Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jul. 01, 2017 | Jul. 28, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | SPX CORP | |
Entity Central Index Key | 88,205 | |
Document Type | 10-Q | |
Document Period End Date | Jul. 1, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 42,522,896 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | ||
Income Statement [Abstract] | |||||
Revenues | [1] | $ 349.7 | $ 371.4 | $ 690.3 | $ 732 |
Costs and expenses: | |||||
Cost of products sold | 273.6 | 280.3 | 526.1 | 551 | |
Selling, general and administrative | 71.4 | 72.8 | 141 | 147.1 | |
Intangible amortization | 0.1 | 0.9 | 0.3 | 1.8 | |
Special charges, net | 0.5 | 2.4 | 1 | 2.9 | |
Impairment of intangible assets | 0 | 0 | 0 | 4 | |
Gain (loss) on sale of dry cooling business | 0 | (1.2) | 0 | 16.7 | |
Operating income | 4.1 | 13.8 | 21.9 | 41.9 | |
Other income (expense), net | (2.1) | 0.1 | (2.8) | 1.3 | |
Interest expense | (4.6) | (3.8) | (8.6) | (7.3) | |
Interest income | 0.3 | 0.2 | 0.7 | 0.4 | |
Income (loss) from continuing operations before income taxes | (2.3) | 10.3 | 11.2 | 36.3 | |
Income tax provision | (6) | (3.8) | (9.2) | (9.6) | |
Income (loss) from continuing operations | (8.3) | 6.5 | 2 | 26.7 | |
Loss from discontinued operations, net of tax | 0 | (3.1) | 0 | (8.6) | |
Gain (loss) on disposition of discontinued operations, net of tax | (0.7) | (0.4) | 6.4 | (1.5) | |
Income (loss) from discontinued operations, net of tax | (0.7) | (3.5) | 6.4 | (10.1) | |
Net income (loss) | (9) | 3 | 8.4 | 16.6 | |
Less: Net loss attributable to redeemable noncontrolling interests | 0 | (1) | 0 | (0.4) | |
Net income (loss) attributable to SPX Corporation common shareholders | (9) | 4 | 8.4 | 17 | |
Adjustment related to redeemable noncontrolling interest (Note 13) | 0 | (18.1) | 0 | (18.1) | |
Net income (loss) attributable to SPX Corporation common shareholders after adjustment related to redeemable noncontrolling interest | (9) | (14.1) | 8.4 | (1.1) | |
Amounts attributable to SPX Corporation common shareholders after adjustment related to redeemable noncontrolling interest: | |||||
Income (loss) from continuing operations, net of tax | (8.3) | (10.6) | 2 | 9 | |
Income (loss) from discontinued operations, net of tax | (0.7) | (3.5) | 6.4 | (10.1) | |
Net income (loss) attributable to SPX Corporation common shareholders after adjustment related to redeemable noncontrolling interest | $ (9) | $ (14.1) | $ 8.4 | $ (1.1) | |
Basic income (loss) per share of common stock: | |||||
Income (loss) from continuing operations attributable to SPX Corporation common shareholders after adjustment related to redeemable noncontrolling interest (in dollars per share) | $ (0.19) | $ (0.25) | $ 0.05 | $ 0.22 | |
Income (loss) from discontinued operations attributable to SPX Corporation common shareholders (in dollars per share) | (0.02) | (0.09) | 0.15 | (0.25) | |
Net income (loss) per share attributable to SPX Corporation common shareholders after adjustment related to redeemable noncontrolling interest (in dollars per share) | $ (0.21) | $ (0.34) | $ 0.20 | $ (0.03) | |
Weighted-average number of common shares outstanding — basic | 42,388 | 41,594 | 42,249 | 41,443 | |
Diluted income (loss) per share of common stock: | |||||
Income (loss) from continuing operations attributable to SPX Corporation common shareholders after adjustment related to redeemable noncontrolling interest (in dollars per share) | $ (0.19) | $ (0.25) | $ 0.04 | $ 0.22 | |
Income (loss) from discontinued operations attributable to SPX Corporation common shareholders (in dollars per share) | (0.02) | (0.09) | 0.15 | (0.25) | |
Net income (loss) per share attributable to SPX Corporation common shareholders after adjustment related to redeemable noncontrolling interest (in dollars per share) | $ (0.21) | $ (0.34) | $ 0.19 | $ (0.03) | |
Weighted-average number of common shares outstanding — diluted | 42,388 | 41,594 | 43,622 | 41,754 | |
Comprehensive income (loss) | $ (8.9) | $ (0.6) | $ 7.5 | $ (25.7) | |
[1] | Under the percentage-of-completion method, we recognized revenues of $65.8 and $80.1 in the three months ended July 1, 2017 and July 2, 2016, respectively. For the six months ended July 1, 2017 and July 2, 2016, revenues under the percentage-of-completion method were $144.6 and $184.4, respectively. Costs and estimated earnings in excess of billings on uncompleted contracts accounted for under the percentage-of-completion method were $31.3 and $33.9 as of July 1, 2017 and December 31, 2016, respectively, and are reported as a component of ‘‘Accounts receivable, net’’ in the condensed consolidated balance sheets. Billings in excess of costs and estimated earnings on uncompleted contracts accounted for under the percentage-of-completion method were $42.0 and $53.3 as of July 1, 2017 and December 31, 2016, respectively, and are reported as a component of ‘‘Accrued expenses’’ in the condensed consolidated balance sheets. |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions | Jul. 01, 2017 | Dec. 31, 2016 | |
Current assets: | |||
Cash and equivalents | $ 83.5 | $ 99.6 | |
Accounts receivable, net | 252 | 251.7 | |
Inventories, net | 168.3 | 145.7 | |
Other current assets | 35.1 | 30.6 | |
Total current assets | 538.9 | 527.6 | |
Property, plant and equipment: | |||
Land | 15.4 | 15.4 | |
Buildings and leasehold improvements | 119.5 | 117.3 | |
Machinery and equipment | 334.1 | 329.8 | |
Property, plant and equipment, gross | 469 | 462.5 | |
Accumulated depreciation | (277.4) | (267) | |
Property, plant and equipment, net | 191.6 | 195.5 | |
Goodwill | 344.1 | 340.4 | |
Intangibles, net | [1] | 118.4 | 117.9 |
Other assets | 671.9 | 680.5 | |
Deferred income taxes | 64.5 | 50.6 | |
TOTAL ASSETS | 1,929.4 | 1,912.5 | |
Current liabilities: | |||
Accounts payable | 140.8 | 137.6 | |
Accrued expenses | 291.2 | 304.3 | |
Income taxes payable | 1.3 | 1.7 | |
Short-term debt | 33.9 | 14.8 | |
Current maturities of long-term debt | 18.1 | 17.9 | |
Total current liabilities | 485.3 | 476.3 | |
Long-term debt | 315.4 | 323.5 | |
Deferred and other income taxes | 45.6 | 42.4 | |
Other long-term liabilities | 874.4 | 878.7 | |
Total long-term liabilities | 1,235.4 | 1,244.6 | |
Commitments and contingent liabilities (Note 13) | |||
Equity: | |||
Common stock (51,050,116 and 42,499,436 issued and outstanding at July 1, 2017, respectively, 50,754,779 and 41,940,089 issued and outstanding at December 31, 2016, respectively) | 0.5 | 0.5 | |
Paid-in capital | 1,301.5 | 1,307.9 | |
Retained deficit | (823.2) | (831.6) | |
Accumulated other comprehensive income | 234.2 | 235.1 | |
Common stock in treasury (8,550,680 and 8,814,690 shares at July 1, 2017 and December 31, 2016, respectively) | (504.3) | (520.3) | |
Total equity | 208.7 | 191.6 | |
TOTAL LIABILITIES AND EQUITY | $ 1,929.4 | $ 1,912.5 | |
[1] | Changes in the gross carrying values of “Other Intangibles, Net” during the six months ended July 1, 2017 related to foreign currency translation. |
CONDENSED CONSOLIDATED BALANCE4
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - shares | Jul. 01, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock, shares issued | 51,050,116 | 50,754,779 |
Common stock, shares outstanding | 42,499,436 | 41,940,089 |
Common stock in treasury, shares | 8,550,680 | 8,814,690 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | Dec. 31, 2016 | |
Cash flows used in operating activities: | |||||
Net Income | $ (9) | $ 3 | $ 8.4 | $ 16.6 | |
Less: Income (loss) from discontinued operations, net of tax | (0.7) | (3.5) | 6.4 | (10.1) | |
Income from continuing operations | (8.3) | 6.5 | 2 | 26.7 | |
Adjustments to reconcile income from continuing operations to net cash used in operating activities: | |||||
Special charges, net | 0.5 | 2.4 | 1 | 2.9 | |
Gain on sale of dry cooling business | 0 | 1.2 | 0 | (16.7) | |
Impairment of intangible assets | 0 | 0 | 0 | 4 | |
Deferred and other income taxes | (3.8) | 1.7 | |||
Depreciation and amortization | 12.6 | 13.2 | |||
Pension and other employee benefits | 7.5 | 8.6 | |||
Long-term incentive compensation | 6.8 | 6.1 | |||
Other, net | 1.7 | 1.4 | |||
Changes in operating assets and liabilities, net of effects from divestiture: | |||||
Accounts receivable and other assets | 6.1 | 33.9 | |||
Inventories | (20.3) | (17.5) | |||
Accounts payable, accrued expenses and other | (22.3) | (76.8) | |||
Cash spending on restructuring actions | (1) | (1.2) | |||
Net cash used in continuing operations | (9.7) | (13.7) | |||
Net cash used in discontinued operations | (5.7) | (25.7) | |||
Net cash used in operating activities | (15.4) | (39.4) | |||
Cash flows from (used in) investing activities: | |||||
Proceeds from asset sales | 0 | 46 | |||
Capital expenditures | (4.8) | (3.7) | |||
Net cash from (used in) continuing operations | (4.8) | 42.3 | |||
Net cash used in discontinued operations | 0 | (2.3) | |||
Net cash from (used in) investing activities | (4.8) | 40 | |||
Cash flows from (used in) financing activities: | |||||
Borrowings under senior credit facilities | 16 | 65 | |||
Repayments under senior credit facilities | (24.7) | (65) | |||
Borrowings under trade receivables financing arrangement | 40 | 20 | |||
Repayments under trade receivables financing arrangement | (19) | (20) | |||
Net repayments under other financing arrangements | (2.7) | (0.6) | |||
Minimum withholdings paid on behalf of employees for net share settlements, net of proceeds from the exercise of employee stock options and other | (1.8) | (1.6) | |||
Net cash from (used in) continuing operations | 7.8 | (2.2) | |||
Net cash from (used in) discontinued operations | 0 | 0 | |||
Net cash from (used in) financing activities | 7.8 | (2.2) | |||
Change in cash and equivalents due to changes in foreign currency exchange rates | (3.7) | 2.2 | |||
Net change in cash and equivalents | (16.1) | 0.6 | |||
Consolidated cash and equivalents, beginning of period | 99.6 | 101.4 | $ 101.4 | ||
Consolidated cash and equivalents, end of period | $ 83.5 | $ 102 | $ 83.5 | $ 102 | $ 99.6 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jul. 01, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Unless otherwise indicated, “we,” “us” and “our” mean SPX Corporation and its consolidated subsidiaries (“SPX”). We prepared the condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information normally required by accounting principles generally accepted in the United States (“GAAP”) can be condensed or omitted. The financial statements represent our accounts after the elimination of intercompany transactions and, in our opinion, include the adjustments (consisting only of normal and recurring items) necessary for their fair presentation. We account for investments in unconsolidated companies where we exercise significant influence but do not have control using the equity method. In determining whether we are the primary beneficiary of a variable interest entity (“VIE”), we perform a qualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties to determine which party has the power to direct the activities of the VIE that most significantly impact the entity’s economic performance, and which party has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. We have an interest in a VIE, in which we are not the primary beneficiary, as a result of the sale of Balcke Dürr. See below and in Note 15 for further discussion of the sale of Balcke Dürr. All other VIEs are considered immaterial, individually and in aggregate, to our condensed consolidated financial statements. Sale of Dry Cooling Business On March 30, 2016, we completed the sale of our dry cooling business, a business previously within our Engineered Solutions reportable segment, to Paharpur Cooling Towers Limited (“Paharpur”) for cash proceeds of $45.9 (net of cash transferred with the business of $3.0 ), resulting in a gain during the quarter ended April 2, 2016 of $17.9 . The gain includes a reclassification from “Equity” of other comprehensive income totaling $40.4 related to foreign currency translation. During the second quarter of 2016, we reduced the gain by $1.2 in connection with adjustments to certain liabilities retained from the sale. During the third quarter of 2016, we increased the gain by $1.7 in connection with the settlement of the final working capital associated with the business. In connection with the sale, we provided customary indemnifications to Paharpur. Accordingly, it is possible that the sales price and resulting gain for this divestiture may be materially adjusted in subsequent periods. Sale of Balcke Dürr Business On December 30, 2016, we completed the sale of Balcke Dürr to a subsidiary of mutares AG (the “Buyer”) for cash proceeds of less than $0.1 . In addition, we left $21.1 of cash in Balcke Dürr at the time of the sale and provided the Buyer with a non-interest bearing loan of $9.1 , payable in installments due at the end of 2018 and 2019. The results of Balcke Dürr are presented as a discontinued operation within the accompanying condensed consolidated financial statements. In connection with the sale, we recorded a net loss of $78.6 in the fourth quarter of 2016 to “Gain (loss) on disposition of discontinued operations, net of tax.” During the first quarter of 2017, we reduced the net loss associated with the sale of Balcke Dürr by $7.2 . The reduction was comprised of an additional income tax benefit recorded for the sale of $8.4 , partially offset by adjustments to liabilities retained in connection with the sale of $1.2 . During the second quarter of 2017, we increased the net loss associated with the sale of Balcke Dürr by $0.4 , with the increase resulting from adjustments to liabilities retained in connection with the sale. The purchase agreement provided that existing parent company guarantees of approximately €79.0 and bank and surety bonds of approximately €79.0 would remain in place through each instrument’s expiration date, with such expiration dates ranging from 2017 to 2022. Balcke Dürr and the Buyer have provided us a full indemnity in the event that any of these guarantees or bonds are called. Also, Balcke Dürr has provided cash collateral of €4.0 and mutares AG has provided a guarantee of €5.0 as a security for the above indemnifications. In connection with the sale, we recorded a liability for the estimated fair value of the guarantees and bonds and an asset for the estimated fair value of the cash collateral and indemnities provided. See Note 15 for further details regarding these estimated fair values. The final sales price for Balcke Dürr is subject to adjustment based on cash and working capital existing at the closing date and is subject to agreement with the Buyer. Final agreement of the cash and working capital amounts with the Buyer has yet to occur. Accordingly, it is possible that the sales price and resulting loss for this divestiture may be materially adjusted in subsequent periods. Other Preparing financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ from these estimates. The unaudited information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2016. Interim results are not necessarily indicative of full year results. We have reclassified certain prior year amounts, including the results of discontinued operations, to conform to the current year presentation. Unless otherwise indicated, amounts provided in these Notes pertain to continuing operations only. See Note 3 for information on discontinued operations. We establish actual interim closing dates using a fiscal calendar, which requires our businesses to close their books on the Saturday closest to the end of the first calendar quarter, with the second and third quarters being 91 days in length. Our fourth quarter ends on December 31. The interim closing dates for the first, second and third quarters of 2017 are April 1, July 1 and September 30, compared to the respective April 2, July 2 and October 1, 2016 dates. We had two fewer days in the first quarter of 2017 and will have one more day in the fourth quarter of 2017 than in the respective 2016 periods. We do not believe the two fewer days during the first quarter of 2017 had a material impact on our consolidated operating results for the first half of 2017, when compared to the consolidated operating results for the first half of 2016. |
NEW ACCOUNTING PRONOUNCEMENTS
NEW ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jul. 01, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
NEW ACCOUNTING PRONOUNCEMENTS | NEW ACCOUNTING PRONOUNCEMENTS The following is a summary of new accounting pronouncements that apply or may apply to our business. In May 2014, the Financial Accounting Standards Board (“FASB”) issued a new standard on revenue recognition that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new standard contains a five-step approach that entities will apply to determine the measurement of revenue and timing of when it is recognized, including (i) identifying the contract(s) with a customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to separate performance obligations, and (v) recognizing revenue when (or as) each performance obligation is satisfied. The new standard requires a number of disclosures intended to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue, and the related cash flows. The disclosures include qualitative and quantitative information about contracts with customers, significant judgments made in applying the revenue guidance, and assets recognized from the costs to obtain or fulfill a contract. The standard is effective for interim and annual reporting periods beginning after December 15, 2017 and we currently plan to adopt the standard using the modified retrospective transition method. The modified retrospective transition approach will recognize any changes from the beginning of the year of initial application through retained earnings with no restatement of comparative periods. We are continuing to assess the potential effect that the standard is expected to have on our consolidated financial statements. We believe the more significant effects on our existing accounting policies will be associated with our power transformer business. Under the new standard, revenue for our power transformers will be recognized over time, which is a change from our current accounting policy of recognizing revenue for power transformers at a point in time. In February 2016, the FASB issued an amendment to existing guidance that requires lessees to recognize assets and liabilities for the rights and obligations created by long-term leases. In addition, this amendment requires new qualitative and quantitative disclosures about leasing arrangements. This standard is effective for annual periods beginning on or after December 15, 2018 for public business entities, and interim periods within those fiscal years. Early adoption is permitted, and adoption must be applied on a modified retrospective basis. We are currently evaluating the effect this new standard will have on our condensed consolidated financial statements. In March 2016, the FASB issued an amendment to existing guidance that simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This standard is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those annual reporting periods. We adopted this guidance on January 1, 2017, and, thus, excess income tax benefits recognized on stock-based compensation awards are now being reflected, on a prospective basis, in our condensed consolidated statement of operations as a component of the provision for income taxes (versus the previous requirement to reflect such amounts within “equity”). In accordance with this prospective adoption, we recognized income tax benefits of $0.2 and $1.2 in our condensed consolidated statements of operations for the three and six months ended July 1, 2017, respectively. In addition, we prospectively adopted the amendment to present excess income tax benefits on share-based compensation awards as an operating activity within our condensed consolidated statement of cash flows (versus the previous requirement to reflect such amounts as a financing activity), which resulted in the classification of $1.2 of such income tax benefits within operating activities of the condensed consolidated statement of cash flows for the six months ended July 1, 2017. Cash paid on employees’ behalf related to shares withheld for income taxes payable continues to be classified as a financing activity. Lastly, we elected to continue estimating stock-based compensation award forfeitures in determining the amount of compensation expense to be recognized in each period. In August 2016, the FASB issued an amendment to existing guidance to reduce diversity in practice in how certain cash receipts and cash payments are presented in the statement of cash flows. This amendment provides clarification on eight specific cash flow presentation issues. The issues include, but are not limited to, debt prepayment or extinguishment costs, settlement of zero-coupon debt, proceeds from the settlement of insurance claims, and cash receipts from payments on beneficial interests in securitization transactions. This amendment is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods. Early adoption is permitted. We are currently evaluating the effect this amendment will have on our condensed consolidated financial statements. In January 2017, the FASB issued an amendment to simplify the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires that an entity recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. This amendment is effective for annual reporting periods beginning after December 31, 2019, including interim periods within those annual reporting periods. Early adoption is permitted. The impact of this amendment on our consolidated financial statements will depend on the results of future goodwill impairment tests. In March 2017, the FASB issued an amendment to revise the presentation of net periodic pension and postretirement benefit cost. The amendment requires the service cost component to be presented separately from the other components of net periodic pension and postretirement benefit cost. Service cost will be presented with other employee compensation costs within operations. The other components of net periodic pension and postretirement benefit cost, such as interest cost, expected return on plan assets, amortization of prior service cost/credits, and gains or losses, are required to be separately presented outside of operations. This amendment is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual periods. The amendment to the presentation in the income statement of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost shall be applied retrospectively. Early adoption is permitted. We will adopt the standard effective January 1, 2018. The adoption is not expected to have a material impact on our condensed consolidated financial statements. See Note 9 for details of our pension and postretirement expense. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 6 Months Ended |
