Consolidated Statements of Oper
Consolidated Statements of Operations (USD $) | |||
In Millions, except Per Share data | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Consolidated Statements of Operations | |||
Revenues | 4850.8 | 5837.6 | 4542.2 |
Costs and expenses: | |||
Cost of products sold | 3429.8 | 4069.3 | 3222.3 |
Selling, general and administrative | 961.3 | 1130.3 | 884.5 |
Intangible amortization | 21.5 | 25.7 | 17.8 |
Impairment of goodwill and other intangible assets | 194.8 | 123 | 4 |
Special charges, net | 73.1 | 17.2 | 5.2 |
Operating income | 170.3 | 472.1 | 408.4 |
Other expense, net | -19.7 | -1.2 | -2.3 |
Interest expense | -92.1 | (116) | -76.9 |
Interest income | 7.5 | 10.9 | 9.1 |
Loss on early extinguishment of debt | -3.3 | ||
Equity earnings in joint ventures | 29.4 | 45.5 | 39.9 |
Income from continuing operations before income taxes | 95.4 | 411.3 | 374.9 |
Income tax provision | -47.2 | -152.4 | -83.5 |
Income from continuing operations | 48.2 | 258.9 | 291.4 |
Income (loss) from discontinued operations, net of tax | -5.6 | 9.3 | 8.2 |
Gain (loss) on disposition of discontinued operations, net of tax | -26.4 | 4.6 | -3.5 |
Income (loss) from discontinued operations | (32) | 13.9 | 4.7 |
Net income | 16.2 | 272.8 | 296.1 |
Less: Net income (loss) attributable to noncontrolling interests | -15.5 | 24.9 | 1.9 |
Net income attributable to SPX Corporation common shareholders | 31.7 | 247.9 | 294.2 |
Amounts attributable to SPX Corporation common shareholders | |||
Income from continuing operations, net of tax | 46.4 | 252.3 | 291 |
Income (loss) from discontinued operations, net of tax | -14.7 | -4.4 | 3.2 |
Net income | 31.7 | 247.9 | 294.2 |
Basic income per share of common stock | |||
Income from continuing operations attributable to SPX Corporation common shareholders (in dollars per share) | 0.94 | 4.71 | 5.25 |
Income (loss) from discontinued operations attributable to SPX Corporation common shareholders (in dollars per share) | -0.3 | -0.08 | 0.06 |
Net income per share attributable to SPX Corporation common shareholders (in dollars per share) | 0.64 | 4.63 | 5.31 |
Weighted-average number of common shares outstanding - basic (in millions of shares) | 49.363 | 53.596 | 55.425 |
Diluted income per share of common stock | |||
Income from continuing operations attributable to SPX Corporation common shareholders (in dollars per share) | 0.93 | 4.64 | 5.16 |
Income (loss) from discontinued operations attributable to SPX Corporation common shareholders (in dollars per share) | -0.29 | -0.08 | 0.05 |
Net income per share attributable to SPX Corporation common shareholders (in dollars per share) | 0.64 | 4.56 | 5.21 |
Weighted-average number of common shares outstanding - diluted (in millions of shares) | 49.797 | 54.359 | 56.437 |
Consolidated Balance Sheets
Consolidated Balance Sheets (USD $) | ||
In Millions | Dec. 31, 2009
| Dec. 31, 2008
|
Current assets: | ||
Cash and equivalents | 522.9 | 475.9 |
Accounts receivable, net | 1046.3 | 1,306 |
Inventories | 560.3 | 666.8 |
Other current assets | 121.2 | 180.6 |
Deferred income taxes | 56.1 | 101.3 |
Assets of discontinued operations | 5.7 | 108.2 |
Total current assets | 2312.5 | 2838.8 |
Property, plant and equipment: | ||
Land | 39.1 | 36.3 |
Buildings and leasehold improvements | 250.4 | 223.5 |
Machinery and equipment | 712.2 | 677.9 |
Property, plant and equipment, gross | 1001.7 | 937.7 |
Accumulated depreciation | -455.3 | -437.3 |
Property, plant and equipment, net | 546.4 | 500.4 |
Goodwill | 1,600 | 1769.8 |
Intangibles, net | 708.3 | 646.8 |
Deferred income taxes | 114.7 | |
Other assets | 442.5 | 382.3 |
TOTAL ASSETS | 5724.4 | 6138.1 |
Current liabilities: | ||
Accounts payable | 475.8 | 633.7 |
Accrued expenses | 987.5 | 1153.6 |
Income taxes payable | 20.3 | 24.5 |
Short-term debt | 74.4 | 112.9 |
Current maturities of long-term debt | 76 | 76.4 |
Liabilities of discontinued operations | 5.3 | 23.9 |
Total current liabilities | 1639.3 | 2,025 |
Long-term debt | 1128.6 | 1155.4 |
Deferred and other income taxes | 92.1 | 124 |
Other long-term liabilities | 962.9 | 788.9 |
Total long-term liabilities | 2183.6 | 2068.3 |
SPX Corporation shareholders' equity | ||
Common stock (97,283,521 and 49,367,689 issued and outstanding at December 31, 2009, respectively, and 96,523,058 and 51,128,448 issued and outstanding at December 31, 2008, respectively) | 979 | 972.3 |
Paid-in capital | 1425.7 | 1393.9 |
Retained earnings | 2,223 | 2240.5 |
Accumulated other comprehensive loss | -213.6 | -179.9 |
Common stock in treasury (47,915,832 and 45,394,610 shares at December 31, 2009 and 2008, respectively) | -2523.3 | (2,416) |
Total SPX Corporation shareholders' equity | 1890.8 | 2010.8 |
Noncontrolling interests | 10.7 | 34 |
Total equity | 1901.5 | 2044.8 |
TOTAL LIABILITIES AND EQUITY | 5724.4 | 6138.1 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | ||
Dec. 31, 2009
| Dec. 31, 2008
| |
Consolidated Balance Sheets | ||
Common stock, number of shares issued | 97,283,521 | 96,523,058 |
Common stock, number of shares outstanding | 49,367,689 | 51,128,448 |
Common stock in treasury, number of shares | 47,915,832 | 45,394,610 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity and Comprehensive Income (Loss) (USD $) | |||||||||||||||||||
In Millions | Common Stock
| Paid-In Capital
| Retained Earnings
| Accum. Other Comprehensive Income (Loss)
| Common Stock In Treasury
| SPX Corporation Shareholders' Equity
| Noncontrolling Interests
| Total
| |||||||||||
Balance at Dec. 31, 2006 | 937.4 | 1134.5 | 1754.2 | -86.6 | -1630.1 | 2109.4 | 3.5 | 2112.9 | |||||||||||
Increase (Decrease) in Shareholders' Equity | |||||||||||||||||||
Net income | 294.2 | 294.2 | 1.9 | 296.1 | |||||||||||||||
Net unrealized gain (loss) on qualifying cash flow hedges, net of tax of $7.4, $13.7, ($6.7) during 2007, 2008 and 2009, respectively | -11.9 | -11.9 | -11.9 | ||||||||||||||||
Pension liability adjustment, net of tax of ($35.5), $62.2 and $56.5 in 2007, 2008 and 2009, respectively | 46.1 | 46.1 | 46.1 | ||||||||||||||||
Foreign currency translation adjustments, including $0.1, $6.3 and $5.7 of translation gains recognized upon sale of discontinued operations in 2007, 2008 and 2009, respectively | 90.5 | 90.5 | 1.4 | 91.9 | |||||||||||||||
Total comprehensive income (loss) | 422.2 | ||||||||||||||||||
Dividends declared ($1.00 per share) | (55) | (55) | (55) | ||||||||||||||||
Cumulative effect adjustment due to the adoption of new accounting guidance related to uncertain tax positions | 52.5 | 52.5 | 52.5 | ||||||||||||||||
Exercise of stock options and other incentive plan activity, including related tax benefit of $32.2, $36.0 and $1.7 in 2007, 2008 and 2009, respectively | 21.3 | 137.8 | 15.5 | 174.6 | 174.6 | ||||||||||||||
Amortization of restricted stock and restricted stock unit grants (includes $4.2, $0.7 and $0.1 recorded to discontinued operations in 2007, 2008 and 2009, respectively) | 42.3 | 42.3 | 42.3 | ||||||||||||||||
Restricted stock and restricted stock unit vesting, net of tax withholdings | 4.8 | -18.6 | (7) | -20.8 | -20.8 | ||||||||||||||
Treasury stock repurchased | -715.9 | -715.9 | -715.9 | ||||||||||||||||
Purchase of noncontrolling interest shares | 3.9 | 3.9 | |||||||||||||||||
Dividends attributable to noncontrolling interests | -0.4 | -0.4 | |||||||||||||||||
Other changes in noncontrolling interests | 0.1 | 0.1 | |||||||||||||||||
Balance at Dec. 31, 2007 | 963.5 | 1,296 | 2045.9 | 38.1 | -2337.5 | 2,006 | 10.4 | 2016.4 | |||||||||||
Increase (Decrease) in Shareholders' Equity | |||||||||||||||||||
Net income | 247.9 | 247.9 | 24.9 | 272.8 | |||||||||||||||
Net unrealized gain (loss) on qualifying cash flow hedges, net of tax of $7.4, $13.7, ($6.7) during 2007, 2008 and 2009, respectively | -21.9 | -21.9 | -21.9 | ||||||||||||||||
Pension liability adjustment, net of tax of ($35.5), $62.2 and $56.5 in 2007, 2008 and 2009, respectively | -101.7 | -101.7 | -101.7 | ||||||||||||||||
