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(Mark One)
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2017, or
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to .
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Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
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38-1016240
(I.R.S. Employer Identification No.)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, Par Value $0.01
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New York Stock Exchange
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Emerging growth company
o
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Business
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Year
Disposed
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Balcke Dürr*
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2016
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Dry Cooling
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2016
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SPX FLOW*
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2015
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*
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Reflected as a discontinued operation for all periods presented.
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•
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Revenues;
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•
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Margins;
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•
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Profits;
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•
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Cash flows;
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•
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Customers’ orders, including order cancellation activity or delays on existing orders;
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•
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Customers’ ability to access credit;
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Customers’ ability to pay amounts due to us; and
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Suppliers’ and distributors’ ability to perform and the availability and costs of materials and subcontracted services.
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Adverse effects on our reported operating results due to charges to earnings, including impairment charges associated with goodwill and other intangibles;
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Diversion of management attention from core business operations;
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Integration of technology, operations, personnel and financial and other systems;
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Increased expenses;
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Increased foreign operations, often with unique issues relating to corporate culture, compliance with legal and regulatory requirements and other challenges;
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Assumption of known and unknown liabilities and exposure to litigation;
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Increased levels of debt or dilution to existing stockholders; and
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Potential disputes with the sellers of acquired businesses, technology, services or products.
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Impact our ability to obtain new, or refinance existing, indebtedness, on favorable terms or at all;
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Limit our ability to obtain, or obtain on favorable terms, additional debt financing for working capital, capital expenditures or acquisitions;
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Limit our flexibility in reacting to competitive and other changes in the industry and economic conditions;
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Limit our ability to pay dividends on our common stock in the future;
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Coupled with a substantial decrease in net operating cash flows due to economic developments or adverse developments in our business, make it difficult to meet debt service requirements; and
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Expose us to interest rate fluctuations to the extent existing borrowings are, and any new borrowings may be, at variable rates of interest, which could result in higher interest expense and interest payments in the event of increases in interest rates.
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Government embargoes or foreign trade restrictions such as anti-dumping duties, as well as the imposition of trade sanctions by the United States against a class of products imported from or sold and exported to, or the loss of “normal trade relations” status with, countries in which we conduct business, could significantly increase our cost of products imported into or exported from the United States or reduce our sales and harm our business;
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Customs and tariffs may make it difficult or impossible for us to move our products or assets across borders in a cost-effective manner;
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Transportation and shipping expenses add cost to our products;
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Complications related to shipping, including delays due to weather, labor action, or customs, may impact our profit margins or lead to lost business;
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Environmental and other laws and regulations could increase our costs or limit our ability to run our business; and
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Our ability to obtain supplies from foreign vendors and ship products internationally may be impaired during times of crisis or otherwise.
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Significant competition could come from local or long-term participants in non-U.S. markets who may have significantly greater market knowledge and substantially greater resources than we do;
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Local customers may have a preference for locally-produced products;
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Credit risk or financial condition of local customers and distributors could affect our ability to market our products or collect receivables;
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Regulatory or political systems or barriers may make it difficult or impossible to enter or remain in new markets. In addition, these barriers may impact our existing businesses, including making it more difficult for them to grow;
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Local political, economic and social conditions, including the possibility of hyperinflationary conditions, political instability, nationalization of private enterprises, or unexpected changes relating to currency could adversely impact our revenues and operations;
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The United Kingdom’s decision to exit from the European Union (commonly referred to as “Brexit”) has contributed to, and may continue to contribute to, European economic, market and regulatory uncertainty and could adversely affect European or worldwide economic, market, regulatory, or political conditions;
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Customs and tariffs may make it difficult or impossible for us to move our products or assets across borders in a cost-effective manner;
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Transportation and shipping expenses add cost to our products;
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Complications related to shipping, including delays due to weather, labor action, or customs, may impact our profit margins or lead to lost business;
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Local, regional or worldwide hostilities could impact our operations; and
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Distance and language and cultural differences may make it more difficult to manage our business and employees and to effectively market our products and services.
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No. of
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Approximate
Square Footage
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Location
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Facilities
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Owned
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Leased
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(in millions)
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HVAC reportable segment
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7 U.S. states and 2 foreign countries
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9
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0.6
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1.2
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Detection and Measurement reportable segment
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4 U.S. states and 1 foreign country
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5
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0.2
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0.2
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Engineered Solutions reportable segment
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8 U.S. states and 1 foreign country
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13
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2.4
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0.2
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Total
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27
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3.2
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1.6
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High
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Low
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Dividends
Declared Per Share
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2017:
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4
th
Quarter
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$
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32.71
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$
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28.09
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$
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—
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3
rd
Quarter
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29.55
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23.41
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—
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2
nd
Quarter
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28.93
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21.97
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—
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1
st
Quarter
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28.13
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22.56
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—
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High
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Low
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Dividends
Declared Per Share
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2016:
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4
th
Quarter
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$
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25.95
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$
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15.49
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$
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—
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3
rd
Quarter
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20.55
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14.05
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—
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2
nd
Quarter
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17.33
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14.00
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—
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1
st
Quarter
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15.52
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7.62
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—
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2012
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2013
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2014
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2015
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2016
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2017
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||||||||||||
SPX Corporation
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$
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100.00
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$
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143.71
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$
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125.87
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$
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54.80
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$
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139.32
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$
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184.37
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S&P 500
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100.00
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132.39
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150.51
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152.59
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170.84
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208.14
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S&P 1500 Industrials
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100.00
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141.19
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153.15
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149.00
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179.40
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217.19
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S&P 600
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100.00
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139.65
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145.85
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140.95
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175.83
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196.46
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As of and for the year ended December 31,
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2017
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2016
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2015
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2014
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2013
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(in millions, except per share amounts)
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||||||||||||||||||
Summary of Operations
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Revenues
(1)
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$
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1,425.8
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$
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1,472.3
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$
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1,559.0
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$
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1,694.4
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$
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1,715.1
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Operating income (loss)
(1)(2)(3)(4)(5)(13)
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54.8
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55.0
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(122.2
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)
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(185.3
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)
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32.9
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Other income (expense), net
(6)(7)(8)
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(2.0
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)
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(0.3
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)
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(10.0
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)
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490.0
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38.4
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Interest expense, net
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(15.8
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)
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(14.0
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(20.7
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)
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(20.1
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(62.7
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)
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Loss on amendment/refinancing of senior credit agreement/ early extinguishment of debt
(8)
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(0.9
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)
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(1.3
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)
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(1.4
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)
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(32.5
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)
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—
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Income (loss) from continuing operations before income taxes
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36.1
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39.4
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(154.3
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)
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252.1
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8.6
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Income tax (provision) benefit
(9)
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47.9
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(9.1
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)
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2.7
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(137.5
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)
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13.2
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Income (loss) from continuing operations
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84.0
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30.3
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(151.6
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)
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114.6
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21.8
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Income (loss) from discontinued operations, net of tax
(10)
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5.3
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(97.9
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)
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34.6
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269.3
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190.5
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Net income (loss)
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89.3
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(67.6
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)
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(117.0
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)
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383.9
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212.3
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Less: Net income (loss) attributable to noncontrolling interests
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—
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(0.4
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)
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(34.3
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)
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(9.5
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)
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2.4
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Net income (loss) attributable to SPX Corporation common shareholders
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89.3
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(67.2
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)
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(82.7
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)
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393.4
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209.9
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Adjustment related to redeemable noncontrolling interests
(11)
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—
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(18.1
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)
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—
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—
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—
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|||||
Net income (loss) attributable to SPX Corporation common shareholders after adjustment related to redeemable noncontrolling interests
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$
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89.3
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$
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(85.3
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)
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$
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(82.7
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)
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$
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393.4
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$
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209.9
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Basic income (loss) per share of common stock:
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|||||
Income (loss) from continuing operations
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$
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1.98
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$
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0.30
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$
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(2.90
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)
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$
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2.98
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$
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0.46
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Income (loss) from discontinued operations
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0.13
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(2.35
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)
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0.87
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6.30
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4.16
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|||||
Net income (loss) per share
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$
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2.11
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$
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(2.05
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)
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$
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(2.03
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)
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|
$
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9.28
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$
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4.62
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Diluted income (loss) per share of common stock:
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|
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|||||
Income (loss) from continuing operations
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$
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1.91
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$
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0.30
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|
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$
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(2.90
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)
|
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$
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2.94
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|
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$
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0.46
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Income (loss) from discontinued operations
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0.12
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|
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(2.32
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)
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0.87
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6.20
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4.10
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|||||
Net income (loss) per share
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$
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2.03
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$
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(2.02
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)
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$
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(2.03
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)
|
|
$
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9.14
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|
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$
|
4.56
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Dividends declared per share
(12)
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$
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—
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$
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—
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$
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0.75
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$
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1.50
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$
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1.00
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Other financial data:
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|||||
Total assets
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$
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2,040.4
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$
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1,912.5
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$
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2,179.3
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$
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5,894.3
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$
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6,851.7
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Total debt
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356.8
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356.2
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371.8
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733.1
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1,057.6
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|||||
Other long-term obligations
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915.4
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921.1
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851.6
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861.8
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930.8
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|||||
SPX shareholders’ equity
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314.7
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191.6
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345.4
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1,808.7
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2,153.3
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|||||
Noncontrolling interests
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—
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—
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(37.1
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)
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3.2
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14.0
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|||||
Capital expenditures
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11.0
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11.7
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16.0
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19.3
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31.4
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|||||
Depreciation and amortization
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25.2
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26.5
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37.0
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40.6
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42.7
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(1)
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During 2017, 2015 and 2014 we made revisions to expected revenues and costs on our large power projects in South Africa. These revisions resulted in a reduction of revenue and operating income of
$36.9
and
$52.8
, respectively, in 2017,
$57.2
and
$95.0
, respectively, in 2015, and a reduction of revenue and operating profit of $25.0 in 2014. See Notes 5 and 13 to our consolidated financial statements for additional details.
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(2)
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During 2017, we settled a contract that had been suspended and then ultimately cancelled by a customer for cash proceeds of
$9.0
and other consideration. In connection with the settlement, we recorded a gain of
$10.2
within our Engineered Solutions reportable segment
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(3)
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During
2017
,
2016
,
2015
,
2014
and
2013
, we recognized income (expense) related to changes in the fair value of plan assets, actuarial gains (losses), settlement gains (losses) and curtailment gains (losses) of $(
1.6
), $(12.0), $(15.9), $(95.0), and $3.5, respectively, associated with our pension and postretirement benefit plans.
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(4)
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During 2016, we recorded impairment charges of
$30.1
related to the intangible assets of our SPX Heat Transfer (“Heat Transfer”) business.
|
(5)
|
During 2016, we sold our dry cooling business, resulting in a pre-tax gain of
$18.4
.
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(6)
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On January 7, 2014, we completed the sale of our 44.5% interest in EGS to Emerson Electric Co. for cash proceeds of $574.1, which resulted in a pre-tax gain of $491.2. Accordingly, we recognized no equity earnings from this joint venture after 2013. Our equity earnings from this investment totaled $41.9 in 2013.
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(7)
|
During
2017
,
2016
,
2015
,
2014
and
2013
, we recognized gains (losses) of $(
3.3
), $(2.4), $(8.6), $(2.6), and $1.6, respectively, associated with foreign currency transactions, foreign currency forward contracts, and currency forward embedded derivatives.
|
(8)
|
During the fourth quarter of 2017, we amended our senior credit agreement. In connection with the amendment, we recorded a charge of $
0.9
during 2017 to “Loss on amendment/refinancing of senior credit agreement,” which consisted of the write-off of a portion of the unamortized deferred financing costs related to our senior credit facilities. In addition, we discontinued hedge accounting for the interest rate swap agreements that were entered into to hedge the interest rate risk on our then existing variable rate term loan, which resulted in a gain during 2017 of
$2.7
that was recorded to “Other expense, net.”
|
(9)
|
During
2017
, our income tax benefit was impacted most significantly by (i) a tax benefit of
$77.6
related to a worthless stock deduction in the U.S. associated with our investment in a South African subsidiary and (ii)
$4.9
of tax benefits related to various audit settlements, statute expirations, and other adjustments to liabilities for uncertain tax positions, partially offset by (iii)
$11.8
of provisional tax charges associated with the impact of the Tax Cuts and Jobs Act and (iv)
$68.2
of foreign losses generated during the year for which no foreign tax benefit was recognized as future realization of a foreign tax benefit is considered unlikely.
|
(10)
|
During 2017, we reduced the net loss associated with the sale of Balcke Dürr by $
6.8
. The reduction was comprised of an additional income tax benefit recorded for the sale of $
9.4
, partially offset by the impact of adjustments to liabilities retained in connection with the sale and certain other adjustments.
|
(11)
|
In connection with our noncontrolling interest in our South African subsidiary, we have 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 in our calculations of basic and diluted earnings per share for the year ended December 31, 2016. See Note 13 to our consolidated financial statements for additional details regarding the put option and this adjustment.
|
(12)
|
In connection with the Spin-Off, we discontinued dividend payments immediately following the dividend payment for the second quarter of 2015.
|
(13)
|
During 2015, 2014, and 2013 there was a significant amount of general and administrative costs associated with corporate employees and other corporate support that transferred to SPX FLOW at the time of the Spin-Off and did not meet the requirements to be presented within discontinued operations.
|
•
|
Income Tax Matters (see Notes 1 and 10 to our consolidated financial statements for additional details)
|
◦
|
During the fourth quarter of 2017, we recorded an income tax benefit of
$77.6
for a worthless stock deduction in the U.S. associated with our investment in a South African subsidiary.
|
◦
|
On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was enacted which significantly changes U.S. income tax law for businesses and individuals. As a result of the Act, we recorded provisional net income tax charges of
$11.8
during the fourth quarter of 2017.
|
•
|
Gain from a Contract Settlement - During the third quarter of 2017, we settled a contract that had been suspended and then ultimately cancelled by a customer. In connection with the settlement, we:
|
◦
|
Received cash proceeds of $9.0 and other consideration; and
|
◦
|
Recorded a gain of $10.2 within our Engineered Solutions reportable segment.
|
•
|
Amendment of Senior Credit Agreement - On December 19, 2017, we amended our senior credit agreement (see Note 11 to our consolidated financial statements for additional details). In connection with the amendment, we recorded:
|
◦
|
A charge of $0.9 associated with the write-off of a portion of the deferred financing costs associated with the senior credit agreement; and
|
◦
|
A gain of $2.7 related to the discontinuance of hedge accounting for the interest rate swap agreements that were entered into to hedge the interest rate risk on our then existing term loan.
|
•
|
Actuarial Gains and Losses on Pension and Postretirement Plans (see Notes 1 and 9 to our consolidated financial statements for additional details) - We recorded:
|
◦
|
An actuarial gain during the third quarter of 2017 of $
2.6
related to an amendment to our postretirement plans; and
|
◦
|
Net actuarial losses of $
4.2
in the fourth quarter of 2017 in connection with the annual remeasurement of our pension and postretirement plans.
|
•
|
Sale of Dry Cooling Business - On March 30, 2016, we completed the sale of the dry cooling business (see Notes 1 and 4 to our consolidated financial statements for additional details). In connection with the sale, we:
|
◦
|
Received cash proceeds of $47.6; and
|
◦
|
Recorded a gain of $18.4, which includes a reclassification from “Accumulated other comprehensive income” of $40.4 related to foreign currency translation.
|
•
|
Sale of Balcke Dürr - On December 30, 2016, we completed the sale of Balcke Dürr (see Notes 1, 4, and 15 to our consolidated financial statements for additional details).
|
◦
|
The results of Balcke Dürr are presented as a discontinued operation.
|
◦
|
In connection with the sale, we:
|
▪
|
Received cash proceeds of less than $0.1;
|
▪
|
Left $21.1 of cash in the business at the time of the sale and provided the buyer a non-interest bearing loan of $9.1, payable in installments at the end of 2018 and 2019; and
|
▪
|
Recorded a net loss of $78.6 to “Gain (loss) on disposition of discontinued operations, net of tax” within our consolidated statement of operations for 2016.
|
•
|
Intangible Asset Impairment Charges - We recorded impairment charges of $30.1 related to the intangible assets of our Heat Transfer business, which included $23.9 for definite-lived intangible assets and $6.2 for indefinite-lived intangible assets (see Note 8 to our consolidated financial statements for additional details).
|
•
|
Actuarial Losses on Pension and Postretirement Plans (see Notes 1 and 9 to our consolidated financial statements for additional details) - During the year, we recorded net actuarial losses of $12.0.
|
•
|
Spin-Off of SPX FLOW - On September 26, 2015, we completed the Spin-Off of SPX FLOW (see Notes 1 and 4 to our consolidated financial statements for additional details).
|
◦
|
The results of SPX FLOW are presented as a discontinued operation.
|
◦
|
Our 2015 results from continuing operations include a significant amount of general and administrative costs associated with corporate employees and other corporate support that transferred to SPX FLOW at the time of the Spin-Off.
|
•
|
Actuarial Losses on Pension and Postretirement Plans (see Notes 1 and 9 to our consolidated financial statements for additional details) - During the year, we recorded net actuarial losses of $21.0 and a curtailment gain of $5.1.
|
|
Year ended December 31,
|
|
2017 vs
|
|
2016 vs
|
||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2016%
|
|
2015%
|
||||||||
Revenues
|
$
|
1,425.8
|
|
|
$
|
1,472.3
|
|
|
$
|
1,559.0
|
|
|
(3.2
|
)%
|
|
(5.6
|
)%
|
Gross profit
|
330.2
|
|
|
375.8
|
|
|
275.9
|
|
|
(12.1
|
)
|
|
36.2
|
|
|||
% of revenues
|
23.2
|
%
|
|
25.5
|
%
|
|
17.7
|
%
|
|
|
|
|
|
|
|||
Selling, general and administrative expense
|
282.3
|
|
|
301.0
|
|
|
387.8
|
|
|
(6.2
|
)
|
|
(22.4
|
)
|
|||
% of revenues
|
19.8
|
%
|
|
20.4
|
%
|
|
24.9
|
%
|
|
|
|
|
|
|
|||
Intangible amortization
|
0.6
|
|
|
2.8
|
|
|
5.2
|
|
|
(78.6
|
)
|
|
(46.2
|
)
|
|||
Impairment of intangible assets
|
—
|
|
|
30.1
|
|
|
—
|
|
|
*
|
|
|
*
|
|
|||
Special charges, net
|
2.7
|
|
|
5.3
|
|
|
5.1
|
|
|
(49.1
|
)
|
|
3.9
|
|
|||
Gain on contract settlement
|
10.2
|
|
|
—
|
|
|
—
|
|
|
*
|
|
|
*
|
|
|||
Gain on sale of dry cooling business
|
—
|
|
|
18.4
|
|
|
—
|
|
|
*
|
|
|
*
|
|
|||
Other expense, net
|
(2.0
|
)
|
|
(0.3
|
)
|
|
(10.0
|
)
|
|
*
|
|
|
*
|
|
|||
Interest expense, net
|
(15.8
|
)
|
|
(14.0
|
)
|
|
(20.7
|
)
|
|
12.9
|
|
|
(32.4
|
)
|
|||
Loss on amendment/refinancing of senior credit agreement
|
(0.9
|
)
|
|
(1.3
|
)
|
|
(1.4
|
)
|
|
(30.8
|
)
|
|
(7.1
|
)
|
|||
Income (loss) from continuing operations before income taxes
|
36.1
|
|
|
39.4
|
|
|
(154.3
|
)
|
|
*
|
|
|
*
|
|
|||
Income tax (provision) benefit
|
47.9
|
|
|
(9.1
|
)
|
|
2.7
|
|
|
*
|
|
|
*
|
|
|||
Income (loss) from continuing operations
|
84.0
|
|
|
30.3
|
|
|
(151.6
|
)
|
|
*
|
|
|
*
|
|
|||
Components of consolidated revenue decline:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Organic
|
|
|
|
|
|
|
|
|
|
(0.8
|
)
|
|
(3.3
|
)
|
|||
Foreign currency
|
|
|
|
|
|
|
|
|
|
0.6
|
|
|
(1.9
|
)
|
|||
Sale of dry cooling business
|
|
|
|
|
|
|
(0.5
|
)
|
|
(4.1
|
)
|
||||||
South Africa revenue revision
|
|
|
|
|
|
|
|
|
|
(2.5
|
)
|
|
3.7
|
|
|||
Net revenue decline
|
|
|
|
|
|
|
|
|
|
(3.2
|
)
|
|
(5.6
|
)
|
*
|
Not meaningful for comparison purposes.
