SPX FLOW, Inc. (Form: 10-Q, Received: 10/31/2019 06:05:52)

false--12-31Q3201900016419912500000.001500000.003500000.002500000.003500000.001500000.000P1Y3420003420003420000.010.01300000000300000000429323394312824742542888425668840.056250.0587550P1YP1Y100000010000001000000.1100300000030000000000P1Y342000342000389451561363 0001641991 2019-01-01 2019-09-28 0001641991 2019-10-25 0001641991 2018-01-01 2018-09-29 0001641991 2018-07-01 2018-09-29 0001641991 2019-06-30 2019-09-28 0001641991 2018-12-31 0001641991 2019-09-28 0001641991 us-gaap:RetainedEarningsMember 2019-09-28 0001641991 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-29 0001641991 us-gaap:ParentMember 2019-06-30 2019-09-28 0001641991 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 2019-09-28 0001641991 us-gaap:CommonStockMember 2019-06-29 0001641991 us-gaap:AdditionalPaidInCapitalMember 2019-06-29 0001641991 us-gaap:NoncontrollingInterestMember 2019-06-30 2019-09-28 0001641991 us-gaap:ParentMember 2019-09-28 0001641991 us-gaap:RetainedEarningsMember 2019-06-30 2019-09-28 0001641991 us-gaap:ParentMember 2019-06-29 0001641991 us-gaap:RetainedEarningsMember 2019-06-29 0001641991 2019-06-29 0001641991 us-gaap:CommonStockMember 2019-09-28 0001641991 us-gaap:CommonStockMember 2019-06-30 2019-09-28 0001641991 us-gaap:AdditionalPaidInCapitalMember 2019-09-28 0001641991 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 2019-09-28 0001641991 us-gaap:NoncontrollingInterestMember 2019-09-28 0001641991 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-09-28 0001641991 us-gaap:NoncontrollingInterestMember 2019-06-29 0001641991 us-gaap:TreasuryStockMember 2019-06-30 2019-09-28 0001641991 us-gaap:TreasuryStockMember 2019-09-28 0001641991 us-gaap:TreasuryStockMember 2019-06-29 0001641991 us-gaap:RetainedEarningsMember 2018-06-30 0001641991 us-gaap:RetainedEarningsMember 2018-07-01 2018-09-29 0001641991 us-gaap:AdditionalPaidInCapitalMember 2018-07-01 2018-09-29 0001641991 us-gaap:ParentMember 2018-07-01 2018-09-29 0001641991 us-gaap:ParentMember 2018-06-30 0001641991 us-gaap:NoncontrollingInterestMember 2018-09-29 0001641991 us-gaap:CommonStockMember 2018-06-30 0001641991 us-gaap:TreasuryStockMember 2018-07-01 2018-09-29 0001641991 us-gaap:TreasuryStockMember 2018-09-29 0001641991 us-gaap:NoncontrollingInterestMember 2018-07-01 2018-09-29 0001641991 us-gaap:CommonStockMember 2018-07-01 2018-09-29 0001641991 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-07-01 2018-09-29 0001641991 us-gaap:AdditionalPaidInCapitalMember 2018-09-29 0001641991 us-gaap:ParentMember 2018-09-29 0001641991 2018-09-29 0001641991 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-06-30 0001641991 us-gaap:RetainedEarningsMember 2018-09-29 0001641991 us-gaap:NoncontrollingInterestMember 2018-06-30 0001641991 us-gaap:AdditionalPaidInCapitalMember 2018-06-30 0001641991 us-gaap:TreasuryStockMember 2018-06-30 0001641991 us-gaap:CommonStockMember 2018-09-29 0001641991 2018-06-30 0001641991 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-09-29 0001641991 us-gaap:ParentMember 2019-01-01 2019-09-28 0001641991 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-09-28 0001641991 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001641991 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-09-28 0001641991 us-gaap:NoncontrollingInterestMember 2019-01-01 2019-09-28 0001641991 us-gaap:RetainedEarningsMember 2018-12-31 0001641991 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001641991 us-gaap:CommonStockMember 2019-01-01 2019-09-28 0001641991 us-gaap:ParentMember 2019-01-01 0001641991 us-gaap:RetainedEarningsMember 2019-01-01 2019-09-28 0001641991 us-gaap:CommonStockMember 2018-12-31 0001641991 us-gaap:RetainedEarningsMember 2019-01-01 0001641991 us-gaap:NoncontrollingInterestMember 2018-12-31 0001641991 us-gaap:TreasuryStockMember 2019-01-01 2019-09-28 0001641991 2019-01-01 0001641991 us-gaap:TreasuryStockMember 2018-12-31 0001641991 us-gaap:ParentMember 2018-12-31 0001641991 2018-01-01 0001641991 us-gaap:NoncontrollingInterestMember 2018-01-01 2018-09-29 0001641991 us-gaap:ParentMember 2018-01-01 2018-09-29 0001641991 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-12-31 0001641991 us-gaap:RetainedEarningsMember 2018-01-01 2018-09-29 0001641991 2017-12-31 0001641991 us-gaap:AdditionalPaidInCapitalMember 2018-01-01 2018-09-29 0001641991 us-gaap:TreasuryStockMember 