Foreign currency translation adjustments, including $0.1, $6.3 and $5.7 of translation gains recognized upon sale of discontinued operations in 2007, 2008 and 2009, respectively | -94.4 | -94.4 | -1.8 | -96.2 | |||||||||||||||
Total comprehensive income (loss) | 53 | ||||||||||||||||||
Dividends declared ($1.00 per share) | -53.3 | -53.3 | -53.3 | ||||||||||||||||
Exercise of stock options and other incentive plan activity, including related tax benefit of $32.2, $36.0 and $1.7 in 2007, 2008 and 2009, respectively | 5.4 | 81 | 42.3 | 128.7 | 128.7 | ||||||||||||||
Amortization of restricted stock and restricted stock unit grants (includes $4.2, $0.7 and $0.1 recorded to discontinued operations in 2007, 2008 and 2009, respectively) | 42.2 | 42.2 | 42.2 | ||||||||||||||||
Restricted stock and restricted stock unit vesting, net of tax withholdings | 3.4 | -25.3 | -5.6 | -27.5 | -27.5 | ||||||||||||||
Treasury stock repurchased | -115.2 | -115.2 | -115.2 | ||||||||||||||||
Purchase of noncontrolling interest shares | 1.5 | 1.5 | |||||||||||||||||
Dividends attributable to noncontrolling interests | -0.9 | -0.9 | |||||||||||||||||
Other changes in noncontrolling interests | -0.1 | -0.1 | |||||||||||||||||
Balance at Dec. 31, 2008 | 972.3 | 1393.9 | 2240.5 | -179.9 | (2,416) | 2010.8 | 34 | 2044.8 | |||||||||||
Increase (Decrease) in Shareholders' Equity | |||||||||||||||||||
Net income | 31.7 | 31.7 | -15.5 | 16.2 | |||||||||||||||
Net unrealized gain (loss) on qualifying cash flow hedges, net of tax of $7.4, $13.7, ($6.7) during 2007, 2008 and 2009, respectively | 10.9 | 10.9 | 10.9 | ||||||||||||||||
Pension liability adjustment, net of tax of ($35.5), $62.2 and $56.5 in 2007, 2008 and 2009, respectively | -95.2 | -95.2 | -95.2 | ||||||||||||||||
Foreign currency translation adjustments, including $0.1, $6.3 and $5.7 of translation gains recognized upon sale of discontinued operations in 2007, 2008 and 2009, respectively | 50.6 | 50.6 | 0.8 | 51.4 | |||||||||||||||
Total comprehensive income (loss) | -16.7 | ||||||||||||||||||
Dividends declared ($1.00 per share) | -49.2 | -49.2 | -49.2 | ||||||||||||||||
Exercise of stock options and other incentive plan activity, including related tax benefit of $32.2, $36.0 and $1.7 in 2007, 2008 and 2009, respectively | 5 | 20.2 | 25.2 | 25.2 | |||||||||||||||
Amortization of restricted stock and restricted stock unit grants (includes $4.2, $0.7 and $0.1 recorded to discontinued operations in 2007, 2008 and 2009, respectively) | 27.7 | 27.7 | 27.7 | ||||||||||||||||
Restricted stock and restricted stock unit vesting, net of tax withholdings | 1.7 | -14.3 | 5.9 | -6.7 | -6.7 | ||||||||||||||
Treasury stock repurchased | -113.2 | -113.2 | -113.2 | ||||||||||||||||
Dividends attributable to noncontrolling interests | -0.4 | -0.4 | |||||||||||||||||
Liquidation of noncontrolling interest due to dispositions of Filtran | -5.1 | [1] | -5.1 | [1] | |||||||||||||||
Purchase of subsidiary shares from noncontrolling interest | -1.8 | -1.8 | -1.2 | (3) | |||||||||||||||
Other changes in noncontrolling interests | -1.9 | -1.9 | |||||||||||||||||
Balance at Dec. 31, 2009 | $979 | 1425.7 | $2,223 | -213.6 | -2523.3 | 1890.8 | 10.7 | 1901.5 | |||||||||||
[1]See Note 4 |
1_Consolidated Statements of Sh
Consolidated Statements of Shareholders' Equity and Comprehensive Income (Parenthetical) (USD $) | |||
In Millions, except Per Share data | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Consolidated Statements of Shareholders' Equity and Comprehensive Income (Loss) | |||
Net unrealized gain (loss) on qualifying cash flow hedges, tax | 6.7 | -13.7 | -7.4 |
Pension liability adjustment, tax | -56.5 | -62.2 | 35.5 |
Foreign currency translation gains recognized upon sale of discontinued operations | 5.7 | 6.3 | 0.1 |
Dividends declared, per share (in dollars per share) | $1 | $1 | $1 |
Exercise of stock options and other incentive plan activity, related tax benefit | 1.7 | 36 | 32.2 |
Amortization of restricted stock and restricted stock unit grants recorded to discontinued operations. | 0.1 | 0.7 | 4.2 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (USD $) | |||
In Millions | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Cash flows from (used in) operating activities: | |||
Net income | 16.2 | 272.8 | 296.1 |
Less: Income (loss) from discontinued operations, net of tax | (32) | 13.9 | 4.7 |
Income from continuing operations | 48.2 | 258.9 | 291.4 |
Adjustments to reconcile income from continuing operations to net cash from (used in) operating activities | |||
Special charges, net | 73.1 | 17.2 | 5.2 |
Gain on sale of product line | -1.1 | ||
Impairment of goodwill and other intangible assets | 194.8 | 123 | 4 |
Loss on early extinguishment of debt | 3.3 | ||
Deferred and other income taxes | (21) | 49.4 | -9.5 |
Depreciation and amortization | 105.9 | 104.5 | 73.4 |
Pension and other employee benefits | 53.5 | 58 | 58 |
Stock-based compensation | 27.6 | 41.5 | 39.5 |
Other, net | 16.3 | 25.9 | 5.1 |
Cash spending on restructuring actions | -67.1 | -28.1 | -4.9 |
Changes in operating assets and liabilities, net of effects from acquisitions and divestitures | |||
Accounts receivable and other assets | 316.3 | -252.8 | 17.1 |
Inventories | 159.8 | (48) | -33.8 |
Accounts payable, accrued expenses and other | -444.7 | 57.5 | -42.9 |
Net cash from continuing operations | 461.6 | 407 | 405.9 |
Net cash from (used in) discontinued operations | 9.5 | -1.1 | 54.8 |
Net cash from operating activities | 471.1 | 405.9 | 460.7 |
Cash flows from (used in) investing activities: | |||
Proceeds from asset sales and other | 3.6 | 1.3 | 3.3 |
Business acquisitions, net of cash acquired | -131.4 | (15) | -567.2 |
(Increase) decrease in restricted cash | 8.4 | (14) | |
Capital expenditures | -92.8 | -116.4 | -82.6 |
Net cash used in continuing operations | -212.2 | -144.1 | -646.5 |
Net cash from discontinued operations (includes net cash proceeds from dispositions of $28.8, $135.0 and $129.2 in 2009, 2008 and 2007, respectively) | 24 | 130.5 | 117.8 |
Net cash used in investing activities | -188.2 | -13.6 | -528.7 |
Cash flows from (used in) financing activities: | |||
Borrowings under senior credit facilities | 424.5 | 585.5 | 1606.3 |
Repayments under senior credit facilities | (503) | -710.5 | -1560.6 |
Borrowings under senior notes | 500 | ||
Borrowings under trade receivables agreement | 138 | 261 | 586 |
Repayments under trade receivables agreement | (116) | (331) | (517) |
Net repayments under other financing arrangements | -17.6 | -28.3 | -21.7 |
Purchases of common stock | -113.2 | -115.2 | -715.9 |
Proceeds from the exercise of employee stock options and other, net of minimum tax withholdings paid on behalf of employees for net share settlements | 1.2 | 81.5 | 133 |
Purchase of noncontrolling interest in subsidiary | (3) | ||
Dividends paid (includes noncontrolling interest distributions of $0.4, $0.9 and $0.4 in 2009, 2008 and 2007, respectively) | -50.3 | -54.4 | -56.9 |
Financing fees paid | -1.2 | -15.1 | |
Net cash used in continuing operations | -239.4 | -312.6 | -61.9 |
Net cash from (used in) discontinued operations | 0.2 | -0.4 | (6) |
Net cash used in financing activities | -239.2 | (313) | -67.9 |
Increase in cash and equivalents due to changes in foreign exchange rates | 3.3 | 42.5 | 12.8 |
Net change in cash and equivalents | 47 | 121.8 | -123.1 |
Consolidated cash and equivalents, beginning of period | 475.9 | 354.1 | 477.2 |
Consolidated cash and equivalents, end of period | 522.9 | 475.9 | 354.1 |
Cash and equivalents of continuing operations | 522.9 | 475.9 | 354.1 |
Cash and equivalents of discontinued operations | 0 | 0 | 0 |
Supplemental disclosure of cash flow information: | |||
Interest paid | 94.2 | 113.3 | 77.1 |
Income taxes paid, net of refunds of $66.4, $17.6 and $59.1 in 2009, 2008 and 2007, respectively | 35.7 | 95.7 | 80.5 |
