Watts Water (WTS) 10-Q 9 Aug 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jul. 03, 2016	Aug. 08, 2016
Entity Registrant Name	WATTS WATER TECHNOLOGIES INC
Entity Central Index Key	795,403
Document Type	10-Q
Document Period End Date	Jul. 3, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2
Class A
Entity Common Stock, Shares Outstanding		27,824,583
Class B
Entity Common Stock, Shares Outstanding		6,379,290

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Jul. 03, 2016	Dec. 31, 2015
CURRENT ASSETS:
Cash and cash equivalents	$ 286.7	$ 296.2
Trade accounts receivable, less allowance for doubtful accounts of $12.1 million at July 3, 2016 and $10.1 million at December 31, 2015	220.3	186.4
Inventories, net:
Raw materials	84.2	88.5
Work in process	16.8	15.2
Finished goods	146.5	136.3
Total Inventories	247.5	240
Prepaid expenses and other assets	52.2	46.1
Deferred income taxes	38.8	38.4
Assets held for sale	2	1.9
Total Current Assets	847.5	809
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment, at cost	504.3	498.6
Accumulated depreciation	(319.3)	(314.2)
Property, plant and equipment, net	185	184.4
OTHER ASSETS:
Goodwill	495.5	489
Intangible assets, net	183.4	192.8
Deferred income taxes	2.2	3.7
Other, net	10.9	11.9
TOTAL ASSETS	1,724.5	1,690.8
CURRENT LIABILITIES:
Accounts payable	88.4	101.7
Accrued expenses and other liabilities	137.4	145.7
Accrued compensation and benefits	42.2	46.5
Current portion of long-term debt	1.5	1.1
Total Current Liabilities	269.5	295
LONG-TERM DEBT, NET OF CURRENT PORTION	601.5	574.2
DEFERRED INCOME TAXES	71.3	71.8
OTHER NONCURRENT LIABILITIES	48.4	44.9
STOCKHOLDERS' EQUITY:
Preferred Stock, $0.10 par value; 5,000,000 shares authorized; no shares issued or outstanding
Additional paid-in capital	523	512
Retained earnings	332.2	317.7
Accumulated other comprehensive loss	(124.8)	(128.2)
Total Stockholders' Equity	733.8	704.9
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	1,724.5	1,690.8
Class A
STOCKHOLDERS' EQUITY:
Common Stock	2.8	2.8
Class B
STOCKHOLDERS' EQUITY:
Common Stock	$ 0.6	$ 0.6

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Millions	Jul. 03, 2016USD ($)$ / sharesshares	Dec. 31, 2015USD ($)$ / sharesshares
Trade accounts receivable, allowance for doubtful accounts (in dollars) | $	$ 12.1	$ 10.1
Preferred Stock, par value (in dollars per share) | $ / shares	$ 0.10	$ 0.10
Preferred Stock, shares authorized	5,000,000	5,000,000
Preferred Stock, shares issued	0	0
Preferred Stock, shares outstanding	0	0
Class A
Common Stock, par value (in dollars per share) | $ / shares	$ 0.10	$ 0.10
Common Stock, shares authorized	80,000,000	80,000,000
Common Stock, votes per share (Number of votes)	1	1
Common Stock, issued shares	27,851,012	28,049,908
Common Stock, outstanding shares	27,851,012	28,049,908
Class B
Common Stock, par value (in dollars per share) | $ / shares	$ 0.10	$ 0.10
Common Stock, shares authorized	25,000,000	25,000,000
Common Stock, votes per share (Number of votes)	10	10
Common Stock, issued shares	6,379,290	6,379,290
Common Stock, outstanding shares	6,379,290	6,379,290

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jul. 03, 2016	Jun. 28, 2015	Jul. 03, 2016	Jun. 28, 2015
Consolidated Statements of Operations
Net Sales	$ 371.1	$ 386.9	$ 715.3	$ 743.1
Cost of goods sold	220.4	241.1	429.4	466.8
GROSS PROFIT	150.7	145.8	285.9	276.3
Selling, general and administrative expenses	110.5	106.3	213.1	212
Restructuring and other charges, net	3.2	4.7	4.6	6.7
Gain on disposition	(8.7)		(8.7)
OPERATING INCOME	45.7	34.8	76.9	57.6
Other (income) expense:
Interest income	(0.3)	(0.2)	(0.5)	(0.4)
Interest expense	5.5	5.9	12.2	11.8
Other income, net	(0.9)	(0.4)	(3.1)	(0.6)
Total other expense	4.3	5.3	8.6	10.8
INCOME BEFORE INCOME TAXES	41.4	29.5	68.3	46.8
Provision for income taxes	12.8	10.2	23.5	15.9
NET INCOME	$ 28.6	$ 19.3	$ 44.8	$ 30.9
BASIC EPS
NET INCOME PER SHARE	$ 0.83	$ 0.55	$ 1.30	$ 0.88
Weighted average number of shares (in shares)	34.5	35	34.4	35.1
DILUTED EPS
NET INCOME PER SHARE	$ 0.83	$ 0.55	$ 1.30	$ 0.88
Weighted average number of shares (in shares)	34.5	35.1	34.5	35.1
Dividends per share (in dollars per share)	$ 0.18	$ 0.17	$ 0.35	$ 0.32

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 03, 2016	Jun. 28, 2015	Jul. 03, 2016	Jun. 28, 2015
Consolidated Statements of Comprehensive (Loss) Income
Net income	$ 28.6	$ 19.3	$ 44.8	$ 30.9
Other comprehensive income (loss):
Foreign currency translation adjustments	(12.2)	18.4	12.2	(46.7)
Reversal of foreign currency translation	(6.9)		(6.9)
Interest rate swap, net of tax:	(1.7)		(1.9)
Defined benefit pension plans amortization of net losses included in net periodic pension cost, net of tax		0.2		0.4
Other comprehensive income (loss)	(20.8)	18.6	3.4	(46.3)
Comprehensive income (loss)	$ 7.8	$ 37.9	$ 48.2	$ (15.4)

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	6 Months Ended
	Jul. 03, 2016	Jun. 28, 2015
OPERATING ACTIVITIES
Net income	$ 44.8	$ 30.9
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	14.7	15.6
Amortization of intangibles	10.2	10.3
Loss on disposal and impairment of goodwill, property, plant and equipment and other	1.9	1.3
Gain on disposition	(8.3)
Gain on acquisition	(1.7)
Stock-based compensation	7.3	5.1
Deferred income tax benefit	(0.4)	(4.4)
Changes in operating assets and liabilities, net of effects from business acquisitions and divestures:
Accounts receivable	(30.6)	(27.3)
Inventories	(5.5)	9.3
Prepaid expenses and other assets	1.8	(1.5)
Accounts payable, accrued expenses and other liabilities	(26.4)	2.6
Net cash provided by operating activities	7.8	41.9
INVESTING ACTIVITIES
Additions to property, plant and equipment	(19.2)	(12.5)
Proceeds from the sale of property, plant and equipment		0.1
Business acquisitions, net of cash acquired	(2.1)	0.7
Net cash used in investing activities	(21.3)	(11.7)
FINANCING ACTIVITIES
Proceeds from long-term borrowings	530
Payments of long-term debt	(500.7)	(0.8)
Payment of capital leases and other	(1.1)	(2.9)
Proceeds from share transactions under employee stock plans	2.7	1.2
Tax benefit of stock awards exercised	0.2	0.1
Payments to repurchase common stock	(17.6)	(19.5)
Debt issuance costs	(2.1)
Dividends	(12)	(11.3)
Net cash used in financing activities	(0.6)	(33.2)
Effect of exchange rate changes on cash and cash equivalents	4.6	(13.5)
DECREASE IN CASH AND CASH EQUIVALENTS	(9.5)	(16.5)
Cash and cash equivalents at beginning of year	296.2	301.1
CASH AND CASH EQUIVALENTS AT END OF PERIOD	286.7	284.6
Acquisition of businesses:
Fair value of assets acquired	5.7	(0.3)
Cash paid, net of cash acquired	2.1	(0.7)
Gain on fair value of acquisition	1.7
Liabilities assumed	1.9	0.4
Acquisitions of fixed assets under financing agreement		0.2
Issuance of stock under management stock purchase plan	0.7	0.3
CASH PAID FOR:
Interest	11.7	11
Income taxes	$ 14.6	$ 12.6

Basis of Presentation

Basis of Presentation	6 Months Ended
	Jul. 03, 2016
Basis of Presentation
Basis of Presentation	1. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included in the Watts Water Technologies, Inc. (the Company) Consolidated Balance Sheet as of July 3, 2016, the Consolidated Statements of Operations for the second quarters and six months ended July 3, 2016 and June 28, 2015, the Consolidated Statements of Comprehensive Income (Loss) for the second quarters and six months ended July 3, 2016 and June 28, 2015, and the Consolidated Statements of Cash Flows for the six months ended July 3, 2016 and June 28, 2015. The consolidated balance sheet at December 31, 2015 has been derived from the audited consolidated financial statements at that date. The accounting policies followed by the Company are described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. The financial statements included in this report should be read in conjunction with the consolidated financial statements and notes included in the Annual Report on Form 10-K for the year ended December 31, 2015. Operating results for the interim periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2016. The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-03, “Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” effective for public companies beginning with the first interim period after December 15, 2015. This Update required that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts as opposed to an asset. This is considered a change in accounting principal, and the Company applied the new guidance as of April 3, 2016 and on a retrospective basis. Therefore, the Company has restated its long-term debt and other asset balances in the Balance Sheet for December 31, 2015 for comparative purposes. Refer to Note 10 below for further details. The Company operates on a 52-week fiscal year ending on December 31st. Any quarterly data contained in this Quarterly Report on Form 10-Q generally reflect the results of operations for a 13-week period or 26-week period, respectively.