2018-01-01 2018-09-29 0001641991 us-gaap:RetainedEarningsMember 2017-12-31 0001641991 us-gaap:NoncontrollingInterestMember 2017-12-31 0001641991 us-gaap:CommonStockMember 2017-12-31 0001641991 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 0001641991 us-gaap:AdditionalPaidInCapitalMember 2017-12-31 0001641991 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-09-29 0001641991 us-gaap:CommonStockMember 2018-01-01 2018-09-29 0001641991 us-gaap:TreasuryStockMember 2017-12-31 0001641991 us-gaap:RetainedEarningsMember 2018-01-01 0001641991 us-gaap:ParentMember 2017-12-31 0001641991 us-gaap:ParentMember 2018-01-01 0001641991 us-gaap:OtherAssetsMember 2019-09-28 0001641991 us-gaap:OtherAssetsMember 2018-09-29 0001641991 2019-06-30 2019-09-28 0001641991 spxf:AccountingStandardsUpdate201602ReclassificationOfCapitalLeaseToOperatingLeaseMember 2019-01-01 0001641991 spxf:AccountingStandardsUpdate201602ImpairmentOfOperatingLeaseRightofuseAssetMember 2019-01-01 0001641991 spxf:AccountingStandardsUpdate201602RecognitionofOperatingLeasesMember 2019-01-01 0001641991 us-gaap:AccountingStandardsUpdate201602Member 2019-01-01 0001641991 srt:MaximumMember 2019-01-01 2019-09-28 0001641991 srt:MinimumMember 2019-01-01 2019-09-28 0001641991 us-gaap:DiscontinuedOperationsHeldforsaleMember 2019-09-28 0001641991 us-gaap:DiscontinuedOperationsHeldforsaleMember 2018-12-31 0001641991 us-gaap:DiscontinuedOperationsHeldforsaleMember 2018-01-01 2018-09-29 0001641991 us-gaap:DiscontinuedOperationsHeldforsaleMember 2019-01-01 2019-09-28 0001641991 us-gaap:DiscontinuedOperationsHeldforsaleMember 2019-06-30 2019-09-28 0001641991 us-gaap:DiscontinuedOperationsHeldforsaleMember spxf:SeniorNotesSeniorCreditFacilitiesFormerTradeReceivablesMember 2018-01-01 2018-09-29 0001641991 us-gaap:DiscontinuedOperationsHeldforsaleMember spxf:SeniorNotesSeniorCreditFacilitiesFormerTradeReceivablesMember 2019-06-30 2019-09-28 0001641991 us-gaap:DiscontinuedOperationsHeldforsaleMember 2018-07-01 2018-09-29 0001641991 us-gaap:DiscontinuedOperationsHeldforsaleMember spxf:SeniorNotesSeniorCreditFacilitiesFormerTradeReceivablesMember 2019-01-01 2019-09-28 0001641991 us-gaap:DiscontinuedOperationsHeldforsaleMember spxf:SeniorNotesSeniorCreditFacilitiesFormerTradeReceivablesMember 2018-07-01 2018-09-29 0001641991 spxf:OriginalEquipmentMember 2019-01-01 2019-09-28 0001641991 us-gaap:FoodAndBeverageMember 2018-01-01 2018-09-29 0001641991 spxf:AftermarketMember spxf:IndustrialMember 2019-01-01 2019-09-28 0001641991 spxf:AftermarketMember us-gaap:FoodAndBeverageMember 2019-01-01 2019-09-28 0001641991 spxf:IndustrialMember 2018-01-01 2018-09-29 0001641991 spxf:AftermarketMember 2019-01-01 2019-09-28 0001641991 spxf:AftermarketMember us-gaap:FoodAndBeverageMember 2018-01-01 2018-09-29 0001641991 spxf:OriginalEquipmentMember spxf:IndustrialMember 2019-01-01 2019-09-28 0001641991 spxf:OriginalEquipmentMember 2018-01-01 2018-09-29 0001641991 spxf:OriginalEquipmentMember us-gaap:FoodAndBeverageMember 2019-01-01 2019-09-28 0001641991 spxf:IndustrialMember 2019-01-01 2019-09-28 0001641991 us-gaap:FoodAndBeverageMember 2019-01-01 2019-09-28 0001641991 spxf:AftermarketMember 2018-01-01 2018-09-29 0001641991 spxf:OriginalEquipmentMember spxf:IndustrialMember 2018-01-01 2018-09-29 0001641991 spxf:AftermarketMember spxf:IndustrialMember 2018-01-01 2018-09-29 0001641991 spxf:OriginalEquipmentMember us-gaap:FoodAndBeverageMember 2018-01-01 2018-09-29 0001641991 us-gaap:FoodAndBeverageMember 2018-07-01 2018-09-29 0001641991 spxf:AftermarketMember us-gaap:FoodAndBeverageMember 2019-06-30 2019-09-28 0001641991 spxf:IndustrialMember 2018-07-01 2018-09-29 0001641991 spxf:AftermarketMember spxf:IndustrialMember 2018-07-01 2018-09-29 0001641991 spxf:OriginalEquipmentMember us-gaap:FoodAndBeverageMember 2018-07-01 2018-09-29 0001641991 spxf:OriginalEquipmentMember spxf:IndustrialMember 2018-07-01 2018-09-29 0001641991 spxf:OriginalEquipmentMember spxf:IndustrialMember 2019-06-30 2019-09-28 0001641991 spxf:OriginalEquipmentMember 2019-06-30 2019-09-28 0001641991 spxf:AftermarketMember us-gaap:FoodAndBeverageMember 2018-07-01 2018-09-29 0001641991 spxf:OriginalEquipmentMember 2018-07-01 2018-09-29 0001641991 spxf:AftermarketMember spxf:IndustrialMember 2019-06-30 2019-09-28 0001641991 spxf:AftermarketMember 2019-06-30 2019-09-28 0001641991 us-gaap:FoodAndBeverageMember 2019-06-30 