Non-cash investing and financing activity: | |||
Debt assumed | 1.2 | 4.7 |
2_Consolidated Statements of Ca
Consolidated Statements of Cash Flows (Parenthetical) (USD $) | |||
In Millions | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Consolidated Statements of Cash Flows | |||
Net cash proceeds from dispositions of $28.8, $135.0 and $129.2 in 2009, 2008 and 2007, respectively | 28.8 | $135 | 129.2 |
Noncontrolling interest distributions of $0.4, $0.9 and $0.4 in 2009, 2008 and 2007, respectively | 0.4 | 0.9 | 0.4 |
Income tax refunds of $66.4, $17.6 and $59.1 in 2009, 2008 and 2007, respectively | 66.4 | 17.6 | 59.1 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements (in millions, except per share data) | |
Summary of Significant Accounting Policies | (1)Summary of Significant Accounting Policies Our significant accounting policies are described below as well as in other Notes that follow. Basis of Presentation The consolidated financial statements include SPX Corporation's ("our" or "we") accounts after the elimination of intercompany transactions. Investments in unconsolidated companies where we exercise significant influence, but do not have control, are accounted for using the equity method. We have reclassified certain prior year amounts to conform to the current year presentation, including the results of discontinued operations, the impact of the adoption of the noncontrolling interest guidance described in the Consolidation Topic of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("Codification"), and the impact of the adoption of the guidance described in the Earnings Per Share Topic of the Codification that requires certain unvested share-based payment awards to be included in basic and diluted earnings per share calculations. See Note3 for further discussion of the impact of adopting new accounting pronouncements. Unless otherwise indicated, amounts provided in these Notes pertain to continuing operations only (see Note4 for information on discontinued operations). During 2007, we recognized an income tax benefit of $13.5 to "Gain (loss) on disposition of discontinued operations, net of tax" relating to the reversal of certain deferred tax liabilities associated with businesses previously disposed of and reported as discontinued operations, primarily during 2005. These additional gains should have been recorded in the period in which such businesses were disposed. In addition, an internal audit of a Japanese operation within our Test and Measurement segment uncovered employee misconduct and inappropriate accounting entries. Correction of this matter, substantially all of which related to periods prior to 2007, resulted in a reduction of "Income from continuing operations" (before and after taxes) of $7.4 during 2007. These entries included $2.4 of inventory write-downs, $2.0 of accounts receivable write-offs, and $3.0 in other adjustments. We have evaluated the effects of these corrections on prior periods' consolidated financial statements and concluded that no prior period is materially misstated. In addition, we have considered the effects of these corrections on our annual results of operations for the year ended December31, 2007 and concluded that the impact is not material. We evaluated subsequent events (see Note3) through February25, 2010, the issuance date of our consolidated financial statements for the period ended December31, 2009, as this is the date on which we filed such financial statements on Form10-K with the Securities and Exchange Commission ("SEC"). Foreign Currency Translation The financial statements of our foreign subsidiaries are translated into U.S. dollars in accordance with the Foreign Currency Matters Topic of the Codification. Balance sheet accounts are translated at the current rate at the end of each period and income statement accounts are translated at the average rate for each period. Gains an |
Use Of Estimates
Use Of Estimates | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements (in millions, except per share data) | |
Use Of Estimates | (2)Use Of Estimates The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States ("GAAP") requires us to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues (e.g.,our percentage-of-completion estimates described above) and expenses during the reporting period. We evaluate these estimates and judgments on an ongoing basis and base our estimates on experience, current and expected future conditions, third-party evaluations and various other assumptions that we believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Actual results may differ from the estimates and assumptions used in the financial statements and related notes. Listed below are certain significant estimates and assumptions used in the preparation of our consolidated financial statements. Certain other estimates and assumptions are further explained in the related notes. Accounts Receivable Allowances We provide allowances for estimated losses on uncollectible accounts based on our historical experience and the evaluation of the likelihood of success in collecting specific customer receivables. In addition, we maintain allowances for customer returns, discounts and invoice pricing discrepancies, with such allowances primarily based on historical experience. Summarized below is the activity for these allowance accounts. YearendedDecember31, 2009 2008 2007 Balance at beginning of year $ 62.4 $ 55.4 $ 41.6 Acquisitions 0.2 5.0 8.8 Allowances provided 14.4 20.6 22.2 Write-offs, net of recoveries and credits issued (16.8 ) (18.6 ) (17.2 ) Balance at end of year $ 60.2 $ 62.4 $ 55.4 Inventory We estimate losses for excess and/or obsolete inventory and the net realizable value of inventory based on the aging of the inventory and the evaluation of the likelihood of recovering the inventory costs based on anticipated demand and selling price. Impairment of Long-Lived Assets and Intangibles Subject to Amortization We continually review whether events and circumstances subsequent to the acquisition of any long-lived assets, or intangible assets subject to amortization, have occurred that indicate the remaining estimated useful lives of those assets may warrant revision or that the remaining balance of those assets may not be recoverable. If events and circumstances indicate that the long-lived assets should be reviewed for possible impairment, we use projections to assess whether future cash flows on an undiscounted basis related to the assets are likely to exceed the related carrying amount to determine if a write-down is appropriate. We will record |
New Accounting Pronouncements
New Accounting Pronouncements | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements (in millions, except per share data) | |
