2 | ||
Reduction of related party notes receivable | $ 669.7 | ||
Related party notes receivable, weighted-average interest rate | 5.00% | 5.00% | |
Related party notes payable, interest expense | $ 28.4 | ||
Reduction of related party notes payable | $ 991.3 | ||
Related party notes payable, weighted average interest rate | 7.00% | 7.00% |
QUARTERLY RESULTS (UNAUDITED108
QUARTERLY RESULTS (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Aug. 31, 2016 | |
Selected Quarterly Financial Information [Abstract] | ||||||||||||
Revenues | $ 529.2 | $ 491.1 | $ 498 | $ 433.2 | $ 495.4 | $ 466.8 | $ 528.8 | $ 505 | $ 1,951.5 | $ 1,996 | $ 2,388.5 | |
Gross profit | 165.2 | 159.1 | 153 | 139.1 | 152.5 | 146.1 | 166.8 | 159.2 | ||||
Net income (loss) | 30.9 | 13 | 10.2 | (7.3) | 7.6 | (4.2) | (352.3) | (32.1) | 46.8 | (381) | 87.4 | |
Less: Net income (loss) attributable to noncontrolling interests | 0.2 | 0.2 | (0.1) | 0.1 | 0.8 | 0.5 | 0.5 | (1) | 0.4 | 0.8 | (0.1) | |
Net income (loss) attributable to SPX FLOW, Inc. | $ 30.7 | $ 12.8 | $ 10.3 | $ (7.4) | $ 6.8 | $ (4.7) | $ (352.8) | $ (31.1) | $ 46.4 | $ (381.8) | $ 87.5 | |
Basic income (loss) per share of common stock (in dollars per share) | $ 0.73 | $ 0.31 | $ 0.25 | $ (0.18) | $ 0.16 | $ (0.11) | $ (8.52) | $ (0.75) | $ 1.11 | $ (9.23) | $ 2.14 | |
Diluted income (loss) per share of common stock (in dollars per share) | $ 0.72 | $ 0.30 | $ 0.24 | $ (0.18) | $ 0.16 | $ (0.11) | $ (8.52) | $ (0.75) | $ 1.10 | $ (9.23) | $ 2.14 | |
Indefinite-lived Intangible Assets [Line Items] | ||||||||||||
Change in enacted tax rate | $ 71.2 | $ 71.2 | ||||||||||
Transition tax on accumulated foreign earnings, tax cuts and jobs act of 2017 | 50.4 | 50.4 | ||||||||||
Charges related to pre-tax losses | $ 6.1 | 11.6 | ||||||||||
Foreign tax expense (benefit) | $ 16.4 | $ 4.9 | $ 19.7 | |||||||||
Poland | ||||||||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||||||||
Foreign tax expense (benefit) | $ (23.8) | $ (23.8) | ||||||||||
6.875% senior notes | Senior notes | ||||||||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||||||||
Gain (loss) on early extinguishment of debt, net of tax | $ (24.3) | |||||||||||
Senior notes interest rate | 6.875% | 6.875% | ||||||||||
Assets marketed for sale | ||||||||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||||||||
Asset impairment charges | $ 3.3 | $ 7.5 | ||||||||||
Trademarks and technology assets | ||||||||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||||||||
Impairment charge | $ 22.7 | |||||||||||
Food and Beverage and Power and Energy | Trademarks and technology assets | ||||||||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||||||||
Impairment charge | $ 10.6 | |||||||||||
Power and Energy | ||||||||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||||||||
Impairment of goodwill and intangible assets, net of tax | $ 358.4 |
SUBSQUENT EVENT (Details)
SUBSQUENT EVENT (Details) - Term loan - USD ($) $ in Millions | Jan. 31, 2018 | Dec. 31, 2017 | Oct. 31, 2017 |
Subsequent Event [Line Items] | |||
Voluntary prepayment amount | $ 20 | $ 80 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Voluntary prepayment amount | $ 30 | ||
Principal amount | $ 240 |