2019-09-28 0001641991 spxf:OriginalEquipmentMember us-gaap:FoodAndBeverageMember 2019-06-30 2019-09-28 0001641991 spxf:IndustrialMember 2019-06-30 2019-09-28 0001641991 spxf:AftermarketMember 2018-07-01 2018-09-29 0001641991 us-gaap:TransferredOverTimeMember 2018-07-01 2018-09-29 0001641991 us-gaap:TransferredOverTimeMember 2019-06-30 2019-09-28 0001641991 us-gaap:FoodAndBeverageMember us-gaap:TransferredOverTimeMember 2018-07-01 2018-09-29 0001641991 us-gaap:FoodAndBeverageMember us-gaap:TransferredOverTimeMember 2019-06-30 2019-09-28 0001641991 spxf:IndustrialMember us-gaap:TransferredOverTimeMember 2018-07-01 2018-09-29 0001641991 spxf:IndustrialMember us-gaap:TransferredOverTimeMember 2018-01-01 2018-09-29 0001641991 spxf:IndustrialMember us-gaap:TransferredOverTimeMember 2019-01-01 2019-09-28 0001641991 us-gaap:TransferredOverTimeMember 2019-01-01 2019-09-28 0001641991 us-gaap:FoodAndBeverageMember us-gaap:TransferredOverTimeMember 2018-01-01 2018-09-29 0001641991 spxf:IndustrialMember us-gaap:TransferredOverTimeMember 2019-06-30 2019-09-28 0001641991 us-gaap:FoodAndBeverageMember us-gaap:TransferredOverTimeMember 2019-01-01 2019-09-28 0001641991 us-gaap:TransferredOverTimeMember 2018-01-01 2018-09-29 0001641991 us-gaap:OperatingSegmentsMember 2018-01-01 2018-09-29 0001641991 us-gaap:OperatingSegmentsMember us-gaap:FoodAndBeverageMember 2018-07-01 2018-09-29 0001641991 us-gaap:OperatingSegmentsMember 2019-01-01 2019-09-28 0001641991 us-gaap:OperatingSegmentsMember 2018-07-01 2018-09-29 0001641991 us-gaap:OperatingSegmentsMember us-gaap:FoodAndBeverageMember 2018-01-01 2018-09-29 0001641991 us-gaap:MaterialReconcilingItemsMember 2018-01-01 2018-09-29 0001641991 us-gaap:OperatingSegmentsMember spxf:IndustrialMember 2018-07-01 2018-09-29 0001641991 us-gaap:MaterialReconcilingItemsMember 2019-01-01 2019-09-28 0001641991 us-gaap:OperatingSegmentsMember spxf:IndustrialMember 2019-01-01 2019-09-28 0001641991 us-gaap:OperatingSegmentsMember 2019-06-30 2019-09-28 0001641991 us-gaap:OperatingSegmentsMember us-gaap:FoodAndBeverageMember 2019-01-01 2019-09-28 0001641991 us-gaap:MaterialReconcilingItemsMember 2019-06-30 2019-09-28 0001641991 us-gaap:OperatingSegmentsMember spxf:IndustrialMember 2019-06-30 2019-09-28 0001641991 us-gaap:OperatingSegmentsMember us-gaap:FoodAndBeverageMember 2019-06-30 2019-09-28 0001641991 us-gaap:CorporateNonSegmentMember 2019-01-01 2019-09-28 0001641991 us-gaap:OperatingSegmentsMember spxf:IndustrialMember 2018-01-01 2018-09-29 0001641991 us-gaap:MaterialReconcilingItemsMember 2018-07-01 2018-09-29 0001641991 us-gaap:CorporateNonSegmentMember 2018-07-01 2018-09-29 0001641991 us-gaap:CorporateNonSegmentMember 2019-06-30 2019-09-28 0001641991 us-gaap:CorporateNonSegmentMember 2018-01-01 2018-09-29 0001641991 us-gaap:CorporateNonSegmentMember us-gaap:SegmentDiscontinuedOperationsMember 2019-06-30 2019-09-28 0001641991 us-gaap:CorporateNonSegmentMember us-gaap:SegmentDiscontinuedOperationsMember 2018-07-01 2018-09-29 0001641991 us-gaap:CorporateNonSegmentMember us-gaap:SegmentDiscontinuedOperationsMember 2018-01-01 2018-09-29 0001641991 2019-01-01 2019-03-30 0001641991 spxf:OriginalEquipmentHighlyEngineeredSystemsMember us-gaap:FoodAndBeverageMember 2018-01-01 2018-09-29 0001641991 us-gaap:CorporateNonSegmentMember us-gaap:SegmentDiscontinuedOperationsMember 2019-01-01 2019-09-28 0001641991 spxf:OriginalEquipmentHighlyEngineeredSystemsMember us-gaap:FoodAndBeverageMember 2018-07-01 2018-09-29 0001641991 spxf:OriginalEquipmentHighlyEngineeredSystemsMember us-gaap:FoodAndBeverageMember 2019-06-30 2019-09-28 0001641991 spxf:OriginalEquipmentHighlyEngineeredSystemsMember us-gaap:FoodAndBeverageMember 2019-01-01 2019-09-28 0001641991 spxf:IndustrialMember 2018-12-31 0001641991 us-gaap:FoodAndBeverageMember 2019-09-28 0001641991 us-gaap:TrademarksMember us-gaap:FoodAndBeverageMember 2019-09-28 0001641991 spxf:IndustrialMember 2019-09-28 0001641991 us-gaap:TrademarksMember spxf:IndustrialMember 2019-09-28 0001641991 us-gaap:CustomerRelationshipsMember 2019-09-28 0001641991 us-gaap:PatentsMember 2019-09-28 0001641991 us-gaap:TrademarksMember 2018-12-31 0001641991 us-gaap:TechnologyBasedIntangibleAssetsMember 2018-12-31 0001641991 us-gaap:OtherIntangibleAssetsMember 2018-12-31 0001641991 us-gaap:TrademarksMember 2019-09-28 0001641991 us-gaap:OtherIntangibleAssetsMember 2019-09-28 0001641991 