Accounting Policies

Accounting Policies	6 Months Ended
	Jul. 03, 2016
Accounting Policies
Accounting Policies	2. Accounting Policies Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Goodwill and Long-Lived Assets The changes in the carrying amount of goodwill by geographic segment are as follows: July 3, 2016 Gross Balance Accumulated Impairment Losses Net Goodwill Balance January 1, 2016 Acquired During the Period Foreign Currency Translation and Other Balance July 3, 2016 Balance January 1, 2016 Impairment Loss During the Period Balance July 3, 2016 July 3, 2016 (in millions ) Americas $ $ — $ $ $ ) $ — $ ) $ Europe, Middle East and Africa (EMEA) — ) — ) Asia-Pacific ) — ) Total $ $ $ $ $ ) $ — $ ) $ December 31, 2015 Gross Balance Accumulated Impairment Losses Net Goodwill Balance January 1, 2015 Acquired During the Period Foreign Currency Translation and Other Balance December 31, 2015 Balance January 1, 2015 Impairment Loss During the Period Balance December 31, 2015 December 31, 2015 (in millions) Americas $ $ — $ ) $ $ ) $ — $ ) $ EMEA — ) — ) ) Asia-Pacific ) — ) Total $ $ $ ) $ $ ) $ ) $ ) $ Goodwill and indefinite-lived intangible assets are tested for impairment at least annually or more frequently if events or circumstances indicate that it is “more likely than not” that they might be impaired, such as from a change in business conditions. There were no triggering events identified during the second quarter of 2016. The Company performs its annual goodwill and indefinite-lived intangible assets impairment assessment in the fourth quarter of each year. On February 26, 2016, the Company acquired an additional 50% of the outstanding shares of AERCO Korea Co., Ltd., (“AERCO Korea”) for an aggregate purchase price of approximately $4 million. Prior to February 26, 2016, the Company held a 40% interest in AERCO Korea, which operated as a joint venture. The Company completed a valuation of the assets and liabilities acquired that resulted in the recognition of $3.3 million in goodwill and $1.6 million in intangible assets. In the fourth quarter of 2015, the Company performed a quantitative impairment analysis for the EMEA reporting unit in connection with the annual strategic plan and due to the underperformance to budget, primarily caused by the continued challenging European macroeconomic environment. The Company estimated the fair value of the reporting unit using a weighted calculation of the income approach and the market approach. In the second step of the impairment test, the carrying value of the goodwill exceeded the implied fair value of goodwill, resulting in a pre-tax impairment charge of $129.7 million. On November 30, 2015, the Company completed the acquisition of 80% of the outstanding shares of Apex Valves Limited (“Apex”), a New Zealand company, with a commitment to purchase the remaining 20% ownership within three years of closing. The aggregate purchase price was approximately $20.4 million. The Company accounted for the transaction as a business combination. The Company completed a valuation of the assets and liabilities acquired that resulted in the recognition of $12.9 million in goodwill and $10.1 million in intangible assets. Intangible assets with estimable lives and other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. There were no triggering events identified during the second quarter of 2016. Recoverability of intangible assets with estimable lives and other long-lived assets are measured by a comparison of the carrying amount of an asset or asset group to future net undiscounted pretax cash flows expected to be generated by the asset or asset group. If these comparisons indicate that an asset is not recoverable, the impairment loss recognized is the amount by which the carrying amount of the asset or asset group exceeds the related estimated fair value. Estimated fair value is based on either discounted future pretax operating cash flows or appraised values, depending on the nature of the asset. The Company determines the discount rate for this analysis based on the weighted average cost of capital based on the market and guideline public companies for the related business, and does not allocate interest charges to the asset or asset group being measured. Judgment is required to estimate future operating cash flows. Intangible assets include the following: July 3, 2016 December 31, 2015 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (in millions) Patents $ $ ) $ $ $ ) $ Customer relationships ) ) Technology ) ) Trade Names ) ) Other ) ) Total amortizable intangibles ) ) Indefinite-lived intangible assets — — Total $ $ ) $ $ $ ) $ The Company acquired $1.6 million in intangible assets as part of the AERCO Korea acquisition, consisting entirely of customer relationships. The amortization period of these customer relationships is 10 years. Aggregate amortization expense for amortizable intangible assets for the second quarter of 2016 and 2015 was $5.1 million and $5.2 million, respectively, and for the first six months of 2016 and 2015 was $10.2 million and $10.3 million, respectively. Additionally, future amortization expense for the next five years on amortizable intangible assets is expected to be approximately $10.1 million for the remainder of 2016, $19.4 million for 2017, $16.6 million for 2018, $12.6 million for 2019 and $12.2 million for 2020. Amortization expense is recorded on a straight-line basis over the estimated useful lives of the intangible assets. The weighted-average remaining life of total amortizable intangible assets is 11.2 years. Patents, customer relationships, technology, trade names and other amortizable intangibles have weighted-average remaining lives of 3.8 years, 11.2 years, 9.1 years, 14.2 years and 20.3 years, respectively. Indefinite-lived intangible assets primarily include trademarks and trade names. Stock-Based Compensation The Company maintains one stock incentive plan, the Second Amended and Restated 2004 Stock Incentive Plan (the “2004 Stock Incentive Plan”). Under this plan, key employees have been granted nonqualified stock options to purchase the Company’s Class A common stock. Options typically become exercisable over a four-year period at the rate of 25% per year and expire ten years after the grant date. However, most options granted in 2014 become exercisable over a three-year period at the rate of one-third per year. Options granted under the plan may have exercise prices of not less than 100% of the fair market value of the Class A common stock on the date of grant. The Company’s practice has been to grant all options at fair market value on the grant date. Beginning in 2015, the Company stopped granting stock options as part of its annual equity awards to employees and the Company did not issue any stock options in the first six months of 2016 or 2015. The Company grants shares of restricted stock and deferred shares to key employees and stock awards to non-employee members of the Company’s Board of Directors under the 2004 Stock Incentive Plan. Stock awards to non-employee members of the Company’s Board of Directors are fully vested upon grant. Employees’ restricted stock awards and deferred shares typically vest over a three-year period at the rate of one-third per year, except that most restricted stock awards and deferred shares granted in 2014 vest over a two-year period at the rate of 50% per year. The restricted stock awards and deferred shares are amortized to expense on a straight-line basis over the vesting period. In 2016, the Company changed the timing of its annual grant to the first quarter compared to past annual grants in the third quarter. The Company issued 110,295 shares of restricted stock awards and deferred shares in the first six months of 2016 related to the annual grant and awarded 60,278 shares of restricted stock in the first six months of 2015. The Company also grants performance stock units to key employees under the 2004 Stock Incentive Plan. Performance stock units vest at the end of the performance period set by the Compensation Committee of our Board of Directors at the time of grant. Upon vesting, the number of shares of the Company’s Class A common stock awarded to each performance stock unit recipient will be determined based on the Company’s performance relative to certain performance goals set at the time the performance stock units were granted. The recipient of a performance stock unit award may earn from zero shares to twice the number of target shares awarded to such recipient. The performance stock units are amortized to expense over the vesting period, and based on the Company’s performance relative to the performance goals, may be adjusted. Changes to the estimated shares expected to vest will result in adjustments to the related share-based compensation expense that will be recorded in the period of change. If the performance goals are not met, no awards are earned and previously recognized compensation expense is reversed. The Company granted 106,724 of annual awards for performance stock units during the first six months of 2016 and issued 631 performance stock units in the first six months of 2015. The Company has a Management Stock Purchase Plan that allows for the purchase of restricted stock units (RSUs) by key employees. On an annual basis, key employees may elect to receive a portion of their annual incentive compensation in RSUs instead of cash. Each RSU represents one share of Class A common stock and is purchased by the employee at 67% of the fair market value of the Company’s Class A common stock on the date of grant. Beginning with annual incentive compensation for 2016, the purchase price for RSUs has been increased to 80% of the fair market value of the Company’s Class A common stock. RSUs vest either annually over a three-year period from the grant date or upon the third anniversary of the grant date and receipt of the shares underlying RSUs is deferred for a minimum of three years or such greater number of years as is chosen by the employee. An aggregate of 2,000,000 shares of Class A common stock may be issued under the Management Stock Purchase Plan. The Company granted 88,882 RSUs and 59,995 RSUs in the first six months of 2016 and 2015, respectively. The fair value of each RSU issued under the Management Stock Purchase Plan is estimated on the date of grant using the Black-Scholes-Merton Model based on the following weighted average assumptions: 2016 2015 Expected life (years) Expected stock price volatility % % Expected dividend yield % % Risk-free interest rate % % The above assumptions were used to determine the RSUs weighted average grant-date fair value of $18.15 and $19.04 in 2016 and 2015, respectively. A more detailed description of each of these plans can be found in Note 13 of the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Shipping and Handling The Company’s shipping and handling costs included in selling, general and administrative expenses were $11.5 million and $13.8 million for the second quarters of 2016 and 2015, respectively, and were $22.9 million and $28.2 million for the first six months of 2016 and 2015, respectively. Research and Development Research and development costs included in selling, general and administrative expenses were $6.4 million and $6.3 million for the second quarters of 2016 and 2015, respectively, and were $13.0 million and $12.7 million for the first six months of 2016 and 2015, respectively. Taxes, Other than Income Taxes Taxes assessed by governmental authorities on sale transactions are recorded on a net basis and excluded from sales in the Company’s consolidated statements of operations. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. New Accounting Standards In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers-Identifying Performance Obligations and Licensing.” ASU 2016-10 clarifies the guidance on identifying performance obligations and licensing implementation guidance determined in ASU 2014-09 “Revenue from Contracts with Customers (Topic 606),” which is not yet affective. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as equity or liabilities, forfeitures, and classification on the statement of cash flows. ASU 2016-09 is effective for financial statements issued for annual periods beginning after December 15, 2016 and all interim periods thereafter. Amendments related to the timing of income tax consequences and forfeitures should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory requirement should be applied retrospectively. Amendments requiring recognition of income tax consequences in the income statement should be applied prospectively. The Company is assessing the impact of this standard on the Company’s financial statements. In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers-Principal versus Agent Consideration.” ASU 2016-08 clarifies the guidance on principal versus agent considerations determined in ASU 2014-09 “Revenue from Contracts with Customers (Topic 606),” which is not yet effective. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. In March 2016, the FASB issued ASU 2016-06, “Contingent Put and Call Options in Debt Instruments”. ASU 2016-06 clarifies the requirements for assessing whether contingent put (call) options that can accelerate the principal on debt instruments are clearly and closely related to their debt hosts. ASU 2016-06 is effective for financial statements issued for annual periods beginning after December 15, 2016 and all interim periods thereafter. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. ASU 2016-02 requires a lessee to recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing the right to use the underlying asset for the lease term for both finance and operating leases. ASU 2016-02 is effective for financial statements issued for annual periods beginning after December 15, 2018 and all interim periods thereafter. Earlier application is permitted for all entities. The Company is assessing the impact of this standard on the Company’s financial statements.

Acquisitions

Acquisitions	6 Months Ended
	Jul. 03, 2016
Acquisitions
Acquisitions	3. Acquisitions AERCO Korea On February 26, 2016, the Company acquired an additional 50% of the outstanding shares of AERCO Korea for an aggregate purchase price of approximately $4 million. Prior to February 26, 2016, the Company held a 40% interest in AERCO Korea, which operated as a joint venture. The Company now owns 90% of the outstanding shares of AERCO Korea and as part of the transaction committed to purchase the remaining 10% ownership by December 31, 2017. AERCO Korea sells AERCO U.S. products in Korea, including commercial high-efficiency boilers and water heaters. AERCO Korea strengthens Watts’ strategic vision to expand solutions sales into Asia-Pacific. The Company accounted for the transaction as a step acquisition within a business combination. The Company recognized a $1.7 million pre-tax gain on the previously held 40% ownership interest in the first quarter of 2016. The Company completed a valuation of the assets and liabilities acquired that resulted in the recognition of $3.3 million in goodwill, $1.6 million in intangible assets and $0.8 million as the estimate of the acquisition date fair value on commitment to purchase the remaining 10% ownership by December 31, 2017. The intangible assets acquired consisted entirely of customer relationships. The amortization period of these customer relationships is 10 years. The goodwill is not deductible for tax purposes. The results of AERCO Korea are not material to the Company’s consolidated financial statements. The balance sheet and results of operations for AERCO Korea are included in the Company’s Asia-Pacific segment since acquisition date. APEX On November 30, 2015, the Company completed the acquisition of 80% of the outstanding shares of Apex. As part of the transaction, the Company committed to purchase the remaining 20% ownership interest within three years after closing. Apex specializes in the design and manufacture of control valves for low and high pressure hot water and filtration systems. Apex also produces an extensive range of float and reservoir valves for the agricultural industry. The aggregate purchase price was approximately $20.4 million and the Company recorded a long-term liability of $5.5 million as the estimate of the acquisition date fair value on the contractual call option to purchase the remaining 20% ownership interest. The Company accounted for the transaction as a business combination. The Company completed a valuation of the assets and liabilities acquired that resulted in the recognition of $12.9 million in goodwill and $10.1 million in intangible assets. Intangible assets consist primarily of customer relationships with an estimated life of 10 years and a trade name with an estimated life of 15 years. The goodwill is not deductible for tax purposes. The results of Apex are not material to the Company’s consolidated financial statements. The results of operations for Apex are included in the Company’s Asia-Pacific segment since acquisition date.

Sale of Business

Sale of Business	6 Months Ended
	Jul. 03, 2016
Sale of Business.
Sale of Business	4. Sale of Business Gain on Sale of China Operating Subsidiary On September 22, 2015, the Company signed an agreement to sell an operating subsidiary in China whose manufacturing facility was dedicated to the production of non-core products. As of April 3, 2016, the Company had stopped manufacturing at the facility and met the requirements for held for sale classification on the consolidated balance sheet. The sale was finalized in the second quarter of 2016, and the Company will receive total proceeds of approximately $9.0 million from the sale by the end of the third quarter of 2016. The Company recognized a pre-tax gain of $8.7 million, which includes a non-cash accumulated currency translation adjustment of $7.3 million. The net after-tax gain was approximately $8.3 million.

Financial Instruments and Deriv

Financial Instruments and Derivative Instruments	6 Months Ended
	Jul. 03, 2016
Financial Instruments and Derivative Instruments
Financial Instruments and Derivative Instruments	5. Financial Instruments and Derivative Instruments The Company measures certain financial assets and liabilities at fair value on a recurring basis, including deferred compensation plan assets and related liabilities, and redeemable financial instruments. The fair values of these certain financial assets and liabilities were determined using the following inputs at July 3, 2016 and December 31, 2015: Fair Value Measurements at July 3, 2016 Using: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) (in millions) Assets Plan asset for deferred compensation(1) $ $ $ — $ — Total assets $ $ $ — $ — Liabilities Plan liability for deferred compensation(2) $ $ $ — $ — Redeemable financial instrument(3),(4) — — Interest rate swap (5) — — Total liabilities $ $ $ $ Fair Value Measurements at December 31, 2015 Using: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) (in millions) Assets Plan asset for deferred compensation(1) $ $ $ — $ — Total assets $ $ $ — $ — Liabilities Plan liability for deferred compensation(2) $ $ $ — $ — Redeemable financial instrument(3) — — Total liabilities $ $ $ — $ (1) Included on the Company’s consolidated balance sheet in other assets (other, net). (2) Included on the Company’s consolidated balance sheet in accrued compensation and benefits. (3) Included in the Company’s consolidated balance sheet in other noncurrent liabilities as of July 3, 2016 and December 31, 2015 and relates to a mandatorily redeemable equity instrument as part of the Apex acquisition in 2015. (4) Included in the Company’s consolidated balance sheet in other noncurrent liabilities as of July 3, 2016 and relates to a mandatorily redeemable equity instrument as part of the AERCO Korea acquisition. (5) Included on the Company’s consolidated balance sheet in other noncurrent liabilities. The table below provides a summary of the changes in fair value of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the period December 31, 2015 to July 3, 2016. Balance Total realized and unrealized (gains) losses included in: Balance December 31, 2015 Settlements Purchases Net earnings adjustments Comprehensive income July 3, 2016 (in millions) Redeemable financial instrument $ — $ — $ $ In connection with the acquisition of AERCO Korea in the first quarter of 2016, a liability of $0.8 million was recognized as the estimate of the acquisition date fair value of the mandatorily redeemable equity instrument. This liability is classified as Level 3 under the fair value hierarchy as it is based on the commitment to purchase the remaining 10% of AERCO Korea shares by December 31, 2017, which is not observable in the market. In connection with the acquisition of Apex in the fourth quarter of 2015, a liability of $5.5 million was recognized as the estimate of the acquisition date fair value of the mandatorily redeemable equity instrument. This liability is classified as Level 3 under the fair value hierarchy as it is based on the commitment to purchase the remaining 20% of Apex shares within the next three years, which is not observable in the market. The Company uses financial instruments from time to time to enhance its ability to manage risk, including foreign currency, interest rates and commodity pricing exposures, which exist as part of its ongoing business operations. The use of derivatives exposes the Company to counterparty credit risk for nonperformance and to market risk related to changes in currency exchange rates, interest rates and commodity prices. The Company manages its exposure to counterparty credit risk through diversification of counterparties. The Company’s counterparties in derivative transactions are substantial commercial banks with significant experience using such derivative instruments. The impact of market risk on the fair value and cash flows of the Company’s derivative instruments is monitored and the Company restricts the use of derivative financial instruments to hedging activities. The Company does not enter into contracts for trading purposes nor does the Company enter into any contracts for speculative purposes. The use of derivative instruments is approved by senior management under written guidelines. Interest Rate Swap O n February 12, 2016, the Company entered into a new Credit Agreement (the “Credit Agreement”) pursuant to which it received a funding commitment under a Term Loan of $300 million, of which the entire $300 million has been drawn on, and a Revolving Commitment (“Revolver”) of $500 million, of which $230 million has been drawn as of July 3, 2016. Both facilities mature on February 12, 2021. For each facility, the Company can choose either an Adjusted LIBOR or Alternative Base Rate (“ABR”). Upon intended election of Adjusted LIBOR as the interest rate, the Term Loan has quarterly interest payments that began on May 12, 2016, quarterly principal repayments commencing on March 31, 2017, with a balloon payment of principal on maturity date. The Revolver has quarterly interest payments that began on July 27, 2016. Accordingly, the Company’s earnings and cash flows are exposed to interest rate risk from changes in Adjusted LIBOR. In order to manage the Company’s exposure to changes in cash flows attributable to fluctuations in LIBOR indexed interest payments related to the Term Loan, the Company entered into two interest rate swaps. For each interest rate swap, the Company receives the three-month USD-LIBOR subject to a 0% floor, and pays a fixed rate of 1.31375% on a notional amount of $225.0 million. The swaps mature on February 12, 2021. The Company formally documents the hedge relationships at hedge inception to ensure that its interest rate swaps qualify for hedge accounting. On a quarterly basis, the Company assesses whether the interest rate swaps are highly effective in offsetting changes in the cash flow of the hedged item. The Company does not hold or issue interest rate swaps for trading purposes. The swaps are designated as cash flow hedges. For the three and six months ended July 3, 2016, a loss of $1.7 million and $1.9 million, respectively, was recorded in Accumulated Other Comprehensive Loss to recognize the effective portion of the fair value of interest rate swaps that qualify as a cash flow hedge. Non-Designated Cash Flow Hedge The Company has exposure to a number of foreign currency rates, including the Canadian dollar, the euro, the Chinese yuan and the British pound. To manage this risk, the Company generally uses a layering methodology whereby at the end of any quarter, the Company has generally entered into forward exchange contracts which hedge approximately 50% of the projected intercompany purchase transactions for the next twelve months. These forward exchange contracts are not designated as cash flow or fair value hedges. The Company entered into one forward exchange contract to manage the foreign currency rate exposure between the Canadian dollar and the euro regarding an intercompany loan. This forward contract is marked-to-market with changes in the fair value recorded to earnings. The Company recorded a gain of $0.3 million and $0.1 million for the three and six months ended July 3, 2016, respectively, related to the foreign exchange contract. The Company did not have any forward contracts in the first six months of 2015. Fair Value Cash equivalents consist of instruments with remaining maturities of three months or less at the date of purchase and consist primarily of money market funds, for which the carrying amount is a reasonable estimate of fair value. The carrying amounts of cash and cash equivalents, trade receivables and trade payables approximate fair value because of the short maturity of these financial instruments. The fair value of the Company’s 5.05% senior notes due 2020 is based on quoted market prices of similar notes (level 2). The fair value of the Company’s borrowings outstanding under the Credit Agreement and the Company’s variable rate debt approximates its carrying value. The carrying amount and the estimated fair market value of the Company’s long-term debt, including the current portion, are as follows: July 3, December 31, 2016 2015 (in millions) Carrying amount $ $ Estimated fair value $ $