New Accounting Pronouncements | (3)New Accounting Pronouncements The following is a summary of new accounting pronouncements that apply or may apply to our business. In December 2007, the FASB issued guidance that requires an acquiring entity to recognize all the assets acquired and liabilities assumed in a transaction at the acquisition-date fair value with limited exceptions. In addition, under this guidance, acquisition costs are required to be expensed as incurred, acquired contingent liabilities will be recorded at fair value at the acquisition date and subsequently measured at either the higher of such amount or the amount determined under existing guidance for non-acquired contingencies, in-process research and development will be recorded at fair value as an indefinite-lived intangible asset (until completion or abandonment of the research and development efforts) at the acquisition date, restructuring costs associated with a business combination will be generally expensed subsequent to the acquisition date and changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense. A substantial number of new disclosures are also required under this guidance. The guidance is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December15, 2008. We adopted the guidance on January1, 2009 and we expect this statement will have (and has had with the acquisition of substantially all the assets and certain liabilities of Yuba Heat Transfer,LLC see Note4) an impact on our consolidated financial statements for acquisitions consummated after January1, 2009, but the nature and magnitude of the specific effects will depend upon the terms and size of the acquisitions we consummate. During 2009, there were no settlements of acquisition-related liabilities for unrecognized tax benefits or reductions of acquisition-related valuation allowances. In December 2007, the FASB issued guidance that established new accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. Specifically, noncontrolling interest (minority interest) is required to be recognized as equity in the consolidated financial statements and separate from the parent's equity. The amount of net income attributable to the noncontrolling interest is to be included in consolidated net income on the face of the income statement. In addition, a parent is required to recognize a gain or loss in net income when a subsidiary is deconsolidated. Such gain or loss will be measured using the fair value of the noncontrolling equity investment on the deconsolidation date. The guidance establishes a single method of accounting for changes in a parent's ownership interest in a subsidiary that do not result in deconsolidation by clarifying that all of those transactions are equity transactions if the parent retains its controlling financial interest in the subsidiary. Expanded disclosures regarding the interests of the parent and the noncontrolling interest are required. The guid |
Acquisitions and Discontinued O
Acquisitions and Discontinued Operations | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements (in millions, except per share data) | |
Acquisitions and Discontinued Operations | (4)Acquisitions and Discontinued Operations We use acquisitions as a part of our strategy to gain access to customer relationships, new technology, expand our geographical reach, penetrate new markets and leverage our existing product, market, manufacturing and technical expertise. Further, as part of our operating strategy, we regularly review and negotiate potential divestitures, some of which are or may be material. As a result of this continuous review, we determined that certain of our businesses would be better strategic fits with other companies or investors. Acquisitions and divestitures for the years ended December31, 2009, 2008 and 2007 are described below. All business acquisitions consummated in 2009 have been accounted for in accordance with the Business Combinations Topic of the Codification and those acquisitions consummated prior to 2009 in accordance with the appropriate accounting guidance applicable at the time. Refer to Note3 for the details of the amendments to the guidance. The consolidated statements of operations include the results of each acquired business since the date of acquisition. The assets acquired and liabilities assumed are recorded at estimates of fair values as determined by management based on information available at the acquisition date. Management considers a number of factors, including third-party valuations or appraisals, when making these determinations. We will recognize additional assets or liabilities if new information is obtained during the measurement period about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of those assets and liabilities as of that date. The measurement period shall not exceed one year from the acquisition date. Refer to Note8 for additional disclosure on the purchase price adjustments of the following acquisitions. Acquisitions 2009 In December, 2009, in the Thermal Equipment and Services segment, our SPX Heat TransferInc. subsidiary completed the acquisition of substantially all the assets and certain liabilities of Yuba, a leading global supplier of heat transfer equipment utilized by nuclear, solar, geothermal, gas and coal power generation facilities, for a purchase price of $129.2. Yuba had revenues of approximately $128.8 in the twelve months prior to the date of acquisition. The pro forma effect of the acquisition and the results of operations since acquisition are not material to our results of operations. The assets acquired and liabilities assumed were recorded at preliminary estimates of fair values as determined by management, based on information currently available and on current assumptions as to future operations, and are subject to change during the measurement period upon the completion of acquisition accounting, including the finalization of asset valuations and any working capital settlement. Acquisitions 2008 During September 2008, in the Test and Measurement segment, we completed the acquisition of Autoboss Tech,Inc., a China-based manufacturer of diagnostic tools and equipment serving China's vehicle maintenance and repair market, for a purchase price of |
Business Segment Information
Business Segment Information | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements (in millions, except per share data) | |
Business Segment Information | (5)Business Segment Information We are a global provider of flow technology, test and measurement products and services, thermal equipment and services and industrial products and services with operations in over 35 countries. We offer a diverse collection of products, which include, but are not limited to, valves, fluid handling equipment, metering and mixing solutions, specialty service tools, diagnostic systems, service equipment and technical information services, cooling, heating and ventilation products, power transformers, and TV and radio broadcast antennas. Our products are used by a broad array of customers in various industries, including power generation, chemical processing, pharmaceuticals, infrastructure, mineral processing, petrochemical, automotive service, telecommunications and transportation. We have aggregated our operating segments into four reportable segments: Flow Technology, Test and Measurement, Thermal Equipment and Services and Industrial Products and Services. 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 and distribution methods. In determining our segments, we apply the threshold criteria of the Segment Reporting Topic of the Codification to operating income or loss of each segment before considering impairment and special charges, pensions and postretirement expense, stock-based compensation and other indirect corporate expense. This is consistent with the way our chief operating decision maker evaluates the results of each segment. Revenues by business segment, group of products and geographic area represent sales to unaffiliated customers, and no one customer or group of customers that, to our knowledge, are under common control accounted for more than 10% of our consolidated revenues for any period presented. Intercompany revenues among segments are not significant. Identifiable assets by business segment are those used in our operations in each segment. General corporate assets are principally cash, pension assets, deferred tax assets, certain prepaid expenses, fixed assets and our 44.5% interest in the EGS Electrical Group,LLC and Subsidiaries ("EGS") joint venture. See Note9 for financial information relating to EGS. Flow Technology Our Flow Technology segment designs, manufactures, and markets solutions and products that are used to blend, meter and transport fluids, as well as air and gas filtration and dehydration products. Our Flow Technology businesses focus on innovative, highly engineered new product introductions and expansion from products to systems and services to create total customer solutions. Products for the segment include high-integrity pumps, valves, heat exchangers, fluid mixers, agitators, metering systems, filters and dehydration equipment for the food and beverage and, oil and gas, power generation, chemical, mining, and general industrial markets. Test and Measurement Our Test and Measurement segment engineers and manufactures branded, technologically advanced test and measurement products used on a global |