Jul. 01, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS As indicated in Note 1, the results of Balcke Dürr are presented as a discontinued operation within the accompanying condensed consolidated financial statements for the three and six months ended July 2, 2016 . Major classes of line items constituting pre-tax loss and after-tax loss of Balcke Dürr for the three and six months ended July 2, 2016 are shown below: Three months ended Six months ended July 2, July 2, Revenues $ 41.5 $ 70.2 Costs and expenses: Cost of products sold 37.8 66.6 Selling, general and administrative 8.2 16.1 Special charges (credits), net (0.4 ) (0.6 ) Other expense, net (0.2 ) (0.2 ) Loss before taxes (4.3 ) (12.1 ) Income tax benefit 1.2 3.5 Loss from discontinued operations, net of tax $ (3.1 ) $ (8.6 ) The following table presents selected financial information for Balcke Dürr that is included within discontinued operations in the condensed consolidated statement of cash flows for the six months ended July 2, 2016 : Non-cash items included in loss from discontinued operations: Depreciation and amortization $ 1.0 Capital expenditures 0.6 During the first quarter of 2017, we reduced the net loss associated with the sale of Balcke Dürr by $7.2 . The reduction was comprised of an additional income tax benefit recorded for the sale of $8.4 , partially offset by adjustments to liabilities retained in connection with the sale of $1.2 . During the second quarter of 2017, we increased the net loss associated with the sale of Balcke Dürr by $0.4 , with the increase resulting from adjustments to liabilities retained in connection with the sale. In addition to the adjustment for the net loss related to the Balcke Dürr sale, we recognized net losses of $0.3 and $0.4 during the three and six months ended July 1, 2017 , and $0.4 and $1.5 during the three and six months ended July 2, 2016 , respectively, resulting from revisions to liabilities retained from businesses discontinued prior to 2016. For the three and six months ended July 1, 2017 and July 2, 2016 , the table below presents a reconciliation of discontinued operations activity to the related amounts in the condensed consolidated statements of operations: Three months ended Six months ended July 1, July 2, July 1, July 2, Balcke Dürr Loss from discontinued operations $ (0.5 ) $ (4.3 ) $ (2.6 ) $ (12.1 ) Income tax benefit 0.1 1.2 9.4 3.5 Income (loss) from discontinued operations, net (0.4 ) (3.1 ) 6.8 (8.6 ) All other Loss from discontinued operations (0.4 ) (0.6 ) (0.9 ) (1.8 ) Income tax benefit 0.1 0.2 0.5 0.3 Loss from discontinued operations, net (0.3 ) (0.4 ) (0.4 ) (1.5 ) Total Loss from discontinued operations (0.9 ) (4.9 ) (3.5 ) (13.9 ) Income tax benefit 0.2 1.4 9.9 3.8 Income (loss) from discontinued operations, net $ (0.7 ) $ (3.5 ) $ 6.4 $ (10.1 ) |
INFORMATION ON REPORTABLE SEGME
INFORMATION ON REPORTABLE SEGMENTS | 6 Months Ended |
Jul. 01, 2017 | |
Segment Reporting [Abstract] | |
INFORMATION ON REPORTABLE SEGMENTS | INFORMATION ON REPORTABLE SEGMENTS We are a global supplier of highly specialized engineered solutions with operations in over 15 countries and sales in over 100 countries around the world. We have aggregated our operating segments into the following three reportable segments: HVAC, Detection and Measurement, and Engineered Solutions. The factors considered in determining our aggregated segments are the economic similarity of the businesses, the nature of products sold or services provided, production processes, types of customers, distribution methods, and regulatory environment. In determining our segments, we apply the threshold criteria of the Segment Reporting Topic of the Codification. Operating income or loss for each of our segments is determined before considering impairment and special charges, pension and postretirement expense/income, long-term incentive compensation and other indirect corporate expenses. This is consistent with the way our chief operating decision maker evaluates the results of each segment. HVAC Reportable Segment Our HVAC reportable segment engineers, designs, manufactures, installs and services cooling products for the HVAC and industrial markets, as well as boilers, comfort heating and ventilation products for the residential and commercial markets. The primary distribution channels for the segment’s products are direct to customers, independent manufacturing representatives, third-party distributors, and retailers. The segment serves a customer base in North America, Europe, and Asia Pacific. Detection and Measurement Reportable Segment Our Detection and Measurement reportable segment engineers, designs, manufactures and installs underground pipe and cable locators and inspection equipment, bus fare collection systems, communication technologies, and specialty lighting. The primary distribution channels for the segment’s products are direct to customers and third-party distributors. The segment serves a global customer base, with a strong presence in North America, Europe, and Asia Pacific. Engineered Solutions Reportable Segment Our Engineered Solutions reportable segment engineers, designs, manufactures, installs and services transformers for the power transmission and distribution market and process cooling equipment and stationary heat exchangers for the industrial and power generation markets. The primary distribution channels for the segment’s products are direct to customers and third-party representatives. The segment has a strong presence in North America and South Africa. Corporate Expense Corporate expense generally relates to the cost of our Charlotte, North Carolina corporate headquarters. Financial data for our reportable segments for the three and six months ended July 1, 2017 and July 2, 2016 are presented below: Three months ended Six months ended July 1, July 2, July 1, July 2, Revenues: (1) HVAC segment $ 120.3 $ 121.9 $ 230.4 $ 233.5 Detection and Measurement segment 64.5 60.1 118.1 115.5 Engineered Solutions segment (2) 164.9 189.4 341.8 383.0 Consolidated revenues $ 349.7 $ 371.4 $ 690.3 $ 732.0 Income (loss): HVAC segment $ 15.4 $ 17.1 $ 31.9 $ 33.0 Detection and Measurement segment 17.3 12.1 28.5 23.1 Engineered Solutions segment (2) (12.0 ) 3.0 (5.4 ) 5.9 Total income for segments 20.7 32.2 55.0 62.0 Corporate expense (11.3 ) (8.6 ) (22.7 ) (20.0 ) Long-term incentive compensation expense (3.6 ) (3.4 ) (6.8 ) (6.1 ) Pension and postretirement expense (1.2 ) (2.8 ) (2.6 ) (3.8 ) Special charges, net (0.5 ) (2.4 ) (1.0 ) (2.9 ) Impairment of intangible assets — — — (4.0 ) Gain (loss) on sale of dry cooling business — (1.2 ) — 16.7 Consolidated operating income $ 4.1 $ 13.8 $ 21.9 $ 41.9 ___________________________ (1) Under the percentage-of-completion method, we recognized revenues of $65.8 and $80.1 in the three months ended July 1, 2017 and July 2, 2016 , respectively. For the six months ended July 1, 2017 and July 2, 2016 , revenues under the percentage-of-completion method were $144.6 and $184.4 , respectively. Costs and estimated earnings in excess of billings on uncompleted contracts accounted for under the percentage-of-completion method were $31.3 and $33.9 as of July 1, 2017 and December 31, 2016 , respectively, and are reported as a component of ‘‘Accounts receivable, net’’ in the condensed consolidated balance sheets. Billings in excess of costs and estimated earnings on uncompleted contracts accounted for under the percentage-of-completion method were $42.0 and $53.3 as of July 1, 2017 and December 31, 2016 , respectively, and are reported as a component of ‘‘Accrued expenses’’ in the condensed consolidated balance sheets. (2) As further discussed in Note 13, during the second quarter of 2017, we made revisions to our expected revenues and profits on our large power projects in South Africa. As a result of these revisions, we reduced revenue and segment income by $13.5 and $22.9 , respectively, for the three and six months ended July 1, 2017 . |
SPECIAL CHARGES, NET
SPECIAL CHARGES, NET | 6 Months Ended |
Jul. 01, 2017 | |
Restructuring and Related Activities [Abstract] | |
SPECIAL CHARGES, NET | SPECIAL CHARGES, NET Special charges, net, for the three and six months ended July 1, 2017 and July 2, 2016 are described in more detail below: Three months ended Six months ended July 1, July 2, July 1, July 2, HVAC segment $ 0.3 $ — $ 0.4 $ — Detection and Measurement segment — — 0.3 0.2 Engineered Solutions segment 0.2 2.4 0.2 2.7 Corporate — — 0.1 — Total $ 0.5 $ 2.4 $ 1.0 $ 2.9 HVAC Segment — Charges for the three and six months ended July 1, 2017 related primarily to severance costs associated with a restructuring action at the segment’s Cooling Americas business. Detection and Measurement Segment — Charges for the six months ended July 1, 2017 related to severance costs associated with a restructuring action at the segment’s communication technologies business during the first quarter of 2017. Charges for the six months ended July 2, 2016 related to severance costs associated with a restructuring action at the segment’s bus fare collection systems business. Engineered Solutions Segment — Charges for the three and six months ended July 1, 2017 related primarily to severance costs associated with a restructuring action at the segment’s process cooling business. Charges for the three and six months ended July 2, 2016 related to a restructuring actions at the segment’s SPX Heat Transfer (“Heat Transfer”) business. The costs incurred for the Heat Transfer business restructuring action included asset impairment charges of $2.6 associated with the discontinuance of a product line and severance costs. Corporate — Charges for the six months ended July 1, 2017 related to severance costs incurred in connection with the sale of Balcke Dürr. Expected charges still to be incurred under actions approved as of July 1, 2017 are approximately $0.1 . The following is an analysis of our restructuring liabilities for the six months ended July 1, 2017 and July 2, 2016 : Six months ended July 1, July 2, Balance at beginning of year $ 0.9 $ 1.6 Special charges (1) 1.0 0.3 Utilization — cash (1.0 ) (1.2 ) Currency translation adjustment and other — (0.1 ) Balance at end of period $ 0.9 $ 0.6 ___________________________ (1) The six months ended July 1, 2017 and July 2, 2016 included $0.0 and $2.6 of non-cash charges, respectively, that did not impact the restructuring liability. |
INVENTORIES, NET
INVENTORIES, NET | 6 Months Ended |
Jul. 01, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORIES, NET | INVENTORIES, NET Inventories at July 1, 2017 and December 31, 2016 comprised the following: July 1, December 31, Finished goods $ 49.7 $ 43.0 Work in process 59.8 50.0 Raw materials and purchased parts 70.9 64.9 Total FIFO cost 180.4 157.9 Excess of FIFO cost over LIFO inventory value (12.1 ) (12.2 ) Total inventories, net $ 168.3 $ 145.7 Inventories include material, labor and factory overhead costs and are reduced, when necessary, to estimated net realizable values. Certain domestic inventories are valued using the last-in, first-out (“LIFO”) method. These inventories were approximately 55% and 51% of total inventory at July 1, 2017 and December 31, 2016 , respectively. Other inventories are valued using the first-in, first-out (“FIFO”) method. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Jul. 01, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The changes in the carrying amount of goodwill, by reportable segment, were as follows: December 31, Impairments Foreign Currency Translation and Other July 1, HVAC segment Gross goodwill $ 258.5 $ — $ 3.3 $ 261.8 Accumulated impairments (144.2 ) — (0.3 ) (144.5 ) Goodwill 114.3 — 3.0 117.3 Detection and Measurement segment Gross goodwill 214.4 — 1.4 215.8 Accumulated impairments (134.2 ) — (1.1 ) (135.3 ) Goodwill 80.2 — 0.3 80.5 Engineered Solutions segment Gross goodwill 351.4 — 4.6 356.0 Accumulated impairments (205.5 ) — (4.2 ) (209.7 ) Goodwill 145.9 — 0.4 146.3 Total Gross goodwill 824.3 — 9.3 833.6 Accumulated impairments (483.9 ) — (5.6 ) (489.5 ) Goodwill $ 340.4 $ — $ 3.7 $ 344.1 Other Intangibles, Net Identifiable intangible assets at July 1, 2017 and December 31, 2016 comprised the following: July 1, 2017 December 31, 2016 Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value Intangible assets with determinable lives: Customer relationships $ 1.4 $ (1.4 ) $ — $ 1.4 $ (1.4 ) $ — Technology 2.1 (0.4 ) 1.7 2.1 (0.4 ) 1.7 Patents 4.5 (4.5 ) — 4.5 (4.5 ) — Other 12.7 (7.7 ) 5.0 12.7 (7.4 ) 5.3 20.7 (14.0 ) 6.7 20.7 (13.7 ) 7.0 Trademarks with indefinite lives 111.7 — 111.7 110.9 — 110.9 Total (1) $ 132.4 $ (14.0 ) $ 118.4 $ 131.6 $ (13.7 ) $ 117.9 ___________________________ (1) Changes in the gross carrying values of “Other Intangibles, Net” during the six months ended July 1, 2017 related to foreign currency translation. At July 1, 2017 , the net carrying value of intangible assets with determinable lives consisted of $4.0 in the HVAC segment and $2.7 in the Engineered Solutions segment. At July 1, 2017 , trademarks with indefinite lives consisted of $89.3 in the HVAC segment, $10.0 in the Detection and Measurement segment and $12.4 in the Engineered Solutions segment. We perform our annual goodwill impairment testing during the fourth quarter in conjunction with our annual financial planning process, with such testing based primarily on events and circumstances existing as of the end of the third quarter. In addition, we test goodwill for impairment on a more frequent basis if there are indications of potential impairment. A significant amount of judgment is involved in determining if an indication of impairment has occurred between annual testing dates. Such indication may include: a significant decline in expected future cash flows; a significant adverse change in legal factors or the business climate; unanticipated competition; and a more likely than not expectation of selling or disposing all, or a portion, of a reporting unit. We perform our annual trademarks impairment testing during the fourth quarter, or on a more frequent basis if there are indications of potential impairment. The fair values of our trademarks are determined by applying estimated royalty rates to projected revenues, with the resulting cash flows discounted at a rate of return that reflects current market conditions (fair value based on unobservable inputs - Level 3, as defined in Note 15). The primary basis for these projected revenues is the annual operating plan for each of the related businesses, which is prepared in the fourth quarter of each year. In the first quarter of 2016, we recorded an impairment charge of $4.0 related to trademarks of our Heat Transfer business. No impairment charges were recorded in the first half of 2017. |
WARRANTY
WARRANTY | 6 Months Ended |
Jul. 01, 2017 | |
Product Warranties Disclosures [Abstract] | |
WARRANTY | WARRANTY The following is an analysis of our product warranty accrual for the periods presented: Six months ended July 1, July 2, Balance at beginning of year $ 35.8 $ 36.3 Provisions 5.2 6.6 Usage (8.1 ) (8.2 ) Currency translation adjustment 0.2 (0.3 ) Balance at end of period 33.1 34.4 Less: Current portion of warranty 12.7 15.8 Non-current portion of warranty $ 20.4 $ 18.6 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 6 Months Ended |
Jul. 01, 2017 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS In connection with the spin-off of SPX Flow, Inc. (“SPX Flow”) on September 26, 2015, participants in the SPX U.S. Pension Plan (the “U.S. Plan”) that were transferred to SPX FLOW became eligible to elect a lump-sum payment option in lieu of a future pension benefit under the U.S. Plan. During the second quarter of 2016, approximately 9% , or $25.2 , of the projected benefit obligation of the U.S. Plan was settled as a result of lump-sum payments. In connection with these lump-sum payments, we remeasured the assets and liabilities of the U.S. Plan as of May 31, 2016, which resulted in a charge to net periodic pension benefit expense of $1.0 during the quarter. During the second quarter of 2016, we made lump-sum payments to certain participants of the Supplemental Individual Account Retirement Plan (“SIARP”), settling approximately 22% , or $2.7 , of the SIARP’s projected benefit obligation. In connection with these lump-sum payments, we remeasured the liabilities of the SIARP as of June 30, 2016, which resulted in a charge to net periodic pension benefit expense of $0.8 during the quarter. Net periodic benefit expense (income) for our pension and postretirement plans included the following components: Domestic Pension Plans Three months ended Six months ended July 1, July 2, July 1, July 2, Service cost $ 0.1 $ 0.1 $ 0.2 $ 0.2 Interest cost 3.3 3.5 6.6 7.1 Expected return on plan assets (2.5 ) (3.2 ) (5.0 ) (6.4 ) Recognized net actuarial loss — 1.8 — 1.8 Total net periodic pension benefit expense $ 0.9 $ 2.2 $ 1.8 $ 2.7 Foreign Pension Plans Three months ended Six months ended July 1, July 2, July 1, July 2, Service cost $ — $ — $ — $ — Interest cost 1.2 1.5 2.4 2.9 Expected return on plan assets (1.6 ) (1.8 ) (3.1 ) (3.5 ) Net periodic pension benefit income $ (0.4 ) $ (0.3 ) $ (0.7 ) $ (0.6 ) Postretirement Plans Three months ended Six months ended July 1, July 2, July 1, July 2, Service cost $ — $ — $ — $ — Interest cost 0.9 1.1 1.9 2.1 Amortization of unrecognized prior service credits (0.2 ) (0.2 ) (0.4 ) (0.4 ) Net periodic postretirement benefit expense $ 0.7 $ 0.9 $ 1.5 $ 1.7 |
INDEBTEDNESS
INDEBTEDNESS | 6 Months Ended |
Jul. 01, 2017 | |
Debt Disclosure [Abstract] | |
INDEBTEDNESS | INDEBTEDNESS The following summarizes our debt activity (both current and non-current) for the six months ended July 1, 2017 : December 31, Borrowings Repayments Other (4) July 1, Revolving loans $ — $ 16.0 $ (16.0 ) $ — $ — Term loan (1) 339.6 — (8.7 ) 0.2 331.1 Trade receivables financing arrangement (2) — 40.0 (19.0 ) — 21.0 Other indebtedness (3) 16.6 21.4 (24.1 ) 1.4 15.3 Total debt 356.2 $ 77.4 $ (67.8 ) $ 1.6 367.4 Less: short-term debt 14.8 33.9 Less: current maturities of long-term debt 17.9 18.1 Total long-term debt $ 323.5 $ 315.4 ___________________________ (1) The term loan is repayable in quarterly installments of 1.25% of the original loan balance of $350.0 . The remaining balance is repayable in full on September 24, 2020. Balances are net of unamortized debt issuance costs of $1.4 and $1.6 at July 1, 2017 and December 31, 2016 , respectively. (2) Under this arrangement, we can borrow, on a continuous basis, up to $50.0 , as available. At July 1, 2017 , we had $22.9 of available borrowing capacity under this facility. (3) Primarily includes balances under a purchase card program of $3.0 and $3.9 , capital lease obligations of $2.4 and $1.7 , and borrowings under lines of credit in South Africa and China totaling $ 9.2 and $ 10.2 at July 1, 2017 and December 31, 2016 , respectively. The purchase card program allows for payment beyond the normal payment terms for goods and services acquired under the program. As this arrangement extends the payment of these purchases beyond their normal payment terms through third-party lending institutions, we have classified these amounts as short-term debt. (4) “Other” primarily includes debt assumed, foreign currency translation on any debt instruments denominated in currencies other than the U.S. dollar, and the impact of amortization of debt issuance costs associated with the term loan. Senior Credit Facilities On March 20, 2017, we entered into an amendment to our senior credit facilities. Among other things, the amendment extended the period during which we may reinvest the net proceeds from the disposition of our dry cooling business. A detailed description of our senior credit facilities is included in our 2016 Annual Report on Form 10-K. At July 1, 2017 , we had $36.1 and $195.2 of outstanding letters of credit issued under our revolving credit and our foreign credit instrument facilities of our senior credit agreement, respectively. The weighted-average interest rate of outstanding borrowings under our senior credit agreement was approximately 3.0% at July 1, 2017 . At July 1, 2017 , we were in compliance with all covenants of our senior credit agreement. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 6 Months Ended |