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Employee termination costs
|
$
|
2.5
|
|
|
$
|
1.7
|
|
|
$
|
4.5
|
|
Facility consolidation costs
|
—
|
|
|
—
|
|
|
0.2
|
|
|||
Other cash costs, net
|
0.2
|
|
|
—
|
|
|
0.1
|
|
|||
Non-cash asset write-downs
|
—
|
|
|
3.6
|
|
|
0.3
|
|
|||
Total
|
$
|
2.7
|
|
|
$
|
5.3
|
|
|
$
|
5.1
|
|
|
Year ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Revenues
|
$
|
153.4
|
|
|
$
|
160.3
|
|
Costs and expenses:
|
|
|
|
||||
Costs of products sold
|
144.2
|
|
|
143.8
|
|
||
Selling, general and administrative
|
31.4
|
|
|
37.9
|
|
||
Impairment of goodwill
|
—
|
|
|
13.7
|
|
||
Special charges (credits), net
|
(1.3
|
)
|
|
12.7
|
|
||
Other expense, net
|
(0.2
|
)
|
|
(0.9
|
)
|
||
Loss before taxes
|
(21.1
|
)
|
|
(48.7
|
)
|
||
Income tax benefit
|
4.5
|
|
|
9.1
|
|
||
Loss from discontinued operations
|
$
|
(16.6
|
)
|
|
$
|
(39.6
|
)
|
|
Year ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Non-cash items included in income (loss) from discontinued operations, net of tax
|
|
|
|
||||
Depreciation and amortization
|
$
|
2.0
|
|
|
$
|
2.2
|
|
Impairment of goodwill
|
—
|
|
|
13.7
|
|
||
Capital expenditures
|
0.7
|
|
|
1.9
|
|
Revenues
|
$
|
1,775.1
|
|
Costs and expenses:
|
|
|
|
Costs of products sold
|
1,179.3
|
|
|
Selling, general and administrative
(2)
|
368.2
|
|
|
Intangible amortization
|
17.7
|
|
|
Impairment of intangible assets
|
15.0
|
|
|
Special charges
|
41.2
|
|
|
Other income, net
|
1.3
|
|
|
Interest expense, net
|
(32.6
|
)
|
|
Income before taxes
|
122.4
|
|
|
Income tax provision
|
(43.0
|
)
|
|
Income from discontinued operations
|
79.4
|
|
|
Less: Net loss attributable to noncontrolling interest
|
(0.9
|
)
|
|
Income from discontinued operations attributable to common shareholders
|
$
|
80.3
|
|
(1)
|
Represents financial results for SPX FLOW through the date of Spin-Off (i.e., the nine months ended September 26, 2015), except for a revision to increase the income tax provision by $1.4 that was recorded during the fourth quarter of 2015.
|
(2)
|
Includes $30.8 of professional fees and other costs that were incurred in connection with the Spin-Off.
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
(1)
|
||||||
Balcke Dürr
|
|
|
|
|
|
||||||
Loss from discontinued operations
|
$
|
(2.6
|
)
|
|
$
|
(107.0
|
)
|
|
$
|
(48.7
|
)
|
Income tax benefit
|
9.4
|
|
|
11.8
|
|
|
9.1
|
|
|||
Income (loss) from discontinued operations, net
|
6.8
|
|
|
(95.2
|
)
|
|
(39.6
|
)
|
|||
|
|
|
|
|
|
||||||
SPX FLOW
|
|
|
|
|
|
||||||
Income from discontinued operations
|
—
|
|
|
—
|
|
|
122.4
|
|
|||
Income tax provision
|
—
|
|
|
—
|
|
|
(43.0
|
)
|
|||
Income from discontinued operations, net
|
—
|
|
|
—
|
|
|
79.4
|
|
|||
|
|
|
|
|
|
||||||
All other
|
|
|
|
|
|
||||||
Loss from discontinued operations
|
(4.0
|
)
|
|
(3.7
|
)
|
|
(8.6
|
)
|
|||
Income tax benefit
|
2.5
|
|
|
1.0
|
|
|
3.4
|
|
|||
Loss from discontinued operations, net
|
(1.5
|
)
|
|
(2.7
|
)
|
|
(5.2
|
)
|
|||
|
|
|
|
|
|
||||||
Total
|
|
|
|
|
|
||||||
Income (loss) from discontinued operations
|
(6.6
|
)
|
|
(110.7
|
)
|
|
65.1
|
|
|||
Income tax (provision) benefit
|
11.9
|
|
|
12.8
|
|
|
(30.5
|
)
|
|||
Income (loss) from discontinued operations, net
|
$
|
5.3
|
|
|
$
|
(97.9
|
)
|
|
$
|
34.6
|
|
(1)
|
For SPX FLOW, represents financial results through the date of Spin-Off (i.e., the nine months ended September 26, 2015), except for a revision to increase the income tax provision by $1.4 that was recorded during the fourth quarter of 2015.
|
|
Year Ended December 31,
|
|
2017 vs.
2016%
|
|
2016 vs.
2015%
|
||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
|
||||||||||
Revenues
|
$
|
511.0
|
|
|
$
|
509.5
|
|
|
$
|
529.1
|
|
|
0.3
|
|
|
(3.7
|
)
|
Income
|
74.1
|
|
|
80.2
|
|
|
80.2
|
|
|
(7.6
|
)
|
|
—
|
|
|||
% of revenues
|
14.5
|
%
|
|
15.7
|
%
|
|
15.2
|
%
|
|
|
|
|
|
|
|||
Components of revenue increase (decline):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Organic
|
|
|
|
|
|
|
|
|
|
0.3
|
|
|
(2.4
|
)
|
|||
Foreign currency
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(1.3
|
)
|
|||
Net revenue increase (decline)
|
|
|
|
|
|
|
|
|
|
0.3
|
|
|
(3.7
|
)
|
|
Year Ended December 31,
|
|
2017 vs.
2016%
|
|
2016 vs.
2015%
|
||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
|
||||||||||
Revenues
|
$
|
260.3
|
|
|
$
|
226.4
|
|
|
$
|
232.3
|
|
|
15.0
|
|
|
(2.5
|
)
|
Income
|
63.4
|
|
|
45.3
|
|
|
46.0
|
|
|
40.0
|
|
|
(1.5
|
)
|
|||
% of revenues
|
24.4
|
%
|
|
20.0
|
%
|
|
19.8
|
%
|
|
|
|
|
|
|
|||
Components of revenue increase (decline):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Organic
|
|
|
|
|
|
|
|
|
|
15.5
|
|
|
(0.3
|
)
|
|||
Foreign currency
|
|
|
|
|
|
|
|
|
|
(0.5
|
)
|
|
(2.2
|
)
|
|||
Net revenue increase (decline)
|
|
|
|
|
|
|
|
|
|
15.0
|
|
|
(2.5
|
)
|
|
Year Ended December 31,
|
|
2017 vs.
2016%
|
|
2016 vs.
2015%
|
||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
|
||||||||||
Revenues
|
$
|
654.5
|
|
|
$
|
736.4
|
|
|
$
|
797.6
|
|
|
(11.1
|
)
|
|
(7.7
|
)
|
Income (loss)
|
(12.6
|
)
|
|
17.3
|
|
|
(87.4
|
)
|
|
*
|
|
|
*
|
|
|||
% of revenues
|
(1.9
|
)%
|
|
2.3
|
%
|
|
(11.0
|
)%
|
|
|
|
|
|
|
|||
Components of revenue decline:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Organic
|
|
|
|
|
|
|
|
|
|
(6.7
|
)
|
|
(4.5
|
)
|
|||
Foreign currency
|
|
|
|
|
|
|
|
|
|
1.5
|
|
|
(2.3
|
)
|
|||
Sale of dry cooling business
|
|
|
|
|
|
|
(0.9
|
)
|
|
(8.1
|
)
|
||||||
South Africa revenue revision
|
|
|
|
|
|
|
(5.0
|
)
|
|
7.2
|
|
||||||
Net revenue decline
|
|
|
|
|
|
|
|
|
|
(11.1
|
)
|
|
(7.7
|
)
|
*
|
Not meaningful for comparison purposes.
|
|
Year Ended December 31,
|
|
2017 vs.
2016%
|
|
2016 vs.
2015%
|
||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
|
||||||||||
Total consolidated revenues
|
$
|
1,425.8
|
|
|
$
|
1,472.3
|
|
|
$
|
1,559.0
|
|
|
(3.2
|
)
|
|
(5.6
|
)
|
Corporate expense
|
46.2
|
|
|
41.7
|
|
|
103.4
|
|
|
10.8
|
|
|
(59.7
|
)
|
|||
% of revenues
|
3.2
|
%
|
|
2.8
|
%
|
|
6.6
|
%
|
|
|
|
|
|
|
|||
Pension and postretirement expense
|
5.4
|
|
|
15.4
|
|
|
18.6
|
|
|
(64.9
|
)
|
|
(17.2
|
)
|
|||
Long-term incentive compensation expense
|
15.8
|
|
|
13.7
|
|
|
33.9
|
|
|
15.3
|
|
|
(59.6
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Continuing operations:
|
|
|
|
|
|
|
|
|
|||
Cash flows from (used in) operating activities
|
$
|
54.2
|
|
|
$
|
53.4
|
|
|
$
|
(76.0
|
)
|
Cash flows from (used in) investing activities
|
(11.3
|
)
|
|
36.4
|
|
|
(14.0
|
)
|
|||
Cash flows used in financing activities
|
(6.2
|
)
|
|
(20.5
|
)
|
|
(173.7
|
)
|
|||
Cash flows used in discontinued operations
|
(6.6
|
)
|
|
(77.8
|
)
|
|
(4.6
|
)
|
|||
Change in cash and equivalents due to changes in foreign currency exchange rates
|
(5.4
|
)
|
|
6.7
|
|
|
(57.9
|
)
|
|||
Net change in cash and equivalents
|
$
|
24.7
|
|
|
$
|
(1.8
|
)
|
|
$
|
(326.2
|
)
|
|
December 31,
2016 |
|
Borrowings
|
|
Repayments
|
|
Other
(5)
|
|
December 31,
2017 |
||||||||||
Revolving loans
|
$
|
—
|
|
|
$
|
54.6
|
|
|
$
|
(54.6
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Term loans
(1)(2)
|
339.6
|
|
|
350.0
|
|
|
(341.2
|
)
|
|
(0.7
|
)
|
|
347.7
|
|
|||||
Trade receivables financing arrangement
(3)
|
—
|
|
|
74.0
|
|
|
(74.0
|
)
|
|
—
|
|
|
—
|
|
|||||
Other indebtedness
(4)
|
16.6
|
|
|
38.7
|
|
|
(48.8
|
)
|
|
2.6
|
|
|
9.1
|
|
|||||
Total debt
|
356.2
|
|
|
$
|
517.3
|
|
|
$
|
(518.6
|
)
|
|
$
|
1.9
|
|
|
356.8
|
|
||
Less: short-term debt
|
14.8
|
|
|
|
|
|
|
|
|
|
|
|
7.0
|
|
|||||
Less: current maturities of long-term debt
|
17.9
|
|
|
|
|
|
|
|
|
0.5
|
|
||||||||
Total long-term debt
|
$
|
323.5
|
|
|
|
|
|
|
|
|
$
|
349.3
|
|
(1)
|
As noted below, we amended our senior credit agreement on December 19, 2017 and proceeds of $350.0 were made available by way of a new term loan facility, with $328.1 utilized to repay, in full, amounts outstanding under the then-existing term loan facility
|
(2)
|
The new term loan is repayable in quarterly installments of
1.25%
of the initial loan amount of $350.0, beginning in the first quarter of 2019, with the remaining balance payable in full on December 19, 2022. Balances are net of unamortized debt issuance costs of
$2.3
and
$1.6
at
December 31, 2017
and
December 31, 2016
, respectively.
|
(3)
|
Under this arrangement, we can borrow, on a continuous basis, up to
$50.0
, as available. At
December 31, 2017
, we had
$33.3
of available borrowing capacity under this facility.
|
(4)
|
Primarily includes capital lease obligations of
$2.1
and
$1.7
, balances under purchase card programs of
$2.8
and $3.9, borrowings under a line of credit in South Africa of
$0.0
and $10.2, and borrowings under a line of credit in China of
$4.1
and
$0.0
, at
December 31, 2017
and
2016
, respectively. The purchase card program allows for payment beyond the normal payment terms for goods and services acquired under the program. As this arrangement extends the payment of these purchases beyond their normal payment terms through third-party lending institutions, we have classified these amounts as short-term debt.
|
(5)
|
“Other” primarily includes debt assumed, foreign currency translation on any debt instruments denominated in currencies other than the U.S. dollar, debt issuance costs incurred in connection with the new term loan, and the impact of amortization of debt issuance costs associated with the term loan.
|
•
|
A new term loan facility in an aggregate principle amount of
$350.0
;
|
•
|
A domestic revolving credit facility, available for loans and letters of credit, in an aggregate principal amount up to
$200.0
;
|
•
|
A global revolving credit facility, available for loans in Euros, GBP and other currencies, in an aggregate principal amount up to the equivalent of
$150.0
;
|
•
|
A participation foreign credit instrument facility, available for performance letters of credit and guarantees, in an aggregate principal amount up to the equivalent of
$145.0
(previously $175.0); and
|
•
|
A bilateral foreign credit instrument facility, available for performance letters of credit and guarantees, in an aggregate principal amount up to the equivalent of
$55.0
(previously $125.0).
|
•
|
Adjusts the maximum aggregate amount of additional commitments we may seek, without consent of existing lenders, to add an incremental term loan facility and/or increase the commitments in respect of the domestic revolving credit facility, the global revolving credit facility, the participation foreign credit instrument facility, and/or the bilateral foreign credit instrument facility, to (i) the greater of (A) $200.0 or (B) our Consolidated EBITDA for the preceding four fiscal quarters, plus (ii) an amount equal to all voluntary prepayments of the term loan facility and the voluntary prepayments accompanied by permanent commitment reductions of revolving credit facilities and foreign credit instrument facilities, plus (iii) an unlimited amount so long as, immediately after giving effect thereto, our Consolidated Senior Secured Leverage Ratio for the prior four fiscal quarters does not exceed 2.75 to 1.00 (with the provisions described in clauses (ii) and (iii) being essentially unchanged from the previous agreement);
|
•
|
Permits unlimited investments, capital stock repurchases and dividends, and prepayments of subordinated debt if our Consolidated Leverage Ratio, after giving pro forma effect to such payments, is less than 2.75 to 1.00 (2.50 to 1.00 prior to the amendment);
|
•
|
Increases the Consolidated Leverage Ratio that we are required to maintain as of the last day of any fiscal quarter to not more than 3.50 to 1.00 (or 4.00 to 1.00 for the four fiscal quarters after certain permitted acquisitions) and included certain add-backs in the definition of consolidated EBITDA used in determining such ratio; and
|
•
|
Adjusts per annum fees charged and the interest rate margins applicable to Eurodollar and alternate base rate loans, in each case based on the Consolidated Leverage Ratio, to be as follows:
|
Consolidated
Leverage
Ratio
|
|
Domestic
Revolving
Commitment
Fee
|
|
Global
Revolving
Commitment
Fee
|
|
Letter of
Credit
Fee
|
|
Foreign
Credit
Commitment
Fee
|
|
Foreign
Credit
Instrument
Fee
|
|
LIBOR
Rate
Loans
|
|
ABR
Loans
|
|||||||
Greater than or equal to 3.00 to 1.0
|
|
0.350
|
%
|
|
0.350
|
%
|
|
2.000
|
%
|
|
0.350
|
%
|
|
1.250
|
%
|
|
2.000
|
%
|
|
1.000
|
%
|
Between 2.25 to 1.0 and 3.00 to 1.0
|
|
0.300
|
%
|
|
0.300
|
%
|
|
1.750
|
%
|
|
0.300
|
%
|
|
1.000
|
%
|
|
1.750
|
%
|
|
0.750
|
%
|
Between 1.50 to 1.0 and 2.25 to 1.0
|
|
0.275
|
%
|
|
0.275
|
%
|
|
1.500
|
%
|
|
0.275
|
%
|
|
0.875
|
%
|
|
1.500
|
%
|
|
0.500
|
%
|
Less than 1.50 to 1.0
|
|
0.250
|
%
|
|
0.250
|
%
|
|
1.375
|
%
|
|
0.250
|
%
|
|
0.800
|
%
|
|
1.375
|
%
|
|
0.375
|
%
|
•
|
Each existing and subsequently acquired or organized domestic material subsidiary with specified exceptions; and
|
•
|
SPX with respect to the obligations of our foreign borrower subsidiaries under the global revolving credit facility, the participation foreign credit instrument facility and the bilateral foreign credit instrument facility.
|
•
|
A Consolidated Interest Coverage Ratio (defined in the Credit Agreement generally as the ratio of consolidated adjusted EBITDA for the four fiscal quarters ended on such date to consolidated cash interest expense for such period) as of the last day of any fiscal quarter of at least
3.50
to
1.00
; and
|
•
|
As previously discussed, a Consolidated Leverage Ratio as of the last day of any fiscal quarter of not more than
3.50
to
1.00
(or
4.00
to
1.00
for the four fiscal quarters after certain permitted acquisitions).