us-gaap:CustomerRelationshipsMember 2018-12-31 0001641991 us-gaap:TechnologyBasedIntangibleAssetsMember 2019-09-28 0001641991 us-gaap:PatentsMember 2018-12-31 0001641991 us-gaap:FoodAndBeverageMember 2018-12-31 0001641991 us-gaap:ForeignPlanMember us-gaap:PensionPlansDefinedBenefitMember 2019-01-01 2019-09-28 0001641991 us-gaap:ForeignPlanMember us-gaap:PensionPlansDefinedBenefitMember 2018-01-01 2018-09-29 0001641991 country:US 2018-01-01 2018-09-29 0001641991 country:US 2019-01-01 2019-09-28 0001641991 us-gaap:PensionPlansDefinedBenefitMember 2019-01-01 2019-09-28 0001641991 us-gaap:ForeignPlanMember us-gaap:PensionPlansDefinedBenefitMember 2019-06-30 2019-09-28 0001641991 us-gaap:ForeignPlanMember us-gaap:PensionPlansDefinedBenefitMember 2018-07-01 2018-09-29 0001641991 country:US 2018-07-01 2018-09-29 0001641991 country:US 2019-06-30 2019-09-28 0001641991 us-gaap:PensionPlansDefinedBenefitMember 2018-01-01 2018-09-29 0001641991 us-gaap:SecuredDebtMember spxf:SeniorCreditFacilityMember 2019-06-27 0001641991 us-gaap:SecuredDebtMember spxf:SeniorCreditFacilityMember us-gaap:DomesticLineOfCreditMember 2019-06-27 0001641991 us-gaap:SecuredDebtMember spxf:SeniorCreditFacilityMember 2019-09-28 0001641991 us-gaap:SecuredDebtMember us-gaap:ForeignLineOfCreditMember 2019-09-28 0001641991 us-gaap:ForeignLineOfCreditMember 2019-09-28 0001641991 us-gaap:ProductFinancingArrangementMember 2019-09-28 0001641991 us-gaap:SecuredDebtMember spxf:SeniorCreditFacilityMember 2018-12-31 0001641991 us-gaap:SecuredDebtMember spxf:SeniorCreditFacilityMember spxf:FederalFundsEffectiveRateMember 2019-01-01 2019-09-28 0001641991 us-gaap:SecuredDebtMember spxf:SeniorCreditFacilityMember spxf:GlobalRevolvingCreditFacilityMember 2019-06-27 0001641991 us-gaap:SecuredDebtMember us-gaap:LetterOfCreditMember 2019-06-27 2019-06-27 0001641991 us-gaap:SecuredDebtMember spxf:SeniorCreditFacilityMember us-gaap:ForeignLineOfCreditMember 2019-06-27 0001641991 us-gaap:SecuredDebtMember us-gaap:LetterOfCreditMember 2019-09-28 0001641991 us-gaap:SecuredDebtMember spxf:SeniorCreditFacilityMember spxf:OneMonthLondonInterbankOfferedRateOneMonthLIBORMember 2019-01-01 2019-09-28 0001641991 us-gaap:ProductFinancingArrangementMember 2018-12-31 0001641991 2019-06-01 2019-06-29 0001641991 spxf:DueinAugust20265.875InterestMember us-gaap:SeniorNotesMember 2018-12-31 0001641991 spxf:DueinAugust20245.625InterestMember us-gaap:SeniorNotesMember 2019-09-28 0001641991 spxf:DueinAugust20245.625InterestMember us-gaap:SeniorNotesMember 2018-12-31 0001641991 spxf:DueinAugust20265.875InterestMember us-gaap:SeniorNotesMember 2019-09-28 0001641991 us-gaap:LoansPayableMember 2019-09-28 0001641991 us-gaap:LoansPayableMember 2018-12-31 0001641991 spxf:Between2.50To1.0And1.50To1.0Member us-gaap:SecuredDebtMember us-gaap:DomesticLineOfCreditMember 2019-01-01 2019-09-28 0001641991 spxf:Between3.50to1.0And2.50to1.0Member us-gaap:SecuredDebtMember 2019-01-01 2019-09-28 0001641991 spxf:GreaterThanOrEqualTo3.50to1.00Member us-gaap:SecuredDebtMember us-gaap:ForeignLineOfCreditMember 2019-01-01 2019-09-28 0001641991 spxf:Between2.50To1.0And1.50To1.0Member us-gaap:SecuredDebtMember spxf:GlobalRevolvingCreditFacilityMember 2019-01-01 2019-09-28 0001641991 spxf:GreaterThanOrEqualTo3.50to1.00Member us-gaap:SecuredDebtMember us-gaap:LetterOfCreditMember 2019-01-01 2019-09-28 0001641991 spxf:GreaterThanOrEqualTo3.50to1.00Member us-gaap:SecuredDebtMember 2019-01-01 2019-09-28 0001641991 spxf:Between2.50To1.0And1.50To1.0Member us-gaap:SecuredDebtMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-09-28 0001641991 spxf:Between2.50To1.0And1.50To1.0Member us-gaap:SecuredDebtMember 2019-01-01 2019-09-28 0001641991 spxf:Between3.50to1.0And2.50to1.0Member us-gaap:SecuredDebtMember us-gaap:DomesticLineOfCreditMember 2019-01-01 2019-09-28 0001641991 spxf:Between2.50To1.0And1.50To1.0Member us-gaap:SecuredDebtMember us-gaap:BaseRateMember 2019-01-01 2019-09-28 0001641991 spxf:GreaterThanOrEqualTo3.50to1.00Member us-gaap:SecuredDebtMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-09-28 0001641991 spxf:Between3.50to1.0And2.50to1.0Member us-gaap:SecuredDebtMember us-gaap:BaseRateMember 2019-01-01 2019-09-28 0001641991 spxf:LessThan1.50To1.0Member us-gaap:SecuredDebtMember spxf:GlobalRevolvingCreditFacilityMember 2019-01-01 2019-09-28 0001641991 spxf:LessThan1.50To1.0Member us-gaap:SecuredDebtMember