Jul. 01, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS Interest Rate Swaps During the second quarter of 2016, we entered into interest rate swap agreements (“Swaps”) to hedge the interest rate risk on our variable rate term loan. These Swaps, which we designate and account for as cash flow hedges, have effective dates beginning in January 2017 and maturities through September 2020 and effectively convert 50% of the borrowing under the variable rate term loan to a fixed rate of 1.2895% plus the applicable margin. These are amortizing Swaps; therefore, the outstanding notional value is scheduled to decline commensurate with the scheduled maturities of the term loan. As of July 1, 2017 , the aggregate notional amounts of the Swaps was $166.9 and the unrealized gain, net of tax, recorded in accumulated other comprehensive income (“AOCI”) was $0.9 . In addition, we have recorded a long-term asset of $1.9 to recognize the fair value of these Swaps. These changes in fair value are reclassified into earnings as a component of interest expense, when the forecasted transaction impacts earnings. Currency Forward Contracts and Currency Forward Embedded Derivatives From time to time, we enter into forward contracts to manage the exposure on contracts with forecasted transactions denominated in non-functional currencies and to manage the risk of transaction gains and losses associated with assets/liabilities denominated in currencies other than the functional currency of certain subsidiaries (“FX forward contracts”). In addition, some of our contracts contain currency forward embedded derivatives (“FX embedded derivatives”), because the currency of exchange is not “clearly and closely” related to the functional currency of either party to the transaction. Certain of our FX forward contracts are designated as cash flow hedges. To the extent these derivatives are effective in offsetting the variability of the hedged cash flows, changes in the derivatives’ fair value are not included in current earnings, but are included in accumulated other comprehensive income (“AOCI”). These changes in fair value are reclassified into earnings as a component of revenues or cost of products sold, as applicable, when the forecasted transaction impacts earnings. In addition, if the forecasted transaction is no longer probable, the cumulative change in the derivatives’ fair value is recorded as a component of “Other income (expense), net” in the period in which the transaction is no longer considered probable of occurring. To the extent a previously designated hedging transaction is no longer an effective hedge, any ineffectiveness measured in the hedging relationship is recorded in earnings in the period in which it occurs. We had FX forward contracts with an aggregate notional amount of $5.3 and $8.8 outstanding as of July 1, 2017 and December 31, 2016 , respectively, with all of the $5.3 scheduled to mature within one year. We also had FX embedded derivatives with an aggregate notional amount of $0.4 and $0.9 at July 1, 2017 and December 31, 2016 , respectively, with all of the $0.4 scheduled to mature within one year. There were no unrealized gains or losses recorded in AOCI related to FX forward contracts as of July 1, 2017 and December 31, 2016 . The fair value of our FX forward contracts and FX embedded derivative instruments were not material in relation to our condensed consolidated balance sheets as of July 1, 2017 and December 31, 2016 . Commodity Contracts From time to time, we enter into commodity contracts to manage the exposure on forecasted purchases of commodity raw materials. At July 1, 2017 and December 31, 2016 , the outstanding notional amount of commodity contracts was 4.3 and 4.1 pounds of copper, respectively. We designate and account for these contracts as cash flow hedges and, to the extent these commodity contracts are effective in offsetting the variability of the forecasted purchases, the change in fair value is included in AOCI. We reclassify AOCI associated with our commodity contracts to cost of products sold when the forecasted transaction impacts earnings. As of July 1, 2017 and December 31, 2016 , the fair value of these contracts was $0.5 (current asset) and $1.1 (current asset), respectively. The unrealized gains, net of tax, recorded in AOCI were $0.4 and $0.8 as of July 1, 2017 and December 31, 2016 , respectively. We anticipate reclassifying the unrealized gains as of July 1, 2017 to income over the next 12 months . |
SHAREHOLDERS' EQUITY AND LONG-T
SHAREHOLDERS' EQUITY AND LONG-TERM INCENTIVE COMPENSATION | 6 Months Ended |
Jul. 01, 2017 | |
SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION | |
SHAREHOLDERS' EQUITY AND LONG-TERM INCENTIVE COMPENSATION | SHAREHOLDERS’ EQUITY AND LONG-TERM INCENTIVE COMPENSATION Income (Loss) Per Share The following table sets forth the number of weighted-average shares outstanding used in the computation of basic and diluted income (loss) per share: Three months ended Six months ended July 1, July 2, July 1, July 2, Weighted-average number of common shares used in basic income per share 42.388 41.594 42.249 41.443 Dilutive securities — Employee stock options, restricted stock shares and restricted stock units — — 1.373 0.311 Weighted-average number of common shares and dilutive securities used in diluted income per share 42.388 41.594 43.622 41.754 The weighted-average number of restricted stock shares/units and stock options excluded from the computation of diluted income per share because the assumed proceeds for these instruments exceed the average market value of the underlying common stock for the related period was 0.476 and 1.037 , respectively, for the three months ended July 1, 2017 , and 0.435 and 1.010 , respectively, for the six months ended July 1, 2017 . In addition, for the three months ended July 1, 2017 , 0.804 and 0.597 of restricted stock shares/units and stock options, respectively, were excluded from the related computation of diluted income per share due to the net loss from continuing operations attributable to SPX common shareholders during the period. The weighted-average number of restricted stock shares/units and stock options excluded from the computation of diluted income per share because the assumed proceeds for these instruments exceed the average market value of the underlying common stock for the related period was 1.365 and 1.417 , respectively, for the three months ended July 2, 2016 and 1.254 and 1.251 , respectively, for the six months ended July 2, 2016 . In addition, for the three months ended July 2, 2016, 0.359 and 0.001 of restricted stock shares/units and stock options, respectively, were excluded from the related computation of diluted income per share due to the net loss from continuing operations attributable to SPX common shareholders during the period. Long-Term Incentive Compensation Long-term incentive compensation awards may be granted to certain eligible employees or non-employee directors. A detailed description of the awards granted prior to 2017 is included in our 2016 Annual Report on Form 10-K. Awards granted on March 1, 2017 to executive officers and other members of senior management were comprised of performance stock units (“PSU’s”), stock options, time-based restricted stock units (“RSU’s”), and long-term cash awards, while other eligible employees were granted RSU’s and long-term cash awards. The PSU’s are eligible to vest at the end of a three -year performance period, with performance based on the total return of our stock over the three -year performance period against the S&P 600 Capital Goods Index. Stock options and RSU’s vest ratably over the three -year period subsequent to the date of grant. Long-term cash awards are eligible to vest at the end of a three -year performance measurement period, with performance based on our achieving a target segment income amount over the three -year measurement period. Effective May 8, 2017, we granted 0.024 RSU’s to our Non-employee directors, which vest in their entirety immediately prior to the annual meeting of stockholders in May 2018. Compensation expense within income from continuing operations related to long-term incentive awards totaled $3.6 and $3.4 for the three months ended July 1, 2017 and July 2, 2016 , respectively, and $6.8 and $6.1 for the six months ended July 1, 2017 and July 2, 2016 , respectively. The related tax benefit was $1.4 and $1.3 for the three months ended July 1, 2017 and July 2, 2016 , respectively, and $2.6 and $2.3 for the six months ended July 1, 2017 and July 2, 2016 , respectively. Accumulated Other Comprehensive Income (Loss) The changes in the components of accumulated other comprehensive income, net of tax, for the three months ended July 1, 2017 were as follows: Foreign Currency Translation Adjustment Net Unrealized Gains on Qualifying Cash Flow Hedges (1) Pension and Postretirement Liability Adjustment (2) Total Balance at beginning of period $ 228.2 $ 2.2 $ 3.7 $ 234.1 Other comprehensive income (loss) before reclassifications 1.1 (0.6 ) — 0.5 Amounts reclassified from accumulated other comprehensive income — (0.3 ) (0.1 ) (0.4 ) Current-period other comprehensive income (loss) 1.1 (0.9 ) (0.1 ) 0.1 Balance at end of period $ 229.3 $ 1.3 $ 3.6 $ 234.2 __________________________ (1) Net of tax provision of $0.8 and $1.3 as of July 1, 2017 and April 1, 2017 , respectively. (2) Net of tax provision of $2.6 and $2.7 as of July 1, 2017 and April 1, 2017 , respectively. The balances as of July 1, 2017 and April 1, 2017 represent net unamortized prior service credits. The changes in the components of accumulated other comprehensive income, net of tax, for the six months ended July 1, 2017 were as follows: Foreign Net Unrealized Gains (1) Pension and (2) Total Balance at beginning of period $ 229.7 $ 1.5 $ 3.9 $ 235.1 Other comprehensive income (loss) before reclassifications (0.4 ) 0.5 — 0.1 Amounts reclassified from accumulated other comprehensive income — (0.7 ) (0.3 ) (1.0 ) Current-period other comprehensive loss (0.4 ) (0.2 ) (0.3 ) (0.9 ) Balance at end of period $ 229.3 $ 1.3 $ 3.6 $ 234.2 _________________________ (1) Net of tax provision of $0.8 and $0.9 as of July 1, 2017 and December 31, 2016 , respectively. (2) Net of tax provision of $2.6 and $2.7 as of July 1, 2017 and December 31, 2016 . The balances as of July 1, 2017 and December 31, 2016 represent net unamortized prior service credits. The changes in the components of accumulated other comprehensive income, net of tax, for the three months ended July 2, 2016 were as follows: Foreign Currency Translation Adjustment Net Unrealized Losses on Qualifying Cash Flow Hedges (1) Pension and Postretirement Liability Adjustment (2) Total Balance at beginning of period $ 241.9 $ (0.6 ) $ 4.3 $ 245.6 Other comprehensive loss before reclassifications (2.3 ) (1.5 ) — (3.8 ) Amounts reclassified from accumulated other comprehensive income (loss) — 0.5 (0.1 ) 0.4 Current-period other comprehensive loss (2.3 ) (1.0 ) (0.1 ) (3.4 ) Balance at end of period $ 239.6 $ (1.6 ) $ 4.2 $ 242.2 ___________________________ (1) Net of tax benefit of $1.0 and $0.4 as of July 2, 2016 and April 2, 2016 , respectively. (2) Net of tax provision of $3.0 and $3.1 as of July 2, 2016 and April 2, 2016 , respectively. The balances as of July 2, 2016 and April 2, 2016 include net unamortized prior service credits. The changes in the components of accumulated other comprehensive income, net of tax, for the six months ended July 2, 2016 were as follows: Foreign Net Unrealized Losses (2) Pension and (3) Total Balance at beginning of period $ 280.6 $ (1.8 ) $ 4.5 $ 283.3 Other comprehensive loss before reclassifications (0.6 ) (1.7 ) — (2.3 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) (40.4 ) 1.9 (0.3 ) (38.8 ) Current-period other comprehensive income (loss) (41.0 ) 0.2 (0.3 ) (41.1 ) Balance at end of period $ 239.6 $ (1.6 ) $ 4.2 $ 242.2 __________________________ (1) In connection with the sale of our dry cooling business, we reclassified $40.4 of other comprehensive income related to foreign currency translation to “Gain (loss) on sale of dry cooling business.” (2) Net of tax benefit of $1.0 and $0.8 as of July 2, 2016 and December 31, 2015 , respectively. (3) Net of tax provision of $3.0 and $3.1 as of July 2, 2016 and December 31, 2015 , respectively. The balances as of July 2, 2016 and December 31, 2015 include net unamortized prior service credits. The following summarizes amounts reclassified from each component of accumulated comprehensive income for the three months ended July 1, 2017 and July 2, 2016 : Amount Reclassified from AOCI Three months ended July 1, 2017 July 2, 2016 Affected Line Item in the Condensed Consolidated Statements of Operations (Gains) losses on qualifying cash flow hedges: FX forward contracts $ — $ — Revenues Commodity contracts (0.7 ) 0.9 Cost of products sold Swaps 0.2 — Interest expense Pre-tax (0.5 ) 0.9 Income taxes 0.2 (0.4 ) $ (0.3 ) $ 0.5 Gains on pension and postretirement items: Amortization of unrecognized prior service credits $ (0.2 ) $ (0.2 ) Selling, general and administrative Pre-tax (0.2 ) (0.2 ) Income taxes 0.1 0.1 $ (0.1 ) $ (0.1 ) The following summarizes amounts reclassified from each component of accumulated comprehensive income (loss) for the six months ended July 1, 2017 and July 2, 2016 : Amount Reclassified from AOCI Six months ended July 1, 2017 July 2, 2016 Affected Line Item in the Condensed (Gains) losses on qualifying cash flow hedges: FX forward contracts $ — $ 1.0 Revenues Commodity contracts (1.4 ) 1.6 Cost of products sold Swaps 0.3 — Interest expense Pre-tax (1.1 ) 2.6 Income taxes 0.4 (0.7 ) $ (0.7 ) $ 1.9 Gains on pension and postretirement items: Amortization of unrecognized prior service credits $ (0.4 ) $ (0.4 ) Selling, general and administrative Pre-tax (0.4 ) (0.4 ) Income taxes 0.1 0.1 $ (0.3 ) $ (0.3 ) Gain on sale of dry cooling business: Recognition of foreign currency translation adjustment $ — $ (40.4 ) Gain (loss) on sale of dry cooling business Common Stock in Treasury During the six months ended July 1, 2017 and July 2, 2016 , “Common stock in treasury” was decreased by the settlement of restricted stock units issued from treasury stock of $16.0 and $17.7 , respectively. Changes in Equity A summary of the changes in equity for the three months ended July 1, 2017 and July 2, 2016 is provided below: July 1, 2017 July 2, 2016 SPX Corporation Shareholders’ Equity Noncontrolling Interests Total Equity SPX Corporation Shareholders’ Equity Noncontrolling Interests Total Equity Equity, beginning of period $ 211.0 $ — $ 211.0 $ 322.8 $ (37.5 ) $ 285.3 Net income (loss) (9.0 ) — (9.0 ) 4.0 (1.0 ) 3.0 Net unrealized losses on qualifying cash flow hedges, net of tax benefit of $0.5 and $0.6 for the three months ended July 1, 2017 and July 2, 2016, respectively (0.9 ) — (0.9 ) (1.0 ) — (1.0 ) Pension and postretirement liability adjustment, net of tax benefit of $0.1 for the three months ended July 2, 2017 and July 2, 2016 (0.1 ) — (0.1 ) (0.1 ) — (0.1 ) Foreign currency translation adjustments 1.1 — 1.1 (2.3 ) (0.2 ) (2.5 ) Total comprehensive income (loss), net (8.9 ) — (8.9 ) 0.6 (1.2 ) (0.6 ) Incentive plan activity 3.6 — 3.6 1.9 — 1.9 Long-term incentive compensation expense 3.0 — 3.0 3.2 — 3.2 Restricted stock and restricted stock unit vesting, net of tax withholdings, and related tax benefit of $0.0 and $0.1 for the three months ended July 1, 2017 and July 2, 2016, respectively — — — 0.1 — 0.1 Adjustment related to redeemable noncontrolling interest (see Note 13) — — — (56.0 ) 38.7 (17.3 ) Equity, end of period $ 208.7 $ — $ 208.7 $ 272.6 $ — $ 272.6 A summary of the changes in equity for the six months ended July 1, 2017 and July 2, 2016 is provided below: July 1, 2017 July 2, 2016 SPX Noncontrolling Total SPX Noncontrolling Total Equity, beginning of period $ 191.6 $ — $ 191.6 $ 345.4 $ (37.1 ) $ 308.3 Net income (loss) 8.4 — 8.4 17.0 (0.4 ) 16.6 Net unrealized gains (losses) on qualifying cash flow hedges, net of tax benefit of $0.1 and $0.2 for the six months ended July 1, 2017 and July 2, 2016, respectively (0.2 ) — (0.2 ) 0.2 — 0.2 Pension and postretirement liability adjustment, net of tax benefit of $0.1 for the six months ended July 1, 2017 and July 2, 2016 (0.3 ) — (0.3 ) (0.3 ) — (0.3 ) Foreign currency translation adjustments (0.4 ) — (0.4 ) (41.0 ) (1.2 ) (42.2 ) Total comprehensive income (loss), net 7.5 — 7.5 (24.1 ) (1.6 ) (25.7 ) Incentive plan activity 7.4 — 7.4 4.6 — 4.6 Long-term incentive compensation expense 5.8 — 5.8 5.9 — 5.9 Restricted stock and restricted stock unit vesting, net of tax withholdings, and related tax provision of $0.0 and $1.5 for the six months ended July 1, 2017 and July 2, 2016, respectively (3.6 ) — (3.6 ) (3.2 ) — (3.2 ) Adjustment related to redeemable noncontrolling interest (see Note 13) — — — (56.0 ) 38.7 (17.3 ) Equity, end of period $ 208.7 $ — $ 208.7 $ 272.6 $ — $ 272.6 |
CONTINGENT LIABILITIES AND OTHE
CONTINGENT LIABILITIES AND OTHER MATTERS | 6 Months Ended |
Jul. 01, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENT LIABILITIES AND OTHER MATTERS | CONTINGENT LIABILITIES AND OTHER MATTERS General Numerous claims, complaints and proceedings arising in the ordinary course of business have been asserted or are pending against us or certain of our subsidiaries (collectively, “claims”). These claims relate to litigation matters (e.g., class actions and contracts, intellectual property, and competitive claims), environmental matters, product liability matters (predominately associated with alleged exposure to asbestos-containing materials), and other risk management matters (e.g., general liability, automobile, and workers’ compensation claims). Additionally, we may become subject to other claims of which we are currently unaware, which may be significant, or the claims of which we are aware may result in our incurring significantly greater loss than we anticipate. While we (and our subsidiaries) maintain property, cargo, auto, product, general liability, environmental, and directors’ and officers’ liability insurance and have acquired rights under similar policies in connection with acquisitions that we believe cover a significant portion of these claims, this insurance may be insufficient or unavailable (e.g., in the case of insurer insolvency) to protect us against potential loss exposures. Also, while we believe we are entitled to indemnification from third parties for some of these claims, these rights may be insufficient or unavailable to protect us against potential loss exposures. Our recorded liabilities related to these matters totaled $651.4 (including $606.1 for asbestos product liability matters) and $653.5 (including $605.6 for asbestos product liability matters) at July 1, 2017 and December 31, 2016 , respectively. Of these amounts, $615.7 and $621.0 are included in “Other long-term liabilities” within our condensed consolidated balance sheets at July 1, 2017 and December 31, 2016 , respectively, with the remainder included in “Accrued expenses.” The liabilities we record for these claims are based on a number of assumptions, including historical claims and payment experience and, with respect to asbestos claims, actuarial estimates of the future period during which additional claims are reasonably foreseeable. While we base our assumptions on facts currently known to us, they entail inherently subjective judgments and uncertainties. As a result, our current assumptions for estimating these liabilities may not prove accurate, and we may be required to adjust these liabilities in the future, which could result in charges to earnings. These variances relative to current expectations could have a material impact on our financial position and results of operations. Our asbestos-related claims are typical in certain of the industries in which we operate or pertain to legacy businesses we no longer operate. It is not unusual in these cases for fifty or more corporate entities to be named as defendants. We vigorously defend these claims, many of which are dismissed without payment, and the significant majority of costs related to these claims have historically been paid pursuant to our insurance arrangements. During the three months ended July 1, 2017 and July 2, 2016 , our payments for asbestos-related matters, net of insurance recoveries, were $1.2 and $1.3 , respectively. During the six months ended July 1, 2017 , our insurance recoveries for asbestos-related matters, net of payments, were $7.8 , which included cash proceeds received during the first quarter of 2017 of $8.5 related to a settlement reached with an insurance carrier. During the six months ended July 2, 2016 , our payments for asbestos-related matters, net of insurance recoveries, were $3.0 . A significant increase in claims, costs and/or issues with existing insurance coverage (e.g., dispute with or insolvency of insurer(s)) could have a material adverse impact on our share of future payments related to these matters, and, as such, have a material impact on our financial position, results of operations and cash flows. We have recorded insurance recovery assets associated with the asbestos product liability matters, with such amounts totaling $554.0 and $564.4 at July 1, 2017 and December 31, 2016 , respectively, and included in “Other assets” within our condensed consolidated balance sheets. These assets represent amounts that we believe we are or will be entitled to recover under agreements we have with insurance companies. The assets we record for these insurance recoveries are based on a number of assumptions, including the continued solvency of the insurers, and are subject to a variety of uncertainties. Our current assumptions for estimating these assets may not prove accurate, and we may be required to adjust these assets in the future, which could result in additional charges to earnings. These variances relative to current expectations could have a material impact on our financial position and results of operations. During the three and six months ended July 1, 2017 , we recorded a charge to “Other income (expense), net” of $3.0 associated with the settlement of a group of asbestos-related claims, while there were no such charges during the three and six months ended July 2, 2016 . Large Power Projects in South Africa The business environment surrounding our large power projects in South Africa remains difficult, as we have experienced delays, cost over-runs, and various other challenges associated with a complex set of contractual relationships among the end customer, prime contractors, various subcontractors (including us and our subcontractors), and various suppliers. We currently are involved in a number of claim disputes relating to these challenges. We are pursuing various commercial alternatives for addressing these challenges, in an attempt to mitigate our overall financial exposure. Over the last two years, we have implemented various controls and initiatives that have reduced the risk associated with our large power projects in South Africa, including more recent steps to accelerate the timeline for completing certain portions of the projects. In addition, we have experienced higher than expected costs as we complete certain scopes of work. Lastly, during the second quarter of 2017, we became aware of financial challenges facing one of our sub-contractors, which will negatively impact the ultimate cost of the related project scope. As a result of these efforts to accelerate certain timelines, the higher than expected costs on certain scopes of work, and the aforementioned sub-contractor financial challenges, we determined during the second quarter of 2017 that additional cost would be required in order to complete certain remaining portions of the projects. As such, we revised our estimates of revenues, costs and profits associated with the projects. These revisions resulted in a charge to “Income (loss) from continuing operations before income taxes” of $22.9 during the three and six months ended July 1, 2017, which is comprised of a reduction in revenue of $13.5 and an increase in cost of products sold of $9.4 . We recognize revenue associated with unapproved change orders and claims to the extent the related costs have been incurred and the amount of expected recovery is probable