|
|
Total
|
|
Due
Within
1 Year
|
|
Due in
1-3 Years
|
|
Due in
3-5 Years
|
|
Due After
5 Years
|
||||||||||
Short-term debt obligations
|
$
|
7.0
|
|
|
$
|
7.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Long-term debt obligations
|
352.1
|
|
|
0.5
|
|
|
36.0
|
|
|
315.6
|
|
|
—
|
|
|||||
Pension and postretirement benefit plan contributions and payments
(1)
|
210.7
|
|
|
17.3
|
|
|
31.0
|
|
|
25.7
|
|
|
136.7
|
|
|||||
Purchase and other contractual obligation
(2)
|
91.8
|
|
|
90.8
|
|
|
0.9
|
|
|
0.1
|
|
|
—
|
|
|||||
Future minimum operating lease payment
(3)
|
38.3
|
|
|
8.3
|
|
|
14.4
|
|
|
9.0
|
|
|
6.6
|
|
|||||
Interest payments
|
68.0
|
|
|
13.3
|
|
|
28.4
|
|
|
26.3
|
|
|
—
|
|
|||||
Total contractual cash obligations
(4)(5)
|
$
|
767.9
|
|
|
$
|
137.2
|
|
|
$
|
110.7
|
|
|
$
|
376.7
|
|
|
$
|
143.3
|
|
(1)
|
Estimated minimum required pension funding and pension and postretirement benefit payments are based on actuarial estimates using current assumptions for, among other things, discount rates, expected long-term rates of return on plan assets (where applicable), rate of compensation increases, and health care cost trend rates. The expected pension contributions for the U.S. plans in 2018 and thereafter reflect the minimum required contributions under the Pension Protection Act of 2006 and the Worker, Retiree, and Employer Recovery Act of 2008. These contributions do not reflect potential voluntary contributions, or additional contributions that may be required in connection with acquisitions, dispositions or related plan mergers. See Note 9 to our consolidated financial statements for additional information on expected future contributions and benefit payments.
|
(2)
|
Represents contractual commitments to purchase goods and services at specified dates.
|
(3)
|
Represents rental payments under operating leases with remaining non-cancelable terms in excess of one year.
|
(4)
|
Contingent obligations, such as environmental accruals and those relating to uncertain tax positions generally do not have specific payment dates and accordingly have been excluded from the above table. We believe that within the next 12 months it is reasonably possible that our previously unrecognized tax benefits could decrease by approximately $
3.0
to $
15.0
.
|
(5)
|
In addition, the above table does not include potential payments under (i) our derivative financial instruments or (ii) the guarantees and bonds associated with Balcke Dürr.
|
•
|
Sales Price Incentives and Sales Price Escalation Clauses — Sales price incentives and sales price escalations that are reasonably assured and reasonably estimable are recorded over the performance period of the contract. Otherwise, these amounts are recorded when awarded.
|
•
|
Cost Recovery for Product Design Changes and Claims — On occasion, design specifications may change during the course of the contract. Any additional costs arising from these changes may be supported by change orders, or we may submit a claim to the customer. Change orders are accounted for as described above. See below for our accounting policies related to claims.
|
•
|
Material Availability and Costs — Our estimates of material costs generally are based on existing supplier relationships, adequate availability of materials, prevailing market prices for materials, and, in some cases, long-term supplier contracts. Changes in our supplier relationships, delays in obtaining materials, or changes in material prices can have a significant impact on our cost and profitability estimates.
|
•
|
Use of Subcontractors — Our arrangements with subcontractors are generally based on fixed prices; however, our estimates of the cost and profitability can be impacted by subcontractor delays, customer claims arising from subcontractor performance issues, or a subcontractor’s inability to fulfill its obligations.
|
•
|
Labor Costs and Anticipated Productivity Levels — Where applicable, we include the impact of labor improvements in our estimation of costs, such as in cases where we expect a favorable learning curve over the duration of the contract. In these cases, if the improvements do not materialize, costs and profitability could be adversely impacted. Additionally, to the extent we are more or less productive than originally anticipated, estimated costs and profitability may also be impacted.
|
•
|
Effect of Foreign Currency Fluctuations — Fluctuations between currencies in which our long-term contracts are denominated and the currencies under which contract costs are incurred can have an impact on profitability. When the impact on profitability is potentially significant, we may enter into FX forward contracts or prepay certain vendors for raw materials to manage the potential exposure. See Note 12 to our consolidated financial statements for additional details on our FX forward contracts.
|
•
|
Significant variances in financial performance (e.g., revenues, earnings and cash flows) in relation to expectations and historical performance;
|
•
|
Significant changes in end markets or other economic factors;
|
•
|
Significant changes or planned changes in our use of a reporting unit’s assets; and
|
•
|
Significant changes in customer relationships and competitive conditions.
|
|
Expected Maturity Date
|
||||||||||||||||||||||||||
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
|
Fair Value
|
||||||||||||||
Term loan
|
$
|
—
|
|
|
$
|
17.5
|
|
|
$
|
17.5
|
|
|
$
|
17.5
|
|
|
$
|
297.5
|
|
|
$
|
350.0
|
|
|
$
|
—
|
|
Average interest rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.2
|
%
|
|
|
|
|
Page
|
SPX Corporation and Subsidiaries
|
|
Consolidated Financial Statements:
|
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues
|
$
|
1,425.8
|
|
|
$
|
1,472.3
|
|
|
$
|
1,559.0
|
|
Costs and expenses:
|
|
|
|
|
|
||||||
Cost of products sold
|
1,095.6
|
|
|
1,096.5
|
|
|
1,283.1
|
|
|||
Selling, general and administrative
|
282.3
|
|
|
301.0
|
|
|
387.8
|
|
|||
Intangible amortization
|
0.6
|
|
|
2.8
|
|
|
5.2
|
|
|||
Impairment of intangible assets
|
—
|
|
|
30.1
|
|
|
—
|
|
|||
Special charges, net
|
2.7
|
|
|
5.3
|
|
|
5.1
|
|
|||
Gain on contract settlement
|
10.2
|
|
|
—
|
|
|
—
|
|
|||
Gain on sale of dry cooling business
|
—
|
|
|
18.4
|
|
|
—
|
|
|||
Operating income (loss)
|
54.8
|
|
|
55.0
|
|
|
(122.2
|
)
|
|||
Other expense, net
|
(2.0
|
)
|
|
(0.3
|
)
|
|
(10.0
|
)
|
|||
Interest expense
|
(17.1
|
)
|
|
(14.8
|
)
|
|
(22.0
|
)
|
|||
Interest income
|
1.3
|
|
|
0.8
|
|
|
1.3
|
|
|||
Loss on amendment/refinancing of senior credit agreement
|
(0.9
|
)
|
|
(1.3
|
)
|
|
(1.4
|
)
|
|||
Income (loss) from continuing operations before income taxes
|
36.1
|
|
|
39.4
|
|
|
(154.3
|
)
|
|||
Income tax (provision) benefit
|
47.9
|
|
|
(9.1
|
)
|
|
2.7
|
|
|||
Income (loss) from continuing operations
|
84.0
|
|
|
30.3
|
|
|
(151.6
|
)
|
|||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
(16.6
|
)
|
|
39.8
|
|
|||
Gain (loss) on disposition of discontinued operations, net of tax
|
5.3
|
|
|
(81.3
|
)
|
|
(5.2
|
)
|
|||
Income (loss) from discontinued operations, net of tax
|
5.3
|
|
|
(97.9
|
)
|
|
34.6
|
|
|||
Net income (loss)
|
89.3
|
|
|
(67.6
|
)
|
|
(117.0
|
)
|
|||
Less: Net loss attributable to noncontrolling interests
|
—
|
|
|
(0.4
|
)
|
|
(34.3
|
)
|
|||
Net income (loss) attributable to SPX Corporation common shareholders
|
89.3
|
|
|
(67.2
|
)
|
|
(82.7
|
)
|
|||
Adjustment related to redeemable noncontrolling interest (Note 13)
|
—
|
|
|
(18.1
|
)
|
|
—
|
|
|||
Net income (loss) attributable to SPX Corporation common shareholders after
adjustment related to redeemable noncontrolling interest
|
$
|
89.3
|
|
|
$
|
(85.3
|
)
|
|
$
|
(82.7
|
)
|
|
|
|
|
|
|
||||||
Amounts attributable to SPX Corporation common shareholders after adjustment related to redeemable noncontrolling interest:
|
|
|
|
|
|
||||||
Income (loss) from continuing operations, net of tax
|
$
|
84.0
|
|
|
$
|
12.6
|
|
|
$
|
(118.2
|
)
|
Income (loss) from discontinued operations, net of tax
|
5.3
|
|
|
(97.9
|
)
|
|
35.5
|
|
|||
Net income (loss)
|
$
|
89.3
|
|
|
$
|
(85.3
|
)
|
|
$
|
(82.7
|
)
|
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
|
$
|
1.98
|
|
|
$
|
0.30
|
|
|
$
|
(2.90
|
)
|
Income (loss) from discontinued operations attributable to SPX Corporation common shareholders
|
0.13
|
|
|
(2.35
|
)
|
|
0.87
|
|
|||
Net income (loss) per share attributable to SPX Corporation common shareholders after adjustment related to redeemable noncontrolling interest
|
$
|
2.11
|
|
|
$
|
(2.05
|
)
|
|
$
|
(2.03
|
)
|
Weighted-average number of common shares outstanding — basic
|
42.413
|
|
|
41.610
|
|
|
40.733
|
|
|||
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
|
$
|
1.91
|
|
|
$
|
0.30
|
|
|
$
|
(2.90
|
)
|
Income (loss) from discontinued operations attributable to SPX Corporation common shareholders
|
0.12
|
|
|
(2.32
|
)
|
|
0.87
|
|
|||
Net income (loss) per share attributable to SPX Corporation common shareholders after adjustment related to redeemable noncontrolling interest
|
$
|
2.03
|
|
|
$
|
(2.02
|
)
|
|
$
|
(2.03
|
)
|
Weighted-average number of common shares outstanding — diluted
|
43.905
|
|
|
42.161
|
|
|
40.733
|
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net income (loss)
|
$
|
89.3
|
|
|
$
|
(67.6
|
)
|
|
$
|
(117.0
|
)
|
Other comprehensive income (loss), net:
|
|
|
|
|
|
|
|
||||
Pension liability adjustment, net of tax (provision) benefit of $(9.8), $0.4, and $(0.1) in 2017, 2016 and 2015, respectively
|
15.2
|
|
|
(0.6
|
)
|
|
(0.4
|
)
|
|||
Net unrealized gains (losses) on qualifying cash flow hedges, net of tax (provision) benefit of $0.4, $(1.7) and $(0.3) in 2017, 2016 and 2015, respectively
|
(0.7
|
)
|
|
3.3
|
|
|
(0.6
|
)
|
|||
Foreign currency translation adjustments
|
0.5
|
|
|
(50.9
|
)
|
|
(132.9
|
)
|
|||
Other comprehensive Income (loss), net
|
15.0
|
|
|
(48.2
|
)
|
|
(133.9
|
)
|
|||
Total comprehensive income (loss)
|
104.3
|
|
|
(115.8
|
)
|
|
(250.9
|
)
|
|||
Less: Total comprehensive loss attributable to noncontrolling interests
|
—
|
|
|
(0.4
|
)
|
|
(34.3
|
)
|
|||
Total comprehensive income (loss) attributable to SPX Corporation common shareholders
|
$
|
104.3
|
|
|
$
|
(115.4
|
)
|
|
$
|
(216.6
|
)
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and equivalents
|
$
|
124.3
|
|
|
$
|
99.6
|
|
Accounts receivable, net
|
267.5
|
|
|
251.7
|
|
||
Inventories, net
|
143.0
|
|
|
145.7
|
|
||
Other current assets (includes income taxes receivable of $62.4 and $1.2 at December 31, 2017 and 2016, respectively)
|
97.7
|
|
|
30.6
|
|
||
Total current assets
|
632.5
|
|
|
527.6
|
|
||
Property, plant and equipment:
|
|
|
|
|
|||
Land
|
15.8
|
|
|
15.4
|
|
||
Buildings and leasehold improvements
|
120.5
|
|
|
117.3
|
|
||
Machinery and equipment
|
330.4
|
|
|
329.8
|
|
||
|
466.7
|
|
|
462.5
|
|
||
Accumulated depreciation
|
(280.1
|
)
|
|
(267.0
|
)
|
||
Property, plant and equipment, net
|
186.6
|
|
|
195.5
|
|
||
Goodwill
|
345.9
|
|
|
340.4
|
|
||
Intangibles, net
|
117.6
|
|
|
117.9
|
|
||
Other assets
|
706.9
|
|
|
680.5
|
|
||
Deferred income taxes
|
50.9
|
|
|
50.6
|
|
||
TOTAL ASSETS
|
$
|
2,040.4
|
|
|
$
|
1,912.5
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|||
Current liabilities:
|
|
|
|
|
|||
Accounts payable
|
$
|
159.7
|
|
|
$
|
137.6
|
|
Accrued expenses
|
292.6
|
|
|
304.3
|
|
||
Income taxes payable
|
1.2
|
|
|
1.7
|
|
||
Short-term debt
|
7.0
|
|
|
14.8
|
|
||
Current maturities of long-term debt
|
0.5
|
|
|
17.9
|
|
||
Total current liabilities
|
461.0
|
|
|
476.3
|
|
||
Long-term debt
|
349.3
|
|
|
323.5
|
|
||
Deferred and other income taxes
|
29.6
|
|
|
42.4
|
|
||
Other long-term liabilities
|
885.8
|
|
|
878.7
|
|
||
Total long-term liabilities
|
1,264.7
|
|
|
1,244.6
|
|
||
Commitments and contingent liabilities (Note 13)
|
|
|
|
|
|
||
Equity:
|
|
|
|
|
|||
Common stock (51,186,064 and 42,650,599 issued and outstanding at December 31, 2017, respectively, and 50,754,779 and 41,940,089 issued and outstanding at December 31, 2016, respectively)
|
0.5
|
|
|
0.5
|
|
||
Paid-in capital
|
1,309.8
|
|
|
1,307.9
|
|
||
Retained deficit
|
(742.3
|
)
|
|
(831.6
|
)
|
||
Accumulated other comprehensive income
|
250.1
|
|
|
235.1
|
|
||
Common stock in treasury (8,535,465 and 8,814,690 shares at December 31, 2017 and 2016, respectively)
|
(503.4
|
)
|
|
(520.3
|
)
|
||
Total equity
|
314.7
|
|
|
191.6
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
2,040.4
|
|
|
$
|
1,912.5
|
|
|
Common
Stock |
|
Paid-In
Capital |
|
Retained
Earnings (Deficit) |
|
Accum. Other
Comprehensive Income |
|
Common
Stock In Treasury |
|
SPX
Corporation Shareholders’ Equity |
|
Noncontrolling
Interests |
|
Total
Equity |
||||||||||||||||
Balance at December 31, 2014
|
$
|
1.0
|
|
|
$
|
2,608.0
|
|
|
$
|
2,628.6
|
|
|
$
|
62.6
|
|
|
$
|
(3,491.5
|
)
|
|
$
|
1,808.7
|
|
|
$
|
3.2
|
|
|
$
|
1,811.9
|
|
Net Loss
|
—
|
|
|
—
|
|
|
(82.7
|
)
|
|
|
|
|
—
|
|
|
(82.7
|
)
|
|
(34.3
|
)
|
|
(117.0
|
)
|
||||||||
Other comprehensive loss, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(133.9
|
)
|
|
—
|
|
|
(133.9
|
)
|
|
—
|
|
|
(133.9
|
)
|
||||||||
Dividends declared ($0.75 per share)
|
—
|
|
|
—
|
|
|
(30.9
|
)
|
|
—
|
|
|
—
|
|
|
(30.9
|
)
|
|
—
|
|
|
(30.9
|
)
|
||||||||
Incentive plan activity
|
—
|
|
|
14.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14.7
|
|
|
—
|
|
|
14.7
|
|
||||||||
Long-term incentive compensation expense, including $6.0 related to discontinued operations
|
—
|
|
|
39.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39.9
|
|
|
—
|
|
|
39.9
|
|
||||||||
Restricted stock and restricted stock unit vesting, including related tax benefit of $0.7 and net of tax withholdings
|
—
|
|
|
(13.0
|
)
|
|
—
|
|
|
—
|
|
|
5.2
|
|
|
(7.8
|
)
|
|
—
|
|
|
(7.8
|
)
|
||||||||
Other changes in noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.3
|
|
|
5.3
|
|
||||||||
Spin-Off of FLOW Business
|
—
|
|
|
—
|
|
|
(1,617.2
|
)
|
|
354.6
|
|
|
—
|
|
|
(1,262.6
|
)
|
|
(11.3
|
)
|
|
(1,273.9
|
)
|
||||||||
Balance at December 31, 2015
|
1.0
|
|
|
2,649.6
|
|
|
897.8
|
|
|
283.3
|
|
|
(3,486.3
|
)
|
|
345.4
|
|
|
(37.1
|
)
|
|
308.3
|
|
||||||||
Net loss
|
—
|
|
|
—
|
|
|
(67.2
|
)
|
|
|
|
—
|
|
|
(67.2
|
)
|
|
(0.4
|
)
|
|
(67.6
|
)
|
|||||||||
Other comprehensive loss, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(48.2
|
)
|
|
—
|
|
|
(48.2
|
)
|
|
—
|
|
|
(48.2
|
)
|
||||||||
Incentive plan activity
|
—
|
|
|
8.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.8
|
|
|
—
|
|
|
8.8
|
|
||||||||
Long-term incentive compensation expense
|
—
|
|
|
12.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12.7
|
|
|
—
|
|
|
12.7
|
|
||||||||
Restricted stock and restricted stock unit vesting, including related tax benefit of $2.2 and net of tax withholdings
|
—
|
|
|
(21.8
|
)
|
|
—
|
|
|
—
|
|
|
17.9
|
|
|
(3.9
|
)
|
|
—
|
|
|
(3.9
|
)
|
||||||||
Treasury share retirement
|
(0.5
|
)
|
|
(1,285.4
|
)
|
|
(1,662.2
|
)
|
|
|
|
2,948.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Adjustment related to redeemable noncontrolling interest (Note 13)
|
—
|
|
|
(56.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(56.0
|
)
|
|
38.7
|
|
|
(17.3
|
)
|
||||||||
Other changes in noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.2
|
)
|
|
(1.2
|
)
|
||||||||
Balance at December 31, 2016
|
0.5
|
|
|
1,307.9
|
|
|
(831.6
|
)
|
|
235.1
|
|
|
(520.3
|
)
|
|
191.6
|
|
|
—
|
|
|
191.6
|
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
89.3
|
|
|
—
|
|
|
—
|
|
|
89.3
|
|
|
—
|
|
|
89.3
|
|
||||||||
Other comprehensive income, net
|
—
|
|
|
—
|
|
|
—
|
|
|
15.0
|
|
|
—
|
|
|
15.0
|
|
|
—
|
|
|
15.0
|
|
||||||||
Incentive plan activity
|
—
|
|
|
11.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11.3
|
|
|
—
|
|
|
11.3
|
|
||||||||
Long-term incentive compensation expense
|
—
|
|
|
12.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12.0
|
|
|
—
|
|
|
12.0
|
|
||||||||