Restructuring and Other Charges

Restructuring and Other Charges, Net	6 Months Ended
	Jul. 03, 2016
Restructuring and Other Charges, Net
Restructuring and Other Charges, Net	6. Restructuring and Other Charges, Net The Company’s Board of Directors approves all major restructuring programs that involve the discontinuance of significant product lines or the shutdown of significant facilities. From time to time, the Company takes additional restructuring actions, including involuntary terminations that are not part of a major program. The Company accounts for these costs in the period that the liability is incurred. These costs are included in restructuring and other charges in the Company’s consolidated statements of operations. A summary of the pre-tax cost by restructuring program is as follows: Second Quarter Ended Six Months Ended July 3, 2016 June 28, 2015 July 3, 2016 June 28, 2015 (in millions) Restructuring costs: 2015 Actions $ $ $ $ 2013 Actions — — — Other Actions Total restructuring and other charges, net $ $ $ $ The Company recorded pre-tax restructuring and other charges, net in its business segments as follows: Second Quarter Ended Six Months Ended July 3, 2016 June 28, 2015 July 3, 2016 June 28, 2015 (in millions) Americas $ $ $ $ EMEA Asia-Pacific — Corporate ) — ) ) Total $ $ $ $ 2015 Actions In 2015, the Board of Directors of the Company approved a program relating to the transformation of the Company’s Americas and Asia-Pacific businesses. The first phase of the program primarily involved the exit of low-margin, non-core product lines and global sourcing actions. The Company eliminated approximately $165 million of combined Americas and Asia-Pacific net sales primarily within the Company’s do-it-yourself (DIY) distribution channel. As part of the rationalization exercise, the Company entered into an agreement to sell an operating subsidiary in China whose manufacturing facility was dedicated exclusively to the manufacturing of products being rationalized. The Company finalized the sale in the second quarter of 2016, and expects to receive approximately $9.0 million in proceeds during the third quarter of 2016. The second phase of the program involves reducing the square footage of the Company’s Americas facilities, which together with phase one, is expected to reduce the Americas net operating footprint by approximately 30%. The second phase is designed to improve the utilization of our remaining facilities, better leverage our cost structure, reduce working capital, and improve execution of customer delivery requirements. On a combined basis, the total estimated pre-tax cost for the Company’s transformation program related to its Americas and Asia-Pacific businesses is $63 million to $68 million, including restructuring costs of $20.4 million, goodwill and intangible asset impairments of $13.4 million and other transformation and deployment costs of $29 million to $34 million. The other transformation and deployment costs include consulting and project management fees, inventory write offs and other associated costs. Costs of the program are expected to be incurred through 2017. The following table summarizes by type, the total expected, incurred and remaining pre-tax restructuring costs for the Company’s transformation program related to its Americas and Asia-Pacific businesses: Severance Legal and consultancy Asset write-downs Facility exit and other Total (in millions) Costs incurred—2015 $ $ $ $ $ Costs incurred—first quarter 2016 Costs incurred—second quarter 2016 — ) Remaining costs to be incurred Total expected restructuring costs $ $ $ $ $ The following table summarizes total incurred, incurred to date and expected pre-tax restructuring costs by business segment for the Company’s Americas and Asia-Pacific 2015 transformation program: Second Quarter Ended Six Months Ended July 3, 2016 July 3, 2016 Incurred to Date Remaining costs Total Expected Costs (in millions) Asia-Pacific $ — $ $ $ — $ Americas Total restructuring costs $ $ $ $ $ Details of the restructuring reserve activity for the Company’s Americas and Asia-Pacific 2015 transformation program for the period ended July 3, 2016 are as follows: Severance Legal and Consultancy Asset write-downs Facility exit and other Total (in millions) Balance at December 31, 2015 $ $ $ — $ $ Net pre-tax restructuring charges Utilization and foreign currency impact ) ) ) ) ) Balance at April 3, 2016 $ $ — — $ $ Net pre-tax restructuring charges — ) Utilization and foreign currency impact — — ) ) ) Balance at July 3, 2016 $ $ — $ — $ $ Other Actions The Company also periodically initiates other actions which are not part of a major program. In the fourth quarters of 2015 and 2014, management initiated certain restructuring actions and strategic initiatives with respect to the Company’s EMEA segment in response to the ongoing economic challenges in Europe and additional product rationalization. The restructuring actions primarily include expected severance benefits and limited costs relating to asset write offs, professional fees and relocation. Total “Other Actions” pre-tax restructuring expense was $2.4 million and $2.8M for the three month and six month period ended July 3, 2016, respectively. Included in “Other Actions” is the 2014 and 2015 EMEA restructuring initiatives, in addition to other minor initiatives for which the Company incurred restructuring expense of $0.8 million for both the three and six month period ended July 3, 2016. The total pre-tax charge for the EMEA 2015 restructuring initiatives is expected to be approximately $10 million, of which approximately $8.5 million was incurred as of July 3, 2016 for the program to date. The remaining expected costs relate to severance, legal and relocation costs and are expected to be completed by the end of the fourth quarter of 2016. The total pre-tax charge for the EMEA 2014 restructuring initiatives is expected to be approximately $8 million, of which approximately $6.8 million was incurred as of July 3, 2016 for the program to date. The remaining costs relate to severance, asset write-offs and relocation costs and are expected to be completed by the end of the fourth quarter of 2016. The following table summarizes total expected, incurred and remaining pre-tax restructuring costs for the EMEA 2015 restructuring actions: Severance Legal and consultancy Facility exit and other Total (in millions) Costs incurred—2015 — Costs incurred—first quarter 2016 — — Costs incurred—second quarter 2016 — Remaining costs to be incurred — Total expected restructuring costs Details of the Company’s EMEA 2015 restructuring reserve activity for the period ended July 3, 2016 are as follows: Severance Legal and consultancy Facility exit and other Total Balance at December 31, 2015 $ $ — $ — $ Net pre-tax restructuring charges — — Utilization and foreign currency impact ) — — ) Balance at April 3, 2016 $ — — Net pre-tax restructuring charges $ — Utilization and foreign currency impact ) ) — ) Balance at July 3, 2016 $ $ — $ — $ The following table summarizes total expected, incurred and remaining pre-tax restructuring costs for the EMEA 2014 restructuring actions: Severance Legal and consultancy Asset write-downs Facility exit and other Total (in millions) Costs incurred—2014 $ $ — $ — $ — $ Costs incurred—2015 ) — ) Costs incurred—first quarter 2016 — — Costs incurred—second quarter 2016 — — — Remaining costs to be incurred — Total expected restructuring costs Details of the Company’s EMEA 2014 restructuring reserve activity for the six months ended July 3, 2016 are as follows: Severance Legal and consultancy Asset write-downs Total (in millions) Balance at December 31, 2015 $ $ — $ — $ Net pre-tax restructuring charges Utilization and foreign currency impact ) ) ) Balance at April 3, 2016 $ $ — $ — $ Net pre-tax restructuring charges — — Utilization and foreign currency impact ) — ) ) Balance at July 3, 2016 $ $ — $ — $

Earnings per Share

Earnings per Share	6 Months Ended
	Jul. 03, 2016
Earnings per Share
Earnings per Share	7. Earnings per Share The following tables set forth the reconciliation of the calculation of earnings per share: For the Second Quarter Ended July 3, 2016 For the Second Quarter Ended June 28, 2015 Income (Numerator) Shares (Denominator) Per Share Amount Income (Numerator) Shares (Denominator) Per Share Amount (amounts in millions, except per share amounts) Basic EPS: Net income $ $ $ $ Effect of dilutive securities: Common stock equivalents — Diluted EPS: Net income $ $ $ $ Options to purchase 0.1 million and 0.3 million shares of Class A common stock were outstanding during the second quarters of 2016 and 2015, respectively, but were not included in the computation of diluted EPS because to do so would be anti-dilutive. For the First Six Months Ended July 3, 2016 For the First Six Months Ended June 28, 2015 Income (Numerator) Shares (Denominator) Per Share Amount Income (Numerator) Shares (Denominator) Per Share Amount (amounts in millions, except per share amounts) Basic EPS: Net income $ $ $ $ Effect of dilutive securities: Common stock equivalents — Diluted EPS: Net income $ $ $ $ Options to purchase 0.2 million and 0.3 million shares of Class A common stock were outstanding during the first six months of 2016 and 2015, respectively, but were not included in the computation of diluted EPS because to do so would be anti-dilutive. On July 27, 2015, the Company’s Board of Directors authorized the repurchase of up to $100 million of the Company’s Class A common stock from time to time on the open market or in privately negotiated transactions. The timing and number of shares repurchased will be determined by the Company’s management based on its evaluation of market conditions and other factors. Repurchases may also be made under a Rule 10b5-1 plan, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. The repurchase program may be suspended or discontinued at any time, subject to the terms of any Rule 10b5-1 plan the Company may enter into with respect to the repurchase program. As of July 3, 2016, there was approximately $65.1 million remaining authorized for share repurchases under this program. On April 30, 2013, the Company’s Board of Directors authorized the repurchase of up to $90 million of the Company’s Class A common stock from time to time on the open market or in privately negotiated transactions. The stock repurchase program was completed in September 2015, after the Company expended the entire $90 million authorized under the program. The following table summarizes the cost and the number of Class A common stock repurchased under the April 30, 2013 and July 27, 2015 programs during the three and six month periods ended July 3, 2016 and June 28, 2015: For the Second Quarter Ended July 3, 2016 For the Second Quarter Ended June 28, 2015 Number of shares repurchased Cost of shares repurchased Number of shares repurchased Cost of shares repurchased (amounts in millions, except share amount) Stock repurchase programs: April 30, 2013 — $ — $ July 27, 2015 — — Total $ $ For the Six Months Ended July 3, 2016 For the Six Months Ended June 28, 2015 Number of shares repurchased Cost of shares repurchased Number of shares repurchased Cost of shares repurchased (amounts in millions, except share amount) Stock repurchase programs: April 30, 2013 — $ — $ July 27, 2015 — — Total $ $

Segment Information

Segment Information	6 Months Ended
	Jul. 03, 2016
Segment Information
Segment Information	8. Segment Information The Company operates in three geographic segments: Americas, EMEA, and Asia-Pacific. Each of these segments has separate financial results that are reviewed by the Company’s chief operating decision-maker. All intercompany sales transactions have been eliminated. Sales by region are based upon location of the entity recording the sale. The accounting policies for each segment are the same as those described in the summary of significant accounting policies. The following is a summary of the Company’s significant accounts and balances by segment, reconciled to the consolidated totals: Second Quarter Ended Six Months Ended July 3, 2016 June 28, 2015 July 3, 2016 June 28, 2015 (in millions) Net sales Americas $ $ $ $ EMEA Asia-Pacific Consolidated net sales $ $ $ $ Operating income (loss) Americas $ $ $ $ EMEA Asia-Pacific ) ) Subtotal reportable segments Corporate (*) ) ) ) ) Consolidated operating income Interest income ) ) ) ) Interest expense Other income, net ) ) ) ) Income before income taxes $ $ $ $ Capital expenditures Americas $ $ $ $ EMEA Asia-Pacific Consolidated capital expenditures $ $ $ $ Depreciation and amortization Americas $ $ $ $ EMEA Asia-Pacific Consolidated depreciation and amortization $ $ $ $ Identifiable assets (at end of period) Americas $ $ EMEA Asia-Pacific Consolidated identifiable assets $ $ Property, plant and equipment, net (at end of period) Americas $ $ EMEA Asia-Pacific Consolidated property, plant and equipment, net $ $ * Corporate expenses are primarily for administrative compensation expense, internal controls costs, professional fees, including corporate-related legal and audit expenses, shareholder services and benefit administration costs. The above operating segments are presented on a basis consistent with the presentation included in the Company’s December 31, 2015 consolidated financial statements included in its Annual Report on Form 10-K. The U.S. property, plant and equipment of the Company’s Americas segment was $91.5 million and $82.0 million at July 3, 2016 and June 28, 2015, respectively. The following includes U.S. net sales of the Company’s Americas segment: Second Quarter Ended Six Months Ended July 3, 2016 June 28, 2015 July 3, 2016 June 28, 2015 (in millions) U.S. net sales $ $ $ $ The following includes intersegment sales for Americas, EMEA and Asia-Pacific: Second Quarter Ended Six Months Ended July 3, 2016 June 28, 2015 July 3, 2016 June 28, 2015 (in millions) Intersegment Sales Americas $ $ $ $ EMEA Asia-Pacific Intersegment sales $ $ $ $

Accumulated Other Comprehensive

Accumulated Other Comprehensive (Loss) Income	6 Months Ended
	Jul. 03, 2016
Accumulated Other Comprehensive (Loss) Income
Accumulated Other Comprehensive (Loss) Income	9. Accumulated Other Comprehensive (Loss) Income Accumulated other comprehensive (loss) income consists of the following Foreign Currency Translation Pension Adjustment Interest Rate Swap Accumulated Other Comprehensive Income (Loss) (in millions) Balance December 31, 2015 $ ) $ — — $ ) Change in period — ) Balance April 3, 2016 $ ) $ — ) $ ) Change in period ) — ) ) Reversal of foreign currency translation ) — — ) Balance July 3, 2016 $ ) $ — ) $ ) Balance December 31, 2014 $ ) $ ) — $ ) Change in period ) — ) Balance March 29, 2015 $ $ ) — $ ) Change in period — Balance June 28, 2015 $ ) $ ) — $ ) The reversal of foreign currency translation relates to the sale of an operating subsidiary in China which was finalized in the second quarter of 2016. The Company recognized an after-tax gain of $8.3 million, which included a non-cash accumulated currency translation adjustment of $6.9 million that was reclassified out of accumulated other comprehensive loss to net income.