and reasonably estimable. At July 1, 2017 , the projected revenues related to our large power projects in South Africa included approximately $27.6 related to claims and unapproved change orders. We believe these amounts are recoverable under the provisions of the related contracts and reflect our best estimate of recoverable amounts. Although we believe that our current estimates of revenues, costs and profits relating to these projects are reasonable, it is possible that future revisions of such estimates could have a material effect on our condensed consolidated financial statements. Noncontrolling Interest in South African Subsidiary Our South African subsidiary, DBT Technologies (PTY) LTD (“DBT”), has a Black Economic Empowerment shareholder (the “BEE Partner”) that holds a 25.1% noncontrolling interest in DBT. Under the terms of the shareholder agreement between the BEE Partner and SPX Technologies (PTY) LTD (“SPX Technologies”), the BEE Partner had the option to put its ownership interest in DBT to SPX Technologies, the majority shareholder of DBT, at a redemption amount determined in accordance with the terms of the shareholder agreement (the “Put Option”). The BEE Partner notified SPX Technologies of its intention to exercise the Put Option and, on July 6, 2016, an Arbitration Tribunal declared that the BEE Partner was entitled to South African Rand 287.3 in connection with the exercise of the Put Option, having not considered an amount due from the BEE Partner under a promissory note of South African Rand 30.3 held by SPX Technologies. As a result, we have reflected the net redemption amount of South African Rand 257.0 (or $19.8 ) within “Accrued expenses” on our condensed consolidated balance sheet as of July 1, 2017 , with the related offset recorded to “Paid-in-capital” and “Accumulated other comprehensive income.” In addition, we reclassified $38.7 from “Noncontrolling Interests” to “Paid-in capital.” Lastly, under the two-class method of calculating earnings per share, we reflected an adjustment of $18.1 to “Net income (loss) attributable to SPX Corporation common shareholders” for the excess redemption amount of the Put Option (i.e., the increase in the redemption amount during the second quarter of 2016 in excess of fair value) in our calculations of basic and diluted earnings per share for the three and six months ended July 2, 2016 . SPX Technologies disagrees with the arbitration determination and will continue to pursue all available legal recourse in this matter. Patent Infringement Lawsuit Our subsidiary, SPX Cooling Technologies, Inc. (“SPXCT”), is a defendant in a legal action brought by Baltimore Aircoil Company (“BAC”) alleging that a SPXCT product infringes United States Patent No. 7,107,782, entitled “Evaporative Heat Exchanger and Method.” BAC filed suit on July 16, 2013 in the United States District Court for the District of Maryland (the “District Court”) seeking monetary damages and injunctive relief. On November 4, 2016, the jury for the trial in the District Court found in favor of SPXCT. The verdict by the District Court is currently under appeal by BAC. We believe that we will ultimately be successful in any future judicial processes; however, to the extent we are not successful, the outcome could have a material adverse effect on our financial position, results of operations, and cash flows. Litigation Matters We are subject to other legal matters that arise in the normal course of business. We believe these matters are either without merit or of a kind that should not have a material effect, individually or in the aggregate, on our financial position, results of operations or cash flows; however, we cannot assure you that these proceedings or claims will not have a material effect on our financial position, results of operations or cash flows. Environmental Matters Our operations and properties are subject to federal, state, local and foreign regulatory requirements relating to environmental protection. It is our policy to comply fully with all applicable requirements. As part of our effort to comply, we have a comprehensive environmental compliance program that includes environmental audits conducted by internal and external independent professionals, as well as regular communications with our operating units regarding environmental compliance requirements and anticipated regulations. Based on current information, we believe that our operations are in substantial compliance with applicable environmental laws and regulations, and we are not aware of any violations that could have a material effect, individually or in the aggregate, on our business, financial condition, and results of operations or cash flows. As of July 1, 2017 , we had liabilities for site investigation and/or remediation at 28 sites ( 30 sites at December 31, 2016) that we own or control. In addition, while we believe that we maintain adequate accruals to cover the costs of site investigation and/or remediation, we cannot provide assurance that new matters, developments, laws and regulations, or stricter interpretations of existing laws and regulations will not materially affect our business or operations in the future. Our environmental accruals cover anticipated costs, including investigation, remediation, and operation and maintenance of clean-up sites. Our estimates are based primarily on investigations and remediation plans established by independent consultants, regulatory agencies and potentially responsible third parties. Accordingly, our estimates may change based on future developments, including new or changes in existing environmental laws or policies, differences in costs required to complete anticipated actions from estimates provided, future findings of investigation or remediation actions, or alteration to the expected remediation plans. It is our policy to revise an estimate once the revision becomes probable and the amount of change can be reasonably estimated. We generally do not discount our environmental accruals and do not reduce them by anticipated insurance recoveries. We take into account third-party indemnification from financially viable parties in determining our accruals where there is no dispute regarding the right to indemnification. In the case of contamination at offsite, third-party disposal sites, as of July 1, 2017 , we have been notified that we are potentially responsible and have received other notices of potential liability pursuant to various environmental laws at 22 sites at which the liability has not been settled, of which 8 sites have been active in the past few years. These laws may impose liability on certain persons that are considered jointly and severally liable for the costs of investigation and remediation of hazardous substances present at these sites, regardless of fault or legality of the original disposal. These persons include the present or former owners or operators of the site and companies that generated, disposed of or arranged for the disposal of hazardous substances at the site. We are considered a “de minimis” potentially responsible party at most of the sites, and we estimate that our aggregate liability, if any, related to these sites is not material to our condensed consolidated financial statements. We conduct extensive environmental due diligence with respect to potential acquisitions, including environmental site assessments and such further testing as we may deem warranted. If an environmental matter is identified, we estimate the cost and either establish a liability, purchase insurance or obtain an indemnity from a financially sound seller; however, in connection with our acquisitions or dispositions, we may assume or retain significant environmental liabilities, some of which we may be unaware. The potential costs related to these environmental matters and the possible impact on future operations are uncertain due in part to the complexity of government laws and regulations and their interpretations, the varying costs and effectiveness of various clean-up technologies, the uncertain level of insurance or other types of recovery, and the questionable level of our responsibility. We record a liability when it is both probable and the amount can be reasonably estimated. In our opinion, after considering accruals established for such purposes, the cost of remedial actions for compliance with the present laws and regulations governing the protection of the environment are not expected to have a material impact, individually or in the aggregate, on our financial position, results of operations or cash flows. Self-insured Risk Management Matters We are self-insured for certain of our workers’ compensation, automobile, product and general liability, disability and health costs, and we believe that we maintain adequate accruals to cover our retained liability. Our accruals for risk management matters are determined by us, are based on claims filed and estimates of claims incurred but not yet reported, and generally are not discounted. We consider a number of factors, including third-party actuarial valuations, when making these determinations. We maintain third-party stop-loss insurance policies to cover certain liability costs in excess of predetermined retained amounts. The insurance may be insufficient or unavailable (e.g., because of insurer insolvency) to protect us against loss exposure. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jul. 01, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Uncertain Tax Benefits As of July 1, 2017 , we had gross unrecognized tax benefits of $37.9 (net unrecognized tax benefits of $25.2 ). Of these net unrecognized tax benefits, $20.3 would impact our effective tax rate from continuing operations if recognized. We classify interest and penalties related to unrecognized tax benefits as a component of our income tax provision. As of July 1, 2017 , gross accrued interest totaled $4.5 (net accrued interest of $2.9 ). As of July 1, 2017 , we had no accrual for penalties included in our unrecognized tax benefits. Based on the outcome of certain examinations or as a result of the expiration of statutes of limitations for certain jurisdictions, we believe that within the next 12 months it is reasonably possible that our previously unrecognized tax benefits could decrease by approximately $6.0 to $10.0 . The previously unrecognized tax benefits relate to a variety of tax matters relating to deemed income inclusions, transfer pricing and various state matters. Other Tax Matters For the three months ended July 1, 2017 , we recorded an income tax provision of $6.0 on $2.3 of a pre-tax loss from continuing operations, resulting in an effective tax rate of (260.9)% . This compares to an income tax provision for the three months ended July 2, 2016 of $3.8 on $10.3 of pre-tax income from continuing operations, resulting in an effective tax rate of 36.9% . The most significant item impacting the income tax provision for the second quarter of 2017 was $24.6 of foreign losses generated during the period for which no tax benefit was recognized, as future realization of any such tax benefit is considered unlikely. The most significant item impacting the income tax provision for the second quarter of 2016 was $5.0 of foreign losses generated during the period for which no tax benefit was recognized, as future realization of any such tax benefit is considered unlikely. For the six months ended July 1, 2017 , we recorded an income tax provision of $9.2 on $11.2 of pre-tax income from continuing operations, resulting in an effective tax rate of 82.1% . This compares to an income tax provision for the six months ended July 2, 2016 of $9.6 on $36.3 of pre-tax income from continuing operations, resulting in an effective tax rate of 26.4% . The most significant items impacting the income tax provision for the first six months of 2017 were (i) $29.6 of foreign losses generated during the period for which no benefit was recognized, as future realization of any such tax benefit is considered unlikely, and (ii) $1.2 of excess tax benefits resulting from stock-based compensation awards which vested in the period. The most significant items impacting the income tax provision for the first six months of 2016 were (i) $0.3 of income taxes that were provided in connection with the $16.7 gain that was recorded on the sale of the dry cooling business and (ii) $9.7 of foreign losses generated during the period for which no tax benefit was recognized, as future realization of any such tax benefit is considered unlikely . We perform reviews of our income tax positions on a continuous basis and accrue for potential uncertain positions when we determine that an uncertain position meets the criteria of the Income Taxes Topic of the Codification. Accruals for these uncertain tax positions are recorded in “Income taxes payable” and “Deferred and other income taxes” in the accompanying condensed consolidated balance sheets based on the expectation as to the timing of when the matters will be resolved. As events change and resolutions occur, these accruals are adjusted, such as in the case of audit settlements with taxing authorities. We have filed our federal income tax returns for the 2013, 2014 and 2015 tax years and those returns are subject to examination. With regard to all open tax years, we believe any contingencies are adequately provided for. State income tax returns generally are subject to examination for a period of three to five years after filing the respective tax returns. The impact on such tax returns of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. We have various state income tax returns in the process of examination. We believe any uncertain tax positions related to these examinations have been adequately provided for. We have various foreign income tax returns under examination. The most significant of these are in Germany for the 2010 through 2014 tax years. We believe that any uncertain tax positions related to these examinations have been adequately provided for. An unfavorable resolution of one or more of the above matters could have a material adverse effect on our results of operations or cash flows in the quarter and year in which an adjustment is recorded or the tax is due or paid. As audits and examinations are still in process, the timing of the ultimate resolution and any payments that may be required for the above matters cannot be determined at this time. |
FAIR VALUE
FAIR VALUE | 6 Months Ended |
Jul. 01, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Preference is given to observable inputs. These two types of inputs create the following fair value hierarchy: • Level 1 — Quoted prices for identical instruments in active markets. • Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level 3 — Significant inputs to the valuation model are unobservable. There were no changes during the periods presented to the valuation techniques we use to measure asset and liability fair values on a recurring or nonrecurring basis. Valuation Methodologies Used to Measure Fair Value on a Non-Recurring Basis Parent Guarantees and Bonds Associated with Balcke Dürr — As indicated in Note 1, in connection with the sale of Balcke Dürr, parent company guarantees of approximately €79.0 and bank and surety bonds of approximately €79.0 existing at the time of the sale will remain in place through each instrument’s expiration date, with such expiration dates ranging from 2017 to 2022. These guarantees and bonds provide protections for Balcke Dürr customers in regard to advance payments, performance, and warranties on projects in existence at the time of sale. In addition, certain bonds relate to lease obligations and foreign tax matters in existence at the time of sale. Balcke Dürr and the Buyer have provided us a full indemnity in the event that any of these guarantees or bonds are called. Also, Balcke Dürr has provided cash collateral of €4.0 and mutares AG has provided a guarantee of €5.0 as a security for the above indemnifications. Summarized below are the liability (related to the parent company guarantees and bank and surety bonds) and asset (related to the cash collateral and guarantee provided by mutares AG) recorded at the time of sale, along with the change in the liability and the asset during the six months ended July 1, 2017 . Six months ended July 1, 2017 Guarantees and Bonds Liability Indemnification Assets Balance as of December 31, 2016 (1) (2) $ 9.9 $ 4.8 Reduction/Amortization for the period (3) (1.1 ) (1.3 ) Impact of changes in foreign currency rates 0.9 0.5 Balance as of July 1, 2017 (2) $ 9.7 $ 4.0 ___________________________ (1) In connection with the sale, we estimated the fair value of the existing parent company guarantees and bank and surety bonds considering the probability of default by Balcke Dürr and an estimate of the amount we would be obligated to pay in the event of a default. Additionally, we estimated the fair value of the cash collateral provided by Balcke Dürr and guarantee provided by mutares AG based on the terms and conditions and relative risk associated with each of these securities (unobservable inputs - Level 3). (2) Balance associated with the guarantees and bonds is reflected within “Other long-term liabilities,” while the balance associated with the indemnification assets is reflected within “Other assets.” (3) We reduce the liability generally at the earlier of the completion of the related underlying project milestones or the expiration of the guarantees or bonds. We amortize the asset based on the expiration terms of each of the securities. We record the reduction of the liability and the amortization of the asset to “Other income (expense), net.” As of July 1, 2017 , the outstanding parent company guarantees and bank and surety bonds totaled €79.0 and €64.5 , respectively. In addition, the cash collateral of €4.0 and the guarantee provided by mutares AG of €5.0 continue to serve as security for the indemnifications noted above. Goodwill, Indefinite-Lived Intangible and Other Long-Lived Assets — Certain of our non-financial assets are subject to impairment analysis, including long-lived assets, indefinite-lived intangible assets and goodwill. We review the carrying amounts of such assets whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable or at least annually for indefinite-lived intangible assets and goodwill. Any resulting asset impairment would require that the instrument be recorded at its fair value. Valuation Methodologies Used to Measure Fair Value on a Recurring Basis Derivative Financial Instruments — Our financial derivative assets and liabilities include interest rate swaps, FX forward contracts, FX embedded derivatives and commodity contracts, valued using valuation models based on observable market inputs such as forward rates, interest rates, our own credit risk and the credit risk of our counterparties, which comprise investment-grade financial institutions. Based on these inputs, the derivative assets and liabilities are classified within Level 2 of the valuation hierarchy. We have not made any adjustments to the inputs obtained from the independent sources. Based on our continued ability to enter into forward contracts, we consider the markets for our fair value instruments active. We primarily use the income approach, which uses valuation techniques to convert future amounts to a single present amount. As of July 1, 2017 , there has been no significant impact to the fair value of our derivative liabilities due to our own credit risk, as the related instruments are collateralized under our senior credit facilities. Similarly, there has been no significant impact to the fair value of our derivative assets based on our evaluation of our counterparties’ credit risks. Indebtedness and Other — The estimated fair value of our debt instruments as of July 1, 2017 and December 31, 2016 approximated the related carrying values due primarily to the variable market-based interest rates for such instruments. See Note 10 for further details. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jul. 01, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | We prepared the condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information normally required by accounting principles generally accepted in the United States (“GAAP”) can be condensed or omitted. The financial statements represent our accounts after the elimination of intercompany transactions and, in our opinion, include the adjustments (consisting only of normal and recurring items) necessary for their fair presentation. |
Variable Interest Entity | We account for investments in unconsolidated companies where we exercise significant influence but do not have control using the equity method. In determining whether we are the primary beneficiary of a variable interest entity (“VIE”), we perform a qualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties to determine which party has the power to direct the activities of the VIE that most significantly impact the entity’s economic performance, and which party has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. We have an interest in a VIE, in which we are not the primary beneficiary, as a result of the sale of Balcke Dürr. See below and in Note 15 for further discussion of the sale of Balcke Dürr. All other VIEs are considered immaterial, individually and in aggregate, to our condensed consolidated financial statements. |
Spin-Off of FLOW Business and Sale of Dry Cooling Business | Sale of Dry Cooling Business On March 30, 2016, we completed the sale of our dry cooling business, a business previously within our Engineered Solutions reportable segment, to Paharpur Cooling Towers Limited (“Paharpur”) for cash proceeds of $45.9 (net of cash transferred with the business of $3.0 ), resulting in a gain during the quarter ended April 2, 2016 of $17.9 . The gain includes a reclassification from “Equity” of other comprehensive income totaling $40.4 related to foreign currency translation. During the second quarter of 2016, we reduced the gain by $1.2 in connection with adjustments to certain liabilities retained from the sale. During the third quarter of 2016, we increased the gain by $1.7 in connection with the settlement of the final working capital associated with the business. In connection with the sale, we provided customary indemnifications to Paharpur. Accordingly, it is possible that the sales price and resulting gain for this divestiture may be materially adjusted in subsequent periods. |