Restricted stock and restricted stock unit vesting, including related tax benefit of $0.6 and net of tax withholdings
|
—
|
|
|
(21.4
|
)
|
|
—
|
|
|
—
|
|
|
16.9
|
|
|
(4.5
|
)
|
|
—
|
|
|
(4.5
|
)
|
||||||||
Balance at December 31, 2017
|
$
|
0.5
|
|
|
$
|
1,309.8
|
|
|
$
|
(742.3
|
)
|
|
$
|
250.1
|
|
|
$
|
(503.4
|
)
|
|
$
|
314.7
|
|
|
$
|
—
|
|
|
$
|
314.7
|
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from (used in) operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
89.3
|
|
|
$
|
(67.6
|
)
|
|
$
|
(117.0
|
)
|
Less: Income (loss) from discontinued operations, net of tax
|
5.3
|
|
|
(97.9
|
)
|
|
34.6
|
|
|||
Income (loss) from continuing operations
|
84.0
|
|
|
30.3
|
|
|
(151.6
|
)
|
|||
Adjustments to reconcile income (loss) from continuing operations to net cash from (used in) operating activities
|
|
|
|
|
|
|
|
|
|||
Special charges, net
|
2.7
|
|
|
5.3
|
|
|
5.1
|
|
|||
Gain on asset sales
|
—
|
|
|
(0.9
|
)
|
|
(1.2
|
)
|
|||
Gain on sale of dry cooling business
|
—
|
|
|
(18.4
|
)
|
|
—
|
|
|||
Impairment of intangible assets
|
—
|
|
|
30.1
|
|
|
—
|
|
|||
Loss on amendment/refinancing of senior credit agreement
|
0.9
|
|
|
1.3
|
|
|
1.4
|
|
|||
Deferred and other income taxes
|
(21.0
|
)
|
|
—
|
|
|
4.9
|
|
|||
Depreciation and amortization
|
25.2
|
|
|
26.5
|
|
|
37.0
|
|
|||
Pension and other employee benefits
|
14.9
|
|
|
24.8
|
|
|
35.2
|
|
|||
Long-term incentive compensation
|
15.8
|
|
|
13.7
|
|
|
33.9
|
|
|||
Other, net
|
4.7
|
|
|
3.2
|
|
|
3.8
|
|
|||
Changes in operating assets and liabilities, net of effects from acquisition and divestitures
|
|
|
|
|
|
|
|
|
|||
Accounts receivable and other assets
|
(102.8
|
)
|
|
(28.7
|
)
|
|
(6.9
|
)
|
|||
Inventories
|
4.5
|
|
|
8.5
|
|
|
(21.2
|
)
|
|||
Accounts payable, accrued expenses and other
|
28.3
|
|
|
(40.2
|
)
|
|
(11.3
|
)
|
|||
Cash spending on restructuring actions
|
(3.0
|
)
|
|
(2.1
|
)
|
|
(5.1
|
)
|
|||
Net cash from (used in) continuing operations
|
54.2
|
|
|
53.4
|
|
|
(76.0
|
)
|
|||
Net cash from (used in) discontinued operations
|
(6.6
|
)
|
|
(46.9
|
)
|
|
37.5
|
|
|||
Net cash from (used in) operating activities
|
47.6
|
|
|
6.5
|
|
|
(38.5
|
)
|
|||
Cash flows from (used in) investing activities:
|
|
|
|
|
|
|
|
|
|||
Proceeds from asset sales
|
—
|
|
|
48.1
|
|
|
2.0
|
|
|||
Increase in restricted cash
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|||
Capital expenditures
|
(11.0
|
)
|
|
(11.7
|
)
|
|
(16.0
|
)
|
|||
Net cash from (used in) continuing operations
|
(11.3
|
)
|
|
36.4
|
|
|
(14.0
|
)
|
|||
Net cash used in discontinued operations (includes cash divested with the sale of Balcke Dürr of $30.2 in 2016)
|
—
|
|
|
(30.9
|
)
|
|
(40.2
|
)
|
|||
Net cash from (used in) investing activities
|
(11.3
|
)
|
|
5.5
|
|
|
(54.2
|
)
|
|||
Cash flows used in financing activities:
|
|
|
|
|
|
|
|
|
|||
Borrowings under senior credit facilities
|
404.6
|
|
|
56.2
|
|
|
1,264.0
|
|
|||
Repayments under senior credit facilities
|
(395.8
|
)
|
|
(65.0
|
)
|
|
(1,167.0
|
)
|
|||
Borrowings under trade receivables agreement
|
74.0
|
|
|
72.0
|
|
|
156.0
|
|
|||
Repayments under trade receivables agreement
|
(74.0
|
)
|
|
(72.0
|
)
|
|
(166.0
|
)
|
|||
Net borrowings (repayments) under other financing arrangements
|
(10.1
|
)
|
|
(10.1
|
)
|
|
12.2
|
|
|||
Minimum withholdings paid on behalf of employees for net share settlements, net of proceeds from the exercise of employee stock options and other
|
(1.3
|
)
|
|
(1.6
|
)
|
|
(6.2
|
)
|
|||
Financing fees paid
|
(3.6
|
)
|
|
—
|
|
|
(12.2
|
)
|
|||
Dividends paid
|
—
|
|
|
—
|
|
|
(45.9
|
)
|
|||
Cash divested in connection with the spin-off of FLOW Business
|
—
|
|
|
—
|
|
|
(208.6
|
)
|
|||
Net cash used in continuing operations
|
(6.2
|
)
|
|
(20.5
|
)
|
|
(173.7
|
)
|
|||
Net cash used in discontinued operations
|
—
|
|
|
—
|
|
|
(1.9
|
)
|
|||
Net cash used in financing activities
|
(6.2
|
)
|
|
(20.5
|
)
|
|
(175.6
|
)
|
|||
Change in cash and equivalents due to changes in foreign currency exchange rates
|
(5.4
|
)
|
|
6.7
|
|
|
(57.9
|
)
|
|||
Net change in cash and equivalents
|
24.7
|
|
|
(1.8
|
)
|
|
(326.2
|
)
|
|||
Consolidated cash and equivalents, beginning of period
|
99.6
|
|
|
101.4
|
|
|
427.6
|
|
|||
Consolidated cash and equivalents, end of period
|
$
|
124.3
|
|
|
$
|
99.6
|
|
|
$
|
101.4
|
|
Cash and equivalents of continuing operations
|
$
|
124.3
|
|
|
$
|
99.6
|
|
|
$
|
97.2
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|||
Interest paid
|
$
|
15.1
|
|
|
$
|
12.5
|
|
|
$
|
60.8
|
|
Income taxes paid, net of refunds of $2.7, $4.3 and $8.8 in 2017, 2016 and 2015, respectively
|
$
|
22.9
|
|
|
$
|
4.8
|
|
|
$
|
51.0
|
|
Non-cash investing and financing activity:
|
|
|
|
|
|
|
|
|
|||
Debt assumed
|
$
|
0.9
|
|
|
$
|
3.9
|
|
|
$
|
1.0
|
|
•
|
Sale of Dry Cooling Business - On March 30, 2016, we completed the sale of our dry cooling business, a business that provides dry cooling systems to the global power generation markets and was previously reported within our Engineered Solutions reportable segment, to Paharpur Cooling Towers Limited. See Note 4 for additional details.
|
•
|
Sale of Balcke Dürr Business - On December 30, 2016, we completed the sale of Balcke Dürr, a business that provides heat exchangers and other related components to the European and Asian power generation markets, to a subsidiary of mutares AG (the “Buyer”). Balcke Dürr historically had been the most significant of our power generation businesses and, in recent years, had experienced significant declines in its operating performance as evidenced by its net loss of
$39.6
in 2015. With the sale, we eliminated the losses and liquidity needs of Balcke Dürr, which were expected to be significant in the foreseeable future. As we considered the disposition of Balcke Dürr to be the cornerstone of our strategic shift away from the power generation markets, and given the significance of Balcke Dürr’s financial results to our overall operations prior to its disposition, we have classified Balcke Dürr as a discontinued operation in the accompanying consolidated financial statements. See Note 4 for additional details.
|
|
2017
|
|
2016
|
||||
Costs incurred on uncompleted contracts
|
$
|
1,261.3
|
|
|
$
|
1,191.4
|
|
Estimated earnings (loss) to date
|
(59.9
|
)
|
|
25.0
|
|
||
|
1,201.4
|
|
|
1,216.4
|
|
||
Less: Billings to date
|
(1,202.0
|
)
|
|
(1,235.8
|
)
|
||
Billings in excess of costs and estimated earnings
|
$
|
(0.6
|
)
|
|
$
|
(19.4
|
)
|
|
2017
|
|
2016
|
||||
Costs and estimated earnings in excess of billings
(1)
|
$
|
28.8
|
|
|
$
|
33.9
|
|
Billings in excess of costs and estimated earnings on uncompleted contracts
(2)
|
(29.4
|
)
|
|
(53.3
|
)
|
||
Net billings in excess of costs and estimated earnings
|
$
|
(0.6
|
)
|
|
$
|
(19.4
|
)
|
(1)
|
Reported as a component of “Accounts receivable, net.”
|
(2)
|
Reported as a component of “Accrued expenses.”
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of year
|
$
|
10.1
|
|
|
$
|
9.1
|
|
|
$
|
12.9
|
|
Allowances provided
|
13.2
|
|
|
15.7
|
|
|
14.0
|
|
|||
Write-offs, net of recoveries, credits issued and other
|
(13.1
|
)
|
|
(14.7
|
)
|
|
(17.8
|
)
|
|||
Balance at end of year
|
$
|
10.2
|
|
|
$
|
10.1
|
|
|
$
|
9.1
|
|
(1)
|
Unearned revenue includes billings in excess of costs and estimated earnings on uncompleted contracts accounted for under the percentage-of-completion method of revenue recognition, customer deposits and unearned amounts on service contracts.
|
(2)
|
Other consists of various items including, among other items, accrued legal costs, interest and restructuring costs, none of which is individually material.
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of year
|
$
|
35.8
|
|
|
$
|
36.3
|
|
|
$
|
34.5
|
|
Provisions
|
13.0
|
|
|
15.2
|
|
|
18.1
|
|
|||
Usage
|
(15.4
|
)
|
|
(15.5
|
)
|
|
(16.0
|
)
|
|||
Currency translation adjustment
|
0.5
|
|
|
(0.2
|
)
|
|
(0.3
|
)
|
|||
Balance at end of year
|
33.9
|
|
|
35.8
|
|
|
36.3
|
|
|||
Less: Current portion of warranty
|
13.8
|
|
|
15.6
|
|
|
17.0
|
|
|||
Non-current portion of warranty
|
$
|
20.1
|
|
|
$
|
20.2
|
|
|
$
|
19.3
|
|
|
Year ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Revenues
|
$
|
153.4
|
|
|
$
|
160.3
|
|
Costs and expenses:
|
|
|
|
||||
Costs of products sold
|
144.2
|
|
|
143.8
|
|
||
Selling, general and administrative
|
31.4
|
|
|
37.9
|
|
||
Impairment of goodwill
|
—
|
|
|
13.7
|
|
||
Special charges (credits), net
|
(1.3
|
)
|
|
12.7
|
|
||
Other expense
|
(0.2
|
)
|
|
(0.9
|
)
|
||
Loss before taxes
|
(21.1
|
)
|
|
(48.7
|
)
|
||
Income tax benefit
|
4.5
|
|
|
9.1
|
|
||
Loss from discontinued operations
|
$
|
(16.6
|
)
|
|
$
|
(39.6
|
)
|
|
Year ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Non-cash items included in income (loss) from discontinued operations, net of tax
|
|
|
|
||||
Depreciation and amortization
|
$
|
2.0
|
|
|
$
|
2.2
|
|
Impairment of goodwill
|
—
|
|
|
13.7
|
|
||
Capital expenditures
|
0.7
|
|
|
1.9
|
|
Revenues
|
$
|
1,775.1
|
|
Costs and expenses:
|
|
|
|
Costs of products sold
|
1,179.3
|
|
|
Selling, general and administrative
(2)
|
368.2
|
|
|
Intangible amortization
|
17.7
|
|
|
Impairment of intangible assets
|
15.0
|
|
|
Special charges
|
41.2
|
|
|
Other income, net
|
1.3
|
|
|
Interest expense, net
|
(32.6
|
)
|
|
Income before taxes
|
122.4
|
|
|
Income tax provision
|
(43.0
|
)
|
|
Income from discontinued operations
|
79.4
|
|
|
Less: Net loss attributable to noncontrolling interest
|
(0.9
|
)
|
|
Income from discontinued operations attributable to common shareholders
|
$
|
80.3
|
|
(1)
|
Represents financial results for SPX FLOW through the date of Spin-Off (i.e., the nine months ended September 26, 2015), except for a revision to increase the income tax provision by
$1.4
that was recorded during the fourth quarter of 2015.
|
(2)
|
Includes $
30.8
of professional fees and other costs that were incurred in connection with the Spin-Off.
|
(1)
|
Represents financial results for SPX FLOW through the date of Spin-Off (i.e., the nine months ended September 26, 2015).
|
•
|
Separation and Distribution Agreement;
|
•
|
Tax Matters Agreement;
|
•
|
Employee Matters Agreement; and
|
•
|
Trademark License Agreement.
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
(1)
|
||||||
Balcke Dürr
|
|
|
|
|
|
||||||
Loss from discontinued operations
|
$
|
(2.6
|
)
|
|
$
|
(107.0
|
)
|
|
$
|
(48.7
|
)
|
Income tax benefit
|
9.4
|
|
|
11.8
|
|
|
9.1
|
|
|||
Income (loss) from discontinued operations, net
|
6.8
|
|
|
(95.2
|
)
|
|
(39.6
|
)
|
|||
|
|
|
|
|
|
||||||
SPX FLOW
|
|
|
|
|
|
||||||
Income from discontinued operations
|
—
|
|
|
—
|
|
|
122.4
|
|
|||
Income tax provision
|
—
|
|
|
—
|
|
|
(43.0
|
)
|
|||
Income from discontinued operations, net
|
—
|
|
|
—
|
|
|
79.4
|
|
|||
|
|
|
|
|
|
||||||
All other
|
|
|
|
|
|
||||||
Loss from discontinued operations
|
(4.0
|
)
|
|
(3.7
|
)
|
|
(8.6
|
)
|
|||
Income tax benefit
|
2.5
|
|
|
1.0
|
|
|
3.4
|
|
|||
Loss from discontinued operations, net
|
(1.5
|
)
|
|
(2.7
|
)
|
|
(5.2
|
)
|
|||
|
|
|
|
|
|
||||||
Total
|
|
|
|
|
|
||||||
Income (loss) from discontinued operations
|
(6.6
|
)
|
|
(110.7
|
)
|
|
65.1
|
|
|||
Income tax (provision) benefit
|
11.9
|
|
|
12.8
|
|
|
(30.5
|
)
|
|||
Income (loss) from discontinued operations, net
|
$
|
5.3
|
|
|
$
|
(97.9
|
)
|
|
$
|
34.6
|
|
(1)
|
For SPX FLOW, represents financial results through the date of Spin-Off (i.e., the nine months ended September 26, 2015), except for a revision to increase the income tax provision by
$1.4
that was recorded during the fourth quarter of 2015.
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues:
|
|
|
|
|
|
||||||
HVAC segment
|
$
|
511.0
|
|
|
$
|
509.5
|
|
|
$
|
529.1
|
|
Detection and Measurement segment
|
260.3
|
|
|
226.4
|
|
|
232.3
|
|
|||
Engineered Solutions segment
(1)
|
654.5
|
|
|
736.4
|
|
|
797.6
|
|
|||
Consolidated revenues
|
$
|
1,425.8
|
|
|
$
|
1,472.3
|
|
|
$
|
1,559.0
|
|
Income (loss):
|
|
|
|
|
|
||||||
HVAC segment
|
$
|
74.1
|
|
|
$
|
80.2
|
|
|
$
|
80.2
|
|
Detection and Measurement segment
|
63.4
|
|
|
45.3
|
|
|
46.0
|
|
|||
Engineered Solutions segment
(1)(3)
|
(12.6
|
)
|
|
17.3
|
|
|
(87.4
|
)
|
|||
Total income for segments
|
124.9
|
|
|
142.8
|
|
|
38.8
|
|
|||
Corporate expense
|
46.2
|
|
|
41.7
|
|
|
103.4
|
|
|||
Pension and postretirement expense
|
5.4
|
|
|
15.4
|
|
|
18.6
|
|
|||
Long-term incentive compensation expense
|
15.8
|
|
|
13.7
|
|
|
33.9
|
|
|||
Impairment of intangible assets
|
—
|
|
|
30.1
|
|
|
—
|
|
|||
Special charges, net
|
2.7
|
|
|
5.3
|
|
|
5.1
|
|
|||
Gain on sale of dry cooling business
|
—
|
|
|
18.4
|
|
|
—
|
|
|||
Consolidated operating income (loss)
|
$
|
54.8
|
|
|
$
|
55.0
|
|
|
$
|
(122.2
|
)
|
|
|
|
|
|
|
||||||
Capital expenditures:
|
|
|
|
|
|
||||||
HVAC segment
|
$
|
2.2
|
|
|
$
|
1.9
|
|
|
$
|
2.3
|
|
Detection and Measurement segment
|
0.8
|
|
|
0.7
|
|
|
1.2
|
|
|||
Engineered Solutions segment
|
6.1
|
|
|
6.5
|
|
|
8.1
|
|
|||
General corporate
|
1.9
|
|
|
2.6
|
|
|
4.4
|
|
|||
Total capital expenditures
|
$
|
11.0
|
|
|
$
|
11.7
|
|
|
$
|
16.0
|
|
Depreciation and amortization:
|
|
|
|
|
|
||||||
HVAC segment
|
$
|
5.5
|
|
|
$
|
5.3
|
|
|
$
|
4.6
|
|
Detection and Measurement segment
|
4.1
|
|
|
3.5
|
|
|
2.8
|
|
|||
Engineered Solutions segment
|
12.5
|
|
|
15.2
|
|
|
20.7
|
|
|||
General corporate
|
3.1
|
|
|
2.5
|
|
|
8.9
|
|
|||
Total depreciation and amortization
|
$
|
25.2
|
|
|
$
|
26.5
|
|
|
$
|
37.0
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Identifiable assets:
|
|
|
|
|
|
||||||
HVAC segment
|
$
|
747.1
|
|
|
$
|
710.1
|
|
|
$
|
623.0
|
|
Detection and Measurement segment
|
277.8
|
|
|
244.2
|
|
|
256.5
|
|
|||
Engineered Solutions segment
|
557.8
|
|
|
567.6
|
|
|
808.6
|
|
|||
General corporate
|
457.7
|
|
|
390.6
|
|
|
371.2
|
|
|||
Discontinued operations
|
—
|
|
|
—
|
|
|
120.0
|
|
|||
Total identifiable assets
|
$
|
2,040.4
|
|
|
$
|
1,912.5
|
|
|
$
|
2,179.3
|
|
Geographic Areas:
|
|
|
|
|
|
||||||
Revenues:
(2)
|
|
|
|
|
|
||||||
United States
|
$
|
1,243.3
|
|
|
$
|
1,235.2
|
|
|
$
|
1,255.4
|
|
China
|
28.0
|
|
|
33.5
|
|
|
83.6
|
|
|||
South Africa
(1)
|
56.9
|
|
|
105.4
|
|
|
54.2
|
|
|||
United Kingdom
|
60.8
|
|
|
59.1
|
|
|
69.6
|
|
|||
Other
|
36.8
|
|
|
39.1
|
|
|
96.2
|
|
|||
|
$
|
1,425.8
|
|
|
$
|
1,472.3
|
|
|
$
|
1,559.0
|
|
|
|
|
|
|
|
||||||
Tangible Long-Lived Assets:
|
|
|
|
|
|
||||||
United States
|
$
|
919.6
|
|
|
$
|
897.0
|
|
|
$
|
835.9
|
|
Other
|
24.8
|
|
|
29.6
|
|
|
40.4
|
|
|||
Long-lived assets of continuing operations
|
944.4
|
|
|
926.6
|
|
|
876.3
|
|
|||
Long-lived assets of discontinued operations
|
—
|
|
|
—
|
|
|
35.8
|
|
|||
Total tangible long-lived assets
|
$
|
944.4
|
|
|
$
|
926.6
|
|
|
$
|
912.1
|
|
(1)
|
As further discussed in Note 13, during the second and fourth quarters of 2017, we made revisions to our estimates of expected revenues and costs on our large power projects in South Africa. As a result of these revisions, we reduced 2017 revenues by
$36.9
(
$13.5
and
$23.4
during the second and fourth quarters of 2017, respectively) and 2017 segment income by
$52.8
(
$22.9
and
$29.9
in the second and fourth quarters of 2017, respectively). During the third quarter of 2015, we also made revisions to our estimates of expected revenues and costs on our large power projects in South Africa. As a result of these revisions, we reduced revenue and segment income by $
57.2
and $
95.0
, respectively, during the third quarter of 2015.
|
(2)
|
Revenues are included in the above geographic areas based on the country that recorded the customer revenue.
|
(3)
|
During the third quarter of 2017, we settled a contract that had been suspended and then ultimately canceled by a customer for cash proceeds of
$9.0
and other consideration. In connection with the settlement, we recorded a gain of
$10.2
during the quarter within our Engineered Solutions reportable segment.