us-gaap:BaseRateMember 2019-01-01 2019-09-28 0001641991 spxf:GreaterThanOrEqualTo3.50to1.00Member us-gaap:SecuredDebtMember us-gaap:BaseRateMember 2019-01-01 2019-09-28 0001641991 spxf:Between3.50to1.0And2.50to1.0Member us-gaap:SecuredDebtMember spxf:GlobalRevolvingCreditFacilityMember 2019-01-01 2019-09-28 0001641991 spxf:Between2.50To1.0And1.50To1.0Member us-gaap:SecuredDebtMember us-gaap:LetterOfCreditMember 2019-01-01 2019-09-28 0001641991 spxf:GreaterThanOrEqualTo3.50to1.00Member us-gaap:SecuredDebtMember us-gaap:DomesticLineOfCreditMember 2019-01-01 2019-09-28 0001641991 spxf:LessThan1.50To1.0Member us-gaap:SecuredDebtMember us-gaap:LetterOfCreditMember 2019-01-01 2019-09-28 0001641991 spxf:Between2.50To1.0And1.50To1.0Member us-gaap:SecuredDebtMember us-gaap:ForeignLineOfCreditMember 2019-01-01 2019-09-28 0001641991 spxf:Between3.50to1.0And2.50to1.0Member us-gaap:SecuredDebtMember us-gaap:LetterOfCreditMember 2019-01-01 2019-09-28 0001641991 spxf:Between3.50to1.0And2.50to1.0Member us-gaap:SecuredDebtMember us-gaap:ForeignLineOfCreditMember 2019-01-01 2019-09-28 0001641991 spxf:LessThan1.50To1.0Member us-gaap:SecuredDebtMember us-gaap:DomesticLineOfCreditMember 2019-01-01 2019-09-28 0001641991 spxf:LessThan1.50To1.0Member us-gaap:SecuredDebtMember us-gaap:ForeignLineOfCreditMember 2019-01-01 2019-09-28 0001641991 spxf:Between3.50to1.0And2.50to1.0Member us-gaap:SecuredDebtMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-09-28 0001641991 spxf:LessThan1.50To1.0Member us-gaap:SecuredDebtMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-09-28 0001641991 spxf:GreaterThanOrEqualTo3.50to1.00Member us-gaap:SecuredDebtMember spxf:GlobalRevolvingCreditFacilityMember 2019-01-01 2019-09-28 0001641991 spxf:LessThan1.50To1.0Member us-gaap:SecuredDebtMember 2019-01-01 2019-09-28 0001641991 spxf:Between3.50to1.0And2.50to1.0Member srt:MaximumMember 2019-09-28 0001641991 spxf:GreaterThanOrEqualTo3.50to1.00Member srt:MinimumMember 2019-09-28 0001641991 spxf:LessThan1.50To1.0Member srt:MaximumMember 2019-09-28 0001641991 spxf:Between2.50To1.0And1.50To1.0Member srt:MaximumMember 2019-09-28 0001641991 spxf:Between2.50To1.0And1.50To1.0Member srt:MinimumMember 2019-09-28 0001641991 spxf:Between3.50to1.0And2.50to1.0Member srt:MinimumMember 2019-09-28 0001641991 us-gaap:ForeignExchangeForwardMember 2018-12-31 0001641991 us-gaap:ForwardContractsMember 2019-09-28 0001641991 us-gaap:ForeignExchangeForwardMember 2019-09-28 0001641991 us-gaap:ForeignExchangeForwardMember 2019-01-01 2019-09-28 0001641991 us-gaap:ForwardContractsMember us-gaap:OtherNonoperatingIncomeExpenseMember 2019-01-01 2019-09-28 0001641991 us-gaap:ForwardContractsMember us-gaap:OtherNonoperatingIncomeExpenseMember 2018-07-01 2018-09-29 0001641991 us-gaap:ForwardContractsMember us-gaap:OtherNonoperatingIncomeExpenseMember 2019-06-30 2019-09-28 0001641991 us-gaap:ForwardContractsMember 2018-12-31 0001641991 us-gaap:EmbeddedDerivativeFinancialInstrumentsMember 2018-12-31 0001641991 us-gaap:EmbeddedDerivativeFinancialInstrumentsMember 2019-09-28 0001641991 srt:MinimumMember us-gaap:EmbeddedDerivativeFinancialInstrumentsMember 2019-01-01 2019-09-28 0001641991 us-gaap:ForwardContractsMember us-gaap:OtherNonoperatingIncomeExpenseMember 2018-01-01 2018-09-29 0001641991 srt:MinimumMember us-gaap:EmbeddedDerivativeFinancialInstrumentsMember 2018-01-01 2018-12-31 0001641991 us-gaap:ForeignExchangeForwardMember 2018-01-01 2018-12-31 0001641991 spxf:RestrictedStockandRestrictedStockUnitsMember 2019-09-28 0001641991 us-gaap:EmployeeStockOptionMember 2019-06-30 2019-09-28 0001641991 us-gaap:EmployeeStockOptionMember spxf:SPXFLOWStockOptionsMember 2019-09-28 0001641991 spxf:RestrictedStockandRestrictedStockUnitsMember us-gaap:ShareBasedPaymentArrangementEmployeeMember 2019-09-28 0001641991 spxf:RestrictedStockandRestrictedStockUnitsMember 2019-01-01 2019-09-28 0001641991 spxf:RestrictedStockandRestrictedStockUnitsMember 2018-07-01 2018-09-29 0001641991 spxf:RestrictedStockandRestrictedStockUnitsMember us-gaap:ShareBasedPaymentArrangementEmployeeMember 2019-01-01 2019-09-28 0001641991 spxf:NonOfficerEmployeeMember us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-09-28 0001641991 srt:MinimumMember spxf:RestrictedStockandRestrictedStockUnitsMember 2019-01-01 2019-09-28 0001641991 spxf:RestrictedStockandRestrictedStockUnitsMember 2019-01-01 2019-09-28 0001641991 