Use of Estimates | Sale of Balcke Dürr Business On December 30, 2016, we completed the sale of Balcke Dürr to a subsidiary of mutares AG (the “Buyer”) for cash proceeds of less than $0.1 . In addition, we left $21.1 of cash in Balcke Dürr at the time of the sale and provided the Buyer with a non-interest bearing loan of $9.1 , payable in installments due at the end of 2018 and 2019. The results of Balcke Dürr are presented as a discontinued operation within the accompanying condensed consolidated financial statements. In connection with the sale, we recorded a net loss of $78.6 in the fourth quarter of 2016 to “Gain (loss) on disposition of discontinued operations, net of tax.” During the first quarter of 2017, we reduced the net loss associated with the sale of Balcke Dürr by $7.2 . The reduction was comprised of an additional income tax benefit recorded for the sale of $8.4 , partially offset by adjustments to liabilities retained in connection with the sale of $1.2 . During the second quarter of 2017, we increased the net loss associated with the sale of Balcke Dürr by $0.4 , with the increase resulting from adjustments to liabilities retained in connection with the sale. The purchase agreement provided that existing parent company guarantees of approximately €79.0 and bank and surety bonds of approximately €79.0 would remain in place through each instrument’s expiration date, with such expiration dates ranging from 2017 to 2022. Balcke Dürr and the Buyer have provided us a full indemnity in the event that any of these guarantees or bonds are called. Also, Balcke Dürr has provided cash collateral of €4.0 and mutares AG has provided a guarantee of €5.0 as a security for the above indemnifications. In connection with the sale, we recorded a liability for the estimated fair value of the guarantees and bonds and an asset for the estimated fair value of the cash collateral and indemnities provided. See Note 15 for further details regarding these estimated fair values. The final sales price for Balcke Dürr is subject to adjustment based on cash and working capital existing at the closing date and is subject to agreement with the Buyer. Final agreement of the cash and working capital amounts with the Buyer has yet to occur. Accordingly, it is possible that the sales price and resulting loss for this divestiture may be materially adjusted in subsequent periods. |
Fiscal Period | We establish actual interim closing dates using a fiscal calendar, which requires our businesses to close their books on the Saturday closest to the end of the first calendar quarter, with the second and third quarters being 91 days in length. Our fourth quarter ends on December 31. The interim closing dates for the first, second and third quarters of 2017 are April 1, July 1 and September 30, compared to the respective April 2, July 2 and October 1, 2016 dates. We had two fewer days in the first quarter of 2017 and will have one more day in the fourth quarter of 2017 than in the respective 2016 periods. We do not believe the two fewer days during the first quarter of 2017 had a material impact on our consolidated operating results for the first half of 2017, when compared to the consolidated operating results for the first half of 2016. |
New Accounting Pronouncements | NEW ACCOUNTING PRONOUNCEMENTS The following is a summary of new accounting pronouncements that apply or may apply to our business. In May 2014, the Financial Accounting Standards Board (“FASB”) issued a new standard on revenue recognition that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new standard contains a five-step approach that entities will apply to determine the measurement of revenue and timing of when it is recognized, including (i) identifying the contract(s) with a customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to separate performance obligations, and (v) recognizing revenue when (or as) each performance obligation is satisfied. The new standard requires a number of disclosures intended to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue, and the related cash flows. The disclosures include qualitative and quantitative information about contracts with customers, significant judgments made in applying the revenue guidance, and assets recognized from the costs to obtain or fulfill a contract. The standard is effective for interim and annual reporting periods beginning after December 15, 2017 and we currently plan to adopt the standard using the modified retrospective transition method. The modified retrospective transition approach will recognize any changes from the beginning of the year of initial application through retained earnings with no restatement of comparative periods. We are continuing to assess the potential effect that the standard is expected to have on our consolidated financial statements. We believe the more significant effects on our existing accounting policies will be associated with our power transformer business. Under the new standard, revenue for our power transformers will be recognized over time, which is a change from our current accounting policy of recognizing revenue for power transformers at a point in time. In February 2016, the FASB issued an amendment to existing guidance that requires lessees to recognize assets and liabilities for the rights and obligations created by long-term leases. In addition, this amendment requires new qualitative and quantitative disclosures about leasing arrangements. This standard is effective for annual periods beginning on or after December 15, 2018 for public business entities, and interim periods within those fiscal years. Early adoption is permitted, and adoption must be applied on a modified retrospective basis. We are currently evaluating the effect this new standard will have on our condensed consolidated financial statements. In March 2016, the FASB issued an amendment to existing guidance that simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This standard is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those annual reporting periods. We adopted this guidance on January 1, 2017, and, thus, excess income tax benefits recognized on stock-based compensation awards are now being reflected, on a prospective basis, in our condensed consolidated statement of operations as a component of the provision for income taxes (versus the previous requirement to reflect such amounts within “equity”). In accordance with this prospective adoption, we recognized income tax benefits of $0.2 and $1.2 in our condensed consolidated statements of operations for the three and six months ended July 1, 2017, respectively. In addition, we prospectively adopted the amendment to present excess income tax benefits on share-based compensation awards as an operating activity within our condensed consolidated statement of cash flows (versus the previous requirement to reflect such amounts as a financing activity), which resulted in the classification of $1.2 of such income tax benefits within operating activities of the condensed consolidated statement of cash flows for the six months ended July 1, 2017. Cash paid on employees’ behalf related to shares withheld for income taxes payable continues to be classified as a financing activity. Lastly, we elected to continue estimating stock-based compensation award forfeitures in determining the amount of compensation expense to be recognized in each period. In August 2016, the FASB issued an amendment to existing guidance to reduce diversity in practice in how certain cash receipts and cash payments are presented in the statement of cash flows. This amendment provides clarification on eight specific cash flow presentation issues. The issues include, but are not limited to, debt prepayment or extinguishment costs, settlement of zero-coupon debt, proceeds from the settlement of insurance claims, and cash receipts from payments on beneficial interests in securitization transactions. This amendment is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods. Early adoption is permitted. We are currently evaluating the effect this amendment will have on our condensed consolidated financial statements. In January 2017, the FASB issued an amendment to simplify the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires that an entity recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. This amendment is effective for annual reporting periods beginning after December 31, 2019, including interim periods within those annual reporting periods. Early adoption is permitted. The impact of this amendment on our consolidated financial statements will depend on the results of future goodwill impairment tests. In March 2017, the FASB issued an amendment to revise the presentation of net periodic pension and postretirement benefit cost. The amendment requires the service cost component to be presented separately from the other components of net periodic pension and postretirement benefit cost. Service cost will be presented with other employee compensation costs within operations. The other components of net periodic pension and postretirement benefit cost, such as interest cost, expected return on plan assets, amortization of prior service cost/credits, and gains or losses, are required to be separately presented outside of operations. This amendment is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual periods. The amendment to the presentation in the income statement of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost shall be applied retrospectively. Early adoption is permitted. We will adopt the standard effective January 1, 2018. The adoption is not expected to have a material impact on our condensed consolidated financial statements. See Note 9 for details of our pension and postretirement expense. |
Inventories, net | Inventories include material, labor and factory overhead costs and are reduced, when necessary, to estimated net realizable values. Certain domestic inventories are valued using the last-in, first-out (“LIFO”) method. These inventories were approximately 55% and 51% of total inventory at July 1, 2017 and December 31, 2016 , respectively. Other inventories are valued using the first-in, first-out (“FIFO”) method. |
Goodwill and Other Intangible Assets | We perform our annual goodwill impairment testing during the fourth quarter in conjunction with our annual financial planning process, with such testing based primarily on events and circumstances existing as of the end of the third quarter. In addition, we test goodwill for impairment on a more frequent basis if there are indications of potential impairment. A significant amount of judgment is involved in determining if an indication of impairment has occurred between annual testing dates. Such indication may include: a significant decline in expected future cash flows; a significant adverse change in legal factors or the business climate; unanticipated competition; and a more likely than not expectation of selling or disposing all, or a portion, of a reporting unit. We perform our annual trademarks impairment testing during the fourth quarter, or on a more frequent basis if there are indications of potential impairment. The fair values of our trademarks are determined by applying estimated royalty rates to projected revenues, with the resulting cash flows discounted at a rate of return that reflects current market conditions (fair value based on unobservable inputs - Level 3, as defined in Note 15). The primary basis for these projected revenues is the annual operating plan for each of the related businesses, which is prepared in the fourth quarter of each year. |
Currency Forward Contracts and Currency Forward Embedded Derivatives | Currency Forward Contracts and Currency Forward Embedded Derivatives From time to time, we enter into forward contracts to manage the exposure on contracts with forecasted transactions denominated in non-functional currencies and to manage the risk of transaction gains and losses associated with assets/liabilities denominated in currencies other than the functional currency of certain subsidiaries (“FX forward contracts”). In addition, some of our contracts contain currency forward embedded derivatives (“FX embedded derivatives”), because the currency of exchange is not “clearly and closely” related to the functional currency of either party to the transaction. Certain of our FX forward contracts are designated as cash flow hedges. To the extent these derivatives are effective in offsetting the variability of the hedged cash flows, changes in the derivatives’ fair value are not included in current earnings, but are included in accumulated other comprehensive income (“AOCI”). These changes in fair value are reclassified into earnings as a component of revenues or cost of products sold, as applicable, when the forecasted transaction impacts earnings. In addition, if the forecasted transaction is no longer probable, the cumulative change in the derivatives’ fair value is recorded as a component of “Other income (expense), net” in the period in which the transaction is no longer considered probable of occurring. To the extent a previously designated hedging transaction is no longer an effective hedge, any ineffectiveness measured in the hedging relationship is recorded in earnings in the period in which it occurs. |
Potential Uncertain Positions | We perform reviews of our income tax positions on a continuous basis and accrue for potential uncertain positions when we determine that an uncertain position meets the criteria of the Income Taxes Topic of the Codification. Accruals for these uncertain tax positions are recorded in “Income taxes payable” and “Deferred and other income taxes” in the accompanying condensed consolidated balance sheets based on the expectation as to the timing of when the matters will be resolved. As events change and resolutions occur, these accruals are adjusted, such as in the case of audit settlements with taxing authorities. We have filed our federal income tax returns for the 2013, 2014 and 2015 tax years and those returns are subject to examination. With regard to all open tax years, we believe any contingencies are adequately provided for. State income tax returns generally are subject to examination for a period of three to five years after filing the respective tax returns. The impact on such tax returns of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. We have various state income tax returns in the process of examination. We believe any uncertain tax positions related to these examinations have been adequately provided for. We have various foreign income tax returns under examination. The most significant of these are in Germany for the 2010 through 2014 tax years. We believe that any uncertain tax positions related to these examinations have been adequately provided for. An unfavorable resolution of one or more of the above matters could have a material adverse effect on our results of operations or cash flows in the quarter and year in which an adjustment is recorded or the tax is due or paid. As audits and examinations are still in process, the timing of the ultimate resolution and any payments that may be required for the above matters cannot be determined at this time. |
Fair Value | Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Preference is given to observable inputs. These two types of inputs create the following fair value hierarchy: • Level 1 — Quoted prices for identical instruments in active markets. • Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level 3 — Significant inputs to the valuation model are unobservable. There were no changes during the periods presented to the valuation techniques we use to measure asset and liability fair values on a recurring or nonrecurring basis. Goodwill, Indefinite-Lived Intangible and Other Long-Lived Assets — Certain of our non-financial assets are subject to impairment analysis, including long-lived assets, indefinite-lived intangible assets and goodwill. We review the carrying amounts of such assets whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable or at least annually for indefinite-lived intangible assets and goodwill. Any resulting asset impairment would require that the instrument be recorded at its fair value. Valuation Methodologies Used to Measure Fair Value on a Recurring Basis Derivative Financial Instruments — Our financial derivative assets and liabilities include interest rate swaps, FX forward contracts, FX embedded derivatives and commodity contracts, valued using valuation models based on observable market inputs such as forward rates, interest rates, our own credit risk and the credit risk of our counterparties, which comprise investment-grade financial institutions. Based on these inputs, the derivative assets and liabilities are classified within Level 2 of the valuation hierarchy. We have not made any adjustments to the inputs obtained from the independent sources. Based on our continued ability to enter into forward contracts, we consider the markets for our fair value instruments active. We primarily use the income approach, which uses valuation techniques to convert future amounts to a single present amount. As of July 1, 2017 , there has been no significant impact to the fair value of our derivative liabilities due to our own credit risk, as the related instruments are collateralized under our senior credit facilities. Similarly, there has been no significant impact to the fair value of our derivative assets based on our evaluation of our counterparties’ credit risks. Indebtedness and Other — The estimated fair value of our debt instruments as of July 1, 2017 and December 31, 2016 approximated the related carrying values due primarily to the variable market-based interest rates for such instruments. See Note 10 for further details. |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of disposal groups, including discontinued operations, income statement, balance sheet and additional disclosures | The following table presents selected financial information for Balcke Dürr that is included within discontinued operations in the condensed consolidated statement of cash flows for the six months ended July 2, 2016 : Non-cash items included in loss from discontinued operations: Depreciation and amortization $ 1.0 Capital expenditures 0.6 For the three and six months ended July 1, 2017 and July 2, 2016 , the table below presents a reconciliation of discontinued operations activity to the related amounts in the condensed consolidated statements of operations: Three months ended Six months ended July 1, July 2, July 1, July 2, Balcke Dürr Loss from discontinued operations $ (0.5 ) $ (4.3 ) $ (2.6 ) $ (12.1 ) Income tax benefit 0.1 1.2 9.4 3.5 Income (loss) from discontinued operations, net (0.4 ) (3.1 ) 6.8 (8.6 ) All other Loss from discontinued operations (0.4 ) (0.6 ) (0.9 ) (1.8 ) Income tax benefit 0.1 0.2 0.5 0.3 Loss from discontinued operations, net (0.3 ) (0.4 ) (0.4 ) (1.5 ) Total Loss from discontinued operations (0.9 ) (4.9 ) (3.5 ) (13.9 ) Income tax benefit 0.2 1.4 9.9 3.8 Income (loss) from discontinued operations, net $ (0.7 ) $ (3.5 ) $ 6.4 $ (10.1 ) Major classes of line items constituting pre-tax loss and after-tax loss of Balcke Dürr for the three and six months ended July 2, 2016 are shown below: Three months ended Six months ended July 2, July 2, Revenues $ 41.5 $ 70.2 Costs and expenses: Cost of products sold 37.8 66.6 Selling, general and administrative 8.2 16.1 Special charges (credits), net (0.4 ) (0.6 ) Other expense, net (0.2 ) (0.2 ) Loss before taxes (4.3 ) (12.1 ) Income tax benefit 1.2 3.5 Loss from discontinued operations, net of tax $ (3.1 ) $ (8.6 ) |
INFORMATION ON REPORTABLE SEG23
INFORMATION ON REPORTABLE SEGMENTS (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Segment Reporting [Abstract] | |
Schedule of financial data for reportable segments and other operating segments | Financial data for our reportable segments for the three and six months ended July 1, 2017 and July 2, 2016 are presented below: Three months ended Six months ended July 1, July 2, July 1, July 2, Revenues: (1) HVAC segment $ 120.3 $ 121.9 $ 230.4 $ 233.5 Detection and Measurement segment 64.5 60.1 118.1 115.5 Engineered Solutions segment (2) 164.9 189.4 341.8 383.0 Consolidated revenues $ 349.7 $ 371.4 $ 690.3 $ 732.0 Income (loss): HVAC segment $ 15.4 $ 17.1 $ 31.9 $ 33.0 Detection and Measurement segment 17.3 12.1 28.5 23.1 Engineered Solutions segment (2) (12.0 ) 3.0 (5.4 ) 5.9 Total income for segments 20.7 32.2 55.0 62.0 Corporate expense (11.3 ) (8.6 ) (22.7 ) (20.0 ) Long-term incentive compensation expense (3.6 ) (3.4 ) (6.8 ) (6.1 ) Pension and postretirement expense (1.2 ) (2.8 ) (2.6 ) (3.8 ) Special charges, net (0.5 ) (2.4 ) (1.0 ) (2.9 ) Impairment of intangible assets — — — (4.0 ) Gain (loss) on sale of dry cooling business — (1.2 ) — 16.7 Consolidated operating income $ 4.1 $ 13.8 $ 21.9 $ 41.9 ___________________________ (1) Under the percentage-of-completion method, we recognized revenues of $65.8 and $80.1 in the three months ended July 1, 2017 and July 2, 2016 , respectively. For the six months ended July 1, 2017 and July 2, 2016 , revenues under the percentage-of-completion method were $144.6 and $184.4 , respectively. Costs and estimated earnings in excess of billings on uncompleted contracts accounted for under the percentage-of-completion method were $31.3 and $33.9 as of July 1, 2017 and December 31, 2016 , respectively, and are reported as a component of ‘‘Accounts receivable, net’’ in the condensed consolidated balance sheets. Billings in excess of costs and estimated earnings on uncompleted contracts accounted for under the percentage-of-completion method were $42.0 and $53.3 as of July 1, 2017 and December 31, 2016 , respectively, and are reported as a component of ‘‘Accrued expenses’’ in the condensed consolidated balance sheets. (2) As further discussed in Note 13, during the second quarter of 2017, we made revisions to our expected revenues and profits on our large power projects in South Africa. As a result of these revisions, we reduced revenue and segment income by $13.5 and $22.9 , respectively, for the three and six months ended July 1, 2017 . |
SPECIAL CHARGES, NET (Tables)
SPECIAL CHARGES, NET (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of special charges, net | Special charges, net, for the three and six months ended July 1, 2017 and July 2, 2016 are described in more detail below: Three months ended Six months ended July 1, July 2, July 1, July 2, HVAC segment $ 0.3 $ — $ 0.4 $ — Detection and Measurement segment — — 0.3 0.2 Engineered Solutions segment 0.2 2.4 0.2 2.7 Corporate — — 0.1 — Total $ 0.5 $ 2.4 $ 1.0 $ 2.9 |