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Employee termination costs
|
$
|
2.5
|
|
|
$
|
1.7
|
|
|
$
|
4.5
|
|
Facility consolidation costs
|
—
|
|
|
—
|
|
|
0.2
|
|
|||
Other cash costs, net
|
0.2
|
|
|
—
|
|
|
0.1
|
|
|||
Non-cash asset write-downs
|
—
|
|
|
3.6
|
|
|
0.3
|
|
|||
Total
|
$
|
2.7
|
|
|
$
|
5.3
|
|
|
$
|
5.1
|
|
|
Employee
Termination
Costs
|
|
Facility
Consolidation
Costs
|
|
Other
Cash Costs,
Net
|
|
Non-Cash
Asset
Write-downs
|
|
Total
Special
Charges
|
||||||||||
HVAC segment
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.4
|
|
Detection and Measurement segment
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|||||
Engineered Solutions segment
|
1.7
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
1.9
|
|
|||||
Corporate
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|||||
Total
|
$
|
2.5
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
2.7
|
|
|
Employee
Termination
Costs
|
|
Facility
Consolidation
Costs
|
|
Other
Cash Costs, Net
|
|
Non-Cash
Asset
Write-downs
|
|
Total
Special
Charges
|
||||||||||
HVAC segment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Detection and Measurement segment
|
0.5
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.8
|
|
|||||
Engineered Solutions segment
|
1.2
|
|
|
—
|
|
|
—
|
|
|
3.3
|
|
|
4.5
|
|
|||||
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
1.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.6
|
|
|
$
|
5.3
|
|
|
Employee
Termination
Costs
|
|
Facility
Consolidation
Costs
|
|
Other
Cash Costs, Net
|
|
Non-Cash
Asset
Write-downs
|
|
Total
Special
Charges
|
||||||||||
HVAC segment
|
$
|
0.9
|
|
|
$
|
0.1
|
|
|
$
|
(0.2
|
)
|
|
$
|
0.3
|
|
|
$
|
1.1
|
|
Detection and Measurement segment
|
0.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|||||
Engineered Solutions segment
|
1.6
|
|
|
0.1
|
|
|
0.3
|
|
|
—
|
|
|
2.0
|
|
|||||
Corporate
|
1.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|||||
Total
|
$
|
4.5
|
|
|
$
|
0.2
|
|
|
$
|
0.1
|
|
|
$
|
0.3
|
|
|
$
|
5.1
|
|
|
December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of year
|
$
|
0.9
|
|
|
$
|
1.6
|
|
|
$
|
1.7
|
|
Special charges
(1)
|
2.7
|
|
|
1.7
|
|
|
4.8
|
|
|||
Utilization — cash
|
(3.0
|
)
|
|
(2.1
|
)
|
|
(5.1
|
)
|
|||
Currency translation adjustment and other
|
—
|
|
|
(0.3
|
)
|
|
0.2
|
|
|||
Balance at the end of year
|
$
|
0.6
|
|
|
$
|
0.9
|
|
|
$
|
1.6
|
|
(1)
|
The years ended
December 31, 2017
,
2016
and
2015
excluded $
0.0
, $
3.6
and $
0.3
, respectively, of non-cash charges that impacted special charges but not the restructuring liabilities.
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Finished goods
|
$
|
33.0
|
|
|
$
|
43.0
|
|
Work in process
|
56.0
|
|
|
50.0
|
|
||
Raw materials and purchased parts
|
66.4
|
|
|
64.9
|
|
||
Total FIFO cost
|
155.4
|
|
|
157.9
|
|
||
Excess of FIFO cost over LIFO inventory value
|
(12.4
|
)
|
|
(12.2
|
)
|
||
Total inventories
|
$
|
143.0
|
|
|
$
|
145.7
|
|
|
December 31,
2016 |
|
Impairments
|
|
Foreign
Currency Translation |
|
December 31,
2017 |
||||||||
HVAC segment
|
|
|
|
|
|
|
|
||||||||
Gross goodwill
|
$
|
258.5
|
|
|
$
|
—
|
|
|
$
|
5.2
|
|
|
$
|
263.7
|
|
Accumulated impairments
|
(144.2
|
)
|
|
—
|
|
|
(0.5
|
)
|
|
(144.7
|
)
|
||||
Goodwill
|
114.3
|
|
|
—
|
|
|
4.7
|
|
|
119.0
|
|
||||
Detection and Measurement segment
|
|
|
|
|
|
|
|
||||||||
Gross goodwill
|
214.4
|
|
|
—
|
|
|
2.2
|
|
|
216.6
|
|
||||
Accumulated impairments
|
(134.2
|
)
|
|
—
|
|
|
(1.8
|
)
|
|
(136.0
|
)
|
||||
Goodwill
|
80.2
|
|
|
—
|
|
|
0.4
|
|
|
80.6
|
|
||||
Engineered Solutions segment
|
|
|
|
|
|
|
|
||||||||
Gross goodwill
|
351.4
|
|
|
—
|
|
|
6.9
|
|
|
358.3
|
|
||||
Accumulated impairments
|
(205.5
|
)
|
|
—
|
|
|
(6.5
|
)
|
|
(212.0
|
)
|
||||
Goodwill
|
145.9
|
|
|
—
|
|
|
0.4
|
|
|
146.3
|
|
||||
Total
|
|
|
|
|
|
|
|
||||||||
Gross goodwill
|
824.3
|
|
|
—
|
|
|
14.3
|
|
|
838.6
|
|
||||
Accumulated impairments
|
(483.9
|
)
|
|
—
|
|
|
(8.8
|
)
|
|
(492.7
|
)
|
||||
Goodwill
|
$
|
340.4
|
|
|
$
|
—
|
|
|
$
|
5.5
|
|
|
$
|
345.9
|
|
|
December 31,
2015 |
|
Disposition of Business
(1)
|
|
Foreign
Currency Translation |
|
December 31,
2016 |
||||||||
HVAC segment
|
|
|
|
|
|
|
|
||||||||
Gross goodwill
|
$
|
261.3
|
|
|
$
|
—
|
|
|
$
|
(2.8
|
)
|
|
$
|
258.5
|
|
Accumulated impairments
|
(145.2
|
)
|
|
—
|
|
|
1.0
|
|
|
(144.2
|
)
|
||||
Goodwill
|
116.1
|
|
|
—
|
|
|
(1.8
|
)
|
|
114.3
|
|
||||
Detection and Measurement segment
|
|
|
|
|
|
|
|
||||||||
Gross goodwill
|
219.1
|
|
|
—
|
|
|
(4.7
|
)
|
|
214.4
|
|
||||
Accumulated impairments
|
(138.0
|
)
|
|
—
|
|
|
3.8
|
|
|
(134.2
|
)
|
||||
Goodwill
|
81.1
|
|
|
—
|
|
|
(0.9
|
)
|
|
80.2
|
|
||||
Engineered Solutions segment
|
|
|
|
|
|
|
|
||||||||
Gross goodwill
|
391.6
|
|
|
(36.1
|
)
|
|
(4.1
|
)
|
|
351.4
|
|
||||
Accumulated impairments
|
(235.3
|
)
|
|
25.9
|
|
|
3.9
|
|
|
(205.5
|
)
|
||||
Goodwill
|
156.3
|
|
|
(10.2
|
)
|
|
(0.2
|
)
|
|
145.9
|
|
||||
Total
|
|
|
|
|
|
|
|
||||||||
Gross goodwill
|
872.0
|
|
|
(36.1
|
)
|
|
(11.6
|
)
|
|
824.3
|
|
||||
Accumulated impairments
|
(518.5
|
)
|
|
25.9
|
|
|
8.7
|
|
|
(483.9
|
)
|
||||
Goodwill
|
$
|
353.5
|
|
|
$
|
(10.2
|
)
|
|
$
|
(2.9
|
)
|
|
$
|
340.4
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Gross
Carrying Value |
|
Accumulated
Amortization |
|
Net
Carrying Value |
|
Gross
Carrying Value |
|
Accumulated
Amortization |
|
Net
Carrying Value |
||||||||||||
Intangible assets with determinable lives:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
$
|
1.4
|
|
|
$
|
(1.4
|
)
|
|
$
|
—
|
|
|
$
|
1.4
|
|
|
$
|
(1.4
|
)
|
|
$
|
—
|
|
Technology
|
2.1
|
|
|
(0.5
|
)
|
|
1.6
|
|
|
2.1
|
|
|
(0.4
|
)
|
|
1.7
|
|
||||||
Patents
|
4.5
|
|
|
(4.5
|
)
|
|
—
|
|
|
4.5
|
|
|
(4.5
|
)
|
|
—
|
|
||||||
Other
|
11.7
|
|
|
(7.9
|
)
|
|
3.8
|
|
|
12.7
|
|
|
(7.4
|
)
|
|
5.3
|
|
||||||
|
19.7
|
|
|
(14.3
|
)
|
|
5.4
|
|
|
20.7
|
|
|
(13.7
|
)
|
|
7.0
|
|
||||||
Trademarks with indefinite lives
(1)
|
112.2
|
|
|
—
|
|
|
112.2
|
|
|
110.9
|
|
|
—
|
|
|
110.9
|
|
||||||
Total
|
$
|
131.9
|
|
|
$
|
(14.3
|
)
|
|
$
|
117.6
|
|
|
$
|
131.6
|
|
|
$
|
(13.7
|
)
|
|
$
|
117.9
|
|
(1)
|
Changes in the gross carrying value during the year ended December 31, 2017 related to foreign currency translation.
|
|
Actual
Allocations
|
|
Mid-point of Target
Allocation Range
|
|||||
|
2017
|
|
2016
|
|
2017
|
|||
Fixed income common trust funds
|
70
|
%
|
|
44
|
%
|
|
65
|
%
|
Commingled global fund allocation
|
12
|
%
|
|
19
|
%
|
|
18
|
%
|
Corporate bonds
|
1
|
%
|
|
11
|
%
|
|
—
|
%
|
Global equity common trust funds
|
7
|
%
|
|
12
|
%
|
|
5
|
%
|
U.S. Government securities
|
9
|
%
|
|
12
|
%
|
|
10
|
%
|
Short-term investments
(1)
|
1
|
%
|
|
2
|
%
|
|
2
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
(1)
|
Short-term investments are generally invested in actively managed common trust funds or interest-bearing accounts.
|
|
Actual
Allocations
|
|
Mid-point of Target
Allocation Range
|
|||||
|
2017
|
|
2016
|
|
2017
|
|||
Global equity common trust funds
|
17
|
%
|
|
16
|
%
|
|
14
|
%
|
Global equities
|
—
|
%
|
|
8
|
%
|
|
—
|
%
|
Fixed income common trust funds
|
46
|
%
|
|
30
|
%
|
|
39
|
%
|
Commingled global fund allocation
|
34
|
%
|
|
20
|
%
|
|
36
|
%
|
Non-U.S. Government securities
|
—
|
%
|
|
24
|
%
|
|
7
|
%
|
Short-term investments
(1)
|
3
|
%
|
|
2
|
%
|
|
4
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
(1)
|
Short-term investments are generally invested in actively managed common trust funds or interest-bearing accounts.
|
|
Total
|
|
Quoted Prices in Active
Markets for Identical
Assets
(Level 1)
|
|
Significant
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Asset class:
|
|
|
|
|
|
|
|
||||||||
Debt securities:
|
|
|
|
|
|
|
|
||||||||
Fixed income common trust funds
(1) (2)
|
$
|
270.2
|
|
|
$
|
—
|
|
|
$
|
270.2
|
|
|
$
|
—
|
|
Corporate bonds
|
1.6
|
|
|
—
|
|
|
1.6
|
|
|
—
|
|
||||
Non-U.S. Government securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
U.S. Government securities
|
25.2
|
|
|
—
|
|
|
25.2
|
|
|
—
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Global equity common trust funds
(1)
(3)
|
50.6
|
|
|
—
|
|
|
50.6
|
|
|
—
|
|
||||
Global equities:
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Alternative investments:
|
|
|
|
|
|
|
|
||||||||
Commingled global fund allocations
(1)
(4)
|
95.1
|
|
|
—
|
|
|
95.1
|
|
|
—
|
|
||||
Other:
|
|
|
|
|
|
|
|
||||||||
Short-term investments
(5)
|
9.4
|
|
|
9.4
|
|
|
—
|
|
|
—
|
|
||||
Other
|
1.0
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
||||
Total
|
$
|
453.1
|
|
|
$
|
9.4
|
|
|
$
|
442.7
|
|
|
$
|
1.0
|
|
|
Total
|
|
Quoted Prices in Active
Markets for Identical
Assets (Level 1)
|
|
Significant
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Asset class:
|
|
|
|
|
|
|
|
||||||||
Debt securities:
|
|
|
|
|
|
|
|
||||||||
Fixed income common trust funds
(1) (2)
|
$
|
163.1
|
|
|
$
|
—
|
|
|
$
|
163.1
|
|
|
$
|
—
|
|
Corporate bonds
|
29.1
|
|
|
—
|
|
|
29.1
|
|
|
—
|
|
||||
Non-U.S. Government securities
|
39.0
|
|
|
—
|
|
|
39.0
|
|
|
—
|
|
||||
U.S. Government securities
|
31.1
|
|
|
—
|
|
|
31.1
|
|
|
—
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Global equity common trust funds
(1)
(3)
|
57.6
|
|
|
—
|
|
|
57.6
|
|
|
—
|
|
||||
Global equities:
|
13.2
|
|
|
—
|
|
|
13.2
|
|
|
—
|
|
||||
Alternative investments:
|
|
|
|
|
|
|
|
|
|
||||||
Commingled global fund allocations
(1)
(4)
|
80.6
|
|
|
—
|
|
|
80.6
|
|
|
—
|
|
||||
Other:
|
|
|
|
|
|
|
|
|
|
||||||
Short-term investments
(5)
|
10.5
|
|
|
10.5
|
|
|
—
|
|
|
—
|
|
||||
Other
|
1.0
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
||||
Total
|
$
|
425.2
|
|
|
$
|
10.5
|
|
|
$
|
413.7
|
|
|
$
|
1.0
|
|
(1)
|
Common/commingled trust funds are similar to mutual funds, with a daily net asset value per share measured by the fund sponsor and used as the basis for current transactions. These investments, however, are not registered with the U.S. Securities and Exchange Commission and participation is not open to the public. The funds are valued at the net asset value per share multiplied by the number of shares held as of the measurement date.
|
(2)
|
This class represents investments in actively managed common trust funds that invest in a variety of fixed income investments, which may include corporate bonds, both U.S. and non-U.S. municipal securities, interest rate swaps, options and futures.
|
(3)
|
This class represents investments in actively managed common trust funds that invest primarily in equity securities, which may include common stocks, options and futures.
|
(4)
|
This class represents investments in actively managed common trust funds with investments in both equity and debt securities. The investments may include common stock, corporate bonds, U.S. and non-U.S. municipal securities, interest rate swaps, options and futures.
|
(5)
|
Short-term investments are valued at $
1.00
/unit, which approximates fair value. Amounts are generally invested in actively managed common trust funds or interest-bearing accounts.
|
|
Global
Equity
Common
Trust
Funds
|
|
Commingled
Global Fund
Allocations
|
|
Fixed Income
Common Trust Funds
|
|
Other
|
|
Total
|
||||||||||
Balance at December 31, 2015
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
1.0
|
|
Transfer from Level 3 to Level 2 assets
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance at December 31, 2016
|
—
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|
1.0
|
|
|||||
Transfer from Level 3 to Level 2 assets
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance at December 31, 2017
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
1.0
|
|
|
Domestic Pension
Plans
|
|
Foreign Pension
Plans
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Change in projected benefit obligation:
|
|
|
|
|
|
|
|
||||||||
Projected benefit obligation — beginning of year
|
$
|
348.1
|
|
|
$
|
371.1
|
|
|
$
|
157.6
|
|
|
$
|
155.7
|
|
Divestiture of Balcke Dürr
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.7
|
)
|
||||
Service cost
|
0.3
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
||||
Interest cost
|
13.4
|
|
|
13.9
|
|
|
4.9
|
|
|
5.6
|
|
||||
Actuarial losses
|
16.5
|
|
|
9.5
|
|
|
6.7
|
|
|
27.4
|
|
||||
Settlements
(2)
|
—
|
|
|
(36.4
|
)
|
|
—
|
|
|
—
|
|
||||
Curtailment losses
|
0.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(22.1
|
)
|
|
(10.4
|
)
|
|
(8.1
|
)
|
|
(6.4
|
)
|
||||
Foreign exchange and other
|
—
|
|
|
—
|
|
|
14.1
|
|
|
(18.0
|
)
|
||||
Projected benefit obligation — end of year
|
$
|
357.1
|
|
|
$
|
348.1
|
|
|
$
|
175.2
|
|
|
$
|
157.6
|
|
(1)
|
Represents the transfer of Balcke Dürr’s pension liabilities as a result of the sale.
|
(2)
|
Amount in 2016 includes settlement payments of
$27.9
in connection with lump-sum payment actions for the U.S. Plan and the SIARP.
|
|
Domestic Pension
Plans
|
|
Foreign Pension
Plans
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Change in plan assets:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets — beginning of year
|
$
|
261.9
|
|
|
$
|
279.2
|
|
|
$
|
163.3
|
|
|
$
|
163.5
|
|
Actual return on plan assets
|
23.6
|
|
|
19.5
|
|
|
10.6
|
|
|
25.6
|
|
||||
Contributions (employer and employee)
|
6.3
|
|
|
10.0
|
|
|
3.4
|
|
|
0.5
|
|
||||
Settlements
|
—
|
|
|
(36.4
|
)
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(22.1
|
)
|
|
(10.4
|
)
|
|
(8.7
|
)
|
|
(6.1
|
)
|
||||
Foreign exchange and other
|
—
|
|
|
—
|
|
|
14.8
|
|
|
(20.2
|
)
|
||||
Fair value of plan assets — end of year
|
$
|
269.7
|
|
|
$
|
261.9
|
|
|
$
|
183.4
|
|
|
$
|
163.3
|
|
Funded status at year-end
|
(87.4
|
)
|
|
(86.2
|
)
|
|
8.2
|
|
|
5.7
|
|
||||
Amounts recognized in the consolidated balance sheets consist of:
|
|
|
|
|
|
|
|
||||||||
Other assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8.4
|
|
|
$
|
6.3
|
|
Accrued expenses
|
(5.9
|
)
|
|
(5.9
|
)
|
|
—
|
|
|
—
|
|
||||
Other long-term liabilities
|
(81.5
|
)
|
|
(80.3
|
)
|
|
(0.2
|
)
|
|
(0.6
|
)
|
||||
Net amount recognized
|
$
|
(87.4
|
)
|
|
$
|
(86.2
|
)
|
|
$
|
8.2
|
|
|
$
|
5.7
|
|
Amount recognized in accumulated other comprehensive income (pre-tax) consists of — net prior service credits
|
$
|
(0.6
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Domestic Pension
Plans
|
|
Foreign Pension
Plans
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Projected benefit obligation
|
$
|
357.1
|
|
|
$
|
348.1
|
|
|
$
|
0.2
|
|
|
$
|
43.8
|
|
Accumulated benefit obligation
|
357.1
|
|
|
347.9
|
|
|
0.2
|
|
|
43.8
|
|
||||
Fair value of plan assets
|
269.7
|
|
|
261.9
|
|
|
—
|
|
|
43.2
|
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Service cost
|
$
|
0.3
|
|
|
$
|
0.4
|
|
|
$
|
2.5
|
|
Interest cost
|
13.4
|
|
|
13.9
|
|
|
16.5
|
|
|||
Expected return on plan assets
|
(10.1
|
)
|
|
(12.9
|
)
|
|
(18.0
|
)
|
|||
Amortization of unrecognized prior service credits
|
(0.1
|
)
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|||
Recognized net actuarial losses
(1)
|
3.9
|
|
|
3.2
|
|
|
18.9
|
|
|||
Total net periodic pension benefit expense
|
$
|
7.4
|
|
|
$
|
4.4
|
|
|
$
|
19.8
|
|
(1)
|
Consists primarily of our reported actuarial (gains) losses, the difference between actual and expected returns on plan assets, settlement gains (losses), and curtailment gains. The actuarial losses for 2016 included
$1.8
related to the lump-sum payment actions that took place during the second quarter of the year. The actuarial losses for 2015 included a charge of
$11.4
and a curtailment gain of
$5.1
related to the freeze of all benefits for non-union participants of the U.S. Plan and the SIARP during the third quarter of the year.