spxf:RestrictedStockandRestrictedStockUnitsMember spxf:EarlyRetirementProvisionMember 2019-01-01 2019-09-28 0001641991 srt:DirectorMember spxf:RestrictedStockandRestrictedStockUnitsMember 2019-01-01 2019-09-28 0001641991 spxf:RestrictedStockandRestrictedStockUnitsMember 2018-01-01 2018-09-29 0001641991 srt:MaximumMember spxf:RestrictedStockandRestrictedStockUnitsMember 2019-01-01 2019-09-28 0001641991 spxf:RestrictedStockandRestrictedStockUnitsMember 2019-06-30 2019-09-28 0001641991 us-gaap:EmployeeStockOptionMember spxf:SPXFLOWStockOptionsMember 2019-01-01 2019-09-28 0001641991 spxf:StockPlanMember 2019-09-28 0001641991 srt:OfficerMember spxf:RestrictedStockandRestrictedStockUnitsMember 2019-01-01 2019-09-28 0001641991 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2019-01-01 2019-09-28 0001641991 us-gaap:SellingGeneralAndAdministrativeExpensesMember us-gaap:SegmentDiscontinuedOperationsMember 2019-01-01 2019-09-28 0001641991 us-gaap:SellingGeneralAndAdministrativeExpensesMember us-gaap:SegmentContinuingOperationsMember 2018-01-01 2018-09-29 0001641991 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2018-07-01 2018-09-29 0001641991 us-gaap:SellingGeneralAndAdministrativeExpensesMember us-gaap:SegmentDiscontinuedOperationsMember 2018-01-01 2018-09-29 0001641991 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2018-01-01 2018-09-29 0001641991 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2019-06-30 2019-09-28 0001641991 us-gaap:SellingGeneralAndAdministrativeExpensesMember us-gaap:SegmentContinuingOperationsMember 2019-01-01 2019-09-28 0001641991 us-gaap:SellingGeneralAndAdministrativeExpensesMember us-gaap:SegmentContinuingOperationsMember 2019-06-30 2019-09-28 0001641991 us-gaap:SellingGeneralAndAdministrativeExpensesMember us-gaap:SegmentDiscontinuedOperationsMember 2018-07-01 2018-09-29 0001641991 us-gaap:SellingGeneralAndAdministrativeExpensesMember us-gaap:SegmentContinuingOperationsMember 2018-07-01 2018-09-29 0001641991 us-gaap:SellingGeneralAndAdministrativeExpensesMember us-gaap:SegmentDiscontinuedOperationsMember 2019-06-30 2019-09-28 0001641991 spxf:RestrictedStockandRestrictedStockUnitsMember 2018-12-31 0001641991 us-gaap:EmployeeStockOptionMember 2019-01-01 2019-09-28 0001641991 us-gaap:EmployeeStockOptionMember spxf:SPXFLOWStockOptionsMember 2018-12-31 0001641991 us-gaap:EmployeeStockOptionMember 2018-07-01 2018-09-29 0001641991 us-gaap:EmployeeStockOptionMember 2018-01-01 2018-09-29 0001641991 2018-09-30 2018-12-31 0001641991 srt:MaximumMember 2019-09-28 0001641991 spxf:GermanTaxAuthorityMember 2019-01-01 2019-09-28 0001641991 spxf:ChineseSubsidiariesMember 2019-01-01 2019-09-28 0001641991 srt:MinimumMember 2019-09-28 0001641991 spxf:DueinAugust20265.875InterestMember us-gaap:FairValueInputsLevel2Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:SeniorNotesMember 2019-09-28 0001641991 us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsNonrecurringMember 2019-09-28 0001641991 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsNonrecurringMember 2019-09-28 0001641991 spxf:DueinAugust20265.875InterestMember us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:SeniorNotesMember 2018-12-31 0001641991 spxf:DueinAugust20245.625InterestMember us-gaap:FairValueInputsLevel2Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:SeniorNotesMember 2018-12-31 0001641991 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsNonrecurringMember 2018-12-31 0001641991 spxf:DueinAugust20245.625InterestMember us-gaap:FairValueInputsLevel2Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:SeniorNotesMember 2019-09-28 0001641991 spxf:DueinAugust20245.625InterestMember us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:SeniorNotesMember 2018-12-31 0001641991 spxf:DueinAugust20245.625InterestMember us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:SeniorNotesMember 2019-09-28 0001641991 spxf:DueinAugust20265.875InterestMember us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:SeniorNotesMember 2019-09-28 0001641991 us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsNonrecurringMember 2018-12-31 0001641991 spxf:DueinAugust20265.875InterestMember us-gaap:FairValueInputsLevel2Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:SeniorNotesMember 2018-12-31 iso4217:USD iso4217:USD xbrli:shares xbrli:shares spxf:segment xbrli:pure spxf:employee spxf:country