Schedule of the analysis of the entity's restructuring liabilities | The following is an analysis of our restructuring liabilities for the six months ended July 1, 2017 and July 2, 2016 : Six months ended July 1, July 2, Balance at beginning of year $ 0.9 $ 1.6 Special charges (1) 1.0 0.3 Utilization — cash (1.0 ) (1.2 ) Currency translation adjustment and other — (0.1 ) Balance at end of period $ 0.9 $ 0.6 ___________________________ (1) The six months ended July 1, 2017 and July 2, 2016 included $0.0 and $2.6 of non-cash charges, respectively, that did not impact the restructuring liability. |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories at July 1, 2017 and December 31, 2016 comprised the following: July 1, December 31, Finished goods $ 49.7 $ 43.0 Work in process 59.8 50.0 Raw materials and purchased parts 70.9 64.9 Total FIFO cost 180.4 157.9 Excess of FIFO cost over LIFO inventory value (12.1 ) (12.2 ) Total inventories, net $ 168.3 $ 145.7 |
GOODWILL AND OTHER INTANGIBLE26
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in the carrying amount of goodwill, by reportable segment and other operating segments | The changes in the carrying amount of goodwill, by reportable segment, were as follows: December 31, Impairments Foreign Currency Translation and Other July 1, HVAC segment Gross goodwill $ 258.5 $ — $ 3.3 $ 261.8 Accumulated impairments (144.2 ) — (0.3 ) (144.5 ) Goodwill 114.3 — 3.0 117.3 Detection and Measurement segment Gross goodwill 214.4 — 1.4 215.8 Accumulated impairments (134.2 ) — (1.1 ) (135.3 ) Goodwill 80.2 — 0.3 80.5 Engineered Solutions segment Gross goodwill 351.4 — 4.6 356.0 Accumulated impairments (205.5 ) — (4.2 ) (209.7 ) Goodwill 145.9 — 0.4 146.3 Total Gross goodwill 824.3 — 9.3 833.6 Accumulated impairments (483.9 ) — (5.6 ) (489.5 ) Goodwill $ 340.4 $ — $ 3.7 $ 344.1 |
Schedule of identifiable intangible assets | Identifiable intangible assets at July 1, 2017 and December 31, 2016 comprised the following: July 1, 2017 December 31, 2016 Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value Intangible assets with determinable lives: Customer relationships $ 1.4 $ (1.4 ) $ — $ 1.4 $ (1.4 ) $ — Technology 2.1 (0.4 ) 1.7 2.1 (0.4 ) 1.7 Patents 4.5 (4.5 ) — 4.5 (4.5 ) — Other 12.7 (7.7 ) 5.0 12.7 (7.4 ) 5.3 20.7 (14.0 ) 6.7 20.7 (13.7 ) 7.0 Trademarks with indefinite lives 111.7 — 111.7 110.9 — 110.9 Total (1) $ 132.4 $ (14.0 ) $ 118.4 $ 131.6 $ (13.7 ) $ 117.9 ___________________________ (1) Changes in the gross carrying values of “Other Intangibles, Net” during the six months ended July 1, 2017 related to foreign currency translation. |
WARRANTY (Tables)
WARRANTY (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Product Warranties Disclosures [Abstract] | |
Schedule of product warranty accrual | The following is an analysis of our product warranty accrual for the periods presented: Six months ended July 1, July 2, Balance at beginning of year $ 35.8 $ 36.3 Provisions 5.2 6.6 Usage (8.1 ) (8.2 ) Currency translation adjustment 0.2 (0.3 ) Balance at end of period 33.1 34.4 Less: Current portion of warranty 12.7 15.8 Non-current portion of warranty $ 20.4 $ 18.6 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Postretirement Plans | |
Employee Benefit Plans | |
Schedule of net periodic benefit (income) expense | Postretirement Plans Three months ended Six months ended July 1, July 2, July 1, July 2, Service cost $ — $ — $ — $ — Interest cost 0.9 1.1 1.9 2.1 Amortization of unrecognized prior service credits (0.2 ) (0.2 ) (0.4 ) (0.4 ) Net periodic postretirement benefit expense $ 0.7 $ 0.9 $ 1.5 $ 1.7 |
United States | Pension Plan | |
Employee Benefit Plans | |
Schedule of net periodic benefit (income) expense | Net periodic benefit expense (income) for our pension and postretirement plans included the following components: Domestic Pension Plans Three months ended Six months ended July 1, July 2, July 1, July 2, Service cost $ 0.1 $ 0.1 $ 0.2 $ 0.2 Interest cost 3.3 3.5 6.6 7.1 Expected return on plan assets (2.5 ) (3.2 ) (5.0 ) (6.4 ) Recognized net actuarial loss — 1.8 — 1.8 Total net periodic pension benefit expense $ 0.9 $ 2.2 $ 1.8 $ 2.7 |
Foreign Plan | Pension Plan | |
Employee Benefit Plans | |
Schedule of net periodic benefit (income) expense | Foreign Pension Plans Three months ended Six months ended July 1, July 2, July 1, July 2, Service cost $ — $ — $ — $ — Interest cost 1.2 1.5 2.4 2.9 Expected return on plan assets (1.6 ) (1.8 ) (3.1 ) (3.5 ) Net periodic pension benefit income $ (0.4 ) $ (0.3 ) $ (0.7 ) $ (0.6 ) |
INDEBTEDNESS (Tables)
INDEBTEDNESS (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of debt activity (both current and non-current) | The following summarizes our debt activity (both current and non-current) for the six months ended July 1, 2017 : December 31, Borrowings Repayments Other (4) July 1, Revolving loans $ — $ 16.0 $ (16.0 ) $ — $ — Term loan (1) 339.6 — (8.7 ) 0.2 331.1 Trade receivables financing arrangement (2) — 40.0 (19.0 ) — 21.0 Other indebtedness (3) 16.6 21.4 (24.1 ) 1.4 15.3 Total debt 356.2 $ 77.4 $ (67.8 ) $ 1.6 367.4 Less: short-term debt 14.8 33.9 Less: current maturities of long-term debt 17.9 18.1 Total long-term debt $ 323.5 $ 315.4 ___________________________ (1) The term loan is repayable in quarterly installments of 1.25% of the original loan balance of $350.0 . The remaining balance is repayable in full on September 24, 2020. Balances are net of unamortized debt issuance costs of $1.4 and $1.6 at July 1, 2017 and December 31, 2016 , respectively. (2) Under this arrangement, we can borrow, on a continuous basis, up to $50.0 , as available. At July 1, 2017 , we had $22.9 of available borrowing capacity under this facility. (3) Primarily includes balances under a purchase card program of $3.0 and $3.9 , capital lease obligations of $2.4 and $1.7 , and borrowings under lines of credit in South Africa and China totaling $ 9.2 and $ 10.2 at July 1, 2017 and December 31, 2016 , respectively. The purchase card program allows for payment beyond the normal payment terms for goods and services acquired under the program. As this arrangement extends the payment of these purchases beyond their normal payment terms through third-party lending institutions, we have classified these amounts as short-term debt. (4) “Other” primarily includes debt assumed, foreign currency translation on any debt instruments denominated in currencies other than the U.S. dollar, and the impact of amortization of debt issuance costs associated with the term loan. |
SHAREHOLDERS' EQUITY AND LONG30
SHAREHOLDERS' EQUITY AND LONG-TERM INCENTIVE COMPENSATION (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION | |
Schedule of weighted-average shares outstanding used in the computation of basic and diluted income per share | The following table sets forth the number of weighted-average shares outstanding used in the computation of basic and diluted income (loss) per share: Three months ended Six months ended July 1, July 2, July 1, July 2, Weighted-average number of common shares used in basic income per share 42.388 41.594 42.249 41.443 Dilutive securities — Employee stock options, restricted stock shares and restricted stock units — — 1.373 0.311 Weighted-average number of common shares and dilutive securities used in diluted income per share 42.388 41.594 43.622 41.754 |
Schedule of changes in the components of accumulated other comprehensive income (loss) | The changes in the components of accumulated other comprehensive income, net of tax, for the three months ended July 1, 2017 were as follows: Foreign Currency Translation Adjustment Net Unrealized Gains on Qualifying Cash Flow Hedges (1) Pension and Postretirement Liability Adjustment (2) Total Balance at beginning of period $ 228.2 $ 2.2 $ 3.7 $ 234.1 Other comprehensive income (loss) before reclassifications 1.1 (0.6 ) — 0.5 Amounts reclassified from accumulated other comprehensive income — (0.3 ) (0.1 ) (0.4 ) Current-period other comprehensive income (loss) 1.1 (0.9 ) (0.1 ) 0.1 Balance at end of period $ 229.3 $ 1.3 $ 3.6 $ 234.2 __________________________ (1) Net of tax provision of $0.8 and $1.3 as of July 1, 2017 and April 1, 2017 , respectively. (2) Net of tax provision of $2.6 and $2.7 as of July 1, 2017 and April 1, 2017 , respectively. The balances as of July 1, 2017 and April 1, 2017 represent net unamortized prior service credits. The changes in the components of accumulated other comprehensive income, net of tax, for the six months ended July 1, 2017 were as follows: Foreign Net Unrealized Gains (1) Pension and (2) Total Balance at beginning of period $ 229.7 $ 1.5 $ 3.9 $ 235.1 Other comprehensive income (loss) before reclassifications (0.4 ) 0.5 — 0.1 Amounts reclassified from accumulated other comprehensive income — (0.7 ) (0.3 ) (1.0 ) Current-period other comprehensive loss (0.4 ) (0.2 ) (0.3 ) (0.9 ) Balance at end of period $ 229.3 $ 1.3 $ 3.6 $ 234.2 _________________________ (1) Net of tax provision of $0.8 and $0.9 as of July 1, 2017 and December 31, 2016 , respectively. (2) Net of tax provision of $2.6 and $2.7 as of July 1, 2017 and December 31, 2016 . The balances as of July 1, 2017 and December 31, 2016 represent net unamortized prior service credits. The changes in the components of accumulated other comprehensive income, net of tax, for the three months ended July 2, 2016 were as follows: Foreign Currency Translation Adjustment Net Unrealized Losses on Qualifying Cash Flow Hedges (1) Pension and Postretirement Liability Adjustment (2) Total Balance at beginning of period $ 241.9 $ (0.6 ) $ 4.3 $ 245.6 Other comprehensive loss before reclassifications (2.3 ) (1.5 ) — (3.8 ) Amounts reclassified from accumulated other comprehensive income (loss) — 0.5 (0.1 ) 0.4 Current-period other comprehensive loss (2.3 ) (1.0 ) (0.1 ) (3.4 ) Balance at end of period $ 239.6 $ (1.6 ) $ 4.2 $ 242.2 ___________________________ (1) Net of tax benefit of $1.0 and $0.4 as of July 2, 2016 and April 2, 2016 , respectively. (2) Net of tax provision of $3.0 and $3.1 as of July 2, 2016 and April 2, 2016 , respectively. The balances as of July 2, 2016 and April 2, 2016 include net unamortized prior service credits. The changes in the components of accumulated other comprehensive income, net of tax, for the six months ended July 2, 2016 were as follows: Foreign Net Unrealized Losses (2) Pension and (3) Total Balance at beginning of period $ 280.6 $ (1.8 ) $ 4.5 $ 283.3 Other comprehensive loss before reclassifications (0.6 ) (1.7 ) — (2.3 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) (40.4 ) 1.9 (0.3 ) (38.8 ) Current-period other comprehensive income (loss) (41.0 ) 0.2 (0.3 ) (41.1 ) Balance at end of period $ 239.6 $ (1.6 ) $ 4.2 $ 242.2 __________________________ (1) In connection with the sale of our dry cooling business, we reclassified $40.4 of other comprehensive income related to foreign currency translation to “Gain (loss) on sale of dry cooling business.” (2) Net of tax benefit of $1.0 and $0.8 as of July 2, 2016 and December 31, 2015 , respectively. (3) Net of tax provision of $3.0 and $3.1 as of July 2, 2016 and December 31, 2015 , respectively. The balances as of July 2, 2016 and December 31, 2015 include net unamortized prior service credits. |
Schedule of amounts reclassified from each component of accumulated comprehensive income (loss) | The following summarizes amounts reclassified from each component of accumulated comprehensive income for the three months ended July 1, 2017 and July 2, 2016 : Amount Reclassified from AOCI Three months ended July 1, 2017 July 2, 2016 Affected Line Item in the Condensed Consolidated Statements of Operations (Gains) losses on qualifying cash flow hedges: FX forward contracts $ — $ — Revenues Commodity contracts (0.7 ) 0.9 Cost of products sold Swaps 0.2 — Interest expense Pre-tax (0.5 ) 0.9 Income taxes 0.2 (0.4 ) $ (0.3 ) $ 0.5 Gains on pension and postretirement items: Amortization of unrecognized prior service credits $ (0.2 ) $ (0.2 ) Selling, general and administrative Pre-tax (0.2 ) (0.2 ) Income taxes 0.1 0.1 $ (0.1 ) $ (0.1 ) The following summarizes amounts reclassified from each component of accumulated comprehensive income (loss) for the six months ended July 1, 2017 and July 2, 2016 : Amount Reclassified from AOCI Six months ended July 1, 2017 July 2, 2016 Affected Line Item in the Condensed (Gains) losses on qualifying cash flow hedges: FX forward contracts $ — $ 1.0 Revenues Commodity contracts (1.4 ) 1.6 Cost of products sold Swaps 0.3 — Interest expense Pre-tax (1.1 ) 2.6 Income taxes 0.4 (0.7 ) $ (0.7 ) $ 1.9 Gains on pension and postretirement items: Amortization of unrecognized prior service credits $ (0.4 ) $ (0.4 ) Selling, general and administrative Pre-tax (0.4 ) (0.4 ) Income taxes 0.1 0.1 $ (0.3 ) $ (0.3 ) Gain on sale of dry cooling business: Recognition of foreign currency translation adjustment $ — $ (40.4 ) Gain (loss) on sale of dry cooling business |
Schedule of changes in equity | A summary of the changes in equity for the three months ended July 1, 2017 and July 2, 2016 is provided below: July 1, 2017 July 2, 2016 SPX Corporation Shareholders’ Equity Noncontrolling Interests Total Equity SPX Corporation Shareholders’ Equity Noncontrolling Interests Total Equity Equity, beginning of period $ 211.0 $ — $ 211.0 $ 322.8 $ (37.5 ) $ 285.3 Net income (loss) (9.0 ) — (9.0 ) 4.0 (1.0 ) 3.0 Net unrealized losses on qualifying cash flow hedges, net of tax benefit of $0.5 and $0.6 for the three months ended July 1, 2017 and July 2, 2016, respectively (0.9 ) — (0.9 ) (1.0 ) — (1.0 ) Pension and postretirement liability adjustment, net of tax benefit of $0.1 for the three months ended July 2, 2017 and July 2, 2016 (0.1 ) — (0.1 ) (0.1 ) — (0.1 ) Foreign currency translation adjustments 1.1 — 1.1 (2.3 ) (0.2 ) (2.5 ) Total comprehensive income (loss), net (8.9 ) — (8.9 ) 0.6 (1.2 ) (0.6 ) Incentive plan activity 3.6 — 3.6 1.9 — 1.9 Long-term incentive compensation expense 3.0 — 3.0 3.2 — 3.2 Restricted stock and restricted stock unit vesting, net of tax withholdings, and related tax benefit of $0.0 and $0.1 for the three months ended July 1, 2017 and July 2, 2016, respectively — — — 0.1 — 0.1 Adjustment related to redeemable noncontrolling interest (see Note 13) — — — (56.0 ) 38.7 (17.3 ) Equity, end of period $ 208.7 $ — $ 208.7 $ 272.6 $ — $ 272.6 A summary of the changes in equity for the six months ended July 1, 2017 and July 2, 2016 is provided below: July 1, 2017 July 2, 2016 SPX Noncontrolling Total SPX Noncontrolling Total Equity, beginning of period $ 191.6 $ — $ 191.6 $ 345.4 $ (37.1 ) $ 308.3 Net income (loss) 8.4 — 8.4 17.0 (0.4 ) 16.6 Net unrealized gains (losses) on qualifying cash flow hedges, net of tax benefit of $0.1 and $0.2 for the six months ended July 1, 2017 and July 2, 2016, respectively (0.2 ) — (0.2 ) 0.2 — 0.2 Pension and postretirement liability adjustment, net of tax benefit of $0.1 for the six months ended July 1, 2017 and July 2, 2016 (0.3 ) — (0.3 ) (0.3 ) — (0.3 ) Foreign currency translation adjustments (0.4 ) — (0.4 ) (41.0 ) (1.2 ) (42.2 ) Total comprehensive income (loss), net 7.5 — 7.5 (24.1 ) (1.6 ) (25.7 ) Incentive plan activity 7.4 — 7.4 4.6 — 4.6 Long-term incentive compensation expense 5.8 — 5.8 5.9 — 5.9 Restricted stock and restricted stock unit vesting, net of tax withholdings, and related tax provision of $0.0 and $1.5 for the six months ended July 1, 2017 and July 2, 2016, respectively (3.6 ) — (3.6 ) (3.2 ) — (3.2 ) Adjustment related to redeemable noncontrolling interest (see Note 13) — — — (56.0 ) 38.7 (17.3 ) Equity, end of period $ 208.7 $ — $ 208.7 $ 272.6 $ — $ 272.6 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 6 Months Ended |
Jul. 01, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Nonrecurring | Summarized below are the liability (related to the parent company guarantees and bank and surety bonds) and asset (related to the cash collateral and guarantee provided by mutares AG) recorded at the time of sale, along with the change in the liability and the asset during the six months ended July 1, 2017 . Six months ended July 1, 2017 Guarantees and Bonds Liability Indemnification Assets Balance as of December 31, 2016 (1) (2) $ 9.9 $ 4.8 Reduction/Amortization for the period (3) (1.1 ) (1.3 ) Impact of changes in foreign currency rates 0.9 0.5 Balance as of July 1, 2017 (2) $ 9.7 $ 4.0 ___________________________ (1) In connection with the sale, we estimated the fair value of the existing parent company guarantees and bank and surety bonds considering the probability of default by Balcke Dürr and an estimate of the amount we would be obligated to pay in the event of a default. Additionally, we estimated the fair value of the cash collateral provided by Balcke Dürr and guarantee provided by mutares AG based on the terms and conditions and relative risk associated with each of these securities (unobservable inputs - Level 3). (2) Balance associated with the guarantees and bonds is reflected within “Other long-term liabilities,” while the balance associated with the indemnification assets is reflected within “Other assets.” (3) We reduce the liability generally at the earlier of the completion of the related underlying project milestones or the expiration of the guarantees or bonds. We amortize the asset based on the expiration terms of each of the securities. We record the reduction of the liability and the amortization of the asset to “Other income (expense), net.” |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) € in Millions, $ in Millions | Dec. 30, 2016USD ($) | Mar. 30, 2016USD ($) | Jul. 01, 2017USD ($) | Apr. 01, 2017USD ($) | Dec. 31, 2016USD ($) | Oct. 01, 2016USD ($) | Jul. 02, 2016USD ($) | Apr. 02, 2016USD ($) | Jul. 01, 2017USD ($) | Jul. 02, 2016USD ($) | Dec. 31, 2016USD ($) | Jul. 01, 2017EUR (€) | Dec. 30, 2016EUR (€) |
Discontinued Operations | |||||||||||||
Gain on sale of dry cooling business | $ 0 | $ (1.2) | $ 0 | $ 16.7 | |||||||||
Gain (loss) on disposition of discontinued operations, net of tax | 0.7 | 0.4 | (6.4) | 1.5 | |||||||||
Dry Cooling Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||||||||
Discontinued Operations | |||||||||||||
Net proceeds from sale of dry cooling business | $ 45.9 | ||||||||||||
Net cash transferred with the business | $ 3 | ||||||||||||
Gain on sale of dry cooling business | $ 17.9 | 16.7 | |||||||||||
Increase (reduction) of gain (loss) | $ 1.7 | $ (1.2) | |||||||||||
Dry Cooling Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Amount Reclassified from AOCI | Foreign Currency Translation Adjustment | |||||||||||||
Discontinued Operations | |||||||||||||
Gain on sale of dry cooling business | $ 0 | $ 40.4 | $ 40.4 | ||||||||||
Balcke Durr Business | Discontinued Operations, Disposed of by Sale | Buyer | |||||||||||||
Discontinued Operations | |||||||||||||
Net proceeds from sale of dry cooling business | $ 0.1 | ||||||||||||
Net cash transferred with the business | 21.1 | ||||||||||||
Increase (reduction) of gain (loss) | $ (0.4) | $ 7.2 | |||||||||||
Gain (loss) on disposition of discontinued operations, net of tax | $ 78.6 | ||||||||||||
Additional tax benefit recorded for the sale | 8.4 | ||||||||||||
Adjustments to liabilities retained in connection with the sale | $ 1.2 | ||||||||||||
Amount of guarantees | € | € 79 | € 79 | |||||||||||
Balcke Durr Business | Discontinued Operations, Disposed of by Sale | Buyer | Bank and Surety Bonds | |||||||||||||
Discontinued Operations | |||||||||||||
Amount of guarantees | € | 64.5 | 79 | |||||||||||
Balcke Durr Business | Discontinued Operations, Disposed of by Sale | Buyer | Balcke-Durr | |||||||||||||
Discontinued Operations | |||||||||||||
Cash collateral | € | 4 | 4 | |||||||||||
Balcke Durr Business | Discontinued Operations, Disposed of by Sale | Buyer | mutares AG | Indemnification Agreement | |||||||||||||
Discontinued Operations | |||||||||||||
Amount of guarantees | € | € 5 | € 5 | |||||||||||
Balcke Durr Business | Discontinued Operations, Disposed of by Sale | Buyer | Loans Receivable | |||||||||||||
Discontinued Operations | |||||||||||||
Non-interest bearing loan | $ 9.1 |
NEW ACCOUNTING PRONOUNCEMENTS N
NEW ACCOUNTING PRONOUNCEMENTS NEW ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jul. 01, 2017 | Jul. 01, 2017 | Jul. 02, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Classification of excess income tax benefits on share-based compensation awards within operating activities | $ (15.4) | $ (39.4) | |
Accounting Standards Update 2016-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Benefit for excess tax benefits related to stock compensation awards | $ 0.2 | 1.2 | |
Classification of excess income tax benefits on share-based compensation awards within operating activities | $ 1.2 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jul. 01, 2017 | Apr. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Costs and expenses: | |||||
Loss from discontinued operations, net of tax | $ 0 | $ (3.1) | $ 0 | $ (8.6) | |
Income (loss) from discontinued operations and related income taxes | |||||
Loss from discontinued operations | (0.9) | (4.9) | (3.5) | (13.9) | |
Income tax benefit | 0.2 | 1.4 | 9.9 | 3.8 | |
Income (loss) from discontinued operations, net of tax | (0.7) | (3.5) | 6.4 | (10.1) | |
Balcke Durr Business | Discontinued Operations, Held-for-sale | |||||
Results of operations for discontinued operations | |||||
Revenues | 41.5 | 70.2 | |||
Costs and expenses: | |||||
Costs of products sold | 37.8 | 66.6 | |||
Selling, general and administrative | 8.2 | 16.1 | |||
Special charges | (0.4) | (0.6) | |||
Other expense, net | (0.2) | (0.2) | |||
Loss before taxes | (4.3) | (12.1) | |||
Income tax benefit | 1.2 | 3.5 | |||
Loss from discontinued operations, net of tax | (3.1) | (8.6) | |||
Non-cash items included in loss from discontinued operations: | |||||
Depreciation and amortization | 1 | ||||
Capital expenditures | 0.6 | ||||
Income (loss) from discontinued operations and related income taxes | |||||
Loss from discontinued operations | (4.3) | (12.1) | |||
Income tax benefit | 1.2 | 3.5 | |||
Income (loss) from discontinued operations, net of tax | (3.1) | (8.6) | |||
Balcke Durr Business | Discontinued Operations, Disposed of by Sale | |||||
Income (loss) from discontinued operations and related income taxes | |||||
Loss from discontinued operations | (0.5) | (2.6) | |||
Income tax benefit | 0.1 | 9.4 | |||
Income (loss) from discontinued operations, net of tax | (0.4) | 6.8 | |||