Special Charges, Net
Special Charges, Net | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements (in millions, except per share data) | |
Special Charges, Net | (6)Special Charges, Net As part of our business strategy, we right-size and consolidate operations to improve long-term results. Additionally, from time to time, we alter our business model to better serve customer demand, fix or discontinue lower-margin product lines and rationalize and consolidate manufacturing capacity. Our restructuring and integration decisions are based, in part, on discounted cash flows to achieve our goals of increased outsourcing, reduced structural footprint, and maintaining profitability in a difficult economic environment. As a result of our strategic review process, we recorded net special charges of $73.1 in 2009, $17.2 in 2008, and $5.2 in 2007. These net special charges were primarily for restructuring initiatives to consolidate manufacturing and sales facilities, reduce workforce, and rationalize certain product lines. The components of the charges have been computed based on actual cash payouts, including severance and other employee benefits based on existing severance policies and local laws and other estimated exit costs, and our estimate of the realizable value of the affected tangible and intangible assets. Impairments of long-lived assets, including amortizable intangibles, which represent non-cash asset write-downs, typically arise from business restructuring decisions that lead to the disposition of assets no longer required in the restructured business. For these situations, we recognize a loss when the carrying amount of an asset exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Fair values for assets subject to impairment testing are determined primarily by management, taking into consideration various factors including third-party appraisals, quoted market prices and previous experience. If an asset remains in service at the decision date, the asset is written down to its fair value and the resulting net book value is depreciated over its remaining economic useful life. When we commit to a plan to sell an asset, including the initiation of a plan to locate a buyer, and it is probable that the asset will be sold within one year based on its current condition and sales price, depreciation of the asset is discontinued and the asset is classified as an asset held for sale. The asset is written down to its fair value less any selling costs. Liabilities for exit costs, including, among other things, severance, other employee benefit costs and operating lease obligations on idle facilities, are measured initially at their fair value and recorded when incurred. Special charges for the years ended December31, 2009, 2008 and 2007 are described in more detail below and in the applicable sections that follow. 2009 2008 2007 Employee termination costs $ 48.0 $ 5.5 $ 2.8 Facility consolidation costs 5.6 2.5 0.3 Other cash costs 8.4 4.9 1.3 Non-cash asset write-downs 11.1 4.3 0.8 Total $ 73.1 $ 17.2 $ 5.2 2009 Charges: Employee Termination Costs Facility Consolidat |
Inventories
Inventories | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements (in millions, except per share data) | |
Inventories | (7)Inventories December31, 2009 2008 Finished goods $ 196.7 $ 229.3 Work in process 118.1 165.0 Raw materials and purchased parts 277.2 312.7 Total FIFO cost 592.0 707.0 Excess of FIFO cost over LIFO inventory value (31.7 ) (40.2 ) Total inventories $ 560.3 $ 666.8 Inventories include material, labor and factory overhead costs and are reduced, when necessary, to estimated realizable values. Certain domestic inventories are valued using the last-in, first-out ("LIFO") method. These inventories were approximately 35% and 36% of total inventory at December31, 2009 and 2008, respectively. Other inventories are valued using the first-in, first-out ("FIFO") method. Progress payments, which are netted against work in process at year-end, were $3.9 and $4.1 at December31, 2009 and 2008, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements (in millions, except per share data) | |
Goodwill and Other Intangible Assets | (8)Goodwill and Other Intangible Assets The changes in the carrying amount of goodwill, by segment, are as follows: December31, 2007 Goodwill resulting from business combinations Impairments(1) Foreign Currency Translation and other(2) December31, 2008 Goodwill resulting from business combinations Impairments(1) Foreign Currency Translation and other(2) December31, 2009 Flow Technology Gross Goodwill $ 661.7 $ $ $ 2.9 $ 664.6 $ $ $ (12.4 ) $ 652.2 Accumulated Impairments Goodwill 661.7 2.9 664.6 (12.4 ) 652.2 Test Measurement Gross Goodwill $ 463.5 $ 3.5 $ $ (6.2 ) $ 460.8 $ $ $ 7.7 $ 468.5 Accumulated Impairments (95.8 ) (0.4 ) (96.2 ) (187.7 ) (3.7 ) (287.6 ) Goodwill 367.7 3.5 (6.6 ) 364.6 (187.7 ) 4.0 180.9 Thermal Equipment and Services Gross Goodwill $ 612.6 $ $ $ (16.9 ) $ 595.7 $ 24.6 $ $ 2.3 $ 622.6 Accumulated Impairments (114.1 ) (114.1 ) (114.1 ) Goodwill 612.6 (114.1 ) (16.9 ) 481.6 24.6 2.3 508.5 Industrial Products and Services Gross Goodwill $ 346.8 $ $ $ (1.9 ) $ 344.9 $ $ $ (0.6 ) $ 344.3 Accumulated Impairments (85.9 ) (85.9 ) (85.9 ) Goodwill 260.9 (1.9 ) 259.0 (0.6 ) 258.4 Total Gross Goodwill $ 2,084.6 $ 3.5 $ $ (22.1 ) $ 2,066.0 $ 24.6 $ $ (3.0 ) $ 2,087.6 Accumulated Impairments (181.7 ) (114.1 ) (0.4 ) (296.2 ) (187.7 ) (3.7 ) (487.6 ) Goodwill $ 1,902.9 $ 3.5 $ (114.1 ) $ (22.5 ) $ 1,769.8 $ 24.6 $ (187.7 ) $ (6.7 ) $ 1,600.0 (1) Impairment charges totaled $187.7 and $114.1 during the years ended December31, 2009 and 2008 and related to our Service Solutions reporting unit and Weil McLain subsidiary, respectively. (2) Includes adjustments resulting from acquisitions and, prior to January1, 2009, adjustments to tax positions considered uncertain at the date of acquisition. For the year ended December31, 2009, adjustments to acquisition accounting and changes from foreign currency translation totaled $(26.3) and $19.6, respectively. For the year ended December31, 2008, net adjustments resulting from the acquisition accounting related to the APV transaction totaled $66.1, which is i |
Investment in Joint Venture
Investment in Joint Venture | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements (in millions, except per share data) | |
Investment in Joint Venture | (9)Investment in Joint Venture We have a joint venture, EGS, with Emerson ElectricCo., in which we hold a 44.5% interest. Emerson ElectricCo. controls and operates the joint venture. EGS operates primarily in the United States, Canada and France and is engaged in the manufacture of electrical fittings, hazardous location lighting and power conditioning products. We account for our investment under the equity method of accounting, on a three-month lag basis, and we typically receive our share of the joint venture's earnings in cash dividends paid quarterly. EGS's results of operations and certain other information for its fiscal years ended 2009, 2008 and 2007 were as follows: 2009 2008 2007 Net sales $ 429.4 $ 575.5 $ 532.0 Gross profit 182.3 245.7 225.4 Net income 62.5 97.4 84.2 Capital expenditures 11.8 10.9 11.5 Depreciation and amortization 8.8 8.2 8.2 Dividends received 30.7 56.5 41.4 Undistributed earnings attributable to SPX Corporation 6.8 9.5 22.3 SPX's equity earnings in EGS 28.0 43.7 39.3 Condensed balance sheet information of EGS as of September30, 2009 and 2008 was as follows: 2009 2008 Current assets $ 126.1 $ 167.1 Non-current assets 297.2 297.8 Current liabilities 61.8 87.5 Non-current liabilities 25.9 17.9 The carrying value of our investment in EGS was $56.5 and $63.6 at December31, 2009 and 2008, respectively, and is recorded in other assets in our consolidated balance sheets. We contributed non-monetary assets to EGS upon its formation. We recorded these contributed assets at their historical cost while EGS recorded these assets at their fair value. As a result of this basis difference in the goodwill recorded by EGS upon formation, our investment in EGS is less than our proportionate share of EGS's net assets, with such difference totaling $85.7 at December31, 2009. |