Debt

Debt	6 Months Ended
	Jul. 03, 2016
Debt
Debt	10. Debt On February 12, 2016, the Company terminated its prior credit agreement and entered into a new Credit Agreement (the “Credit Agreement”) among the Company, certain subsidiaries of the Company who become borrowers under the Credit Agreement, JPMorgan Chase Bank, N.A., as Administrative Agent, Swing Line Lender and Letter of Credit Issuer, and the other lenders referred to therein. The Credit Agreement provides for a $500 million, five-year, senior unsecured revolving credit facility (the “Revolving Credit Facility”) with a sublimit of up to $100 million in letters of credit. The Credit Agreement also provides for a $300 million, five-year, term loan facility (the “Term Loan Facility”) available to the Company in a single draw. Borrowings outstanding under the Revolving Credit Facility bear interest at a fluctuating rate per annum equal to an applicable percentage defined as (i) in the case of Eurocurrency rate loans, the ICE Benchmark Administration LIBOR rate plus an applicable percentage, ranging from 0.975% to 1.45%, determined by reference to the Company’s consolidated leverage ratio plus, or (ii) in the case of base rate loans and swing line loans, the highest of (a) the federal funds rate plus 0.5%, (b) the rate of interest in effect for such day as announced by JPMorgan Chase Bank, N.A. as its “prime rate,” and (c) the ICE Benchmark Administration LIBOR rate plus 1.0%, plus an applicable percentage, ranging from 0.00% to 0.45%, determined by reference to the Company’s consolidated leverage ratio. Borrowings outstanding under the Term Loan Facility will bear interest at a fluctuating rate per annum equal to an applicable percentage defined as the ICE Benchmark Administration LIBOR rate plus an applicable percentage, ranging from 1.125% to 1.75%, determined by reference to the Company’s consolidated leverage ratio. The interest rate as of July 3, 2016 on the Revolving Credit Facility and on the Term Loan Facility were 1.88% and 2.12%, respectively. The loan under the Term Loan Facility amortizes as follows: 0% per annum during the first year, 7.5% in the second and third years, 10% in the fourth and fifth years, and the remaining unpaid balance paid in full on the maturity date. Payments when due are made ratably each year in quarterly installments. In addition to paying interest under the Credit Agreement, the Company is also required to pay certain fees in connection with the credit facility, including, but not limited to, an unused facility fee and letter of credit fees. The Credit Agreement matures on February 12, 2021, subject to extension under certain circumstances and subject to the terms of the Credit Agreement. The Company may repay loans outstanding under the Credit Agreement from time to time without premium or penalty, other than customary breakage costs, if any, and subject to the terms of the Credit Agreement. Once repaid, amounts borrowed under the Term Loan Facility may not be borrowed again. As of July 3, 2016, the Company was in compliance with all covenants related to the Credit Agreement. On April 28, 2016, the Company borrowed $230 million under the Revolving Credit Facility to pay off all amounts outstanding under its $225 million of 5.85% Senior Notes due April 30, 2016 (the “April 2016 Notes”). As of July 3, 2016, the Company had $245.1 million of unused and available credit under the Credit Agreement and $24.9 million of stand-by letters of credit outstanding on the Credit Agreement. The Company has $300 million of borrowings outstanding on the term loan as of July 3, 2016. The Company is a party to a note agreement as further detailed in Note 11 of the Notes to Consolidated Financial Statements of the Annual Report on Form 10-K for the year ended December 31, 2015. This note agreement requires the Company to maintain a fixed charge coverage ratio of consolidated EBITDA plus consolidated rent expense during the period to consolidated fixed charges. Consolidated fixed charges are the sum of consolidated interest expense for the period and consolidated rent expense. As of July 3, 2016, the Company was in compliance with all covenants regarding this note agreement. In April 2015, the FASB issued ASU2015-03, “Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” This ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts as opposed to an asset. This ASU was effective for public companies beginning with the first interim period after December 15, 2015. This is considered a change in accounting principle, and the new guidance has been applied on a retrospective basis. As of July 3, 2016, the Company had total debt outstanding of $606.6 million and total unamortized debt issuance costs on the debt outstanding of $3.6 million. The long-term debt, net of current portion and net of debt issuance costs was $601.5 million as of July 3, 2016. As of December 31, 2015, the Company had total debt outstanding of $576.2 million and total debt issuance costs on this debt outstanding of $2.0 million. In order to apply the guidance on a retrospective basis, the Company reclassified debt issuance costs as of December 31, 2015 from other assets against total long-term debt outstanding. Therefore, the restated long-term debt, net of current portion balance as of December 31, 2015 is $574.2 million, and the restated other long-term asset balance as of December 31, 2015 is $11.9 million.

Contingencies and Environmental

Contingencies and Environmental Remediation	6 Months Ended
	Jul. 03, 2016
Contingencies and Environmental Remediation
Contingencies and Environmental Remediation	11. Contingencies and Environmental Remediation Accrual and Disclosure Policy The Company is a defendant in numerous legal matters arising from its ordinary course of operations, including those involving product liability, environmental matters and commercial disputes. The Company reviews its lawsuits and other legal proceedings on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions. The Company establishes accruals for matters when the Company assesses that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company’s assessment of whether a loss is probable is based on its assessment of the ultimate outcome of the matter following all appeals. Under the FASB-issued ASC 450 “Contingencies”, an event is “reasonably possible” if “the chance of the future event or events occurring is more than remote but less than likely” and an event is “remote” if “the chance of the future event or events occurring is slight”. Thus, references to the upper end of the range of reasonably possible loss for cases in which the Company is able to estimate a range of reasonably possible loss mean the upper end of the range of loss for cases for which the Company believes the risk of loss is more than slight. There may continue to be exposure to loss in excess of any amount accrued. When it is possible to estimate the reasonably possible loss or range of loss above the amount accrued for the matters disclosed, that estimate is aggregated and disclosed. The Company records legal costs associated with its legal contingencies as incurred, except for legal costs associated with product liability claims which are included in the actuarial estimates used in determining the product liability accrual. As of July 3, 2016, the Company estimates that the aggregate amount of reasonably possible loss in excess of the amount accrued for its legal contingencies is approximately $4.2 million pre-tax. With respect to the estimate of reasonably possible loss, management has estimated the upper end of the range of reasonably possible loss based on (i) the amount of money damages claimed, where applicable, (ii) the allegations and factual development to date, (iii) available defenses based on the allegations, and/or (iv) other potentially liable parties. This estimate is based upon currently available information and is subject to significant judgment and a variety of assumptions, and known and unknown uncertainties. The matters underlying the estimate will change from time to time, and actual results may vary significantly from the current estimate. In the event of an unfavorable outcome in one or more of the matters described below, the ultimate liability may be in excess of amounts currently accrued, if any, and may be material to the Company’s operating results or cash flows for a particular quarterly or annual period. However, based on information currently known to it, management believes that the ultimate outcome of all matters, as they are resolved over time, is not likely to have a material adverse effect on the financial condition of the Company, though the outcome could be material to the Company’s operating results for any particular period depending, in part, upon the operating results for such period. Connector Class Actions In November and December 2014, Watts Water Technologies, Inc. and Watts Regulator Co. were named as defendants in three separate putative nationwide class action complaints (Meyers v. Watts Water Technologies, Inc., United States District Court for the Southern District of Ohio; Ponzo v. Watts Regulator Co., United States District Court for the District of Massachusetts; Sharp v. Watts Regulator Co., United States District Court for the District of Massachusetts) seeking to recover damages and other relief based on the alleged failure of water heater connectors. On June 26, 2015, plaintiffs in the three actions filed a consolidated amended complaint, under the case captioned Ponzo v. Watts Regulator Co., in the United States District Court for the District of Massachusetts (hereinafter “Ponzo”). Watts Water Technologies was voluntarily dismissed from the Ponzo case. The complaint seeks among other items, damages in an unspecified amount, replacement costs, injunctive relief, declaratory relief, and attorneys’ fees and costs. On August 7, 2015, the Company filed a motion to dismiss the complaint, which motion was temporarily withdrawn pending final approval of the settlement. After initial discovery was conducted the parties agreed to a mediation of all claims, which resulted in the below-referenced settlement. In February 2015, Watts Regulator Co. was named as a defendant in a putative nationwide class action complaint (Klug v. Watts Water Technologies, Inc., et al ., United States District Court for the District of Nebraska) seeking to recover damages and other relief based on the alleged failure of the Company’s Floodsafe connectors (hereinafter “Klug”). On June 26, 2015, the Company filed a partial motion to dismiss the complaint. In response, on July 17, 2015, plaintiff filed an amended complaint which added additional named plaintiffs and sought to correct deficiencies in the original complaint, Klug v. Watts Regulator Co., United States District Court for the District of Nebraska. Watts Water Technologies, Inc. was dismissed as a defendant. The complaint seeks among other items, damages in an unspecified amount, injunctive relief, declaratory relief, and attorneys’ fees and costs. On July 31, 2015, the Company filed a partial motion to dismiss the complaint which was granted in part and denied in part on December 29, 2015. The Company answered the amended complaint on February 2, 2016. No formal discovery has yet been conducted. The Company participated in joint mediation sessions of the Ponzo and Klug cases in December 2015 and January 2016. On February 16, 2016, the Company reached an agreement in principle to settle all claims in both cases. The proposed total settlement amount is $14 million, of which the Company is expected to pay approximately $4.1 million after insurance proceeds, of up to $9.9 million. The parties executed final written settlement agreements in April 2016. Motions for preliminary approval of the settlements were submitted on May 4, 2016 before the District of Nebraska Federal Court and are pending with that Court. The settlement is subject to preliminary court approval and final court approval after a fairness hearing. Accordingly, there can be no assurance that the proposed settlements will be approved in their current form. If the settlements are not approved, the Company intends to continue to vigorously contest the allegations in these cases. During the fourth quarter of 2015, the Company recorded a liability of $14 million related to the Ponzo and Klug matters of which $7.8 million was included in current liabilities and $6.2 million in other noncurrent liabilities. In addition, a $9.5 million receivable was recorded in current assets related to insurance proceeds due, based on costs incurred as of December 31, 2015, subject to a separate final written settlement agreement that becomes effective if the class action settlement is approved. Product Liability The Company is subject to a variety of potential liabilities in connection with product liability cases. The Company maintains high-deductible product liability and other insurance coverage, which the Company believes to be generally in accordance with industry practices. For product liability cases in the U.S., management establishes its product liability accrual, which includes legal costs associated with accrued claims, by utilizing third-party actuarial valuations which incorporate historical trend factors and the Company’s specific claims experience derived from loss reports provided by third-party claims administrators. The product liability accrual is established after considering any applicable insurance coverage. Changes in the nature of product liability claims, legal costs, or the actual settlement amounts could affect the adequacy of the estimates and require changes to the accrual. Because the liability is an estimate, the ultimate liability may be more or less than reported. Environmental Remediation The Company has been named as a potentially responsible party with respect to a limited number of identified contaminated sites. The levels of contamination vary significantly from site to site as do the related levels of remediation efforts. Environmental liabilities are recorded based on the most probable cost, if known, or on the estimated minimum cost of remediation. Accruals are not discounted to their present value, unless the amount and timing of expenditures are fixed and reliably determinable. The Company accrues estimated environmental liabilities based on assumptions, which are subject to a number of factors and uncertainties. Circumstances that can affect the reliability and precision of these estimates include identification of additional sites, environmental regulations, level of clean-up required, technologies available, number and financial condition of other contributors to remediation and the time period over which remediation may occur. The Company recognizes changes in estimates as new remediation requirements are defined or as new information becomes available. Asbestos Litigation The Company is defending approximately 313 lawsuits in different jurisdictions, alleging injury or death as a result of exposure to asbestos. The complaints in these cases typically name a large number of defendants and do not identify any particular Company products as a source of asbestos exposure. To date, discovery has failed to yield evidence of substantial exposure to any Company products and no judgments have been entered against the Company. Other Litigation Other lawsuits and proceedings or claims, arising from the ordinary course of operations, are also pending or threatened against the Company.

Subsequent Events

Subsequent Events	6 Months Ended
	Jul. 03, 2016
Subsequent Events
Subsequent Events	12. Subsequent Events On August 4, 2016, the Company declared a quarterly dividend of eighteen cents ($0.18) per share on each outstanding share of Class A common stock and Class B common stock payable on September 16, 2016 to stockholders of record at the close of business on September 2, 2016.