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.3
|
|
Interest cost
|
4.9
|
|
|
5.6
|
|
|
7.7
|
|
|||
Expected return on plan assets
|
(6.4
|
)
|
|
(6.6
|
)
|
|
(9.7
|
)
|
|||
Recognized net actuarial losses
(1)
|
3.1
|
|
|
8.2
|
|
|
3.8
|
|
|||
Total net periodic pension benefit expense
|
1.6
|
|
|
7.2
|
|
|
3.1
|
|
|||
Less: Net periodic pension expense of discontinued operations
|
—
|
|
|
(0.2
|
)
|
|
(2.2
|
)
|
|||
Net periodic pension benefit expense of continuing operations
|
$
|
1.6
|
|
|
$
|
7.0
|
|
|
$
|
0.9
|
|
(1)
|
Consists of our reported actuarial losses and the difference between actual and expected returns on plan assets.
|
|
Year ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Domestic Pension Plans
|
|
|
|
|
|
|||
Weighted-average actuarial assumptions used in determining net periodic pension expense:
|
|
|
|
|
|
|||
Discount rate
|
3.98
|
%
|
|
4.06
|
%
|
|
4.09
|
%
|
Rate of increase in compensation levels
|
3.75
|
%
|
|
3.75
|
%
|
|
3.75
|
%
|
Expected long-term rate of return on assets
|
4.00
|
%
|
|
5.00
|
%
|
|
5.75
|
%
|
Weighted-average actuarial assumptions used in determining year-end benefit obligations:
|
|
|
|
|
|
|||
Discount rate
|
3.57
|
%
|
|
3.98
|
%
|
|
4.24
|
%
|
Rate of increase in compensation levels
|
3.75
|
%
|
|
3.75
|
%
|
|
3.75
|
%
|
Foreign Pension Plans
|
|
|
|
|
|
|||
Weighted-average actuarial assumptions used in determining net periodic pension expense:
|
|
|
|
|
|
|||
Discount rate
|
2.97
|
%
|
|
3.82
|
%
|
|
3.68
|
%
|
Rate of increase in compensation levels
|
N/A
|
|
|
N/A
|
|
|
4.00
|
%
|
Expected long-term rate of return on assets
|
4.09
|
%
|
|
4.57
|
%
|
|
5.81
|
%
|
Weighted-average actuarial assumptions used in determining year-end benefit obligations:
|
|
|
|
|
|
|||
Discount rate
|
2.76
|
%
|
|
2.97
|
%
|
|
3.82
|
%
|
Rate of increase in compensation levels
|
N/A
|
|
|
N/A
|
|
|
4.00
|
%
|
|
Postretirement Payments
|
||
2018
|
$
|
8.9
|
|
2019
|
8.2
|
|
|
2020
|
7.5
|
|
|
2021
|
6.9
|
|
|
2022
|
6.3
|
|
|
Subsequent five years
|
23.9
|
|
|
Postretirement
Benefits
|
||||||
|
2017
|
|
2016
|
||||
Change in accumulated postretirement benefit obligation:
|
|
|
|
||||
Accumulated postretirement benefit obligation — beginning of year
|
$
|
115.3
|
|
|
$
|
120.8
|
|
Interest cost
|
3.5
|
|
|
4.2
|
|
||
Actuarial (gains) losses
|
(5.4
|
)
|
|
0.6
|
|
||
Benefits paid
|
(9.0
|
)
|
|
(10.3
|
)
|
||
Plan amendment
|
(26.8
|
)
|
|
—
|
|
||
Accumulated postretirement benefit obligation — end of year
|
$
|
77.6
|
|
|
$
|
115.3
|
|
Funded status at year-end
|
$
|
(77.6
|
)
|
|
$
|
(115.3
|
)
|
Amounts recognized in the consolidated balance sheets consist of:
|
|
|
|
||||
Accrued expenses
|
$
|
(8.7
|
)
|
|
$
|
(11.7
|
)
|
Other long-term liabilities
|
(68.9
|
)
|
|
(103.6
|
)
|
||
Net amount recognized
|
$
|
(77.6
|
)
|
|
$
|
(115.3
|
)
|
Amount recognized in accumulated other comprehensive income (pre-tax) consists of — net prior service credits
|
$
|
(31.0
|
)
|
|
$
|
(5.9
|
)
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
Interest cost
|
3.5
|
|
|
4.2
|
|
|
4.4
|
|
|||
Amortization of unrecognized prior service credits
|
(1.7
|
)
|
|
(0.8
|
)
|
|
(0.8
|
)
|
|||
Plan amendment
|
(2.6
|
)
|
|
—
|
|
|
(1.8
|
)
|
|||
Recognized net actuarial (gains) losses
|
(2.8
|
)
|
|
0.6
|
|
|
(4.0
|
)
|
|||
Net periodic postretirement benefit expense (income)
|
$
|
(3.6
|
)
|
|
$
|
4.0
|
|
|
$
|
(2.1
|
)
|
|
Year ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Assumed health care cost trend rates:
|
|
|
|
|
|
|||
Health care cost trend rate for next year
|
7.25
|
%
|
|
7.50
|
%
|
|
6.60
|
%
|
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
|
5.00
|
%
|
|
5.00
|
%
|
|
5.00
|
%
|
Year that the rate reaches the ultimate trend rate
|
2027
|
|
|
2027
|
|
|
2024
|
|
Discount rate used in determining net periodic postretirement benefit expense
|
3.60
|
%
|
|
3.88
|
%
|
|
3.53
|
%
|
Discount rate used in determining year-end postretirement benefit obligation
|
3.34
|
%
|
|
3.69
|
%
|
|
3.88
|
%
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Income (loss) from continuing operations:
|
|
|
|
|
|
||||||
United States
|
$
|
68.8
|
|
|
$
|
14.0
|
|
|
$
|
(14.2
|
)
|
Foreign
|
(32.7
|
)
|
|
25.4
|
|
|
(140.1
|
)
|
|||
|
$
|
36.1
|
|
|
$
|
39.4
|
|
|
$
|
(154.3
|
)
|
(Provision for) benefit from income taxes:
|
|
|
|
|
|
||||||
Current:
|
|
|
|
|
|
||||||
United States
|
$
|
30.4
|
|
|
$
|
(4.3
|
)
|
|
$
|
10.9
|
|
Foreign
|
(3.5
|
)
|
|
(4.8
|
)
|
|
(3.3
|
)
|
|||
Total current
|
26.9
|
|
|
(9.1
|
)
|
|
7.6
|
|
|||
Deferred and other:
|
|
|
|
|
|
||||||
United States
|
23.5
|
|
|
0.2
|
|
|
(10.7
|
)
|
|||
Foreign
|
(2.5
|
)
|
|
(0.2
|
)
|
|
5.8
|
|
|||
Total deferred and other
|
21.0
|
|
|
—
|
|
|
(4.9
|
)
|
|||
Total (provision) benefit
|
$
|
47.9
|
|
|
$
|
(9.1
|
)
|
|
$
|
2.7
|
|
|
Year ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Tax at U.S. federal statutory rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State and local taxes, net of U.S. federal benefit
|
4.4
|
%
|
|
5.0
|
%
|
|
(0.1
|
)%
|
U.S. credits and exemptions
|
(8.5
|
)%
|
|
(12.9
|
)%
|
|
1.5
|
%
|
Foreign earnings/losses taxed at lower rates
|
(14.9
|
)%
|
|
(5.9
|
)%
|
|
(9.0
|
)%
|
Audit settlements with taxing authorities
|
(0.1
|
)%
|
|
—
|
%
|
|
0.7
|
%
|
Adjustments to uncertain tax positions
|
(9.8
|
)%
|
|
(1.9
|
)%
|
|
(5.4
|
)%
|
Changes in valuation allowance
|
54.4
|
%
|
|
17.4
|
%
|
|
(18.8
|
)%
|
Tax on distributions of foreign earnings
|
—
|
%
|
|
0.7
|
%
|
|
(0.2
|
)%
|
Worthless stock deductions and other basis adjustments
|
(226.3
|
)%
|
|
—
|
%
|
|
(2.4
|
)%
|
Disposition of dry cooling business
|
—
|
%
|
|
(15.6
|
)%
|
|
—
|
%
|
U.S. tax reform
|
32.6
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
0.5
|
%
|
|
1.3
|
%
|
|
0.4
|
%
|
|
(132.7
|
)%
|
|
23.1
|
%
|
|
1.7
|
%
|
|
As of December 31,
|
||||||
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
||||
NOL and credit carryforwards
|
$
|
146.0
|
|
|
$
|
78.2
|
|
Pension, other postretirement and postemployment benefits
|
41.2
|
|
|
77.2
|
|
||
Payroll and compensation
|
18.2
|
|
|
22.8
|
|
||
Legal, environmental and self-insurance accruals
|
25.3
|
|
|
35.1
|
|
||
Working capital accruals
|
11.5
|
|
|
16.4
|
|
||
Other
|
17.6
|
|
|
20.7
|
|
||
Total deferred tax assets
|
259.8
|
|
|
250.4
|
|
||
Valuation allowance
|
(110.9
|
)
|
|
(75.8
|
)
|
||
Net deferred tax assets
|
148.9
|
|
|
174.6
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Intangible assets recorded in acquisitions
|
53.9
|
|
|
68.3
|
|
||
Basis difference in affiliates
|
3.7
|
|
|
10.6
|
|
||
Accelerated depreciation
|
28.8
|
|
|
40.6
|
|
||
Other
|
12.9
|
|
|
6.6
|
|
||
Total deferred tax liabilities
|
99.3
|
|
|
126.1
|
|
||
|
$
|
49.6
|
|
|
$
|
48.5
|
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Unrecognized tax benefit — opening balance
|
$
|
37.9
|
|
|
$
|
48.8
|
|
|
$
|
63.3
|
|
Gross increases — tax positions in prior period
|
1.6
|
|
|
3.6
|
|
|
14.1
|
|
|||
Gross decreases — tax positions in prior period
|
(0.3
|
)
|
|
(9.3
|
)
|
|
(7.6
|
)
|
|||
Gross increases — tax positions in current period
|
0.3
|
|
|
0.7
|
|
|
11.3
|
|
|||
Settlements
|
(1.3
|
)
|
|
—
|
|
|
—
|
|
|||
Lapse of statute of limitations
|
(7.1
|
)
|
|
(5.9
|
)
|
|
(4.4
|
)
|
|||
Gross decreases — Spin-Off
|
—
|
|
|
—
|
|
|
(26.7
|
)
|
|||
Change due to foreign currency exchange rates
|
0.2
|
|
|
—
|
|
|
(1.2
|
)
|
|||
Unrecognized tax benefit — ending balance
|
$
|
31.3
|
|
|
$
|
37.9
|
|
|
$
|
48.8
|
|
|
December 31,
2016 |
|
Borrowings
|
|
Repayments
|
|
Other
(5)
|
|
December 31,
2017 |
||||||||||
Revolving loans
|
$
|
—
|
|
|
$
|
54.6
|
|
|
$
|
(54.6
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Term loans
(1)(2)
|
339.6
|
|
|
350.0
|
|
|
(341.2
|
)
|
|
(0.7
|
)
|
|
347.7
|
|
|||||
Trade receivables financing arrangement
(3)
|
—
|
|
|
74.0
|
|
|
(74.0
|
)
|
|
—
|
|
|
—
|
|
|||||
Other indebtedness
(4)
|
16.6
|
|
|
38.7
|
|
|
(48.8
|
)
|
|
2.6
|
|
|
9.1
|
|
|||||
Total debt
|
356.2
|
|
|
$
|
517.3
|
|
|
$
|
(518.6
|
)
|
|
$
|
1.9
|
|
|
356.8
|
|
||
Less: short-term debt
|
14.8
|
|
|
|
|
|
|
|
|
|
|
|
7.0
|
|
|||||
Less: current maturities of long-term debt
|
17.9
|
|
|
|
|
|
|
|
|
0.5
|
|
||||||||
Total long-term debt
|
$
|
323.5
|
|
|
|
|
|
|
|
|
$
|
349.3
|
|
(1)
|
As noted below, we amended our senior credit agreement on December 19, 2017 and proceeds of $
350.0
were made available by way of a new term loan facility, with $
328.1
utilized to repay, in full, amounts outstanding under the then-existing term loan facility.
|
(2)
|
The new term loan is repayable in quarterly installments of
1.25%
of the initial loan amount of $
350.0
, beginning in the first quarter of 2019, with the remaining balance payable in full on December 19, 2022. Balances are net of unamortized debt issuance costs of
$2.3
and
$1.6
at
December 31, 2017
and
December 31, 2016
, respectively.
|
(3)
|
Under this arrangement, we can borrow, on a continuous basis, up to
$50.0
, as available. At
December 31, 2017
, we had
$33.3
of available borrowing capacity under this facility.
|
(4)
|
Primarily includes capital lease obligations of
$2.1
and
$1.7
, balances under purchase card programs of
$2.8
and
$3.9
, borrowings under a line of credit in South Africa of
$0.0
and
$10.2
, and borrowings under a line of credit in China of
$4.1
and
$0.0
, at
December 31, 2017
and
2016
, respectively. The purchase card program allows for payment beyond the normal payment terms for goods and services acquired under the program. As this arrangement extends the payment of these purchases beyond their normal payment terms through third-party lending institutions, we have classified these amounts as short-term debt.
|
(5)
|
“Other” primarily includes debt assumed, foreign currency translation on any debt instruments denominated in currencies other than the U.S. dollar, debt issuance costs incurred in connection with the new term loan, and the impact of amortization of debt issuance costs associated with the term loan.
|
•
|
A new term loan facility in an aggregate principle amount of
$350.0
;
|
•
|
A domestic revolving credit facility, available for loans and letters of credit, in an aggregate principal amount up to
$200.0
;
|
•
|
A global revolving credit facility, available for loans in Euros, GBP and other currencies, in an aggregate principal amount up to the equivalent of
$150.0
;
|
•
|
A participation foreign credit instrument facility, available for performance letters of credit and guarantees, in an aggregate principal amount up to the equivalent of
$145.0
(previously
$175.0
); and
|
•
|
A bilateral foreign credit instrument facility, available for performance letters of credit and guarantees, in an aggregate principal amount up to the equivalent of
$55.0
(previously
$125.0
).
|
•
|
Adjusts the maximum aggregate amount of additional commitments we may seek, without consent of existing lenders, to add an incremental term loan facility and/or increase the commitments in respect of the domestic revolving credit facility, the global revolving credit facility, the participation foreign credit instrument facility, and/or the bilateral foreign credit instrument facility, to (i) the greater of (A)
$200.0
or (B) our Consolidated EBITDA for the preceding four fiscal quarters, plus (ii) an amount equal to all voluntary prepayments of the term loan facility and the voluntary prepayments accompanied by permanent commitment reductions of revolving credit facilities and foreign credit instrument facilities, plus (iii) an unlimited amount so long as, immediately after giving effect thereto, our Consolidated Senior Secured Leverage Ratio for the prior four fiscal quarters does not exceed
2.75
to 1.00 (with the provisions described in clauses (ii) and (iii) being essentially unchanged from the previous agreement);
|
•
|
Permits unlimited investments, capital stock repurchases and dividends, and prepayments of subordinated debt if our Consolidated Leverage Ratio, after giving pro forma effect to such payments, is less than
2.75
to 1.00 (
2.50
to 1.00 prior to the amendment);
|
•
|
Increases the Consolidated Leverage Ratio that we are required to maintain as of the last day of any fiscal quarter to not more than
3.50
to 1.00 (or
4.00
to 1.00 for the four fiscal quarters after certain permitted acquisitions) and included certain add-backs in the definition of consolidated EBITDA used in determining such ratio; and
|
•
|
Adjusts per annum fees charged and the interest rate margins applicable to Eurodollar and alternate base rate loans, in each case based on the Consolidated Leverage Ratio, to be as follows:
|
Consolidated
Leverage Ratio |
|
Domestic
Revolving Commitment Fee |
|
Global
Revolving Commitment Fee |
|
Letter of
Credit Fee |
|
Foreign
Credit Commitment Fee |
|
Foreign
Credit Instrument Fee |
|
LIBOR
Rate Loans |
|
ABR
Loans |
||||||||||||||
Greater than or equal to 3.00 to 1.0
|
|
0.350
|
%
|
|
0.350
|
%
|
|
2.000
|
%
|
|
0.350
|
%
|
|
1.250
|
%
|
|
2.000
|
%
|
|
1.000
|
%
|
|||||||
Between 2.25 to 1.0 and 3.00 to 1.0
|
|
0.300
|
%
|
|
0.300
|
%
|
|
1.750
|
%
|
|
0.300
|
%
|
|
1.000
|
%
|
|
1.750
|
%
|
|
0.750
|
%
|
|||||||
Between 1.50 to 1.0 and 2.25 to 1.0
|
|
0.275
|
%
|
|
0.275
|
%
|
|
1.500
|
%
|
|
0.275
|
%
|
|
0.875
|
%
|
|
1.500
|
%
|
|
0.500
|
%
|
|||||||
Less than 1.50 to 1.0
|
|
0.250
|
%
|
|
0.250
|
%
|
|
1.375
|
%
|
|
0.250
|
%
|
|
0.800
|
%
|
|
1.375
|
%
|
|
0.375
|
%
|
•
|
Each existing and subsequently acquired or organized domestic material subsidiary with specified exceptions; and
|
•
|
SPX with respect to the obligations of our foreign borrower subsidiaries under the global revolving credit facility, the participation foreign credit instrument facility and the bilateral foreign credit instrument facility.
|
•
|
A Consolidated Interest Coverage Ratio (defined in the Credit Agreement generally as the ratio of consolidated adjusted EBITDA for the four fiscal quarters ended on such date to consolidated cash interest expense for such period) as of the last day of any fiscal quarter of at least
3.50
to
1.00
; and
|
•
|
As previously discussed, a Consolidated Leverage Ratio as of the last day of any fiscal quarter of not more than
3.50
to
1.00
(or
4.00
to
1.00
for the four fiscal quarters after certain permitted acquisitions).