Employee Benefit Plans
Employee Benefit Plans | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements (in millions, except per share data) | |
Employee Benefit Plans | (10)Employee Benefit Plans Overview We have defined benefit pension plans that cover a portion of our salaried and hourly paid employees, including certain employees in foreign countries. Beginning in 2001, we discontinued providing these pension benefits generally to newly hired employees. In addition, we no longer provide service credits to certain active participants. Of the U.S. employees covered by a defined benefit pension and actively accruing a benefit, most are covered by an account balance plan or are part of a collectively bargained plan. We have domestic postretirement plans that provide health and life insurance benefits for certain retirees and their dependents. Beginning in 2001, we discontinued providing these postretirement benefits generally to newly hired employees. Some of these plans require retiree contributions at varying rates. Not all retirees are eligible to receive these benefits, with eligibility governed by the plan(s) in effect at a particular location. Defined Benefit Pension Plans Plan assets Our investment strategy is based on the long-term growth of principal while mitigating overall risk to ensure that funds are available to pay benefit obligations. The domestic plan assets are invested in a broad range of investment classes, including domestic and international equities, fixed income securities and other investments. We engage various investment managers who are regularly evaluated on long-term performance, adherence to investment guidelines and ability to manage risk commensurate with the investment style and objective for which they were hired. Allowable investments under the plan agreements include equity securities, fixed income securities, mutual funds, venture capital funds, real estate and cash and equivalents. In addition, investments in futures and option contracts, commodities and other derivatives are allowed in commingled fund allocations to professional investment managers. Investments prohibited under the plan agreements include private placements and short selling of stock. No shares of our common stock were held by our defined benefit pension plans as of December31, 2009 and 2008. Actual asset allocation percentages of each major category of our domestic and foreign pension plan assets as of December31, 2009 and 2008, along with the targeted asset investment allocation percentages, each of which is based on the midpoint of an allocation range, are as follows: Domestic Pension Plans Actual Allocations Mid-point of Target Allocation Range 2009 2008 2009 Equity securities 54 % 37 % 60 % Debt securities 22 % 41 % 25 % Alternative investments(1) 21 % 18 % 15 % Other(2) 3 % 4 % % Total 100 % 100 % 100 % (1) Alternative investments are comprised of commingled global fund allocations, which include long-term equity investments, fixed income investments, futures and option contracts and commodities. (2) Assets included in this category at December31, 2009 and 2008 were comprised primarily of short-term investments including cash and equ |
Income Taxes
Income Taxes | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements (in millions, except per share data) | |
Income Taxes | (11)Income Taxes Income before income taxes and the provision for income taxes consisted of the following: Year Ended December31, 2009 2008 2007 Income (loss) from continuing operations: United States $ 120.4 $ 203.6 $ 240.8 Foreign (25.0 ) 207.7 134.1 $ 95.4 $ 411.3 $ 374.9 Provision for (benefit from) income taxes: Current: United States $ 54.0 $ 65.2 $ 39.5 Foreign 14.2 37.8 53.5 Total current 68.2 103.0 93.0 Deferred and other: United States (13.6 ) 19.8 (10.7 ) Foreign (7.4 ) 29.6 1.2 Total deferred and other (21.0 ) 49.4 (9.5 ) Total provision $ 47.2 $ 152.4 $ 83.5 The reconciliation of income tax computed at the U.S. federal statutory tax rate to our effective income tax rate is as follows: Year Ended December31, 2009 2008 2007 Tax at U.S. federal statutory rate 35.0 % 35.0 % 35.0 % State and local taxes, net of U.S. federal benefit 3.6 1.2 0.6 U.S. credits and exemptions (5.3 ) (1.7 ) (1.7 ) Foreign earnings taxed at lower rates (28.0 ) (2.0 ) (10.2 ) Audit settlements with taxing authorities (2.9 ) (6.5 ) (4.7 ) Adjustments to tax contingencies, net 4.4 2.2 2.6 Changes in valuation allowance 6.0 Impairment of goodwill and other intangible assets 44.9 9.6 Benefit for loss on investment in foreign subsidiary (4.6 ) Other (3.6 ) (0.7 ) 0.7 49.5 % 37.1 % 22.3 % Significant components of our deferred tax assets and liabilities are as follows: As of December31, 2009 2008 Deferred tax assets: Working capital accruals $ 50.3 $ 48.6 Legal, environmental and self-insurance accruals 45.8 46.7 Pension, other postretirement and postemployment benefits 198.0 152.2 NOL and credit carryforwards 254.3 203.4 Payroll and compensation 46.9 45.8 Other 120.2 70.4 Total deferred tax assets 715.5 567.1 Valuation allowance (211.5 ) (185.3 ) Net deferred tax assets 504.0 381.8 Deferred tax liabilities: Accelerated depreciation 12.8 12.6 Basis difference in affiliates 34.9 19.7 Intangibles recorded in acquisitions 209.9 229.8 Other 75.6 54.4 Total deferred tax liabilities 333.2 316.5 $ 170.8 $ 65.3 General Matters Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We periodically assess deferred tax assets to determine if they w |
Indebtedness
Indebtedness | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements (in millions, except per share data) | |
Indebtedness | (12)Indebtedness The following summarizes our outstanding debt as of, and debt activity for the year ended, December31, 2009. December31, 2008 Borrowings Repayments Other(3) December31, 2009 Term loan $ 675.0 $ $ (75.0 ) $ $ 600.0 Domestic revolving loan facility 65.0 424.5 (428.0 ) 61.5 7.625% senior notes 500.0 500.0 7.50% senior notes 28.2 28.2 6.25% senior notes 21.3 21.3 Trade receivables financing arrangement(1) 138.0 (116.0 ) 22.0 Other indebtedness(2) 55.2 (17.6 ) 8.4 46.0 Total debt 1,344.7 $ 562.5 $ (636.6 ) $ 8.4 1,279.0 Less: short-term debt 112.9 74.4 Less: current maturities of long-term debt 76.4 76.0 Total long-term debt $ 1,155.4 $ 1,128.6 (1) Under this arrangement, we can borrow, on a continuous basis, up to $130.0, as available. (2) Includes aggregate balances under extended accounts payable programs, a travel card program and a purchase card program of $31.5 and $47.9 at December31, 2009 and 2008, respectively. (3) "Other" includes debt assumed and foreign currency translation on any debt instruments denominated in currencies other than the U.S. dollar. Credit Facilities On September21, 2007, we entered into senior credit facilities with a syndicate of lenders that replaced our then-existing senior credit facilities, which were simultaneously terminated. These senior credit facilities provided for committed senior secured financing in the aggregate amount of $2,300.0, consisting of the following: A term loan facility in an aggregate principal amount of $750.0 (balance of $600.0 at December31, 2009) with a final maturity of September 2012; A domestic revolving credit facility, available for loans and letters of credit, in an aggregate principal amount of up to $400.0 with a final maturity of September 2012; A global revolving credit facility, available for loans in Euros, British Pounds and other currencies in an aggregate principal amount up to the equivalent of $200.0 with a final maturity of September 2012; and A foreign credit instrument facility, available for performance letters of credit and guarantees, in an aggregate principal amount in various currencies up to the equivalent of $950.0 with a final maturity of September 2012. In connection with the termination of our then-existing senior credit facilities, we incurred $3.3 of costs, including $2.3 for the write-off of deferred financing costs, $0.2 for an early termination fee and $0.8 for costs associated with the early termination of our then-existing interest rate protection agreements. At December31, 2009, we had $411.0 of available borrowing capacity under our revolving credit facilities after giving effect to borrowings under the domestic revolving loan facility of $61.5 and to $127.5 reserved for outstanding letters of credit. In addition |