Accounting Policies (Policies)

Accounting Policies (Policies)	6 Months Ended
	Jul. 03, 2016
Accounting Policies
Estimates	Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Goodwill and Long-Lived Assets	Goodwill and Long-Lived Assets The changes in the carrying amount of goodwill by geographic segment are as follows: July 3, 2016 Gross Balance Accumulated Impairment Losses Net Goodwill Balance January 1, 2016 Acquired During the Period Foreign Currency Translation and Other Balance July 3, 2016 Balance January 1, 2016 Impairment Loss During the Period Balance July 3, 2016 July 3, 2016 (in millions ) Americas $ $ — $ $ $ ) $ — $ ) $ Europe, Middle East and Africa (EMEA) — ) — ) Asia-Pacific ) — ) Total $ $ $ $ $ ) $ — $ ) $ December 31, 2015 Gross Balance Accumulated Impairment Losses Net Goodwill Balance January 1, 2015 Acquired During the Period Foreign Currency Translation and Other Balance December 31, 2015 Balance January 1, 2015 Impairment Loss During the Period Balance December 31, 2015 December 31, 2015 (in millions) Americas $ $ — $ ) $ $ ) $ — $ ) $ EMEA — ) — ) ) Asia-Pacific ) — ) Total $ $ $ ) $ $ ) $ ) $ ) $ Goodwill and indefinite-lived intangible assets are tested for impairment at least annually or more frequently if events or circumstances indicate that it is “more likely than not” that they might be impaired, such as from a change in business conditions. There were no triggering events identified during the second quarter of 2016. The Company performs its annual goodwill and indefinite-lived intangible assets impairment assessment in the fourth quarter of each year. On February 26, 2016, the Company acquired an additional 50% of the outstanding shares of AERCO Korea Co., Ltd., (“AERCO Korea”) for an aggregate purchase price of approximately $4 million. Prior to February 26, 2016, the Company held a 40% interest in AERCO Korea, which operated as a joint venture. The Company completed a valuation of the assets and liabilities acquired that resulted in the recognition of $3.3 million in goodwill and $1.6 million in intangible assets. In the fourth quarter of 2015, the Company performed a quantitative impairment analysis for the EMEA reporting unit in connection with the annual strategic plan and due to the underperformance to budget, primarily caused by the continued challenging European macroeconomic environment. The Company estimated the fair value of the reporting unit using a weighted calculation of the income approach and the market approach. In the second step of the impairment test, the carrying value of the goodwill exceeded the implied fair value of goodwill, resulting in a pre-tax impairment charge of $129.7 million. On November 30, 2015, the Company completed the acquisition of 80% of the outstanding shares of Apex Valves Limited (“Apex”), a New Zealand company, with a commitment to purchase the remaining 20% ownership within three years of closing. The aggregate purchase price was approximately $20.4 million. The Company accounted for the transaction as a business combination. The Company completed a valuation of the assets and liabilities acquired that resulted in the recognition of $12.9 million in goodwill and $10.1 million in intangible assets. Intangible assets with estimable lives and other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. There were no triggering events identified during the second quarter of 2016. Recoverability of intangible assets with estimable lives and other long-lived assets are measured by a comparison of the carrying amount of an asset or asset group to future net undiscounted pretax cash flows expected to be generated by the asset or asset group. If these comparisons indicate that an asset is not recoverable, the impairment loss recognized is the amount by which the carrying amount of the asset or asset group exceeds the related estimated fair value. Estimated fair value is based on either discounted future pretax operating cash flows or appraised values, depending on the nature of the asset. The Company determines the discount rate for this analysis based on the weighted average cost of capital based on the market and guideline public companies for the related business, and does not allocate interest charges to the asset or asset group being measured. Judgment is required to estimate future operating cash flows. Intangible assets include the following: July 3, 2016 December 31, 2015 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (in millions) Patents $ $ ) $ $ $ ) $ Customer relationships ) ) Technology ) ) Trade Names ) ) Other ) ) Total amortizable intangibles ) ) Indefinite-lived intangible assets — — Total $ $ ) $ $ $ ) $ The Company acquired $1.6 million in intangible assets as part of the AERCO Korea acquisition, consisting entirely of customer relationships. The amortization period of these customer relationships is 10 years. Aggregate amortization expense for amortizable intangible assets for the second quarter of 2016 and 2015 was $5.1 million and $5.2 million, respectively, and for the first six months of 2016 and 2015 was $10.2 million and $10.3 million, respectively. Additionally, future amortization expense for the next five years on amortizable intangible assets is expected to be approximately $10.1 million for the remainder of 2016, $19.4 million for 2017, $16.6 million for 2018, $12.6 million for 2019 and $12.2 million for 2020. Amortization expense is recorded on a straight-line basis over the estimated useful lives of the intangible assets. The weighted-average remaining life of total amortizable intangible assets is 11.2 years. Patents, customer relationships, technology, trade names and other amortizable intangibles have weighted-average remaining lives of 3.8 years, 11.2 years, 9.1 years, 14.2 years and 20.3 years, respectively. Indefinite-lived intangible assets primarily include trademarks and trade names.
Stock-Based Compensation	Stock-Based Compensation The Company maintains one stock incentive plan, the Second Amended and Restated 2004 Stock Incentive Plan (the “2004 Stock Incentive Plan”). Under this plan, key employees have been granted nonqualified stock options to purchase the Company’s Class A common stock. Options typically become exercisable over a four-year period at the rate of 25% per year and expire ten years after the grant date. However, most options granted in 2014 become exercisable over a three-year period at the rate of one-third per year. Options granted under the plan may have exercise prices of not less than 100% of the fair market value of the Class A common stock on the date of grant. The Company’s practice has been to grant all options at fair market value on the grant date. Beginning in 2015, the Company stopped granting stock options as part of its annual equity awards to employees and the Company did not issue any stock options in the first six months of 2016 or 2015. The Company grants shares of restricted stock and deferred shares to key employees and stock awards to non-employee members of the Company’s Board of Directors under the 2004 Stock Incentive Plan. Stock awards to non-employee members of the Company’s Board of Directors are fully vested upon grant. Employees’ restricted stock awards and deferred shares typically vest over a three-year period at the rate of one-third per year, except that most restricted stock awards and deferred shares granted in 2014 vest over a two-year period at the rate of 50% per year. The restricted stock awards and deferred shares are amortized to expense on a straight-line basis over the vesting period. In 2016, the Company changed the timing of its annual grant to the first quarter compared to past annual grants in the third quarter. The Company issued 110,295 shares of restricted stock awards and deferred shares in the first six months of 2016 related to the annual grant and awarded 60,278 shares of restricted stock in the first six months of 2015. The Company also grants performance stock units to key employees under the 2004 Stock Incentive Plan. Performance stock units vest at the end of the performance period set by the Compensation Committee of our Board of Directors at the time of grant. Upon vesting, the number of shares of the Company’s Class A common stock awarded to each performance stock unit recipient will be determined based on the Company’s performance relative to certain performance goals set at the time the performance stock units were granted. The recipient of a performance stock unit award may earn from zero shares to twice the number of target shares awarded to such recipient. The performance stock units are amortized to expense over the vesting period, and based on the Company’s performance relative to the performance goals, may be adjusted. Changes to the estimated shares expected to vest will result in adjustments to the related share-based compensation expense that will be recorded in the period of change. If the performance goals are not met, no awards are earned and previously recognized compensation expense is reversed. The Company granted 106,724 of annual awards for performance stock units during the first six months of 2016 and issued 631 performance stock units in the first six months of 2015. The Company has a Management Stock Purchase Plan that allows for the purchase of restricted stock units (RSUs) by key employees. On an annual basis, key employees may elect to receive a portion of their annual incentive compensation in RSUs instead of cash. Each RSU represents one share of Class A common stock and is purchased by the employee at 67% of the fair market value of the Company’s Class A common stock on the date of grant. Beginning with annual incentive compensation for 2016, the purchase price for RSUs has been increased to 80% of the fair market value of the Company’s Class A common stock. RSUs vest either annually over a three-year period from the grant date or upon the third anniversary of the grant date and receipt of the shares underlying RSUs is deferred for a minimum of three years or such greater number of years as is chosen by the employee. An aggregate of 2,000,000 shares of Class A common stock may be issued under the Management Stock Purchase Plan. The Company granted 88,882 RSUs and 59,995 RSUs in the first six months of 2016 and 2015, respectively. The fair value of each RSU issued under the Management Stock Purchase Plan is estimated on the date of grant using the Black-Scholes-Merton Model based on the following weighted average assumptions: 2016 2015 Expected life (years) Expected stock price volatility % % Expected dividend yield % % Risk-free interest rate % % The above assumptions were used to determine the RSUs weighted average grant-date fair value of $18.15 and $19.04 in 2016 and 2015, respectively. A more detailed description of each of these plans can be found in Note 13 of the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.
Shipping and Handling	Shipping and Handling The Company’s shipping and handling costs included in selling, general and administrative expenses were $11.5 million and $13.8 million for the second quarters of 2016 and 2015, respectively, and were $22.9 million and $28.2 million for the first six months of 2016 and 2015, respectively.
Research and Development	Research and Development Research and development costs included in selling, general and administrative expenses were $6.4 million and $6.3 million for the second quarters of 2016 and 2015, respectively, and were $13.0 million and $12.7 million for the first six months of 2016 and 2015, respectively.
Taxes, Other than Income Taxes	Taxes, Other than Income Taxes Taxes assessed by governmental authorities on sale transactions are recorded on a net basis and excluded from sales in the Company’s consolidated statements of operations.
Income Taxes	Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
New Accounting Standards	New Accounting Standards In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers-Identifying Performance Obligations and Licensing.” ASU 2016-10 clarifies the guidance on identifying performance obligations and licensing implementation guidance determined in ASU 2014-09 “Revenue from Contracts with Customers (Topic 606),” which is not yet affective. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as equity or liabilities, forfeitures, and classification on the statement of cash flows. ASU 2016-09 is effective for financial statements issued for annual periods beginning after December 15, 2016 and all interim periods thereafter. Amendments related to the timing of income tax consequences and forfeitures should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory requirement should be applied retrospectively. Amendments requiring recognition of income tax consequences in the income statement should be applied prospectively. The Company is assessing the impact of this standard on the Company’s financial statements. In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers-Principal versus Agent Consideration.” ASU 2016-08 clarifies the guidance on principal versus agent considerations determined in ASU 2014-09 “Revenue from Contracts with Customers (Topic 606),” which is not yet effective. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. In March 2016, the FASB issued ASU 2016-06, “Contingent Put and Call Options in Debt Instruments”. ASU 2016-06 clarifies the requirements for assessing whether contingent put (call) options that can accelerate the principal on debt instruments are clearly and closely related to their debt hosts. ASU 2016-06 is effective for financial statements issued for annual periods beginning after December 15, 2016 and all interim periods thereafter. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. ASU 2016-02 requires a lessee to recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing the right to use the underlying asset for the lease term for both finance and operating leases. ASU 2016-02 is effective for financial statements issued for annual periods beginning after December 15, 2018 and all interim periods thereafter. Earlier application is permitted for all entities. The Company is assessing the impact of this standard on the Company’s financial statements.

Accounting Policies (Tables)

Accounting Policies (Tables)	6 Months Ended
	Jul. 03, 2016
Accounting Policies
Changes in the carrying amount of goodwill by geographic segment	July 3, 2016 Gross Balance Accumulated Impairment Losses Net Goodwill Balance January 1, 2016 Acquired During the Period Foreign Currency Translation and Other Balance July 3, 2016 Balance January 1, 2016 Impairment Loss During the Period Balance July 3, 2016 July 3, 2016 (in millions ) Americas $ $ — $ $ $ ) $ — $ ) $ Europe, Middle East and Africa (EMEA) — ) — ) Asia-Pacific ) — ) Total $ $ $ $ $ ) $ — $ ) $ December 31, 2015 Gross Balance Accumulated Impairment Losses Net Goodwill Balance January 1, 2015 Acquired During the Period Foreign Currency Translation and Other Balance December 31, 2015 Balance January 1, 2015 Impairment Loss During the Period Balance December 31, 2015 December 31, 2015 (in millions) Americas $ $ — $ ) $ $ ) $ — $ ) $ EMEA — ) — ) ) Asia-Pacific ) — ) Total $ $ $ ) $ $ ) $ ) $ ) $
Schedule of Intangible assets	July 3, 2016 December 31, 2015 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (in millions) Patents $ $ ) $ $ $ ) $ Customer relationships ) ) Technology ) ) Trade Names ) ) Other ) ) Total amortizable intangibles ) ) Indefinite-lived intangible assets — — Total $ $ ) $ $ $ ) $
Schedule of stock-based compensation fair value assumptions	2016 2015 Expected life (years) Expected stock price volatility % % Expected dividend yield % % Risk-free interest rate % %

Restructuring and Other Charg21

Restructuring and Other Charges, Net (Tables)	6 Months Ended
	Jul. 03, 2016
Restructuring
Summary of the pre-tax cost by restructuring program	Second Quarter Ended Six Months Ended July 3, 2016 June 28, 2015 July 3, 2016 June 28, 2015 (in millions) Restructuring costs: 2015 Actions $ $ $ $ 2013 Actions — — — Other Actions Total restructuring and other charges, net $ $ $ $
Summary of recorded pre-tax restructuring and other charges, net by business segment	Second Quarter Ended Six Months Ended July 3, 2016 June 28, 2015 July 3, 2016 June 28, 2015 (in millions) Americas $ $ $ $ EMEA Asia-Pacific — Corporate ) — ) ) Total $ $ $ $

Financial Instruments and Der22

Financial Instruments and Derivative Instruments (Tables)	6 Months Ended
	Jul. 03, 2016
Financial Instruments and Derivative Instruments
Schedule of fair value of financial assets and liabilities	Fair Value Measurements at July 3, 2016 Using: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) (in millions) Assets Plan asset for deferred compensation(1) $ $ $ — $ — Total assets $ $ $ — $ — Liabilities Plan liability for deferred compensation(2) $ $ $ — $ — Redeemable financial instrument(3),(4) — — Interest rate swap (5) — — Total liabilities $ $ $ $ Fair Value Measurements at December 31, 2015 Using: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) (in millions) Assets Plan asset for deferred compensation(1) $ $ $ — $ — Total assets $ $ $ — $ — Liabilities Plan liability for deferred compensation(2) $ $ $ — $ — Redeemable financial instrument(3) — — Total liabilities $ $ $ — $ (1) Included on the Company’s consolidated balance sheet in other assets (other, net). (2) Included on the Company’s consolidated balance sheet in accrued compensation and benefits. (3) Included in the Company’s consolidated balance sheet in other noncurrent liabilities as of July 3, 2016 and December 31, 2015 and relates to a mandatorily redeemable equity instrument as part of the Apex acquisition in 2015. (4) Included in the Company’s consolidated balance sheet in other noncurrent liabilities as of July 3, 2016 and relates to a mandatorily redeemable equity instrument as part of the AERCO Korea acquisition. (5) Included on the Company’s consolidated balance sheet in other noncurrent liabilities.
Summary of the changes in fair value of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3)	Balance Total realized and unrealized (gains) losses included in: Balance December 31, 2015 Settlements Purchases Net earnings adjustments Comprehensive income July 3, 2016 (in millions) Redeemable financial instrument $ — $ — $ $
Schedule of carrying amount and estimated fair market value of the company's long-term debt, including current portion	July 3, December 31, 2016 2015 (in millions) Carrying amount $ $ Estimated fair value $ $