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Income (loss) from continuing operations
|
$
|
84.0
|
|
|
$
|
30.3
|
|
|
$
|
(151.6
|
)
|
Less: Net loss attributable to noncontrolling interests
|
—
|
|
|
(0.4
|
)
|
|
(33.4
|
)
|
|||
Adjustment related to redeemable noncontrolling interest (Note13)
|
—
|
|
|
(18.1
|
)
|
|
—
|
|
|||
Income (loss) from continuing operations attributable to SPX Corporation common shareholders for calculating basic and diluted income per share
|
$
|
84.0
|
|
|
$
|
12.6
|
|
|
$
|
(118.2
|
)
|
Income (loss) from discontinued operations, net of tax
|
$
|
5.3
|
|
|
$
|
(97.9
|
)
|
|
$
|
34.6
|
|
Less: Net loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|||
Income (loss) from discontinued operations attributable to SPX Corporation common shareholders for calculating basic and diluted income per share
|
$
|
5.3
|
|
|
$
|
(97.9
|
)
|
|
$
|
35.5
|
|
Denominator:
|
|
|
|
|
|
||||||
Weighted-average number of common shares used in basic income (loss) per share
|
42.413
|
|
|
41.610
|
|
|
40.733
|
|
|||
Dilutive securities — Employee stock options, restricted stock shares and restricted stock units
|
1.492
|
|
|
0.551
|
|
|
—
|
|
|||
Weighted-average number of common shares and dilutive securities used in diluted income (loss) per share
|
43.905
|
|
|
42.161
|
|
|
40.733
|
|
|
Common Stock
Issued
|
|
Treasury
Stock
|
|
Shares
Outstanding
|
|||
December 31, 2014
|
100.064
|
|
|
(59.206
|
)
|
|
40.858
|
|
Restricted stock shares and restricted stock units
|
0.102
|
|
|
0.096
|
|
|
0.198
|
|
Other
|
0.360
|
|
|
—
|
|
|
0.360
|
|
December 31, 2015
|
100.526
|
|
|
(59.110
|
)
|
|
41.416
|
|
Restricted stock shares and restricted stock units
|
0.042
|
|
|
0.295
|
|
|
0.337
|
|
Retirement of treasury stock
|
(50.000
|
)
|
|
50.000
|
|
|
—
|
|
Other
|
0.187
|
|
|
—
|
|
|
0.187
|
|
December 31, 2016
|
50.755
|
|
|
(8.815
|
)
|
|
41.940
|
|
Restricted stock units
|
—
|
|
|
0.280
|
|
|
0.280
|
|
Other
|
0.431
|
|
|
—
|
|
|
0.431
|
|
December 31, 2017
|
51.186
|
|
|
(8.535
|
)
|
|
42.651
|
|
|
Annual Expected
Stock Price Volatility |
|
Annual Expected
Dividend Yield |
|
Risk-Free Interest Rate
|
|
Correlation
Between Total Shareholder Return for SPX and the Applicable S&P Index |
|||
March 1, 2017
|
|
|
|
|
|
|
|
|||
SPX Corporation
|
41.03
|
%
|
|
—
|
%
|
|
1.52
|
%
|
|
0.3685
|
Peer group within S&P 600 Capital Goods Index
|
34.49
|
%
|
|
n/a
|
|
|
1.52
|
%
|
|
|
March 2, 2016
|
|
|
|
|
|
|
|
|||
SPX Corporation
|
36.91
|
%
|
|
—
|
%
|
|
0.97
|
%
|
|
0.3354
|
Peer group within S&P 600 Capital Goods Index
|
32.94
|
%
|
|
n/a
|
|
|
0.97
|
%
|
|
|
|
Unvested PSU’s, RSU’s, and RS’s
|
|
Weighted-Average
Grant-Date Fair
Value Per Share
|
|||
December 31, 2014
|
1.168
|
|
|
$
|
69.22
|
|
Pre-spin:
|
|
|
|
|||
Granted
|
0.451
|
|
|
81.60
|
|
|
Vested
|
(0.262
|
)
|
|
78.71
|
|
|
Canceled
|
(0.212
|
)
|
|
52.67
|
|
|
Impact of Spin-Off:
|
|
|
|
|||
Terminations
|
(0.785
|
)
|
|
*
|
|
|
Conversions
|
1.010
|
|
|
*
|
|
|
Post-spin
|
|
|
|
|||
Granted
|
0.510
|
|
|
12.32
|
|
|
Canceled
|
(0.011
|
)
|
|
20.34
|
|
|
December 31, 2015
|
1.869
|
|
|
17.63
|
|
|
Granted
|
0.423
|
|
|
13.97
|
|
|
Vested
|
(0.528
|
)
|
|
10.32
|
|
|
Forfeited
|
(0.062
|
)
|
|
20.46
|
|
|
December 31, 2016
|
1.702
|
|
|
16.47
|
|
|
Granted
|
0.252
|
|
|
28.22
|
|
|
Vested
|
(0.483
|
)
|
|
18.17
|
|
|
Forfeited
|
(0.241
|
)
|
|
20.83
|
|
|
December 31, 2017
|
1.230
|
|
|
$
|
17.41
|
|
|
March 1,
2017 |
|
March 2,
2016 |
|
October 14
2015 |
|||
Annual expected stock price volatility
|
32.00
|
%
|
|
30.06
|
%
|
|
27.86
|
%
|
Annual expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Risk-free interest rate
|
2.14
|
%
|
|
1.50
|
%
|
|
1.64
|
%
|
Expected life of stock option (in years)
|
6.0
|
|
|
6.0
|
|
|
6.0
|
|
|
Shares
|
|
Weighted-
Average Exercise
Price
|
|||
Options outstanding and exercisable at December 31, 2014
|
—
|
|
|
$
|
—
|
|
Granted pre-spin
|
0.323
|
|
|
85.87
|
|
|
Impact of Spin-Off:
|
|
|
|
|||
Terminations
|
(0.282
|
)
|
|
85.87
|
|
|
Conversions
|
0.123
|
|
|
*
|
|
|
Granted post-spin
|
0.883
|
|
|
12.36
|
|
|
Options outstanding and exercisable at December 31, 2015
|
1.047
|
|
|
12.91
|
|
|
Granted
|
0.505
|
|
|
12.85
|
|
|
Options outstanding and exercisable at December 31, 2016
|
1.552
|
|
|
12.89
|
|
|
Exercised
|
(0.125
|
)
|
|
20.67
|
|
|
Forfeited
|
(0.027
|
)
|
|
14.45
|
|
|
Granted
|
0.208
|
|
|
27.40
|
|
|
Options outstanding and exercisable at December 31, 2017
|
1.608
|
|
|
$
|
14.67
|
|
|
Foreign
Currency
Translation
Adjustment
|
|
Net Unrealized
Gains on
Qualifying
Cash
Flow
Hedges
(3)
|
|
Pension and
Postretirement
Liability Adjustment
and Other
(1)(4)
|
|
Total
|
||||||||
December 31, 2016
|
$
|
229.7
|
|
|
$
|
1.5
|
|
|
$
|
3.9
|
|
|
$
|
235.1
|
|
Other comprehensive income before reclassifications
(1)
|
0.5
|
|
|
2.3
|
|
|
16.3
|
|
|
19.1
|
|
||||
Amounts reclassified from accumulated other comprehensive income
(2)
|
—
|
|
|
(3.0
|
)
|
|
(1.1
|
)
|
|
(4.1
|
)
|
||||
Current-period other comprehensive income (loss)
|
0.5
|
|
|
(0.7
|
)
|
|
15.2
|
|
|
15.0
|
|
||||
December 31, 2017
|
$
|
230.2
|
|
|
$
|
0.8
|
|
|
$
|
19.1
|
|
|
$
|
250.1
|
|
(3)
|
Net of tax provision of
$0.5
and
$0.9
as of
December 31, 2017
and
2016
, respectively.
|
|
Foreign
Currency
Translation
Adjustment
|
|
Net Unrealized
Losses on
Qualifying
Cash
Flow
Hedges
(2)
|
|
Pension and
Postretirement
Liability Adjustment
and Other
(3)
|
|
Total
|
||||||||
Balance at December 31, 2015
|
$
|
280.6
|
|
|
$
|
(1.8
|
)
|
|
$
|
4.5
|
|
|
$
|
283.3
|
|
Other comprehensive income (loss) before reclassifications
|
(11.9
|
)
|
|
1.1
|
|
|
—
|
|
|
(10.8
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
(1)
|
(39.0
|
)
|
|
2.2
|
|
|
(0.6
|
)
|
|
(37.4
|
)
|
||||
Current-period other comprehensive income (loss)
|
(50.9
|
)
|
|
3.3
|
|
|
(0.6
|
)
|
|
(48.2
|
)
|
||||
Balance at December 31, 2016
|
$
|
229.7
|
|
|
$
|
1.5
|
|
|
$
|
3.9
|
|
|
$
|
235.1
|
|
(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 on sale of dry cooling business.”
|
(2)
|
Net of tax (provision) benefit of
$(0.9)
and
$0.8
as of
December 31, 2016
and
2015
, respectively.
|
(3)
|
Net of tax provision of
$2.7
and
$3.1
as of
December 31, 2016
and
2015
, respectively. The balances as of December 31, 2016 and 2015 include unamortized prior service credits.
|
|
Amount
Reclassified
from
AOCI
|
|
Affected
Line Items
in the
Consolidated Statements of
Operations
|
||||||
|
Year ended
December 31,
|
|
|
||||||
|
2017
|
|
2016
|
|
|
||||
(Gains) losses on qualifying cash flow hedges:
|
|
|
|
|
|
||||
FX forward contracts
|
$
|
—
|
|
|
$
|
1.0
|
|
|
Revenues
|
Commodity contracts
|
(2.5
|
)
|
|
2.0
|
|
|
Cost of products sold
|
||
Swaps
|
0.3
|
|
|
—
|
|
|
Interest Expense
|
||
Swaps
|
(2.7
|
)
|
|
—
|
|
|
Other Expense, net
|
||
Pre-tax
|
(4.9
|
)
|
|
3.0
|
|
|
|
||
Income taxes
|
1.9
|
|
|
(0.8
|
)
|
|
|
||
|
$
|
(3.0
|
)
|
|
$
|
2.2
|
|
|
|
Pension and postretirement items:
|
|
|
|
|
|
||||
Amortization of unrecognized prior service credits - Pre-tax
|
$
|
(1.8
|
)
|
|
$
|
(1.0
|
)
|
|
Selling, general and administrative
|
Income taxes
|
0.7
|
|
|
0.4
|
|
|
|
||
|
$
|
(1.1
|
)
|
|
$
|
(0.6
|
)
|
|
|
|
|
|
|
|
|
||||
Recognition of foreign currency translation adjustments related to business dispositions:
|
|
|
|
|
|
||||
Recognition of foreign currency translation adjustment associated with the sale of our dry cooling business
|
$
|
—
|
|
|
$
|
(40.4
|
)
|
|
Gain on sale of dry cooling business
|
Recognition of foreign currency translation adjustment associated with the sale our Balcke Dürr business
|
—
|
|
|
1.4
|
|
|
Gain (loss) on disposition of discontinued operations, net of tax
|
||
|
$
|
—
|
|
|
$
|
(39.0
|
)
|
|
|
•
|
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.
|
|
|
Twelve Months Ended December 31, 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)
|
|
(2.5
|
)
|
|
(2.6
|
)
|
||
Impact of changes in foreign currency rates
|
|
1.3
|
|
|
0.6
|
|
||
Balance as of December 31, 2017
(2)
|
|
$
|
8.7
|
|
|
$
|
2.8
|
|
(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 the 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 expense, net.”
|
|
First
(5)
|
|
Second
(5)
|
|
Third
(5)
|
|
Fourth
(5)
|
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||
Operating revenues
(1)
|
$
|
340.6
|
|
|
$
|
360.6
|
|
|
$
|
349.7
|
|
|
$
|
371.4
|
|
|
$
|
348.5
|
|
|
$
|
345.0
|
|
|
$
|
387.0
|
|
|
$
|
395.3
|
|
Gross profit
(1)
|
88.1
|
|
|
89.9
|
|
|
76.1
|
|
|
91.1
|
|
|
85.1
|
|
|
80.8
|
|
|
80.9
|
|
|
114.0
|
|
||||||||
Income (loss) from continuing operations, net of tax
(2)
|
10.3
|
|
|
20.2
|
|
|
(8.3
|
)
|
|
6.5
|
|
|
22.0
|
|
|
6.6
|
|
|
60.0
|
|
|
(3.0
|
)
|
||||||||
Income (loss) from discontinued operations, net of tax
(3)
|
7.1
|
|
|
(6.6
|
)
|
|
(0.7
|
)
|
|
(3.5
|
)
|
|
0.3
|
|
|
(4.7
|
)
|
|
(1.4
|
)
|
|
(83.1
|
)
|
||||||||
Net income (loss)
|
17.4
|
|
|
13.6
|
|
|
(9.0
|
)
|
|
3.0
|
|
|
22.3
|
|
|
1.9
|
|
|
58.6
|
|
|
(86.1
|
)
|
||||||||
Less: Net income (loss) attributable to noncontrolling interests
|
—
|
|
|
0.6
|
|
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Net income (loss) attributable to SPX Corporation common shareholders
|
17.4
|
|
|
13.0
|
|
|
(9.0
|
)
|
|
4.0
|
|
|
22.3
|
|
|
1.9
|
|
|
58.6
|
|
|
(86.1
|
)
|
||||||||
Adjustment related to redeemable noncontrolling interest
(4)
|
—
|
|
|
—
|
|
|
—
|
|
|
(18.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Net income (loss) attributable to SPX Corporation common shareholders after adjustment related to redeemable noncontrolling interest
|
$
|
17.4
|
|
|
$
|
13.0
|
|
|
$
|
(9.0
|
)
|
|
$
|
(14.1
|
)
|
|
$
|
22.3
|
|
|
$
|
1.9
|
|
|
$
|
58.6
|
|
|
$
|
(86.1
|
)
|
Basic income (loss) per share of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Continuing operations, net of tax
|
$
|
0.24
|
|
|
$
|
0.47
|
|
|
$
|
(0.19
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
0.51
|
|
|
$
|
0.16
|
|
|
$
|
1.41
|
|
|
$
|
(0.07
|
)
|
Discontinued operations, net of tax
|
0.17
|
|
|
(0.16
|
)
|
|
(0.02
|
)
|
|
(0.09
|
)
|
|
0.01
|
|
|
(0.12
|
)
|
|
(0.03
|
)
|
|
(1.99
|
)
|
||||||||
Net income (loss)
|
$
|
0.41
|
|
|
$
|
0.31
|
|
|
$
|
(0.21
|
)
|
|
$
|
(0.34
|
)
|
|
$
|
0.52
|
|
|
$
|
0.04
|
|
|
$
|
1.38
|
|
|
$
|
(2.06
|
)
|
Diluted income (loss) per share of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Continuing operations, net of tax
|
$
|
0.24
|
|
|
$
|
0.47
|
|
|
$
|
(0.19
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
0.50
|
|
|
$
|
0.16
|
|
|
$
|
1.35
|
|
|
$
|
(0.07
|
)
|
Discontinued operations, net of tax
|
0.16
|
|
|
(0.16
|
)
|
|
(0.02
|
)
|
|
(0.09
|
)
|
|
0.01
|
|
|
(0.12
|
)
|
|
(0.03
|
)
|
|
(1.99
|
)
|
||||||||
Net income (loss)
|
$
|
0.40
|
|
|
$
|
0.31
|
|
|
$
|
(0.21
|
)
|
|
$
|
(0.34
|
)
|
|
$
|
0.51
|
|
|
$
|
0.04
|
|
|
$
|
1.32
|
|
|
$
|
(2.06
|
)
|
(1)
|
During the second and fourth quarters of 2017, we determined that additional cost would be required in order to complete certain remaining portions of large power projects in South Africa. As such, we revised our estimates of revenues and costs associated with the projects. These revisions resulted in charges to “Income (loss) from continuing operations before income taxes” of
$22.9
and
$29.9
, respectively, which is comprised of a reduction in revenue of
$13.5
and
$23.4
, respectively, and increases in cost of products sold of
$9.4
and
$6.5
, respectively, in the second and fourth quarters of 2017. See Notes 5 and 13 to our consolidated financial statements for additional details.
|
(2)
|
During the first quarter of 2016, we completed the sale of our dry cooling business, resulting in a pre-tax gain of $
17.9
. During the second quarter of 2016, we reduced the pre-tax gain by $
1.2
associated with adjustments to certain retained liabilities. During the third quarter of 2016, we increased the pre-tax gain by $
1.7
associated with the working capital settlement related to the transaction. See Notes 1 and 4 for additional details.
|
(3)
|
During the fourth quarter of 2016, we recorded a net loss on the sale of Balcke Dürr of
$78.6
. During the first quarter of 2017, we reduced the net loss by
$7.2
. During the second quarter of 2017, we increased the net loss by $
0.4
. See Note 4 for additional details.
|
(4)
|
During the second quarter of 2016, in connection with the noncontrolling interest in our South Africa subsidiary, we have 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 2016 in excess of fair value) in our calculations of basic and diluted earnings per share (see Note 13 for additional details).
|
(5)
|
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. This practice only affects the quarterly reporting periods and not the annual reporting period. We had two fewer days in the first quarter of 2017 and had one more day in the fourth quarter of 2017 than in the respective 2016 periods.
|
•
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
|
•
|
Provide reasonable assurance that transactions are recorded properly to allow for the preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and Directors; and
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the consolidated financial statements.
|
a)
|
Directors of the company.
|
b)
|
Executive Officers of the company.
|
c)
|
Section 16(a) Beneficial Ownership Reporting Compliance.
|
d)
|
Code of Ethics.
|
e)
|
Information regarding our Audit Committee and Nominating and Governance Committee is set forth in our definitive proxy statement for the 2018 Annual Meeting of Stockholders under the headings “Corporate Governance” and “Board Committees” and is incorporated herein by reference.
|
1.
|
All financial statements. See Index to Consolidated Financial Statements on page
50
of this Form 10-K.
|
2.
|
Financial Statement Schedules. None required. See page
50
of this Form 10-K.
|
3.
|
Exhibits. See Index to Exhibits.