Financial Instruments
Financial Instruments | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements (in millions, except per share data) | |
Financial Instruments | (13)Financial Instruments On January1, 2009, we adopted FASB guidance, which requires enhanced disclosures regarding an entity's derivative and hedging activities. The guidance requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. This adoption had no financial impact on our consolidated financial statements. Interest Rate Swaps We maintain Swaps to hedge interest rate risk on our variable rate term loan. These Swaps, which we designate and account for as cash flow hedges, have maturities through September 2012 and effectively convert the majority of our borrowing under our variable rate term loan to a fixed rate of 4.795% 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 December31, 2009, the aggregate notional amount of the Swaps was $480.0. In connection with the termination of our previously held Swaps, on September21, 2007, we made a net cash payment of $0.4. In addition, we reclassified $0.8 from accumulated other comprehensive income (loss) ("AOCI") to "Loss on early extinguishment of debt." As of December31, 2009 and 2008, we recorded an unrealized loss, net of taxes, of $16.8 and $25.8, respectively, to AOCI. In addition, as of December31, 2009 and 2008, we recorded a long-term liability of $28.0 and $42.0, respectively, to recognize the fair value of our Swaps. Currency Forward Contracts We manufacture and sell our products in a number of countries and, as a result, are exposed to movements in foreign currency exchange rates. Our objective is to preserve the economic value of non-functional currency denominated cash flows and to minimize their impact. Our principal currency exposures relate to the Euro, British Pound, South African Rand and Chinese Yuan. From time to time, we enter into currency protection agreements ("FX 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. In addition, some of our contracts contain currency forward embedded derivatives ("FX embedded derivatives"), as the currency of exchange is not "clearly and closely" related to the functional currency of either party to the transaction. Certain of our FX embedded derivatives and FX forward contracts are designated as cash flow hedges, as deemed appropriate. To the extent these derivatives are effective in offsetting the variability of the hedged cash flows, changes in the derivatives' fair value are included in AOCI. These changes in fair value will subsequently be reclassified into earnings as a component of revenues or cost of goods sold, as applicable, when the forecasted transaction impacts earnings. To the extent that a previously |
Commitments, Contingent Liabili
Commitments, Contingent Liabilities and Other Matters | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements (in millions, except per share data) | |
Commitments, Contingent Liabilities and Other Matters | (14)Commitments, Contingent Liabilities and Other Matters Leases We lease certain manufacturing facilities, offices, sales and service locations, machinery and equipment, vehicles and office equipment under various leasing programs accounted for as operating leases. The future minimum rental payments under operating leases with remaining non-cancelable terms in excess of one year are: Year Ending December31, 2010 $ 41.1 2011 33.6 2012 23.7 2013 17.2 2014 15.0 Thereafter 44.8 Total minimum payments $ 175.4 Total operating lease expense was $58.0 in 2009, $51.4 in 2008 and $44.5 in 2007. Capital leases were not material to any of the periods presented. General Numerous claims, complaints and proceedings arising in the ordinary course of business, including but not limited to those relating to litigation matters (e.g.,class actions, derivative lawsuits and contract, intellectual property, and competitive claims), environmental matters, and risk management matters (e.g.,product and general liability, automobile, and workers' compensation claims), have been filed or are pending against us and certain of our subsidiaries. Additionally, we may become subject to significant claims, of which we are currently unaware, or the claims, of which we are aware, may result in us incurring a significantly greater liability than we anticipate. This may also be true in connection with past or future acquisitions. While we maintain property, cargo, auto, product, general liability, and directors' and officers' liability insurance and have acquired rights under similar policies in connection with these acquisitions that we believe cover a portion of these claims, this insurance may be insufficient or unavailable to protect us against potential loss exposures. In addition, we have increased our self-insurance limits over the past several years. 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. However, we believe that our accruals related to these items are sufficient and that these items and our rights to available insurance and indemnity will be resolved without material adverse effect, individually or in the aggregate, on our financial position, results of operations and cash flows. These accruals totaled $308.5 (including $231.8 for risk management matters) and $340.9 (including $260.7 for risk management matters) at December31, 2009 and 2008, respectively. Of these amounts, $236.8 and $266.8 are included in "Other long-term liabilities" within our consolidated balance sheets at December31, 2009 and 2008, respectively, with the remainder included in "Accrued expenses." Litigation Matters On April13, 2007, we settled a class action lawsuit by purchasers of our common stock alleging violations of the Securities Exchange Act of 1934 and a related ERISA class action lawsuit filed on behalf of participants in our employee benefit plans. Under the terms of the settlement, both class action lawsuits were dismissed with prejudic |
Shareholders' Equity and Stock-
Shareholders' Equity and Stock-Based Compensation | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements (in millions, except per share data) | |