Restructuring and Other Charg23

Restructuring and Other Charges, Net (Tables)	6 Months Ended
	Jul. 03, 2016
Restructuring
Summary of the pre-tax cost by restructuring program	Second Quarter Ended Six Months Ended July 3, 2016 June 28, 2015 July 3, 2016 June 28, 2015 (in millions) Restructuring costs: 2015 Actions $ $ $ $ 2013 Actions — — — Other Actions Total restructuring and other charges, net $ $ $ $
Summary of recorded pre-tax restructuring and other charges, net by business segment	Second Quarter Ended Six Months Ended July 3, 2016 June 28, 2015 July 3, 2016 June 28, 2015 (in millions) Americas $ $ $ $ EMEA Asia-Pacific — Corporate ) — ) ) Total $ $ $ $
Americas and Asia Pacific
Restructuring
Summary of total expected, incurred and remaining pre-tax restructuring costs	Severance Legal and consultancy Asset write-downs Facility exit and other Total (in millions) Costs incurred—2015 $ $ $ $ $ Costs incurred—first quarter 2016 Costs incurred—second quarter 2016 — ) Remaining costs to be incurred Total expected restructuring costs $ $ $ $ $
2015 Actions | Americas and Asia Pacific
Restructuring
Summary of restructuring reserve activity	The following table summarizes total incurred, incurred to date and expected pre-tax restructuring costs by business segment for the Company’s Americas and Asia-Pacific 2015 transformation program: Second Quarter Ended Six Months Ended July 3, 2016 July 3, 2016 Incurred to Date Remaining costs Total Expected Costs (in millions) Asia-Pacific $ — $ $ $ — $ Americas Total restructuring costs $ $ $ $ $ Details of the restructuring reserve activity for the Company’s Americas and Asia-Pacific 2015 transformation program for the period ended July 3, 2016 are as follows: Severance Legal and Consultancy Asset write-downs Facility exit and other Total (in millions) Balance at December 31, 2015 $ $ $ — $ $ Net pre-tax restructuring charges Utilization and foreign currency impact ) ) ) ) ) Balance at April 3, 2016 $ $ — — $ $ Net pre-tax restructuring charges — ) Utilization and foreign currency impact — — ) ) ) Balance at July 3, 2016 $ $ — $ — $ $
2015 Actions | EMEA
Restructuring
Summary of total expected, incurred and remaining pre-tax restructuring costs	Severance Legal and consultancy Facility exit and other Total (in millions) Costs incurred—2015 — Costs incurred—first quarter 2016 — — Costs incurred—second quarter 2016 — Remaining costs to be incurred — Total expected restructuring costs
Summary of restructuring reserve activity	Severance Legal and consultancy Facility exit and other Total Balance at December 31, 2015 $ $ — $ — $ Net pre-tax restructuring charges — — Utilization and foreign currency impact ) — — ) Balance at April 3, 2016 $ — — Net pre-tax restructuring charges $ — Utilization and foreign currency impact ) ) — ) Balance at July 3, 2016 $ $ — $ — $
2014 Actions | EMEA
Restructuring
Summary of total expected, incurred and remaining pre-tax restructuring costs	Severance Legal and consultancy Asset write-downs Facility exit and other Total (in millions) Costs incurred—2014 $ $ — $ — $ — $ Costs incurred—2015 ) — ) Costs incurred—first quarter 2016 — — Costs incurred—second quarter 2016 — — — Remaining costs to be incurred — Total expected restructuring costs
Summary of restructuring reserve activity	Severance Legal and consultancy Asset write-downs Total (in millions) Balance at December 31, 2015 $ $ — $ — $ Net pre-tax restructuring charges Utilization and foreign currency impact ) ) ) Balance at April 3, 2016 $ $ — $ — $ Net pre-tax restructuring charges — — Utilization and foreign currency impact ) — ) ) Balance at July 3, 2016 $ $ — $ — $

Earnings per Share (Tables)

Earnings per Share (Tables)	6 Months Ended
	Jul. 03, 2016
Earnings per Share
Summary of reconciliation of the calculation of earnings per share	For the Second Quarter Ended July 3, 2016 For the Second Quarter Ended June 28, 2015 Income (Numerator) Shares (Denominator) Per Share Amount Income (Numerator) Shares (Denominator) Per Share Amount (amounts in millions, except per share amounts) Basic EPS: Net income $ $ $ $ Effect of dilutive securities: Common stock equivalents — Diluted EPS: Net income $ $ $ $ For the First Six Months Ended July 3, 2016 For the First Six Months Ended June 28, 2015 Income (Numerator) Shares (Denominator) Per Share Amount Income (Numerator) Shares (Denominator) Per Share Amount (amounts in millions, except per share amounts) Basic EPS: Net income $ $ $ $ Effect of dilutive securities: Common stock equivalents — Diluted EPS: Net income $ $ $ $
Summary of the cost and number of Class A common stock repurchased	For the Second Quarter Ended July 3, 2016 For the Second Quarter Ended June 28, 2015 Number of shares repurchased Cost of shares repurchased Number of shares repurchased Cost of shares repurchased (amounts in millions, except share amount) Stock repurchase programs: April 30, 2013 — $ — $ July 27, 2015 — — Total $ $ For the Six Months Ended July 3, 2016 For the Six Months Ended June 28, 2015 Number of shares repurchased Cost of shares repurchased Number of shares repurchased Cost of shares repurchased (amounts in millions, except share amount) Stock repurchase programs: April 30, 2013 — $ — $ July 27, 2015 — — Total $ $

Segment Information (Tables)

Segment Information (Tables)	6 Months Ended
	Jul. 03, 2016
Segment Information
Summary of the Company's significant accounts and balances by segment, reconciled to the consolidated totals	Second Quarter Ended Six Months Ended July 3, 2016 June 28, 2015 July 3, 2016 June 28, 2015 (in millions) Net sales Americas $ $ $ $ EMEA Asia-Pacific Consolidated net sales $ $ $ $ Operating income (loss) Americas $ $ $ $ EMEA Asia-Pacific ) ) Subtotal reportable segments Corporate (*) ) ) ) ) Consolidated operating income Interest income ) ) ) ) Interest expense Other income, net ) ) ) ) Income before income taxes $ $ $ $ Capital expenditures Americas $ $ $ $ EMEA Asia-Pacific Consolidated capital expenditures $ $ $ $ Depreciation and amortization Americas $ $ $ $ EMEA Asia-Pacific Consolidated depreciation and amortization $ $ $ $ Identifiable assets (at end of period) Americas $ $ EMEA Asia-Pacific Consolidated identifiable assets $ $ Property, plant and equipment, net (at end of period) Americas $ $ EMEA Asia-Pacific Consolidated property, plant and equipment, net $ $ * Corporate expenses are primarily for administrative compensation expense, internal controls costs, professional fees, including corporate-related legal and audit expenses, shareholder services and benefit administration costs.
Schedule of U.S. net sales of the Company's Americas segment	Second Quarter Ended Six Months Ended July 3, 2016 June 28, 2015 July 3, 2016 June 28, 2015 (in millions) U.S. net sales $ $ $ $
Schedule of intersegment sales for Americas, EMEA and Asia-Pacific	Second Quarter Ended Six Months Ended July 3, 2016 June 28, 2015 July 3, 2016 June 28, 2015 (in millions) Intersegment Sales Americas $ $ $ $ EMEA Asia-Pacific Intersegment sales $ $ $ $

Accumulated Other Comprehensi26

Accumulated Other Comprehensive (Loss) Income (Tables)	6 Months Ended
	Jul. 03, 2016
Accumulated Other Comprehensive (Loss) Income
Schedule of amounts recognized in accumulated other comprehensive loss	Foreign Currency Translation Pension Adjustment Interest Rate Swap Accumulated Other Comprehensive Income (Loss) (in millions) Balance December 31, 2015 $ ) $ — — $ ) Change in period — ) Balance April 3, 2016 $ ) $ — ) $ ) Change in period ) — ) ) Reversal of foreign currency translation ) — — ) Balance July 3, 2016 $ ) $ — ) $ ) Balance December 31, 2014 $ ) $ ) — $ ) Change in period ) — ) Balance March 29, 2015 $ $ ) — $ ) Change in period — Balance June 28, 2015 $ ) $ ) — $ )

Basis of Presentation (Details)

Basis of Presentation (Details)	6 Months Ended
	Jul. 03, 2016
Basis of Presentation
Length of fiscal year	364 days
Length of fiscal quarter	91 days
Length of two fiscal quarters	182 days

Accounting Policies (Details)

Accounting Policies (Details) - USD ($) $ in Millions	Feb. 26, 2016	Nov. 30, 2015	Dec. 31, 2015	Jul. 03, 2016	Dec. 31, 2015
Gross Balance
Balance at the beginning of the period				$ 656.1	$ 676.4
Acquired During the Period				3.3	12.9
Foreign Currency Translation and Other				3.2	(33.2)
Balance at the end of the period			$ 656.1	662.6	656.1
Accumulated Impairment Losses
Balance at the beginning of the period				(167.1)	(37.4)
Impairment Loss During the Period					(129.7)
Balance at the end of the period			(167.1)	(167.1)	(167.1)
Business combination
Net Goodwill			489	$ 495.5	489
Aerco Korea
Business combination
Aggregate consideration, net	$ 4
Outstanding shares acquired (as a percent)	50.00%
Percentage of ownership before transaction	40.00%
Net Goodwill	$ 3.3
Purchase price allocated to intangible assets	$ 1.6
Shares remaining to be acquired	10.00%			10.00%
Apex
Business combination
Aggregate consideration, net		$ 20.4
Outstanding shares acquired (as a percent)		80.00%
Net Goodwill		$ 12.9
Purchase price allocated to intangible assets		$ 10.1
Shares remaining to be acquired		20.00%		20.00%
Number of years of closing		3 years
Americas
Gross Balance
Balance at the beginning of the period				$ 391.2	398
Foreign Currency Translation and Other				0.6	(6.8)
Balance at the end of the period			391.2	391.8	391.2
Accumulated Impairment Losses
Balance at the beginning of the period				(24.5)	(24.5)
Balance at the end of the period			(24.5)	(24.5)	(24.5)
Business combination
Net Goodwill			366.7	367.3	366.7
EMEA
Gross Balance
Balance at the beginning of the period				238.6	265.5
Foreign Currency Translation and Other				2	(26.9)
Balance at the end of the period			238.6	240.6	238.6
Accumulated Impairment Losses
Balance at the beginning of the period				(129.7)
Impairment Loss During the Period					(129.7)
Balance at the end of the period			(129.7)	(129.7)	(129.7)
Business combination
Net Goodwill			108.9	110.9	108.9
Asia Pacific
Gross Balance
Balance at the beginning of the period				26.3	12.9
Acquired During the Period				3.3	12.9
Foreign Currency Translation and Other				0.6	0.5
Balance at the end of the period			26.3	30.2	26.3
Accumulated Impairment Losses
Balance at the beginning of the period				(12.9)	(12.9)
Balance at the end of the period			(12.9)	(12.9)	(12.9)
Business combination
Net Goodwill			13.4	$ 17.3	$ 13.4
EMEA reporting unit
Accumulated Impairment Losses
Pretax goodwill impairment charges			129.7
Business combination
Pretax goodwill impairment charges			$ 129.7

Accounting Policies - Intangibl

Accounting Policies - Intangible assets (Details) - USD ($) $ in Millions	Nov. 30, 2015	Jul. 03, 2016	Jun. 28, 2015	Jul. 03, 2016	Jun. 28, 2015	Dec. 31, 2015
Intangible assets subject to amortization
Gross Carrying Amount		$ 301.7		$ 301.7		$ 301.2
Accumulated Amortization		(154.8)		(154.8)		(144.6)
Net Carrying Amount		146.9		146.9		156.6
Indefinite-lived intangible assets
Indefinite-lived intangible assets		36.5		36.5		36.2
Intangible assets
Gross Carrying Amount		338.2		338.2		337.4
Net Carrying Amount		183.4		$ 183.4		192.8
Weighted-average amortization				11 years 2 months 12 days
Aggregate amortization expense for amortized intangible assets		5.1	$ 5.2	$ 10.2	$ 10.3
Future amortization expense
Future amortization expense for remainder of 2016		10.1		10.1
Future amortization expense, 2017		19.4		19.4
Future amortization expense, 2018		16.6		16.6
Future amortization expense, 2019		12.6		12.6
Future amortization expense, 2020		12.2		12.2
Aerco Korea
Intangible assets
Net Carrying Amount		1.6		1.6
Patents
Intangible assets subject to amortization
Gross Carrying Amount		16.1		16.1		16.1
Accumulated Amortization		(14.5)		(14.5)		(14.1)
Net Carrying Amount		1.6		$ 1.6		2
Intangible assets
Weighted-average amortization				3 years 9 months 18 days
Customer relationships
Intangible assets subject to amortization
Gross Carrying Amount		215		$ 215		212.5
Accumulated Amortization		(109.6)		(109.6)		(102.1)
Net Carrying Amount		105.4		$ 105.4		110.4
Intangible assets
Weighted-average amortization				11 years 2 months 12 days
Customer relationships | Apex
Intangible assets
Weighted-average amortization	10 years
Customer relationships | Aerco Korea
Intangible assets
Weighted-average amortization				10 years
Technology
Intangible assets subject to amortization
Gross Carrying Amount		41.6		$ 41.6		41.3
Accumulated Amortization		(17.5)		(17.5)		(16.1)
Net Carrying Amount		24.1		$ 24.1		25.2
Intangible assets
Weighted-average amortization				9 years 1 month 6 days
Trade name
Intangible assets subject to amortization
Gross Carrying Amount		22.1		$ 22.1		21.9
Accumulated Amortization		(7.2)		(7.2)		(6.4)
Net Carrying Amount		14.9		$ 14.9		15.5
Intangible assets
Weighted-average amortization				14 years 2 months 12 days
Trade name | Apex
Intangible assets
Weighted-average amortization	15 years
Other
Intangible assets subject to amortization
Gross Carrying Amount		6.9		$ 6.9		9.4
Accumulated Amortization		(6)		(6)		(5.9)
Net Carrying Amount		$ 0.9		$ 0.9		$ 3.5
Intangible assets
Weighted-average amortization				20 years 3 months 18 days