Balcke Durr Business | Discontinued Operations, Disposed of by Sale | Buyer | |||||
Non-cash items included in loss from discontinued operations: | |||||
Increase (reduction) of gain (loss) | (0.4) | $ 7.2 | |||
Additional tax benefit recorded for the sale | 8.4 | ||||
Adjustments to liabilities retained in connection with the sale | $ 1.2 | ||||
Other businesses sold prior to the earliest date presented in the financial statements | Discontinued Operations, Disposed of by Sale | |||||
Non-cash items included in loss from discontinued operations: | |||||
Increase (reduction) of gain (loss) | 0.3 | (0.4) | (0.4) | (1.5) | |
All other | Discontinued Operations, Disposed of by Sale | |||||
Income (loss) from discontinued operations and related income taxes | |||||
Loss from discontinued operations | (0.4) | (0.6) | (0.9) | (1.8) | |
Income tax benefit | 0.1 | 0.2 | 0.5 | 0.3 | |
Income (loss) from discontinued operations, net of tax | $ (0.3) | $ (0.4) | $ (0.4) | $ (1.5) |
INFORMATION ON REPORTABLE SEG35
INFORMATION ON REPORTABLE SEGMENTS (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jul. 01, 2017USD ($)country | Jul. 02, 2016USD ($) | Jul. 01, 2017USD ($)countrysegment | Jul. 02, 2016USD ($) | Dec. 31, 2016USD ($) | ||
Information on reportable segments and other operating segments | ||||||
Number of reportable segments | segment | 3 | |||||
Revenues: | ||||||
Consolidated revenues | [1] | $ 349.7 | $ 371.4 | $ 690.3 | $ 732 | |
Revenues recognized under percentage of completion method | 65.8 | 80.1 | 144.6 | 184.4 | ||
Income | ||||||
Pension and postretirement expense | (7.5) | (8.6) | ||||
Special charges, net | (0.5) | (2.4) | (1) | (2.9) | ||
Impairment of intangible assets | 0 | 0 | 0 | (4) | ||
Gain (loss) on sale of dry cooling business | 0 | (1.2) | 0 | 16.7 | ||
Operating income | 4.1 | 13.8 | 21.9 | 41.9 | ||
Assets | ||||||
Costs and estimated earnings in excess of billings | 31.3 | 31.3 | $ 33.9 | |||
Liabilities | ||||||
Billings in excess of costs and estimated earnings on uncompleted contracts reported as a component of accrued expenses | 42 | 42 | $ 53.3 | |||
Operating Segments | ||||||
Income | ||||||
Operating income | 20.7 | 32.2 | 55 | 62 | ||
Corporate | ||||||
Income | ||||||
Corporate expense | (11.3) | (8.6) | (22.7) | (20) | ||
Special charges, net | 0 | 0 | (0.1) | 0 | ||
Segment Reconciling Items | ||||||
Income | ||||||
Long-term incentive compensation expense | (3.6) | (3.4) | (6.8) | (6.1) | ||
Pension and postretirement expense | (1.2) | (2.8) | (2.6) | (3.8) | ||
Special charges, net | (0.5) | (2.4) | (1) | (2.9) | ||
Impairment of intangible assets | 0 | 0 | 0 | (4) | ||
Gain (loss) on sale of dry cooling business | 0 | (1.2) | 0 | 16.7 | ||
HVAC segment | ||||||
Revenues: | ||||||
Consolidated revenues | [1] | 120.3 | 121.9 | 230.4 | 233.5 | |
Income | ||||||
Special charges, net | (0.3) | 0 | (0.4) | 0 | ||
HVAC segment | Operating Segments | ||||||
Income | ||||||
Operating income | 15.4 | 17.1 | 31.9 | 33 | ||
Detection and Measurement segment | ||||||
Revenues: | ||||||
Consolidated revenues | [1] | 64.5 | 60.1 | 118.1 | 115.5 | |
Income | ||||||
Special charges, net | 0 | 0 | (0.3) | (0.2) | ||
Detection and Measurement segment | Operating Segments | ||||||
Income | ||||||
Operating income | 17.3 | 12.1 | 28.5 | 23.1 | ||
Engineered Solutions segment | ||||||
Revenues: | ||||||
Consolidated revenues | [1],[2] | 164.9 | 189.4 | 341.8 | 383 | |
Income | ||||||
Special charges, net | (0.2) | (2.4) | (0.2) | (2.7) | ||
Engineered Solutions segment | South Africa | Large Power Projects | ||||||
Revenues: | ||||||
Consolidated revenues | (13.5) | |||||
Engineered Solutions segment | Operating Segments | ||||||
Income | ||||||
Operating income | [2] | (12) | $ 3 | (5.4) | $ 5.9 | |
Engineered Solutions segment | Operating Segments | South Africa | Large Power Projects | ||||||
Income | ||||||
Operating income | $ (22.9) | |||||
Engineered Solutions segment | Operating Segments | South Africa | Large Power Projects | Contracts Accounted for under Percentage of Completion | ||||||
Revenues: | ||||||
Consolidated revenues | [1] | (13.5) | ||||
Income | ||||||
Operating income | [2] | $ (22.9) | ||||
Minimum | ||||||
Information on reportable segments and other operating segments | ||||||
Number of countries in which entity operates | country | 15 | 15 | ||||
Number of countries in which entity sells its products and services | country | 100 | 100 | ||||
[1] | Under the percentage-of-completion method, we recognized revenues of $65.8 and $80.1 in the three months ended July 1, 2017 and July 2, 2016, respectively. For the six months ended July 1, 2017 and July 2, 2016, revenues under the percentage-of-completion method were $144.6 and $184.4, respectively. Costs and estimated earnings in excess of billings on uncompleted contracts accounted for under the percentage-of-completion method were $31.3 and $33.9 as of July 1, 2017 and December 31, 2016, respectively, and are reported as a component of ‘‘Accounts receivable, net’’ in the condensed consolidated balance sheets. Billings in excess of costs and estimated earnings on uncompleted contracts accounted for under the percentage-of-completion method were $42.0 and $53.3 as of July 1, 2017 and December 31, 2016, respectively, and are reported as a component of ‘‘Accrued expenses’’ in the condensed consolidated balance sheets. | |||||
[2] | As further discussed in Note 13, during the second quarter of 2017, we made revisions to our expected revenues and profits on our large power projects in South Africa. As a result of these revisions, we reduced revenue and segment income by $13.5 and $22.9, respectively, for the three and six months ended July 1, 2017. |
SPECIAL CHARGES, NET (Details)
SPECIAL CHARGES, NET (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | ||
Special Charges, Net | |||||
Special charges, net | $ 0.5 | $ 2.4 | $ 1 | $ 2.9 | |
Expected charges to be incurred | 0.1 | 0.1 | |||
Restructuring liabilities | |||||
Balance at beginning of year | 0.9 | 1.6 | |||
Special charges | [1] | 1 | 0.3 | ||
Cash spending on restructuring actions | (1) | (1.2) | |||
Currency translation adjustment and other | 0 | (0.1) | |||
Balance at end of period | 0.9 | 0.6 | 0.9 | 0.6 | |
Non-cash special charges | 0 | 2.6 | |||
Corporate | |||||
Special Charges, Net | |||||
Special charges, net | 0 | 0 | 0.1 | 0 | |
HVAC segment | |||||
Special Charges, Net | |||||
Special charges, net | 0.3 | 0 | 0.4 | 0 | |
Detection and Measurement segment | |||||
Special Charges, Net | |||||
Special charges, net | 0 | 0 | 0.3 | 0.2 | |
Engineered Solutions segment | |||||
Special Charges, Net | |||||
Special charges, net | $ 0.2 | $ 2.4 | $ 0.2 | 2.7 | |
Engineered Solutions segment | SPX Heat Transfer Business | |||||
Special Charges, Net | |||||
Asset impairment charges | $ 2.6 | ||||
[1] | The six months ended July 1, 2017 and July 2, 2016 included $0.0 and $2.6 of non-cash charges, respectively, that did not impact the restructuring liability. |
INVENTORIES, NET (Details)
INVENTORIES, NET (Details) - USD ($) $ in Millions | Jul. 01, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 49.7 | $ 43 |
Work in process | 59.8 | 50 |
Raw materials and purchased parts | 70.9 | 64.9 |
Total FIFO cost | 180.4 | 157.9 |
Excess of FIFO cost over LIFO inventory value | (12.1) | (12.2) |
Total inventories, net | $ 168.3 | $ 145.7 |
Domestic inventories, valued using the last-in, first-out ("LIFO") method, as a percentage of total inventory | 55.00% | 51.00% |
GOODWILL AND OTHER INTANGIBLE38
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) $ in Millions | 6 Months Ended |
Jul. 01, 2017USD ($) | |
Changes in the carrying amount of goodwill | |
Gross goodwill, beginning of the period | $ 824.3 |
Accumulated impairments, balance at the beginning of the period | (483.9) |
Goodwill, balance at the beginning of the period | 340.4 |
Gross goodwill, Foreign Currency Translation and Other | 9.3 |
Accumulated impairments, Foreign Currency Translation and Other | (5.6) |
Goodwill, Foreign Currency Translation and Other | 3.7 |
Gross goodwill, end of the period | 833.6 |
Accumulated impairments, balance at the end of the period | (489.5) |
Goodwill, balance at the end of the period | 344.1 |
HVAC segment | |
Changes in the carrying amount of goodwill | |
Gross goodwill, beginning of the period | 258.5 |
Accumulated impairments, balance at the beginning of the period | (144.2) |
Goodwill, balance at the beginning of the period | 114.3 |
Gross goodwill, Foreign Currency Translation and Other | 3.3 |
Accumulated impairments, Foreign Currency Translation and Other | (0.3) |
Goodwill, Foreign Currency Translation and Other | 3 |
Gross goodwill, end of the period | 261.8 |
Accumulated impairments, balance at the end of the period | (144.5) |
Goodwill, balance at the end of the period | 117.3 |
Detection and Measurement segment | |
Changes in the carrying amount of goodwill | |
Gross goodwill, beginning of the period | 214.4 |
Accumulated impairments, balance at the beginning of the period | (134.2) |
Goodwill, balance at the beginning of the period | 80.2 |
Gross goodwill, Foreign Currency Translation and Other | 1.4 |
Accumulated impairments, Foreign Currency Translation and Other | (1.1) |
Goodwill, Foreign Currency Translation and Other | 0.3 |
Gross goodwill, end of the period | 215.8 |
Accumulated impairments, balance at the end of the period | (135.3) |
Goodwill, balance at the end of the period | 80.5 |
Engineered Solutions segment | |
Changes in the carrying amount of goodwill | |
Gross goodwill, beginning of the period | 351.4 |
Accumulated impairments, balance at the beginning of the period | (205.5) |
Goodwill, balance at the beginning of the period | 145.9 |
Gross goodwill, Foreign Currency Translation and Other | 4.6 |
Accumulated impairments, Foreign Currency Translation and Other | (4.2) |
Goodwill, Foreign Currency Translation and Other | 0.4 |
Gross goodwill, end of the period | 356 |
Accumulated impairments, balance at the end of the period | (209.7) |
Goodwill, balance at the end of the period | $ 146.3 |
GOODWILL AND OTHER INTANGIBLE39
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Jul. 01, 2017 | Jul. 02, 2016 | Apr. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | Dec. 31, 2016 | ||
Intangible assets with determinable lives | |||||||
Gross Carrying Value | $ 20,700,000 | $ 20,700,000 | $ 20,700,000 | ||||
Accumulated Amortization | [1] | (14,000,000) | (14,000,000) | (13,700,000) | |||
Net Carrying Value | 6,700,000 | 6,700,000 | 7,000,000 | ||||
Intangible assets with indefinite lives | |||||||
Gross carrying value, Total | [1] | 132,400,000 | 132,400,000 | 131,600,000 | |||
Net Carrying Value, Total | [1] | 118,400,000 | 118,400,000 | 117,900,000 | |||
Impairment of intangible assets | 0 | $ 0 | 0 | $ 4,000,000 | |||
HVAC segment | |||||||
Intangible assets with determinable lives | |||||||
Net Carrying Value | 4,000,000 | 4,000,000 | |||||
Intangible assets with indefinite lives | |||||||
Trademarks | 89,300,000 | 89,300,000 | |||||
Detection and Measurement segment | |||||||
Intangible assets with indefinite lives | |||||||
Trademarks | 10,000,000 | 10,000,000 | |||||
Engineered Solutions segment | |||||||
Intangible assets with determinable lives | |||||||
Net Carrying Value | 2,700,000 | 2,700,000 | |||||
Intangible assets with indefinite lives | |||||||
Trademarks | 12,400,000 | 12,400,000 | |||||
Trademarks with indefinite lives | |||||||
Intangible assets with indefinite lives | |||||||
Trademarks | 111,700,000 | 111,700,000 | 110,900,000 | ||||
Trademarks with indefinite lives | SPX Heat Transfer Business | |||||||
Intangible assets with indefinite lives | |||||||
Impairment of intangible assets | $ 4,000,000 | 0 | |||||
Customer relationships | |||||||
Intangible assets with determinable lives | |||||||
Gross Carrying Value | 1,400,000 | 1,400,000 | 1,400,000 | ||||
Accumulated Amortization | (1,400,000) | (1,400,000) | (1,400,000) | ||||
Net Carrying Value | 0 | 0 | 0 | ||||
Technology | |||||||
Intangible assets with determinable lives | |||||||
Gross Carrying Value | 2,100,000 | 2,100,000 | 2,100,000 | ||||
Accumulated Amortization | (400,000) | (400,000) | (400,000) | ||||
Net Carrying Value | 1,700,000 | 1,700,000 | 1,700,000 | ||||
Patents | |||||||
Intangible assets with determinable lives | |||||||
Gross Carrying Value | 4,500,000 | 4,500,000 | 4,500,000 | ||||
Accumulated Amortization | (4,500,000) | (4,500,000) | (4,500,000) | ||||
Net Carrying Value | 0 | 0 | 0 | ||||
Other | |||||||
Intangible assets with determinable lives | |||||||
Gross Carrying Value | 12,700,000 | 12,700,000 | 12,700,000 | ||||
Accumulated Amortization | (7,700,000) | (7,700,000) | (7,400,000) | ||||
Net Carrying Value | $ 5,000,000 | $ 5,000,000 | $ 5,300,000 | ||||
[1] | Changes in the gross carrying values of “Other Intangibles, Net” during the six months ended July 1, 2017 related to foreign currency translation. |
WARRANTY (Details)
WARRANTY (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jul. 01, 2017 | Jul. 02, 2016 | |
Analysis of product warranty accrual | ||
Balance at beginning of year | $ 35.8 | $ 36.3 |
Provisions | 5.2 | 6.6 |
Usage | (8.1) | (8.2) |
Currency translation adjustment | 0.2 | (0.3) |
Balance at end of period | 33.1 | 34.4 |
Less: Current portion of warranty | 12.7 | 15.8 |
Non-current portion of warranty | $ 20.4 | $ 18.6 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
SIARP | ||||
Employee Benefit Plans | ||||
Percentage of projected benefit obligation | 22.00% | |||
Lump sum payment in lieu of future pension benefit | $ 2.7 | |||
Charge to net periodic pension benefit expense | (0.8) | |||
Postretirement Plans | ||||
Net periodic pension/postretirement benefit expense | ||||
Service cost | $ 0 | 0 | $ 0 | $ 0 |
Interest cost | 0.9 | 1.1 | 1.9 | 2.1 |
Amortization of unrecognized prior service credits | (0.2) | (0.2) | (0.4) | (0.4) |
Net periodic pension benefit income | 0.7 | 0.9 | 1.5 | 1.7 |
United States | Pension Plan | ||||
Net periodic pension/postretirement benefit expense | ||||
Service cost | 0.1 | 0.1 | 0.2 | 0.2 |
Interest cost | 3.3 | 3.5 | 6.6 | 7.1 |
Expected return on plan assets | (2.5) | (3.2) | (5) | (6.4) |
Recognized net actuarial loss | 0 | 1.8 | 0 | 1.8 |
Net periodic pension benefit income | 0.9 | $ 2.2 | 1.8 | 2.7 |
United States | Pension Plan | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | SPX Flow, Inc | ||||
Employee Benefit Plans | ||||
Percentage of projected benefit obligation | 9.00% | |||
Lump sum payment in lieu of future pension benefit | $ 25.2 | |||
Charge to net periodic pension benefit expense | (1) | |||
Foreign Plan | Pension Plan | ||||
Net periodic pension/postretirement benefit expense | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 1.2 | 1.5 | 2.4 | 2.9 |
Expected return on plan assets | (1.6) | (1.8) | (3.1) | (3.5) |
Net periodic pension benefit income | $ (0.4) | $ (0.3) | $ (0.7) | $ (0.6) |
INDEBTEDNESS (Details)
INDEBTEDNESS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Apr. 01, 2017 | Jul. 01, 2017 | Dec. 31, 2016 | ||
Debt | ||||
Balance at the beginning of the period | $ 356,200,000 | $ 356,200,000 | ||
Borrowings | 77,400,000 | |||
Repayments | (67,800,000) | |||
Other | [1] | 1,600,000 | ||
Balance at the end of the period | 367,400,000 | |||
Less: short-term debt | 33,900,000 | $ 14,800,000 | ||
Less: current maturities of long-term debt | 18,100,000 | 17,900,000 | ||
Total long-term debt | 315,400,000 | 323,500,000 | ||
Debt issuance costs | 1,400,000 | 1,600,000 | ||
Trade receivables financing arrangement | ||||
Debt | ||||
Balance at the beginning of the period | [2] | 0 | 0 | |
Borrowings | [2] | 40,000,000 | ||
Repayments | [2] | (19,000,000) | ||
Other | [1],[2] | 0 | ||
Balance at the end of the period | [2] | 21,000,000 | ||
Maximum borrowing capacity | 50,000,000 | |||
Amount of available borrowing capacity | 22,900,000 | |||
Other indebtedness | ||||
Debt | ||||
Balance at the beginning of the period | [3] | 16,600,000 | 16,600,000 | |
Borrowings | [3] | 21,400,000 | ||
Repayments | [3] | (24,100,000) | ||
Other | [1],[3] | 1,400,000 | ||
Balance at the end of the period | [3] | 15,300,000 | ||
Purchase card programs | 3,000,000 | 3,900,000 | ||
Capital lease obligations included in other indebtedness | 2,400,000 | 1,700,000 | ||
Revolving loans | Current Revolving SPX Facilities | ||||
Debt | ||||
Balance at the beginning of the period | 0 | 0 | ||
Borrowings | 16,000,000 | |||
Repayments | (16,000,000) | |||
Other | [1] | 0 | ||
Balance at the end of the period | 0 | |||
Term loans | Current SPX Term Loan Facilities | ||||
Debt | ||||
Balance at the beginning of the period | [4] | $ 339,600,000 | 339,600,000 | |
Borrowings | [4] | 0 | ||
Repayments | [4] | (8,700,000) | ||
Other | [1],[4] | 200,000 | ||
Balance at the end of the period | [4] | 331,100,000 | ||
Initial principal amount of the term loan to be repaid annually in quarterly installments (as a percent) | 1.25% | |||
Original loan balance | $ 350,000,000 | |||
Foreign credit instrument facility | Other indebtedness | South Africa and China | ||||
Debt | ||||
Borrowings under line of credit | $ 9,200,000 | $ 10,200,000 | ||
[1] | “Other” primarily includes debt assumed, foreign currency translation on any debt instruments denominated in currencies other than the U.S. dollar, and the impact of amortization of debt issuance costs associated with the term loan. | |||
[2] | Under this arrangement, we can borrow, on a continuous basis, up to $50.0, as available. At July 1, 2017, we had $22.9 of available borrowing capacity under this facility. | |||
[3] | Primarily includes balances under a purchase card program of $3.0 and $3.9, capital lease obligations of $2.4 and $1.7, and borrowings under lines of credit in South Africa and China totaling $9.2 and $10.2 at July 1, 2017 and December 31, 2016, respectively. The purchase card program allows for payment beyond the normal payment terms for goods and services acquired under the program. As this arrangement extends the payment of these purchases beyond their normal payment terms through third-party lending institutions, we have classified these amounts as short-term debt. | |||
[4] | The term loan is repayable in quarterly installments of 1.25% of the original loan balance of $350.0. The remaining balance is repayable in full on September 24, 2020. Balances are net of unamortized debt issuance costs of $1.4 and $1.6 at July 1, 2017 and December 31, 2016, respectively. |
INDEBTEDNESS (Details 2)
INDEBTEDNESS (Details 2) - Senior Credit Facilities $ in Millions | Jul. 01, 2017USD ($) |
Senior credit facility | |
Credit Facilities | |
Weighted-average interest rate of senior credit facilities (as a percent) | 3.00% |
Domestic revolving credit facility | |
Credit Facilities | |
Letters of credit issued, amount outstanding | $ 36.1 |
Foreign credit instrument facility | |
Credit Facilities | |
Letters of credit issued, amount outstanding | $ 195.2 |
DERIVATIVE FINANCIAL INSTRUME44
DERIVATIVE FINANCIAL INSTRUMENTS (Details) lb in Millions, $ in Millions | 6 Months Ended | 12 Months Ended |
Jul. 01, 2017USD ($)lb | Dec. 31, 2016USD ($)lb | |
Interest Rate Swaps | ||
Derivative Financial Instruments | ||
Unrealized gains (losses), net of tax, recorded in AOCI | $ 0.9 | |
Interest Rate Swaps | Derivative contracts designated as hedging instruments | ||
Derivative Financial Instruments | ||
Aggregate notional amount | 166.9 | |
Long term liability to recognize fair value of swaps | $ 1.9 | |
Interest Rate Swaps | Derivative contracts designated as hedging instruments | Term loan | ||
Derivative Financial Instruments | ||
Percentage of borrowings converted from variable rate term loan to fixed rates under interest rate swap agreements | 50.00% | |
Fixed rate percentage plus applicable margin | 1.2895% | |
FX Forward Contracts | ||
Derivative Financial Instruments | ||
Aggregate notional amount | $ 5.3 | $ 8.8 |
FX embedded derivatives | Derivative contracts not designated as hedging instruments | ||
Derivative Financial Instruments | ||
Aggregate notional amount | 0.4 | 0.9 |
Commodity Contracts | ||
Derivative Financial Instruments | ||
Unrealized gains (losses), net of tax, recorded in AOCI | 0.4 | 0.8 |
Fair value of derivative contract - current asset | $ 0.5 | $ 1.1 |
Commodity Contracts | Derivative contracts designated as hedging instruments | ||
Derivative Financial Instruments | ||
Notional amount of commodity contracts (in pounds of copper) | lb | 4.3 | 4.1 |
SHAREHOLDERS' EQUITY AND LONG45
SHAREHOLDERS' EQUITY AND LONG-TERM INCENTIVE COMPENSATION (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Income Per Share | ||||
Weighted-average number of common shares used in basic income per share | 42,388 | 41,594 | 42,249 | 41,443 |
Dilutive securities — Restricted stock shares and restricted stock units (in shares) | 0 | 0 | 1,373 | 311 |
Weighted-average number of common shares and dilutive securities used in diluted income per share | 42,388 | 41,594 | 43,622 | 41,754 |
Restricted stock shares/units | ||||
Stock-based Compensation | ||||
Number of options or units that were excluded from the computation of diluted income per share | 476 | 1,365 | 435 | 1,254 |
Stock options | ||||
Stock-based Compensation | ||||
Number of options or units that were excluded from the computation of diluted income per share | 1,037 | 1,417 | 1,010 | 1,251 |
Restricted Stock and Restricted Stock Units Excluded from Computation of Diluted Income Per Share Due to Net Loss | ||||
Stock-based Compensation | ||||
Number of options or units that were excluded from the computation of diluted income per share | 804 | 359 | ||
Employee Stock Options Excluded from Computation of Diluted Income Per Share Due to Net Loss | ||||
Stock-based Compensation | ||||
Number of options or units that were excluded from the computation of diluted income per share | 597 | 1 |
SHAREHOLDERS' EQUITY AND LONG46
SHAREHOLDERS' EQUITY AND LONG-TERM INCENTIVE COMPENSATION (Details 2) - USD ($) shares in Thousands, $ in Millions | May 08, 2017 | Mar. 01, 2017 | Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 |
Performance Shares | ||||||
Stock-based Compensation | ||||||
Period over which the fair value of awards are amortized | 3 years | |||||
Employee Stock Option and Restricted Stock Units | ||||||
Stock-based Compensation | ||||||
Period over which the fair value of awards are amortized | 3 years | |||||
Long Term Cash Awards | ||||||
Stock-based Compensation | ||||||
Period over which the fair value of awards are amortized | 3 years | |||||