Shareholders' Equity and Stock-Based Compensation | (15)Shareholders' Equity and Stock-Based Compensation Earnings Per Share The following table sets forth the computations of basic and diluted earnings per share: Year Ended December31, 2009 2008 2007 Numerator: Income from continuing operations $ 48.2 $ 258.9 $ 291.4 Less: Net income attributable to noncontrolling interests 1.8 6.6 0.4 Income from continuing operations attributable to SPX Corporation common shareholders for calculating basic and diluted earnings per share $ 46.4 $ 252.3 $ 291.0 Income (loss) from discontinued operations $ (32.0 ) $ 13.9 $ 4.7 Less: Net income (loss) attributable to noncontrolling interest (17.3 ) 18.3 1.5 Income (loss) from discontinued operations attributable to SPX Corporation common shareholders for calculating basic and diluted earnings per share $ (14.7 ) $ (4.4 ) $ 3.2 Denominator: Weighted-average number of common shares used in basic earnings per share 49.363 53.596 55.425 Dilutive Securities Employee stock options, restricted stock and restricted stock units 0.434 0.763 1.012 Weighted-average number of common shares and dilutive securities used in diluted earnings per share 49.797 54.359 56.437 The total number of stock options that were not included in the computation of dilutive earnings per share because their exercise price was greater than the average market price of common shares was 0.668, 0.326 and 0.656 for the years ended December31, 2009, 2008 and 2007, respectively. The total number of unvested restricted stock and restricted stock units that were not included in the computation of diluted income per share because required market thresholds for vesting (as discussed below) were not met was 0.222 and 0.281 at December31, 2009 and 2008, respectively. Accumulated Other Comprehensive Income (Loss) The components of the balance sheet caption accumulated other comprehensive income (loss) were as follows: December31, 2009 December31, 2008 Foreign currency translation adjustment $ 254.6 $ 204.0 Net unrealized losses on qualifying cash flow hedges, net of tax benefit of $13.0 and $19.7, respectively (20.7 ) (31.6 ) Pension liability adjustment, net of tax benefit of $268.0 and $211.5, respectively(1) (447.5 ) (352.3 ) Accumulated other comprehensive loss $ (213.6 ) $ (179.9 ) (1) As of December31, 2009, includes $6.0 related to our share of the pension liability adjustment for EGS. Common Stock and Treasury Stock At December31, 2009, we had 200.0 authorized shares of common stock (par value $10.00). Common shares issued, treasury shares and shares outstanding are summarized in the table below. Common Stock Issued Treasury Stock Shares Outstanding Balance at December31, 2006 92.835 (34.069 ) 58.766 Stock options exercised 1.899 0.388 2.287 Share repurchases |
Fair Value
Fair Value | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements (in millions, except per share data) | |
Fair Value | (16)Fair Value Effective January1, 2009, we adopted fair value measurements, as required by the Fair Value Measurement and Disclosures Topic of the Codification, for our nonfinancial assets and nonfinancial liabilities measured on a non-recurring basis. We adopted these fair value measurements for our financial assets and liabilities during 2008. 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. We utilize market data or assumptions that we believe market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable quoted prices in active markets for identical assets or liabilities (Level1), significant other observable inputs (Level2) or significant unobservable inputs (Level3). Our financial derivative assets and liabilities include Swaps, FX forward contracts, FX embedded derivatives and commodity contracts that are measured at fair value using observable market inputs such as forward rates, interest rates, our own credit risk and our counterparties' credit risk. Based on these inputs, the derivative assets and liabilities are classified within Level2 of the valuation hierarchy. Based on our continued ability to enter into forward contracts, we consider the markets for our fair value instruments to be active. As of December31, 2009, there has been no significant impact to the fair value of our derivative liabilities due to our own credit risk, as the related agreements are collateralized under our senior credit facilities. Similarly, there has been no significant impact to the valuation of our derivative assets based on our evaluation of our counterparties' credit risk. We primarily use the income approach, which uses valuation techniques to convert future amounts to a single present amount. Assets and liabilities measured at fair value on a recurring basis included the following as of December31, 2009: Fair Value Measurements Using Level1 Level2 Level3 Current assets FX embedded derivatives, FX forward contracts and commodity contracts $ $ 1.3 $ Noncurrent assets FX embedded derivatives 0.9 Current liabilities FX forward contracts and FX embedded derivatives 1.7 Long-term liabilities FX embedded derivatives and Swaps 38.1 Assets and liabilities measured at fair value on a recurring basis included the following as of December31, 2008: Fair Value Measurements Using Level1 Level2 Level3 Current assets FX forward contracts and FX embedded derivatives $ $ 0.6 $ Noncurrent assets FX embedded derivatives 8.9 Current liabilities FX forward contracts and commodity contracts 10.1 Long-term liabilities Swaps 42.0 In connection with our annual goodwill impairment testing during the fourth quarter of 2009, we determined that the fair value of our Service Solutions reporting unit was less |
Quarterly Results
Quarterly Results (Unaudited) | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes to Consolidated Financial Statements (in millions, except per share data) | |
Quarterly Results (Unaudited) | (17)Quarterly Results (Unaudited) First(4)(5) Second(4)(5) Third(4)(5) Fourth(5) 2009 2008 2009 2008 2009 2008 2009 2008 Operating revenues $ 1,159.6 $ 1,345.0 $ 1,193.5 $ 1,504.9 $ 1,173.6 $ 1,481.9 $ 1,324.1 $ 1,505.8 Gross profit(1) 332.0 403.1 348.1 461.1 354.6 441.8 386.3 462.3 Income (loss) from continuing operations(2) 38.3 64.3 39.1 90.3 50.8 111.1 (80.0 ) (6.8 ) Income (loss) from discontinued operations, net of tax(2)(3) (14.0 ) 0.3 (6.0 ) 4.3 (18.8 ) 7.2 6.8 2.1 Net income (loss) 24.3 64.6 33.1 94.6 32.0 118.3 (73.2 ) (4.7 ) Less: Net income (loss) attributable to noncontrolling interests (0.1 ) 3.2 (0.3 ) (0.2 ) (14.0 ) 1.3 (1.1 ) 20.6 Net income (loss) attributable to SPX Corporation common shareholders $ 24.4 $ 61.4 $ 33.4 $ 94.8 $ 46.0 $ 117.0 $ (72.1 ) $ (25.3 ) Basic earnings (loss) per share of common stock: Continuing operations $ 0.78 $ 1.17 $ 0.81 $ 1.68 $ 0.99 $ 2.03 $ (1.63 ) $ (0.20 ) Discontinued operations, net of tax (0.29 ) (0.02 ) (0.13 ) 0.09 (0.05 ) 0.13 0.17 (0.27 ) Net income (loss) $ 0.49 $ 1.15 $ 0.68 $ 1.77 $ 0.94 $ 2.16 $ (1.46 ) $ (0.47 ) Diluted earnings (loss) per share of common stock: Continuing operations $ 0.77 $ 1.15 $ 0.80 $ 1.65 $ 0.98 $ 2.00 $ (1.63 ) $ (0.20 ) Discontinued operations, net of tax (0.29 ) (0.02 ) (0.12 ) 0.08 (0.05 ) 0.12 0.17 (0.27 ) Net income (loss) $ 0.48 $ 1.13 $ 0.68 $ 1.73 $ 0.93 $ 2.12 $ (1.46 ) $ (0.47 ) Note:The sum of the quarters' earnings per share may not equal the full year per share amounts. (1) Gross profit for 2009 included charges related to the settlement of two product liability matters of $3.5, $5.5, and $0.5 in the first, second, and third quarters of 2009, respectively. (2) The first, second, third and fourth quarters of 2009 included charges of $11.9, $23.3, $19.3 and $18.6, respectively, associated with restructuring initiatives. The first, second, third and fourth quarters of 2008 included charges of $0.7, $4.2, $4.8 and $7.5, respectively, associated with restructuring initiatives. See Note6 for additional information. The first, second, third and fourth quarters of 2009 included income (expense) for foreign currency transactions and net changes in fair value of our FX forward contracts and FX embedded derivatives of $(12.1), $(2.2), $(7.0), and $0.3, respectively, while the related amounts for the four quarters of 2008 were $(5.7), $4.4, $0.9, and $(5.3), respectively. The third quarter of 2008 included a cha |
Document and Entity Information
Document and Entity Information (USD $) | |||
12 Months Ended
Dec. 31, 2009 | Feb. 22, 2010
| Jun. 27, 2009
| |
Document and Entity Information | |||
Entity Registrant Name | SPX CORP | ||
Entity Central Index Key | 0000088205 | ||
Document Type | 10-K | ||
Document Period End Date | 2009-12-31 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $2,268,347,523 | ||
Entity Common Stock, Shares Outstanding | 49,816,120 |