Accounting Policies - Stock-Bas

Accounting Policies - Stock-Based Compensation (Details) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jul. 03, 2016USD ($)shares	Jun. 28, 2015USD ($)	Jul. 03, 2016USD ($)item$ / sharesshares	Jun. 28, 2015USD ($)$ / sharesshares	Dec. 31, 2014
Shipping and Handling
Shipping and handling costs included in selling, general and administrative expense | $	$ 11.5	$ 13.8	$ 22.9	$ 28.2
Research and Development
Research and development costs included in selling, general, and administrative expense | $	$ 6.4	$ 6.3	$ 13	$ 12.7
Second Amended and Restated 2004 Stock Incentive Plan
Stock-based compensation
Number of stock incentive plans | item			1
Second Amended and Restated 2004 Stock Incentive Plan | Stock options
Stock-based compensation
Vesting period			4 years		3 years
Percentage of stock options becoming exercisable			25.00%		33.00%
Expiration period (years)			10 years
Options granted (in shares)			0	0
Second Amended and Restated 2004 Stock Incentive Plan | Stock options | Class A
Stock-based compensation
Minimum exercise price as percentage of fair market value of common stock on grant date			100.00%
Second Amended and Restated 2004 Stock Incentive Plan | Restricted stock
Stock-based compensation
Granted (in shares)			110,295	60,278
Second Amended and Restated 2004 Stock Incentive Plan | Deferred shares
Stock-based compensation
Vesting rate per year for maximum vesting period			0.33		0.50
Second Amended and Restated 2004 Stock Incentive Plan | Deferred shares | Maximum
Stock-based compensation
Vesting period			3 years		2 years
Second Amended and Restated 2004 Stock Incentive Plan | Performance stock units
Stock-based compensation
Granted (in shares)			106,724	631
Second Amended and Restated 2004 Stock Incentive Plan | Performance stock units | Minimum
Stock-based compensation
Number of common shares for each unit of award held			0
Management Stock Purchase Plan | Class A
Stock-based compensation
Shares authorized	2,000,000		2,000,000
Management Stock Purchase Plan | Restricted stock units (RSUs)
Stock-based compensation
Granted (in shares)			88,882	59,995
Increased exercise price as percentage of fair market value of common stock on grant date in next fiscal year			80.00%
Fair value assumptions
Expected life (years)			3 years	3 years
Expected stock price volatility (as a percent)			24.80%	23.40%
Expected dividend yield (as a percent)			1.30%	1.20%
Risk-free interest rate (as a percent)			0.90%	1.10%
Weighted average grant-date fair value (in dollars per share) | $ / shares			$ 18.15	$ 19.04
Management Stock Purchase Plan | Restricted stock units (RSUs) | Minimum
Stock-based compensation
Vesting period			3 years
Management Stock Purchase Plan | Restricted stock units (RSUs) | Maximum
Stock-based compensation
Vesting period			3 years
Management Stock Purchase Plan | Restricted stock units (RSUs) | Class A
Stock-based compensation
Number of common shares for each unit of award held			1
Exercise price as percentage of fair market value of common stock on grant date			67.00%

Acquisitions (Details)

Acquisitions (Details) - USD ($) $ in Millions	Feb. 26, 2016	Nov. 30, 2015	Jul. 03, 2016	Apr. 03, 2016	Dec. 31, 2015
Acquisition
Estimated useful lives			11 years 2 months 12 days
Goodwill resulted through acquisition			$ 495.5		$ 489
Redeemable financial instrument
Acquisition
Liability recorded at acquisition date fair value			$ 6.8		5.7
Customer relationships
Acquisition
Estimated useful lives			11 years 2 months 12 days
Technology
Acquisition
Estimated useful lives			9 years 1 month 6 days
Trade name
Acquisition
Estimated useful lives			14 years 2 months 12 days
Aerco Korea
Acquisition
Outstanding shares acquired (as a percent)	50.00%
Percentage of ownership before transaction	40.00%
Aggregate ownership percentage	90.00%
Shares remaining to be acquired	10.00%		10.00%
Pre-tax gain on the previously held ownership interest	$ 1.7
Liability recorded at acquisition date fair value	0.8			$ 0.8
Aggregate consideration, net	4
Goodwill resulted through acquisition	3.3
Purchase price allocated to intangible assets	$ 1.6
Aerco Korea | Customer relationships
Acquisition
Estimated useful lives			10 years
Apex
Acquisition
Outstanding shares acquired (as a percent)		80.00%
Shares remaining to be acquired		20.00%	20.00%
Number of years of closing		3 years
Liability recorded at acquisition date fair value		$ 5.5			$ 5.5
Aggregate consideration, net		20.4
Goodwill resulted through acquisition		12.9
Purchase price allocated to intangible assets		$ 10.1
Apex | Customer relationships
Acquisition
Estimated useful lives		10 years
Apex | Trade name
Acquisition
Estimated useful lives		15 years

Sale of Business (Details)

Sale of Business (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Oct. 02, 2016	Jul. 03, 2016	Jul. 03, 2016
Discontinued Operations
Pre-tax gain on sale of business		$ 8.7	$ 8.7
After-tax gain on sale of business			8.3
China Operating Subsidiary | Forecast
Discontinued Operations
Total proceeds from sale of business	$ 9
Sale of business | China Operating Subsidiary
Discontinued Operations
Pre-tax gain on sale of business			8.7
Non-cash accumulated currency translation adjustment			7.3
After-tax gain on sale of business			$ 8.3

Financial Instruments and Der33

Financial Instruments and Derivative Instruments (Details) - Fair value measured on a recurring basis - USD ($) $ in Millions	Jul. 03, 2016	Dec. 31, 2015
Quoted Prices in Active Markets for Identical Assets (Level 1)
Assets
Plan asset for deferred compensation	$ 3	$ 3.3
Total assets	3	3.3
Liabilities
Plan liability for deferred compensation	3	3.3
Total liabilities	3	3.3
Significant Other Observable Inputs (Level 2)
Liabilities
Total liabilities	1.9
Significant Other Observable Inputs (Level 2) | Interest rate swap
Liabilities
Interest rate swap	1.9
Significant Unobservable Inputs (Level 3)
Liabilities
Redeemable financial instrument	6.8	5.7
Total liabilities	6.8	5.7
Total
Assets
Plan asset for deferred compensation	3	3.3
Total assets	3	3.3
Liabilities
Plan liability for deferred compensation	3	3.3
Redeemable financial instrument	6.8	5.7
Total liabilities	11.7	$ 9
Total | Interest rate swap
Liabilities
Interest rate swap	$ 1.9

Financial Instruments and Der34

Financial Instruments and Derivative Instruments - Change in Fair value (Details) - USD ($) $ in Millions	6 Months Ended
	Jul. 03, 2016	Jul. 03, 2016	Apr. 03, 2016	Feb. 26, 2016	Nov. 30, 2015
Aerco Korea
Reconciliation of changes in fair value of all financial assets and liabilities
Liability recorded at acquisition date fair value			$ 0.8	$ 0.8
Shares remaining to be acquired		10.00%		10.00%
Apex
Reconciliation of changes in fair value of all financial assets and liabilities
Balance at the beginning of the period	$ 5.5
Liability recorded at acquisition date fair value	$ 5.5				$ 5.5
Shares remaining to be acquired		20.00%			20.00%
Commitment to purchase remaining shares	3 years
Redeemable financial instrument
Reconciliation of changes in fair value of all financial assets and liabilities
Balance at the beginning of the period	$ 5.7
Purchases	0.8
Total realized and unrealized (gains) losses included in Comprehensive income	0.3
Balance at the ending of the period	6.8
Liability recorded at acquisition date fair value	$ 5.7	$ 6.8

Financial Instruments and Der35

Financial Instruments and Derivative Instruments - Interest Rate Swap and Non-Designated Cash Flow Hedge (Details) $ in Millions	Jul. 03, 2016USD ($)	Apr. 28, 2016USD ($)	Feb. 12, 2016USD ($)item	Jul. 03, 2016USD ($)	Jul. 03, 2016USD ($)
Derivative instruments
Percentage of projected intercompany purchases hedged by forward exchange contracts					50.00%
Period of projected intercompany purchase transactions					12 months
Credit Agreement
Interest Rate Swap
Amount drawn		$ 230
Term loan facility
Interest Rate Swap
Face amount			$ 300
Amount drawn			300
Senior unsecured revolving credit facility
Interest Rate Swap
Borrowing capacity			$ 500
Amount drawn	$ 230
Forward exchange contracts | Non designated
Amount of Gain or (Loss) Recognized in Income on Derivatives
Loss from derivatives recorded to other expense (income), net in statement of operations				$ 0.3	$ 0.1
Interest rate swap | Designated | Cash Flow Hedging
Interest Rate Swap
Number of derivative contracts entered | item			2
Derivative fixed interest rate			1.31375%
Derivative notional amount			$ 225
Loss recognized in Accumulated Other Comprehensive Loss, effective portion				$ 1.7	$ 1.9
Interest rate swap | Designated | Cash Flow Hedging | LIBOR
Interest Rate Swap
Description of variable rate basis			LIBOR
Derivative, floor interest rate			0.00%

Financial Instruments and Der36

Financial Instruments and Derivative Instruments - Fair Value (Details) - USD ($) $ in Millions	Jul. 03, 2016	Dec. 31, 2015
Long-term debt
Carrying amount	$ 603	$ 575.3
Estimated fair value	$ 610	$ 584.1
5.05% Senior notes due 2020
Senior notes
Interest rate (as a percent)	5.05%

Restructuring and Other Charg37

Restructuring and Other Charges, Net (Details) - USD ($) $ in Millions	Oct. 26, 2015	Feb. 17, 2015	Oct. 02, 2016	Jul. 03, 2016	Jun. 28, 2015	Jul. 03, 2016	Jun. 28, 2015	Dec. 31, 2014
Restructuring
Total restructuring				$ 3.2	$ 4.7	$ 4.6	$ 6.7
Pre-tax restructuring charges, net				3.2	4.7	4.6	6.7
Corporate
Restructuring
Pre-tax restructuring charges, net				(0.1)		(0.1)	(0.1)
EMEA
Restructuring
Pre-tax restructuring charges, net				2.5	0.7	2.9	1.5
Asia Pacific
Restructuring
Pre-tax restructuring charges, net					3.3	0.2	3.3
Americas
Restructuring
Pre-tax restructuring charges, net				0.8	0.7	1.6	2
2015 Actions
Restructuring
Net pre-tax restructuring charges				0.8	4	1.8	5.3
2015 Actions | Minimum
Restructuring
Expected pre-tax program to date restructuring and other charges incurred						63
Other transformation and deployment costs						29
2015 Actions | Maximum
Restructuring
Expected pre-tax program to date restructuring and other charges incurred						68
Other transformation and deployment costs						34
2015 Actions | Forecast
Restructuring
Proceeds from sale of manufacturing facility			$ 9
2015 Actions | Americas and Asia Pacific
Restructuring
Goodwill and intangible asset impairment charges		$ 13.4
Reduction of area of space (as a percent)	30.00%
2015 Actions | Americas and Asia Pacific | Minimum
Restructuring
Elimination of net sales		$ 165
2013 Actions
Restructuring
Net pre-tax restructuring charges							0.5
Other Actions
Restructuring
Net pre-tax restructuring charges				2.4	$ 0.7	2.8	$ 0.9
Other Actions | EMEA
Restructuring
Net pre-tax restructuring charges				0.8		0.8
Expected costs				10		10		$ 8
Pre-tax program to date restructuring and other charges incurred				$ 8.5		8.5
Cost incurred to date						$ 6.8

Restructuring and Other Charg38

Restructuring and Other Charges, Net - Expected, incurred and remaining pre-tax restructuring costs (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended		12 Months Ended		18 Months Ended
	Jul. 03, 2016	Apr. 03, 2016	Jun. 28, 2015	Jul. 03, 2016	Jun. 28, 2015	Dec. 31, 2015	Dec. 31, 2014	Jul. 03, 2016
Restructuring reserve
Costs incurred	$ 3.2		$ 4.7	$ 4.6	$ 6.7
Summary of total expected, incurred and remaining pre-tax costs
Costs incurred	3.2		$ 4.7	4.6	$ 6.7
2015 Actions
Restructuring reserve
Costs incurred	0.8	$ 1		1.8		$ 13.6
Summary of total expected, incurred and remaining pre-tax costs
Costs incurred	0.8	1		1.8		13.6
Costs incurred through date	(15.4)			(15.4)				$ (15.4)
Remaining costs				5				5
Total expected restructuring costs				20.4				20.4
EMEA | 2015 Actions
Restructuring reserve
Balance at the beginning of the period	6.3	6.4		6.4
Costs incurred	1.5	0.1				6.9
Utilization and foreign currency impact	(1)	(0.2)
Balance at the end of the period	6.8	6.3		6.8		6.4		6.8
Summary of total expected, incurred and remaining pre-tax costs
Costs incurred	1.5	0.1				6.9
Remaining costs				1.5
Total expected restructuring costs				10
EMEA | 2014 Actions
Restructuring reserve
Balance at the beginning of the period	1.9	2.6		2.6
Costs incurred	0.1	0.3				(0.5)	$ 6.9
Utilization and foreign currency impact	(0.8)	(1)
Balance at the end of the period	1.2	1.9		1.2		2.6		1.2
Summary of total expected, incurred and remaining pre-tax costs
Costs incurred	0.1	0.3				(0.5)	6.9
Remaining costs				1.2
Total expected restructuring costs				8
Americas and Asia Pacific | 2015 Actions
Restructuring reserve
Balance at the beginning of the period	5.1	6.4		6.4
Costs incurred	0.8	1
Utilization and foreign currency impact	(1.5)	(2.3)
Balance at the end of the period	4.4	5.1		4.4		6.4		4.4
Summary of total expected, incurred and remaining pre-tax costs
Costs incurred	0.8	1
Asia Pacific | 2015 Actions
Restructuring reserve
Costs incurred				0.2
Summary of total expected, incurred and remaining pre-tax costs
Costs incurred				0.2
Costs incurred through date	(4.4)			(4.4)				(4.4)
Total expected restructuring costs								4.4
Americas | 2015 Actions
Restructuring reserve
Costs incurred	0.8			1.6
Summary of total expected, incurred and remaining pre-tax costs
Costs incurred	0.8			1.6
Costs incurred through date	(11)			(11)				(11)
Remaining costs								5
Total expected restructuring costs								16
Severance | 2015 Actions
Restructuring reserve
Costs incurred	0.2	0.2				8.5
Summary of total expected, incurred and remaining pre-tax costs
Costs incurred	0.2	0.2				8.5
Remaining costs				0.1
Total expected restructuring costs				9
Severance | EMEA | 2015 Actions
Restructuring reserve
Balance at the beginning of the period	6.3	6.4		6.4
Costs incurred	1.3	0.1				6.6
Utilization and foreign currency impact	(0.8)	(0.2)
Balance at the end of the period	6.8	6.3		6.8		6.4		6.8
Summary of total expected, incurred and remaining pre-tax costs
Costs incurred	1.3	0.1				6.6
Remaining costs				0.5
Total expected restructuring costs				8.5
Severance | EMEA | 2014 Actions
Restructuring reserve
Balance at the beginning of the period	1.9	2.6		2.6
Costs incurred		0.2				(1)	6.9
Utilization and foreign currency impact	(0.7)	(0.9)
Balance at the end of the period	1.2	1.9		1.2		2.6		1.2
Summary of total expected, incurred and remaining pre-tax costs
Costs incurred		0.2				(1)	$ 6.9
Remaining costs				0.6
Total expected restructuring costs				6.7
Severance | Americas and Asia Pacific | 2015 Actions
Restructuring reserve
Balance at the beginning of the period	4.1	5		5
Costs incurred	0.2	0.2
Utilization and foreign currency impact		(1.1)
Balance at the end of the period	4.3	4.1		4.3		5		4.3
Summary of total expected, incurred and remaining pre-tax costs
Costs incurred	0.2	0.2
Legal and consultancy | 2015 Actions
Restructuring reserve
Costs incurred		0.2				0.7
Summary of total expected, incurred and remaining pre-tax costs
Costs incurred		0.2				0.7
Remaining costs				0.3
Total expected restructuring costs				1.2
Legal and consultancy | EMEA | 2015 Actions
Restructuring reserve
Costs incurred	0.2
Utilization and foreign currency impact	(0.2)
Summary of total expected, incurred and remaining pre-tax costs
Costs incurred	0.2
Remaining costs				1
Total expected restructuring costs				1.2
Legal and consultancy | EMEA | 2014 Actions
Restructuring reserve
Costs incurred						0.2
Summary of total expected, incurred and remaining pre-tax costs
Costs incurred						0.2
Total expected restructuring costs				0.2
Legal and consultancy | Americas and Asia Pacific | 2015 Actions
Restructuring reserve
Balance at the beginning of the period		0.4		0.4
Costs incurred		0.2
Utilization and foreign currency impact		(0.6)
Balance at the end of the period						0.4
Summary of total expected, incurred and remaining pre-tax costs
Costs incurred		0.2
Asset write-downs | 2015 Actions
Restructuring reserve
Costs incurred	0.8	0.2				1.6
Summary of total expected, incurred and remaining pre-tax costs
Costs incurred	0.8	0.2				1.6
Remaining costs				0.1
Total expected restructuring costs				2.7
Asset write-downs | EMEA | 2014 Actions
Restructuring reserve
Costs incurred	0.1	0.1				0.3
Utilization and foreign currency impact	(0.1)	(0.1)
Summary of total expected, incurred and remaining pre-tax costs
Costs incurred	0.1	0.1				0.3
Remaining costs				0.5
Total expected restructuring costs				1
Asset write-downs | Americas and Asia Pacific | 2015 Actions
Restructuring reserve
Costs incurred	0.8	0.2
Utilization and foreign currency impact	(0.8)	(0.2)
Summary of total expected, incurred and remaining pre-tax costs
Costs incurred	0.8	0.2
Facility exit and other | 2015 Actions
Restructuring reserve
Costs incurred	(0.2)	0.4				2.8
Summary of total expected, incurred and remaining pre-tax costs
Costs incurred	(0.2)	0.4				2.8
Remaining costs				4.5
Total expected restructuring costs				7.5
Facility exit and other | EMEA | 2015 Actions
Restructuring reserve
Costs incurred						0.3
Summary of total expected, incurred and remaining pre-tax costs
Costs incurred						0.3
Total expected restructuring costs				0.3
Facility exit and other | EMEA | 2014 Actions
Summary of total expected, incurred and remaining pre-tax costs
Remaining costs				0.1
Total expected restructuring costs				0.1
Facility exit and other | Americas and Asia Pacific | 2015 Actions
Restructuring reserve
Balance at the beginning of the period	1	1		1
Costs incurred	(0.2)	0.4
Utilization and foreign currency impact	(0.7)	(0.4)
Balance at the end of the period	0.1	1		$ 0.1		$ 1		$ 0.1
Summary of total expected, incurred and remaining pre-tax costs
Costs incurred	$ (0.2)	$ 0.4