|
|
SPX CORPORATION
(Registrant)
|
|
|
By
|
/s/ SCOTT W. SPROULE
|
|
|
Scott W. Sproule
Vice President, Chief Financial Officer and Treasurer |
/s/ EUGENE J. LOWE, III
|
|
/s/ SCOTT W. SPROULE
|
Eugene J. Lowe, III
President and Chief Executive Officer
|
|
Scott W. Sproule
Vice President, Chief Financial Officer and Treasurer |
/s/ PATRICK J. O’LEARY
|
|
/s/ RICKY D. PUCKETT
|
Patrick J. O’Leary
Director
|
|
Ricky D. Puckett
Director
|
/s/ DAVID A. ROBERTS
|
|
/s/ RUTH G. SHAW
|
David A. Roberts
Director
|
|
Ruth G. Shaw
Director
|
/s/ ROBERT B. TOTH
|
|
/s/ TANA L. UTLEY
|
Robert B. Toth
Director |
|
Tana L. Utley
Director
|
/s/ MICHAEL A. REILLY
|
|
|
Michael A. Reilly
Chief Accounting Officer, Vice President,
Finance, and Corporate Controller
|
|
|
Item No.
|
|
Description
|
||
2.1
|
|
—
|
||
3.1
|
|
—
|
||
3.2
|
|
—
|
||
3.3
|
|
—
|
||
10.1
|
|
—
|
||
10.2
|
|
—
|
||
10.3
|
|
—
|
||
10.4
|
|
—
|
|
|
10.5
|
|
—
|
|
|
10.6
|
|
—
|
|
|
10.7
|
|
—
|
|
|
10.8
|
|
—
|
|
|
10.9
|
|
—
|
|
|
10.10
|
|
—
|
|
|
10.11
|
|
—
|
|
|
10.12
|
|
—
|
|
|
10.13
|
|
—
|
|
10.14
|
|
—
|
|
|
*10.15
|
|
—
|
||
*10.16
|
|
—
|
||
*10.17
|
|
—
|
||
*10.18
|
|
—
|
||
*10.19
|
|
—
|
||
*10.20
|
|
—
|
||
*10.21
|
|
—
|
||
*10.22
|
|
—
|
||
*10.23
|
|
—
|
||
*10.24
|
|
—
|
||
*10.25
|
|
—
|
||
*10.26
|
|
—
|
||
*10.27
|
|
—
|
||
*10.28
|
|
—
|
||
*10.29
|
|
—
|
||
*10.30
|
|
—
|
||
*10.31
|
|
—
|
||
*10.32
|
|
—
|
*10.33
|
|
—
|
||
*10.34
|
|
—
|
||
*10.35
|
|
—
|
||
*10.36
|
|
—
|
||
*10.37
|
|
—
|
||
10.38
|
|
—
|
||
*10.39
|
|
—
|
||
*10.40
|
|
—
|
||
*10.41
|
|
—
|
||
10.42
|
|
—
|
||
10.43
|
|
—
|
||
10.44
|
|
—
|
||
*10.45
|
|
—
|
||
*10.46
|
|
—
|
||
10.47
|
|
—
|
||
*10.48
|
|
—
|
||
*10.49
|
|
—
|
||
10.50
|
|
—
|
||
*10.51
|
|
—
|
||
*10.52
|
|
—
|
||
*10.53
|
|
—
|
||
*10.54
|
|
—
|
||
*10.55
|
|
—
|
|
*10.56
|
|
—
|
|
|
21.1
|
|
—
|
|
|
23.1
|
|
—
|
|
|
24.1
|
|
—
|
|
|
31.1
|
|
—
|
|
|
31.2
|
|
—
|
|
|
32.1
|
|
—
|
|
|
101.1
|
|
—
|
|
SPX Corporation financial information from its Form 10-K for the fiscal year ended December 31, 2017, formatted in XBRL, including: (i) Consolidated Statements of Operations for the years ended December 31, 2017, 2016 and 2015; (ii) Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2017, 2016 and 2015; (iii) Consolidated Balance Sheets as of December 31, 2017 and 2016; (iv) Consolidated Statements of Equity for the years ended December 31, 2017, 2016 and 2015; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015; and (vi) Notes to Consolidated Financial Statements.
|
SPX CORPORATION
Plan Document
SPX Corporation Executive Long-Term Disability Plan
|
This Booklet constitutes the Plan Document
.
|
As Amended and Restated Effective July 1, 2015
|
Table of Contents
|
|
|
|
|
|
Schedule of Benefits
|
4
|
|
Eligibility
|
4
|
|
Effective Date of Coverage
|
4
|
|
Cost of Coverage
|
5
|
|
Payments
|
5
|
|
Benefit Amount
|
5
|
|
No Reduction in Benefits for Cost-of-Living Increases
|
5
|
|
Coordination with Other Income Benefits
|
5
|
|
When Your Eligibility Ends
|
6
|
|
Claim Filing Procedure
|
6
|
|
Filing a Claim
|
6
|
|
When You Can Expect to Learn if Benefits Have Been Approved
|
6
|
|
How You Will Learn of a Benefits Determination
|
7
|
|
How You Appeal Benefit Denials
|
7
|
|
How You Appeal a Second Time
|
8
|
|
General Provisions
|
9
|
|
Administration of the Plan
|
9
|
|
Applicable Law
|
9
|
|
Benefits Not Transferable
|
10
|
|
Cancellation of Coverage
|
10
|
|
Clerical Error
|
10
|
|
Conformity with Statutes
|
10
|
|
Effective Date of the Plan
|
10
|
|
Effect of Oral or Written Statements
|
10
|
|
Examinations Required by the Plan
|
10
|
|
Health Care Responsibilities
|
11
|
|
Incapacity
|
11
|
|
Limits on Liability
|
11
|
|
Lost Distributees
|
11
|
|
Misrepresentation
|
11
|
|
No Fault Coordination
|
11
|
|
No Guarantee of Tax Consequences
|
11
|
|
No Vested Rights to Benefits
|
12
|
|
Plan Is Not a Contract
|
12
|
|
Plan Modification and Amendment
|
12
|
|
Plan Termination
|
12
|
|
Recovery of Overpayment
|
12
|
|
Severability
|
13
|
|
Time Effective
|
13
|
|
Unfunded Plan
|
13
|
|
Waiver & Estoppel
|
13
|
|
Workers’ Compensation Not Affected
|
14
|
|
Administrative Information
|
15
|
|
Glossary of Terms
|
16
|
|
|
Plan
Benefit Amount
|
Duration
|
After 26 weeks of continuous
disability
.
|
60% of the following:
• pre-disability annual
base pay,
minus $200,000
•
plus
target bonus*, minus $200,000
|
Until maximum benefit period has been reached, no longer
disabled
or age 65, whichever is earlier.
|
Participation in an approved rehabilitation services program as defined in the SPX Corporation Long-Term Disability Plan.
|
70% of the following:
• pre-disability
annual
base pay,
minus $200,000
•
plus
target bonus*, minus $200,000
|
Until participation in rehabilitation services program
ends.
|
Pay from a modified job, an alternate job or from part-time work while you remain
disabled.
|
1
st
18 months of long-term disability benefits: No reduction in
Plan
benefits unless your
Plan
and other SPX disability benefits combined with income from employment exceed your pre-disability
earnings
.
After 18 months of
Plan
benefits,
Plan
benefits are reduced by 50% of income from other employment to a combined total of no more than 100% of your
indexed pre-disability earnings
.
|
Until you cease other employment while still covered by the
Plan
or until you are no longer determined to be
disabled
.
|
•
|
Any sick pay or other salary continuation paid to you by SPX;
|
•
|
Workers’ Compensation benefits;
|
•
|
Unemployment compensation benefits;
|
•
|
Any state or federal disability benefits;
|
•
|
Automobile no-fault wage replacement benefits;
|
•
|
Wage replacement benefits recovered from a third party;
|
•
|
Any benefit received from the Supplemental Retirement Plan for Top Management;
|
•
|
Any benefit from a defined benefit pension plan to which SPX has contributed;
|
•
|
Any benefit from the Supplemental Individual Account Retirement Plan;
|
•
|
Any Social Security benefits that you or your dependents are eligible for due to your disability or age (Please note that you must apply for Social Security benefits and provide proof of application to the
Claims Administrator
, and pursue any appeals to the extent determined by the
Claims Administrator
); or
|
•
|
Any estimated SSDI benefits you would have received should you fail to take the necessary steps for your SSDI benefits, or should your SSDI benefit determination not be received within 12 months of commencement of your
Plan
benefit.
|
•
|
You are no longer eligible for coverage;
|
•
|
You transfer to a non-eligible employee group or your participation was discontinued by the Board or the Committee;
|
•
|
Your approved leave of absence ends;
|
•
|
You are laid off; or
|
•
|
Your employment with SPX ends.
|
•
|
the specific reasons for the denial;
|
•
|
reference to the specific
Plan
provisions on which the determination is based;
|
•
|
a description of any additional material or information necessary for you to complete the claim and an explanation of why such material or information is necessary;
|
•
|
a description of the
Plan’s
review procedures and the time limits applicable to such procedures, including a statement of your right to bring a civil action following an adverse benefit determination on review;
|
•
|
if an internal rule, guideline, protocol, or other criterion was relied upon in the decision-making, either (1) a copy of such rule, guideline, or protocol or (2) a statement that a copy of such rule, guideline, or protocol will be provided to you free of charge upon request; and
|
•
|
if the denial was based on a medical necessity or experimental treatment or similar exclusion or limit, either (1) an explanation of the scientific or clinical judgment for the determination, applying the terms of the
Plan
to your medical circumstances, or (2) a statement that such explanation will be provided free of charge upon request.
|
•
|
the specific reasons for the adverse determination;
|
•
|
reference to the specific
Plan
provisions on which the benefit determination is based;
|
•
|
a statement that you are entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents and records relevant to your claim for benefits, without regard to whether such records were considered or relied upon in making the adverse benefit determination on review, including any reports, and the identities, of any experts whose advice was obtained;
|
•
|
a description of the
Plan’s
review procedures and the time limits applicable to such procedures, including a statement of your right to bring a civil action following an adverse benefit determination on review;
|
•
|
if an internal rule, guideline, protocol, or other criterion was relied upon in the decision-making, either (1) a copy of such rule, guideline, or protocol or (2) a statement that a copy of such rule, guideline, or protocol will be provided free of charge to the claimant upon request;
|
•
|
if the adverse benefit determination was based on a medical necessity or experimental treatment or similar exclusion or limit, either (1) an explanation of the scientific or clinical judgment for the determination, applying the terms of the
Plan
to the claimant’s medical circumstances, or (2) a statement that such explanation will be provided free of charge upon request
|
•
|
a statement describing any voluntary appeal procedures offered by the
Plan
and your right to obtain the information about such procedures;
|
•
|
a statement of your right to bring a civil action following an adverse benefit determination on review;
|
•
|
you and the
Plan
may have other voluntary alternative dispute resolution options, such as mediation.
|
•
|
Interpret the terms of the
Plan
, including the
Plan’s
eligibility provisions and its provisions relating to determination of the amount, manner and time of payment of any benefits payable under the
Plan
;
|
•
|
Resolve ambiguities in the
Plan
;
|
•
|
Adopt, amend and rescind rules and regulations pertaining to its duties under the
Plan
;
|
•
|
Make such determination as to the right of any person to a benefit;
|
•
|
To employ such professional services and advisors as may be required in carrying out the provisions of the
Plan
;
|
•
|
Keep all such books, records and other data as may be deemed necessary for the administration of the
Plan
; and
|
•
|
Make all determinations necessary or advisable for the discharge of its duties under the
Plan
.
|
•
|
The
Plan Administrator
cannot locate the
covered person
to whom payment is due, and
|
•
|
Such benefits would be reinstated if the
covered person
submits a claim for the forfeited benefits within the time prescribed in the “Claim Filing Procedure” section.
|
•
|
any annual change in the Consumer Price Index, or
|
•
|
7%
|
1.
|
Establishment and Purpose
.
|
2.
|
Eligibility to Participate
.
|
3.
|
Benefits After Retirement
.
|
4.
|
Benefits Paid Prior to Retirement
.
|
5.
|
Eligibility for Benefits at Termination of Employment
.
|
A.
|
Generally
|
B.
|
For Cause
|
C.
|
For Disability
|
(i)
|
If the Participant’s employment with the Corporation is terminated before his 65
th
birthday for reason of disability, he may continue to participate in this Plan, with the consent of the Compensation Committee. The Participant whose employment is terminated due to a disability will be considered to be a continuing employee of the Corporation until he reaches his 65
th
birthday (or ceases to be disabled), at which time he will be deemed to have retired.
|
(ii)
|
“Disability” or “disabled” as used herein means the Participant’s inability to engage in any occupation or employment for wage or profit for which he is reasonably qualified by education, training or experience, by reason of a medically-determined physical or mental impairment which can be expected to continue for the balance of his lifetime. The determination of the Participant’s disability shall be made by the Compensation Committee. The Participant agrees to submit to such physical examination and furnish such proof as may be required by the Compensation Committee in connection with the determination of the existence and continuation of the disability.
|
(iii)
|
The Compensation Committee shall have sole discretion in the ultimate determination as to those who may remain in the Plan under this Section 5(C).
|
6.
|
Beneficiary Designation
.
|
7.
|
No Contract of Employment
.
|
8.
|
Payments as Supplemental Compensation
.
|
9.
|
Rights not Assignable
.
|
10.
|
Purchase of Insurance Contracts
.
|
11.
|
Successors, Mergers and Consolidation
.
|
12.
|
Amendment and Termination
.
|
13.
|
Applicable Law
.
|
14.
|
Administration
.
|
15.
|
Validity
.
|
16.
|
Indemnification
.
|
17.
|
Duty of Participants and Beneficiaries
.
|
18.
|
Withholding and Right to Offset
.
|
19.
|
Headings and Construction
.
|
AMENDMENT TO THE
SPX CORPORATION SUPPLEMENTAL RETIREMENT SAVINGS PLAN
|
AMENDMENT TO THE
SPX CORPORATION SUPPLEMENTAL RETIREMENT SAVINGS PLAN
|
1.
|
Article II of the Plan is amended by adding the following new Section 2.3:
|
2.
|
Section 8.1 is amended by adding the following paragraph:
|
3.
|
Section 8.9 is amended by adding the following sentence:
|
4.
|
Section 9.1 is amended by adding the following paragraph:
|
5.
|
Section 10.1 is amended by adding “(and subject to Section 2.3)” at the end of the first sentence
.
|
AMENDMENT TO THE
SPX CORPORATION SUPPLEMENTAL RETIREMENT SAVINGS PLAN
|
AMENDMENT TO THE
SPX CORPORATION SUPPLEMENTAL INDIVIDUAL ACCOUNT RETIREMENT PLAN
|
1.
|
Section 1.13 of the Plan is amended by adding the following sentence:
|
2.
|
Section 1.14 of the Plan is amended by adding the following sentence:
|
3.
|
Section 1.22 of the Plan is amended by adding the following sentence:
|
4.
|
Section 1.24 of the Plan is amended by adding the following sentence:
|
5.
|
Sections 3.1(a) and 3.1(c) of the Plan are each amended by adding the following sentence:
|
6.
|
Article IX of the Plan is amended by adding the following new Section 9.3:
|
AMENDMENT TO THE
SPX CORPORATION SUPPLEMENTAL RETIREMENT PLAN
FOR TOP MANAGEMENT
|
1.
|
Article II of the Plan is amended by adding the following new Section 2.4:
|
2.
|
Section 7.9 is amended by adding the following sentence:
|
3.
|
Article IX is amended by adding “and Section 2.4” after “Section 5.3”
.
|
Entity Name
|
|
Domestic Jurisdiction
|
|
|
|
Ballantyne Holdings LLC
|
|
California
|
Bethpage Finance SARL
|
|
Luxembourg
|
DBT Technologies (Pty) Ltd.
|
|
South Africa
|
Dormant Radio Australia Pty Ltd.
|
|
Australia
|
Fairbanks Morse Pump Corporation
|
|
Kansas
|
Flash Technology, LLC
|
|
Delaware
|
General Signal India Private Limited
|
|
India
|
Genfare Holdings, LLC
|
|
Delaware
|
Jurubatech Technologia Automotiva Ltda.
|
|
Brazil
|
Kayex Holdings LLC
|
|
Delaware
|
Kent-Moore Brasil Indústria e Comércio Ltda.
|
|
Brazil
|
Kiawah Holding Company
|
|
Cayman Islands
|
Marley Canadian Inc.
|
|
Canada
|
Marley Cooling Tower (Holdings) Limited
|
|
United Kingdom
|
Marley Engineered Products LLC.
|
|
Delaware
|
Marley Mexicana S.A. de C.V.
|
|
Mexico
|
MCT Services LLC
|
|
Delaware
|
Pinehurst Holding Company
|
|
Cayman Islands
|
Radiodetection (Canada) Ltd.
|
|
Canada
|
Radiodetection (China) Limited
|
|
Hong Kong
|
Radiodetection Australia Pty Limited
|
|
Australia
|
Radiodetection B.V.
|
|
Netherlands
|
Radiodetection Limited
|
|
United Kingdom
|
Radiodetection S.á r.l.
|
|
France
|
SPX European Holding Limited
|
|
United Kingdom
|
SPX Germany Holding GmbH
|
|
Germany
|
SPX (Guangzhou) Cooling Technologies Co., Ltd.
|
|
China
|
SPX Cooling Technologies Canada, Inc.
|
|
Canada
|
SPX Cooling Technologies Leipzig GmbH
|
|
Germany
|
SPX Cooling Technologies Malaysia Sdn Bhd
|
|
Malaysia
|
SPX Cooling Technologies Singapore Pte. Ltd.
|
|
Singapore
|
SPX Cooling Technologies (Suzhou) Co. Ltd.
|
|
China
|
SPX Cooling Technologies Trading DMCC
|
|
Dubai
|
SPX Cooling Technologies UK Limited
|
|
United Kingdom
|
SPX Cooling Technologies, Inc.
|
|
Delaware
|
SPX Heat Transfer LLC
|
|
Delaware
|
SPX Holding Inc.
|
|
Connecticut
|
SPX Mauritius Ltd.
|
|
Mauritius
|
SPX Pension Trust Company Limited
|
|
United Kingdom
|
SPX Receivables, LLC
|
|
Delaware
|
SPX Technologies (Pty) Ltd.
|
|
Republic of South Africa
|
SPX Thermal Equipment and Services India Private Limited
|
|
India
|
SPX Transformer Solutions, Inc.
|
|
Wisconsin
|
TCI International, Inc.
|
|
Delaware
|
The Marley Company LLC
|
|
Delaware
|
The Marley Wylain Company
|
|
Delaware
|
Vokes Limited
|
|
United Kingdom
|
XCel Erectors, Inc.
|
|
Delaware
|
1.
|
I have reviewed this annual report on Form 10-K of SPX Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: February 21, 2018
|
/s/ EUGENE J. LOWE, III
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of SPX Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: February 21, 2018
|
/s/ SCOTT W. SPROULE
|
|
Vice President, Chief Financial Officer and Treasurer
|
(i)
|
this Annual Report on Form 10-K, for the year ended
December 31, 2017
, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
|
(ii)
|
the information contained in this report fairly presents, in all material respects, the financial condition and results of operations of SPX Corporation.
|
/s/ EUGENE J. LOWE, III
|
|
/s/ SCOTT W. SPROULE
|
Eugene J. Lowe, III
President and Chief Executive Officer
|
|
Scott W. Sproule
Vice President, Chief Financial Officer
and Treasurer
|