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	September 28, 2019
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to

Commission file number 1-37393

SPX FLOW, INC.

(Exact Name of Registrant as Specified in Its Charter)



Delaware		47-3110748
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
13320 Ballantyne Corporate Place		28277
Charlotte,	NC	(Zip Code)
(Address of Principal Executive Offices)

Registrant’s Telephone Number, Including Area Code (704) 752-4400

(Former Name, Former Address, and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, Par Value $0.01	FLOW	New York Stock Exchange



Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.	☒	Yes	☐	No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).	☒	Yes	☐	No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large Accelerated Filer	☒	Accelerated Filer		☐

Non-Accelerated Filer	☐	Smaller Reporting Company			☐

		Emerging Growth Company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.						☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).			☐	Yes	☒	No

Common shares outstanding as of October 25, 2019 were 42,566,884.

SPX FLOW, INC. AND SUBSIDIARIES

FORM 10-Q INDEX



PART I - FINANCIAL INFORMATION
Item 1 – Condensed Consolidated Financial Statements
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 28, 2019 and September 29, 2018 (Unaudited)	1
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 28, 2019 and September 29, 2018 (Unaudited)	2
Condensed Consolidated Balance Sheets as of September 28, 2019 and December 31, 2018 (Unaudited)	3
Condensed Consolidated Statements of Equity for the Three and Nine Months Ended September 28, 2019 and September 29, 2018 (Unaudited)	4
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 28, 2019 and September 29, 2018 (Unaudited)	6
Notes to Condensed Consolidated Financial Statements	8
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3 – Quantitative and Qualitative Disclosures About Market Risk	47
Item 4 – Controls and Procedures	47

PART II - OTHER INFORMATION
Item 1 – Legal Proceedings	48
Item 1A – Risk Factors	48
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 6 – Exhibits	49

SIGNATURES	50

INDEX TO EXHIBITS	51

PART I—FINANCIAL INFORMATION

ITEM 1. Condensed Consolidated Financial Statements

SPX FLOW, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in millions, except per share amounts)



	Three months ended						Nine months ended
	September 28, 2019			September 29, 2018			September 28, 2019			September 29, 2018
Revenues	$	383.5		$	406.7		$	1,142.3		$	1,182.1
Cost of products sold	248.9			274.9			753.7			796.1
Gross profit	134.6			131.8			388.6			386.0
Selling, general and administrative	94.3			83.3			278.0			276.1
Intangible amortization	2.9			3.3			8.6			10.0
Asset impairment charges	10.8			—			10.8			—
Restructuring and other related charges	0.2			0.2			7.1			2.9
Operating income	26.4			45.0			84.1			97.0

Other income (expense), net	0.1			(1.2		)	7.3			(3.3		)
Interest expense, net	(6.5		)	(8.2		)	(22.5		)	(26.5		)
Income from continuing operations before income taxes	20.0			35.6			68.9			67.2
Income tax provision	(2.5		)	(9.6		)	(24.7		)	(14.8		)
Income from continuing operations	17.5			26.0			44.2			52.4
Income (loss) from discontinued operations, net of tax	(48.1		)	6.5			7.5			18.8
Net income (loss)	(30.6		)	32.5			51.7			71.2
Less: Net income (loss) attributable to noncontrolling interests	1.0			(0.2		)	1.2			0.1
Net income (loss) attributable to SPX FLOW, Inc.	$	(31.6	)	$	32.7		$	50.5		$	71.1