Earnings per Share (Details)

Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended		29 Months Ended
	Jul. 03, 2016	Jun. 28, 2015	Jul. 03, 2016	Jun. 28, 2015	Sep. 30, 2015	Jul. 27, 2015	Apr. 30, 2013
Net (loss) income
Net income	$ 28.6	$ 19.3	$ 44.8	$ 30.9
Shares
Shares (in shares)	34,500,000	35,000,000	34,400,000	35,100,000
Per Share Amount
Net income (in dollars per share)	$ 0.83	$ 0.55	$ 1.30	$ 0.88
Dilutive securities, principally common stock options
Common stock equivalents (in shares)		100,000	100,000
Net (loss) income
Net income	$ 28.6	$ 19.3	$ 44.8	$ 30.9
Weighted average number of shares:
Shares (in shares)	34,500,000	35,100,000	34,500,000	35,100,000
Per Share Amount
Net income (in dollars per share)	$ 0.83	$ 0.55	$ 1.30	$ 0.88
Shares repurchased
Options to purchase shares of Class A common stock	100,000	300,000	200,000	300,000
Total value of shares of the entity's Class A common stock authorized to be repurchased						$ 100	$ 90
Number of shares repurchased	91,500	185,000	359,000	349,000
Cost of shares repurchased	$ 5.2	$ 10.1	$ 17.6	$ 19.5
April 30, 2013
Shares repurchased
Number of shares repurchased		185,000		349,000
Cost of shares repurchased		$ 10.1		$ 19.5	$ 90
July 27, 2015
Shares repurchased
Number of shares repurchased	91,500		359,000
Cost of shares repurchased	$ 5.2		$ 17.6
Remaining authorized repurchase amount	$ 65.1		$ 65.1

Segment Information (Details)

Segment Information (Details) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 03, 2016USD ($)	Jun. 28, 2015USD ($)	Jul. 03, 2016USD ($)segment	Jun. 28, 2015USD ($)	Dec. 31, 2015USD ($)
Segment information
Net Sales	$ 371.1	$ 386.9	$ 715.3	$ 743.1
Consolidated operating income	45.7	34.8	76.9	57.6
Interest income	(0.3)	(0.2)	(0.5)	(0.4)
Interest expense	5.5	5.9	12.2	11.8
Other income, net	(0.9)	(0.4)	(3.1)	(0.6)
INCOME BEFORE INCOME TAXES	41.4	29.5	68.3	46.8
Capital Expenditures	10	6.9	19.2	12.5
Depreciation and Amortization	12.5	12.9	24.9	25.9
Identifiable assets (at end of period)	1,724.5	1,893.3	1,724.5	1,893.3	$ 1,690.8
Property, plant and equipment, net (at end of period)	185	186.6	$ 185	186.6	$ 184.4
Number of geographic segments | segment			3
Reportable segments
Segment information
Consolidated operating income	55.4	43.7	$ 95	74.8
Corporate
Segment information
Consolidated operating income	(9.7)	(8.9)	(18.1)	(17.2)
Intersegment sales
Segment information
Net Sales	22.6	37.3	53.4	72.3
Americas
Segment information
Net Sales	239.5	262.8	461.8	500.2
Capital Expenditures	7	4.1	14.4	8.2
Depreciation and Amortization	6.7	7.1	13.3	14.1
Identifiable assets (at end of period)	1,001.5	1,071.9	1,001.5	1,071.9
Property, plant and equipment, net (at end of period)	95.3	85.8	95.3	85.8
Americas | U.S.
Segment information
Net Sales	223.5	244.4	431.4	465.8
Property, plant and equipment, net (at end of period)	91.5	82	91.5	82
Americas | Reportable segments
Segment information
Consolidated operating income	35.4	36.1	63.5	60.3
Americas | Intersegment sales
Segment information
Net Sales	3.4	1.9	6.2	3.7
EMEA
Segment information
Net Sales	117.4	112.2	228.4	221.2
Capital Expenditures	2.8	2.6	4.5	3.8
Depreciation and Amortization	4.9	5.2	9.8	10.6
Identifiable assets (at end of period)	601.4	737	601.4	737
Property, plant and equipment, net (at end of period)	81.6	88.4	81.6	88.4
EMEA | Reportable segments
Segment information
Consolidated operating income	10.5	9.4	20.7	14.8
EMEA | Intersegment sales
Segment information
Net Sales	2.9	2.8	5.5	5.5
Asia Pacific
Segment information
Net Sales	14.2	11.9	25.1	21.7
Capital Expenditures	0.2	0.2	0.3	0.5
Depreciation and Amortization	0.9	0.6	1.8	1.2
Identifiable assets (at end of period)	121.6	84.4	121.6	84.4
Property, plant and equipment, net (at end of period)	8.1	12.4	8.1	12.4
Asia Pacific | Reportable segments
Segment information
Consolidated operating income	9.5	(1.8)	10.8	(0.3)
Asia Pacific | Intersegment sales
Segment information
Net Sales	$ 16.3	$ 32.6	$ 41.7	$ 63.1

Accumulated Other Comprehensi41

Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Millions	3 Months Ended				6 Months Ended
	Jul. 03, 2016	Apr. 03, 2016	Jun. 28, 2015	Mar. 29, 2015	Jul. 03, 2016	Jun. 28, 2015
Changes in accumulated other comprehensive income (loss)
Balance at the beginning of the period		$ (128.2)			$ (128.2)
Change in period	$ (20.8)		$ 18.6		3.4	$ (46.3)
Reversal of foreign currency translation	(6.9)				(6.9)
Balance at the end of the period	(124.8)				(124.8)
After-tax gain on sale of business					8.3
Foreign Currency Translation
Changes in accumulated other comprehensive income (loss)
Balance at the beginning of the period	(103.8)	(128.2)	(118.1)	$ (53)	(128.2)	(53)
Change in period	(12.2)	24.4	18.4	(65.1)
Reversal of foreign currency translation	(6.9)
Balance at the end of the period	(122.9)	(103.8)	(99.7)	(118.1)	(122.9)	(99.7)
Pension Adjustment
Changes in accumulated other comprehensive income (loss)
Balance at the beginning of the period			(35.9)	(36.1)		(36.1)
Change in period			0.2	0.2
Balance at the end of the period			(35.7)	(35.9)		(35.7)
Interest rate swap
Changes in accumulated other comprehensive income (loss)
Balance at the beginning of the period	(0.2)
Change in period	(1.7)	(0.2)
Balance at the end of the period	(1.9)	(0.2)			(1.9)
Accumulated Other Comprehensive Income (Loss)
Changes in accumulated other comprehensive income (loss)
Balance at the beginning of the period	(104)	(128.2)	(154)	(89.1)	(128.2)	(89.1)
Change in period	(13.9)	24.2	18.6	(64.9)
Reversal of foreign currency translation	(6.9)
Balance at the end of the period	$ (124.8)	$ (104)	$ (135.4)	$ (154)	(124.8)	$ (135.4)
China Operating Subsidiary | Sale of business
Changes in accumulated other comprehensive income (loss)
After-tax gain on sale of business					$ 8.3

Debt (Details)

Debt (Details) - USD ($) $ in Millions	Apr. 28, 2016	Feb. 12, 2016	Jul. 03, 2016	Dec. 31, 2015
Credit Agreement
Long-term Debt			$ 606.6	$ 576.2
Borrowings outstanding			606.6	$ 576.2
5.85% Senior notes due 2016
Credit Agreement
Long-term Debt	$ 225
Interest rate (as a percent)	5.85%
Borrowings outstanding	$ 225
Interest rate (as a percent)	5.85%
Credit Agreement
Credit Agreement
Term of debt		5 years
Sublimit on letters of credit		$ 100
Unused and available credit under the credit agreement			245.1
Amount drawn	$ 230
Stand-by letters of credit outstanding			$ 24.9
Eurocurrency rate loans | LIBOR | Minimum
Credit Agreement
Interest rate added to base rate (as a percent)			0.975%
Eurocurrency rate loans | LIBOR | Maximum
Credit Agreement
Interest rate added to base rate (as a percent)			1.45%
Base rate loans and swing line loans | LIBOR
Credit Agreement
Interest rate added to base rate (as a percent)			1.00%
Base rate loans and swing line loans | LIBOR | Minimum
Credit Agreement
Interest rate added to base rate (as a percent)			0.00%
Base rate loans and swing line loans | LIBOR | Maximum
Credit Agreement
Interest rate added to base rate (as a percent)			0.45%
Base rate loans and swing line loans | Federal funds
Credit Agreement
Interest rate added to base rate (as a percent)			0.50%
Variable interest rate basis			federal funds rate
Base rate loans and swing line loans | Prime Rate
Credit Agreement
Variable interest rate basis			prime rate
Senior unsecured revolving credit facility
Credit Agreement
Multi-currency borrowing capacity		$ 500
Interest rate on revolving credit facility (as a percent)			1.88%
Term loan facility
Credit Agreement
Term of debt		5 years
Interest rate on term loan facility (as a percent)			2.12%
First year (as a percent)		0.00%
Second and third years (as a percent)		7.50%
Fourth and fifth years (as a percent)		10.00%
Amount drawn		$ 300
Long-term Debt			$ 300
Borrowings outstanding			$ 300
Face amount		$ 300
Term loan facility | LIBOR | Minimum
Credit Agreement
Interest rate added to base rate (as a percent)		1.125%
Term loan facility | LIBOR | Maximum
Credit Agreement
Interest rate added to base rate (as a percent)		1.75%

Debt - New Accounting Pronounce

Debt - New Accounting Pronouncements (Details) - USD ($) $ in Millions	Jul. 03, 2016	Dec. 31, 2015
New Accounting Pronouncements
Long-term Debt	$ 606.6	$ 576.2
Unamortized debt issuance costs	3.6	2
Long-term debt, net of unamortized issuance costs	601.5	574.2
Other Assets, Noncurrent	$ 10.9	11.9
Accounting Standards Update 201503
New Accounting Pronouncements
Long-term debt, net of unamortized issuance costs		574.2
Other Assets, Noncurrent		$ 11.9

Contingencies and Environment44

Contingencies and Environmental Remediation (Details) $ in Millions	Feb. 16, 2016USD ($)	Jul. 03, 2016USD ($)itemsegment	Dec. 31, 2015USD ($)
Litigation contingencies
Reasonably possible loss in excess of the amount accrued for its legal contingencies		$ 4.2
Number of judgments entered against the Company | item		0
Connector Class Action
Litigation contingencies
Total settlement amount on proposed litigation	$ (14)
Possible loss on proposed estimate	4.1
Estimated insurance receivable	$ 9.9
Liability recorded			$ 14
Liability recorded, current			7.8
Liability recorded, noncurrent			6.2
Insurance proceeds, current assets			$ 9.5
Asbestos Litigation
Litigation contingencies
Number of lawsuits the entity is defending in different jurisdictions | segment		313

Subsequent Events (Details)

Subsequent Events (Details)	Aug. 04, 2016$ / shares
Subsequent event
Subsequent events
Quarterly dividend declared (in dollars per share)	$ 0.18