Restricted Stock Units (RSUs) | ||||||
Stock-based Compensation | ||||||
RSU's granted to non-employee directors (in shares) | 24 | |||||
Restricted stock shares, restricted stock units, and stock options | ||||||
Stock-based Compensation | ||||||
Compensation expense | $ 3.6 | $ 3.4 | $ 6.8 | $ 6.1 | ||
Related tax benefit | $ 1.4 | $ 1.3 | $ 2.6 | $ 2.3 |
SHAREHOLDERS' EQUITY AND LONG47
SHAREHOLDERS' EQUITY AND LONG-TERM INCENTIVE COMPENSATION (Details 3) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||||||||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | Apr. 01, 2017 | Dec. 31, 2016 | Apr. 02, 2016 | Dec. 31, 2015 | |||||
Total | ||||||||||||
Components of accumulated other comprehensive income (loss) | ||||||||||||
Balance at beginning of period | $ 234.1 | $ 245.6 | $ 235.1 | $ 283.3 | ||||||||
Other comprehensive income (loss) before reclassifications | 0.5 | (3.8) | 0.1 | (2.3) | ||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (0.4) | 0.4 | (1) | (38.8) | [1] | |||||||
Current-period other comprehensive income (loss) | 0.1 | (3.4) | (0.9) | (41.1) | ||||||||
Balance at end of period | 234.2 | 242.2 | 234.2 | 242.2 | ||||||||
Foreign Currency Translation Adjustment | ||||||||||||
Components of accumulated other comprehensive income (loss) | ||||||||||||
Balance at beginning of period | 228.2 | 241.9 | 229.7 | 280.6 | ||||||||
Other comprehensive income (loss) before reclassifications | 1.1 | (2.3) | (0.4) | (0.6) | ||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 | 0 | (40.4) | [1] | |||||||
Current-period other comprehensive income (loss) | 1.1 | (2.3) | (0.4) | (41) | ||||||||
Balance at end of period | 229.3 | 239.6 | 229.3 | 239.6 | ||||||||
Foreign Currency Translation Adjustment | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Dry Cooling Business | Gain on Sale of Dry Cooling Business | ||||||||||||
Components of accumulated other comprehensive income (loss) | ||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (40.4) | |||||||||||
Net Unrealized Gains (Losses) on Qualifying Cash Flow Hedges | ||||||||||||
Components of accumulated other comprehensive income (loss) | ||||||||||||
Balance at beginning of period | 2.2 | [2] | (0.6) | [3] | 1.5 | [4] | (1.8) | [5] | ||||
Other comprehensive income (loss) before reclassifications | (0.6) | [2] | (1.5) | [3] | 0.5 | [4] | (1.7) | [5] | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | (0.3) | [2] | 0.5 | [3] | (0.7) | [4] | 1.9 | [1],[5] | ||||
Current-period other comprehensive income (loss) | (0.9) | [2] | (1) | [3] | (0.2) | [4] | 0.2 | [5] | ||||
Balance at end of period | 1.3 | [2],[4] | (1.6) | [3],[5] | 1.3 | [2],[4] | (1.6) | [3],[5] | ||||
Tax (benefit) provision | (0.8) | (1) | (0.8) | (1) | $ (1.3) | $ (0.9) | $ (0.4) | $ (0.8) | ||||
Pension and Postretirement Liability Adjustment | ||||||||||||
Components of accumulated other comprehensive income (loss) | ||||||||||||
Balance at beginning of period | 3.7 | [6] | 4.3 | [7] | 3.9 | [8] | 4.5 | [5] | ||||
Other comprehensive income (loss) before reclassifications | 0 | [6] | 0 | [7] | 0 | [8] | 0 | [5] | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | (0.1) | [6] | (0.1) | [7] | (0.3) | [8] | (0.3) | [1],[5] | ||||
Current-period other comprehensive income (loss) | (0.1) | [6] | (0.1) | [7] | (0.3) | [8] | (0.3) | [5] | ||||
Balance at end of period | 3.6 | [6],[8] | 4.2 | [5],[7] | 3.6 | [6],[8] | 4.2 | [5],[7] | ||||
Tax (benefit) provision | $ 2.6 | $ 3 | $ 2.6 | $ 3 | $ 2.7 | $ 2.7 | $ 3.1 | $ 3.1 | ||||
[1] | In connection with the sale of our dry cooling business, we reclassified $40.4 of other comprehensive income related to foreign currency translation to “Gain (loss) on sale of dry cooling business.” | |||||||||||
[2] | Net of tax provision of $0.8 and $1.3 as of July 1, 2017 and April 1, 2017, respectively. | |||||||||||
[3] | Net of tax benefit of $1.0 and $0.4 as of July 2, 2016 and April 2, 2016, respectively. | |||||||||||
[4] | Net of tax provision of $0.8 and $0.9 as of July 1, 2017 and December 31, 2016, respectively. | |||||||||||
[5] | Net of tax benefit of $1.0 and $0.8 as of July 2, 2016 and December 31, 2015, respectively. | |||||||||||
[6] | Net of tax provision of $2.6 and $2.7 as of July 1, 2017 and April 1, 2017, respectively. The balances as of July 1, 2017 and April 1, 2017 represent net unamortized prior service credits. | |||||||||||
[7] | Net of tax provision of $3.0 and $3.1 as of July 2, 2016 and April 2, 2016, respectively. The balances as of July 2, 2016 and April 2, 2016 include net unamortized prior service credits. | |||||||||||
[8] | Net of tax provision of $2.6 and $2.7 as of July 1, 2017 and December 31, 2016. The balances as of July 1, 2017 and December 31, 2016 represent net unamortized prior service credits. |
SHAREHOLDERS' EQUITY AND LONG48
SHAREHOLDERS' EQUITY AND LONG-TERM INCENTIVE COMPENSATION (Details 4) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jul. 01, 2017 | Jul. 02, 2016 | Apr. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | Dec. 31, 2016 | ||
Amounts reclassified from each component of accumulated comprehensive income | |||||||
Revenues | [1] | $ (349.7) | $ (371.4) | $ (690.3) | $ (732) | ||
Cost of products sold | 273.6 | 280.3 | 526.1 | 551 | |||
Interest expense | 4.6 | 3.8 | 8.6 | 7.3 | |||
Pre-tax | 2.3 | (10.3) | (11.2) | (36.3) | |||
Income taxes | 6 | 3.8 | 9.2 | 9.6 | |||
Net loss (income) | 9 | (3) | (8.4) | (16.6) | |||
Selling, general and administrative | 71.4 | 72.8 | 141 | 147.1 | |||
Recognition of foreign currency translation adjustment associated with the sale of our dry cooling business | 0 | 1.2 | 0 | (16.7) | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Dry Cooling Business | |||||||
Amounts reclassified from each component of accumulated comprehensive income | |||||||
Recognition of foreign currency translation adjustment associated with the sale of our dry cooling business | $ (17.9) | (16.7) | |||||
Net Unrealized Gains (Losses) on Qualifying Cash Flow Hedges | Amount Reclassified from AOCI | |||||||
Amounts reclassified from each component of accumulated comprehensive income | |||||||
Pre-tax | (0.5) | 0.9 | (1.1) | 2.6 | |||
Income taxes | 0.2 | (0.4) | 0.4 | (0.7) | |||
Net loss (income) | (0.3) | 0.5 | (0.7) | 1.9 | |||
Net Unrealized Gains (Losses) on Qualifying Cash Flow Hedges | FX Forward Contracts | Amount Reclassified from AOCI | |||||||
Amounts reclassified from each component of accumulated comprehensive income | |||||||
Revenues | 0 | 0 | 0 | 1 | |||
Net Unrealized Gains (Losses) on Qualifying Cash Flow Hedges | Commodity Contracts | Amount Reclassified from AOCI | |||||||
Amounts reclassified from each component of accumulated comprehensive income | |||||||
Cost of products sold | (0.7) | 0.9 | (1.4) | 1.6 | |||
Net Unrealized Gains (Losses) on Qualifying Cash Flow Hedges | Swaps | Amount Reclassified from AOCI | |||||||
Amounts reclassified from each component of accumulated comprehensive income | |||||||
Interest expense | 0.2 | 0 | 0.3 | 0 | |||
Pension and Postretirement Liability Adjustment | |||||||
Amounts reclassified from each component of accumulated comprehensive income | |||||||
Amortization of unrecognized prior service credits, pre-tax | (0.2) | (0.2) | (0.4) | (0.4) | |||
Income taxes | 0.1 | 0.1 | 0.1 | 0.1 | |||
Gains on pension and postretirement items, net of tax | (0.1) | (0.1) | (0.3) | (0.3) | |||
Pension and Postretirement Liability Adjustment | Amount Reclassified from AOCI | |||||||
Amounts reclassified from each component of accumulated comprehensive income | |||||||
Selling, general and administrative | $ (0.2) | $ (0.2) | (0.4) | (0.4) | |||
Foreign Currency Translation Adjustment | Amount Reclassified from AOCI | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Dry Cooling Business | |||||||
Amounts reclassified from each component of accumulated comprehensive income | |||||||
Recognition of foreign currency translation adjustment associated with the sale of our dry cooling business | $ 0 | $ (40.4) | $ (40.4) | ||||
[1] | Under the percentage-of-completion method, we recognized revenues of $65.8 and $80.1 in the three months ended July 1, 2017 and July 2, 2016, respectively. For the six months ended July 1, 2017 and July 2, 2016, revenues under the percentage-of-completion method were $144.6 and $184.4, respectively. Costs and estimated earnings in excess of billings on uncompleted contracts accounted for under the percentage-of-completion method were $31.3 and $33.9 as of July 1, 2017 and December 31, 2016, respectively, and are reported as a component of ‘‘Accounts receivable, net’’ in the condensed consolidated balance sheets. Billings in excess of costs and estimated earnings on uncompleted contracts accounted for under the percentage-of-completion method were $42.0 and $53.3 as of July 1, 2017 and December 31, 2016, respectively, and are reported as a component of ‘‘Accrued expenses’’ in the condensed consolidated balance sheets. |
SHAREHOLDERS' EQUITY AND LONG49
SHAREHOLDERS' EQUITY AND LONG-TERM INCENTIVE COMPENSATION (Details 5) - USD ($) $ in Millions | 6 Months Ended | |
Jul. 01, 2017 | Jul. 02, 2016 | |
Common Stock In Treasury | ||
Common Stock in Treasury | ||
Decrease in stock by the settlement of restricted stock units | $ 16 | $ 17.7 |
SHAREHOLDERS' EQUITY AND LONG50
SHAREHOLDERS' EQUITY AND LONG-TERM INCENTIVE COMPENSATION (Details 6) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Changes in Equity | ||||
Equity, beginning of period | $ 211 | $ 285.3 | $ 191.6 | $ 308.3 |
Net income (loss) | (9) | 3 | 8.4 | 16.6 |
Net unrealized losses on qualifying cash flow hedges, net of tax benefit | (0.9) | (1) | (0.2) | 0.2 |
Net unrealized losses on qualifying cash flow hedges, tax benefit | 0.5 | 0.6 | 0.1 | 0.2 |
Pension and postretirement liability adjustment, net of tax benefit | (0.1) | (0.1) | (0.3) | (0.3) |
Pension and postretirement liability adjustment, tax benefit | 0.1 | 0.1 | 0.1 | 0.1 |
Foreign currency translation adjustments | 1.1 | (2.5) | (0.4) | (42.2) |
Total comprehensive income (loss), net | (8.9) | (0.6) | 7.5 | (25.7) |
Incentive plan activity | 3.6 | 1.9 | 7.4 | 4.6 |
Long-term incentive compensation expense | 3 | 3.2 | 5.8 | 5.9 |
Restricted stock and restricted stock unit vesting, net of tax withholdings, and related tax (provision) benefit | 0 | 0.1 | (3.6) | (3.2) |
Restricted stock and restricted stock unit vesting, net of tax withholdings, tax (provision) benefit | 0 | 0.1 | 0 | (1.5) |
Adjustment related to redeemable noncontrolling interest (see Note 13) | 0 | (17.3) | 0 | (17.3) |
Equity, end of period | 208.7 | 272.6 | 208.7 | 272.6 |
SPX Corporation Shareholders' Equity | ||||
Changes in Equity | ||||
Equity, beginning of period | 211 | 322.8 | 191.6 | 345.4 |
Net income (loss) | (9) | 4 | 8.4 | 17 |
Net unrealized losses on qualifying cash flow hedges, net of tax benefit | (0.9) | (1) | (0.2) | 0.2 |
Pension and postretirement liability adjustment, net of tax benefit | (0.1) | (0.1) | (0.3) | (0.3) |
Foreign currency translation adjustments | 1.1 | (2.3) | (0.4) | (41) |
Total comprehensive income (loss), net | (8.9) | 0.6 | 7.5 | (24.1) |
Incentive plan activity | 3.6 | 1.9 | 7.4 | 4.6 |
Long-term incentive compensation expense | 3 | 3.2 | 5.8 | 5.9 |
Restricted stock and restricted stock unit vesting, net of tax withholdings, and related tax (provision) benefit | 0 | 0.1 | (3.6) | (3.2) |
Adjustment related to redeemable noncontrolling interest (see Note 13) | 0 | (56) | 0 | (56) |
Equity, end of period | 208.7 | 272.6 | 208.7 | 272.6 |
Noncontrolling Interests | ||||
Changes in Equity | ||||
Equity, beginning of period | 0 | (37.5) | 0 | (37.1) |
Net income (loss) | 0 | (1) | 0 | (0.4) |
Foreign currency translation adjustments | 0 | (0.2) | 0 | (1.2) |
Total comprehensive income (loss), net | 0 | (1.2) | 0 | (1.6) |
Adjustment related to redeemable noncontrolling interest (see Note 13) | 38.7 | 0 | 38.7 | |
Equity, end of period | $ 0 | $ 0 | $ 0 | $ 0 |
CONTINGENT LIABILITIES AND OT51
CONTINGENT LIABILITIES AND OTHER MATTERS (Details) | 3 Months Ended | 6 Months Ended | ||||
Jul. 01, 2017USD ($) | Apr. 01, 2017USD ($) | Jul. 02, 2016USD ($) | Jul. 01, 2017USD ($)corporate_entity | Jul. 02, 2016USD ($) | Dec. 31, 2016USD ($) | |
Contingent Liabilities and Other Matters | ||||||
Carrying values of accruals | $ 651,400,000 | $ 651,400,000 | $ 653,500,000 | |||
Liability for asbestos product liability matters | 606,100,000 | 606,100,000 | 605,600,000 | |||
Accruals included in other long-term liabilities | 615,700,000 | 615,700,000 | 621,000,000 | |||
Payments for asbestos-related matters, net of insurance recoveries | 1,200,000 | $ 1,300,000 | 7,800,000 | $ 3,000,000 | ||
Charge to Other income (expense), net for settlement of asbestos-related claims | 3,000,000 | $ 0 | 3,000,000 | $ 0 | ||
Asbestos Issue | ||||||
Contingent Liabilities and Other Matters | ||||||
Cash proceeds received related to settlement with insurance carrier | $ 8,500,000 | |||||
Insurance recovery assets | $ 554,000,000 | $ 554,000,000 | $ 564,400,000 | |||
Asbestos Issue | Minimum | ||||||
Contingent Liabilities and Other Matters | ||||||
Number of defendants | corporate_entity | 50 |
CONTINGENT LIABILITIES AND OT52
CONTINGENT LIABILITIES AND OTHER MATTERS (Details 2) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jul. 01, 2017USD ($)contractor | Jul. 02, 2016USD ($) | Jul. 01, 2017USD ($) | Jul. 02, 2016USD ($) | ||
Contingent Liabilities and Other Matters | |||||
Consolidated operating income | $ (4.1) | $ (13.8) | $ (21.9) | $ (41.9) | |
Revenues | [1] | (349.7) | (371.4) | (690.3) | (732) |
Cost of products sold | 273.6 | 280.3 | 526.1 | 551 | |
Engineered Solutions segment | |||||
Contingent Liabilities and Other Matters | |||||
Revenues | [1],[2] | (164.9) | (189.4) | (341.8) | (383) |
Operating Segments | |||||
Contingent Liabilities and Other Matters | |||||
Consolidated operating income | (20.7) | (32.2) | (55) | (62) | |
Operating Segments | Engineered Solutions segment | |||||
Contingent Liabilities and Other Matters | |||||
Consolidated operating income | [2] | 12 | $ (3) | $ 5.4 | $ (5.9) |
Large Power Projects | South Africa | |||||
Contingent Liabilities and Other Matters | |||||
Period to implement various controls and initiatives to reduce risks | 2 years | ||||
Revenue recognized | 27.6 | $ 27.6 | |||
Large Power Projects | South Africa | Engineered Solutions segment | |||||
Contingent Liabilities and Other Matters | |||||
Revenues | 13.5 | ||||
Large Power Projects | South Africa | Operating Segments | Engineered Solutions segment | |||||
Contingent Liabilities and Other Matters | |||||
Consolidated operating income | $ 22.9 | ||||
Large Power Projects | South Africa | Operating Segments | Engineered Solutions segment | Contracts Accounted for under Percentage of Completion | |||||
Contingent Liabilities and Other Matters | |||||
Consolidated operating income | [2] | 22.9 | |||
Revenues | [1] | 13.5 | |||
Cost of products sold | [1] | $ 9.4 | |||
Large Power Projects | South Africa | Supplier Concentration Risk | |||||
Contingent Liabilities and Other Matters | |||||
Number of sub-contractors | contractor | 1 | ||||
[1] | Under the percentage-of-completion method, we recognized revenues of $65.8 and $80.1 in the three months ended July 1, 2017 and July 2, 2016, respectively. For the six months ended July 1, 2017 and July 2, 2016, revenues under the percentage-of-completion method were $144.6 and $184.4, respectively. Costs and estimated earnings in excess of billings on uncompleted contracts accounted for under the percentage-of-completion method were $31.3 and $33.9 as of July 1, 2017 and December 31, 2016, respectively, and are reported as a component of ‘‘Accounts receivable, net’’ in the condensed consolidated balance sheets. Billings in excess of costs and estimated earnings on uncompleted contracts accounted for under the percentage-of-completion method were $42.0 and $53.3 as of July 1, 2017 and December 31, 2016, respectively, and are reported as a component of ‘‘Accrued expenses’’ in the condensed consolidated balance sheets. | ||||
[2] | As further discussed in Note 13, during the second quarter of 2017, we made revisions to our expected revenues and profits on our large power projects in South Africa. As a result of these revisions, we reduced revenue and segment income by $13.5 and $22.9, respectively, for the three and six months ended July 1, 2017. |
CONTINGENT LIABILITIES AND OT53
CONTINGENT LIABILITIES AND OTHER MATTERS (Details 3) ZAR in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jul. 01, 2017USD ($) | Jul. 02, 2016USD ($) | Jul. 01, 2017USD ($) | Jul. 02, 2016USD ($) | Jul. 01, 2017ZAR | Jul. 06, 2016ZAR | |
Noncontrolling Interest [Line Items] | ||||||
Adjustment related to redeemable noncontrolling interest | $ 0 | $ 18.1 | $ 0 | $ 18.1 | ||
South African Subsidiary, DBT Technologies | BEE Partner | South Africa | ||||||
Noncontrolling Interest [Line Items] | ||||||
Amount due from BEE Partner under promissory note | ZAR | ZAR 30.3 | |||||
South African Subsidiary, DBT Technologies | BEE Partner | South Africa | Put Option | ||||||
Noncontrolling Interest [Line Items] | ||||||
Amount entitled for Put Option exercise | ZAR | ZAR 287.3 | |||||
Net redemption value | $ 19.8 | 19.8 | ZAR 257 | |||
Amount reclassified from noncontrolling interests to paid in capital | 38.7 | |||||
Adjustment related to redeemable noncontrolling interest | $ 18.1 | |||||
South African Subsidiary, DBT Technologies | BEE Partner | South Africa | Put Option | ||||||
Noncontrolling Interest [Line Items] | ||||||
Non-controlling interest percentage | 25.10% | 25.10% | 25.10% |
CONTINGENT LIABILITIES AND OT54
CONTINGENT LIABILITIES AND OTHER MATTERS (Details 4) - Site investigation and remediation - site | Jul. 01, 2017 | Dec. 31, 2016 |
Environmental Matters | ||
Number of sites | 28 | 30 |
Number of third-party disposal sites for which entity is potentially responsible | 22 | |
Number of active sites | 8 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jul. 01, 2017 | Jul. 02, 2016 | Apr. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Uncertain Tax Benefits | |||||
Gross unrecognized tax benefits | $ 37.9 | $ 37.9 | |||
Net unrecognized tax benefits | 25.2 | 25.2 | |||
Unrecognized tax benefits that would impact effective tax rate if recognized | 20.3 | 20.3 | |||
Gross accrued interest | 4.5 | 4.5 | |||
Net accrued interest | 2.9 | 2.9 | |||
Penalties recorded | 0 | ||||
Other Tax Matters | |||||
Income tax provision | (6) | $ (3.8) | (9.2) | $ (9.6) | |
Pre-tax income (loss) from continuing operations | $ (2.3) | $ 10.3 | $ 11.2 | $ 36.3 | |
Effective tax rate percentage | (260.90%) | 36.90% | 82.10% | 26.40% | |
Gain on sale of dry cooling business | $ 0 | $ (1.2) | $ 0 | $ 16.7 | |
Dry Cooling Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||
Other Tax Matters | |||||
Taxes provided in connection with sale of dry cooling business | 0.3 | ||||
Gain on sale of dry cooling business | $ 17.9 | 16.7 | |||
Accounting Standards Update 2016-09 | |||||
Other Tax Matters | |||||
Excess tax benefits resulting from stock-based compensation awards | 1.2 | ||||
Foreign | |||||
Other Tax Matters | |||||
Foreign losses generated during the period for which no tax benefit was recognized | 24.6 | $ 5 | 29.6 | $ 9.7 | |
Minimum | |||||
Uncertain Tax Benefits | |||||
Reasonably possible amount that unrecognized tax benefits could decrease within next 12 months | 6 | 6 | |||
Maximum | |||||
Uncertain Tax Benefits | |||||
Reasonably possible amount that unrecognized tax benefits could decrease within next 12 months | $ 10 | $ 10 |
FAIR VALUE (Details)
FAIR VALUE (Details) - Discontinued Operations, Disposed of by Sale - Buyer - Balcke Durr Business - EUR (€) € in Millions | Jul. 01, 2017 | Dec. 30, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amount of guarantees | € 79 | € 79 |
Bank and Surety Bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amount of guarantees | 64.5 | 79 |
Balcke-Durr | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash collateral | 4 | 4 |
mutares AG | Indemnification Agreement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amount of guarantees | € 5 | € 5 |
FAIR VALUE (Details 2)
FAIR VALUE (Details 2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | ||
Fair Value, Assets and Liabilities Measured on Non-Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Reduction/Amortization for the period | $ 2.1 | $ (0.1) | $ 2.8 | $ (1.3) | |
Balcke Durr Business | Discontinued Operations, Disposed of by Sale | Guarantees and Bonds | Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 3 | |||||
Fair Value, Assets and Liabilities Measured on Non-Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Guarantees and Bonds Liability, Balance | [1],[2] | 9.9 | |||
Reduction/Amortization for the period | [3] | (1.1) | |||
Impact of changes in foreign currency rates | 0.9 | ||||
Guarantees and Bonds Liability, Balance | [1] | 9.7 | 9.7 | ||
Balcke Durr Business | Discontinued Operations, Disposed of by Sale | Indemnification Agreement | Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 3 | |||||
Fair Value, Assets and Liabilities Measured on Non-Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Indemnification Assets, Balance | [1],[2] | 4.8 | |||
Reduction/Amortization for the period | [3] | 1.3 | |||
Impact of changes in foreign currency rates | (0.5) | ||||
Indemnification Assets, Balance | [1] | $ 4 | $ 4 | ||
[1] | Balance associated with the guarantees and bonds is reflected within “Other long-term liabilities,” while the balance associated with the indemnification assets is reflected within “Other assets.” | ||||
[2] | In connection with the sale, we estimated the fair value of the existing parent company guarantees and bank and surety bonds considering the probability of default by Balcke Dürr and an estimate of the amount we would be obligated to pay in the event of a default. Additionally, we estimated the fair value of the cash collateral provided by Balcke Dürr and guarantee provided by mutares AG based on the terms and conditions and relative risk associated with each of these securities (unobservable inputs - Level 3). | ||||
[3] | We reduce the liability generally at the earlier of the completion of the related underlying project milestones or the expiration of the guarantees or bonds. We amortize the asset based on the expiration terms of each of the securities. We record the reduction of the liability and the amortization of the asset to “Other income (expense), net.” |