Amounts attributable to SPX FLOW, Inc. common shareholders:
Income from continuing operations, net of tax	$	16.7		$	25.9		$	43.0		$	51.7
Income (loss) from discontinued operations, net of tax	(48.3		)	6.8			7.5			19.4
Net income (loss) attributable to SPX FLOW, Inc.	$	(31.6	)	$	32.7		$	50.5		$	71.1

Basic income (loss) per share of common stock:
Income per share from continuing operations	$	0.39		$	0.61		$	1.01		$	1.23
Income (loss) per share from discontinued operations	(1.13		)	0.16			0.18			0.46
Net income (loss) per share attributable to SPX FLOW, Inc.	$	(0.74	)	$	0.77		$	1.19		$	1.69
Diluted income (loss) per share of common stock:
Income per share from continuing operations	$	0.39		$	0.61		$	1.01		$	1.21
Income (loss) per share from discontinued operations	(1.13		)	0.16			0.17			0.46
Net income (loss) per share attributable to SPX FLOW, Inc.	$	(0.74	)	$	0.77		$	1.18		$	1.67

Weighted average number of common shares outstanding - basic	42.434			42.229			42.418			42.169
Weighted average number of common shares outstanding - diluted	42.697			42.696			42.630			42.607

The accompanying notes are an integral part of these statements.

SPX FLOW, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited; in millions)



	Three months ended						Nine months ended
	September 28, 2019			September 29, 2018			September 28, 2019			September 29, 2018
Net income (loss)	$	(30.6	)	$	32.5		$	51.7		$	71.2
Other comprehensive income (loss), net:
Net unrealized gains (losses) on qualifying cash flow hedges, net of tax provision of $0.0 and $0.1, respectively	(0.1		)	—			0.1			—
Foreign currency translation adjustments	(33.1		)	6.1			(32.7		)	(31.9		)
Other comprehensive income (loss), net	(33.2		)	6.1			(32.6		)	(31.9		)
Total comprehensive income (loss)	(63.8		)	38.6			19.1			39.3
Less: Total comprehensive income (loss) attributable to noncontrolling interests	0.7			(0.2		)	0.7			(0.3		)
Total comprehensive income (loss) attributable to SPX FLOW, Inc.	$	(64.5	)	$	38.8		$	18.4		$	39.6

The accompanying notes are an integral part of these statements.

SPX FLOW, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions, except share data)



	September 28, 2019			December 31, 2018
ASSETS
Current assets:
Cash and equivalents	$	217.6		$	197.0
Accounts receivable, net	261.0			278.4
Contract assets	32.8			33.8
Inventories, net	212.9			220.5
Other current assets	29.6			33.3
Assets of discontinued operations - current	612.8			244.4
Total current assets	1,366.7			1,007.4
Property, plant and equipment:
Land	23.2			23.9
Buildings and leasehold improvements	167.8			175.5
Machinery and equipment	314.6			336.8
	505.6			536.2
Accumulated depreciation	(283.3		)	(284.9		)
Property, plant and equipment, net	222.3			251.3
Goodwill	534.7			550.4
Intangibles, net	206.7			219.2
Other assets	186.0			111.1
Assets of discontinued operations - long-term	—			412.4
TOTAL ASSETS	$	2,516.4		$	2,551.8

LIABILITIES, MEZZANINE EQUITY AND EQUITY
Current liabilities:
Accounts payable	$	145.5		$	157.0
Contract liabilities	105.1			136.4
Accrued expenses	154.2			149.0
Income taxes payable	21.8			26.7
Short-term debt	25.6			26.0
Current maturities of long-term debt	0.1			20.8
Liabilities of discontinued operations - current	224.6			133.4
Total current liabilities	676.9			649.3
Long-term debt	693.3			718.3
Deferred and other income taxes	41.8			71.5
Other long-term liabilities	106.7			67.5
Liabilities of discontinued operations - long-term	—			60.6
Total long-term liabilities	841.8			917.9
Commitments and contingent liabilities (Note 12)
Mezzanine equity	20.2			21.5
Equity:
SPX FLOW, Inc. shareholders’ equity:
Preferred stock, no par value, 3,000,000 shares authorized, and no shares issued and outstanding	—			—
Common stock, par value $0.01 per share, 300,000,000 shares authorized, 43,128,247 issued and 42,566,884 outstanding at September 28, 2019, and 42,932,339 issued and 42,542,888 outstanding at December 31, 2018	0.4			0.4
Paid-in capital	1,672.8			1,662.6
Accumulated deficit	(223.6		)	(265.6		)
Accumulated other comprehensive loss	(462.8		)	(430.7		)
Common stock in treasury (561,363 shares at September 28, 2019, and 389,451 shares at December 31, 2018)	(19.3		)	(13.9		)
Total SPX FLOW, Inc. shareholders' equity	967.5			952.8
Noncontrolling interests	10.0			10.3
Total equity	977.5			963.1
TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY	$	2,516.4		$	2,551.8

The accompanying notes are an integral part of these statements.

SPX FLOW, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited; in millions)



	Three months ended September 28, 2019
	Common Stock			Paid-In Capital		Accumulated Deficit			Accumulated Other Comprehensive Loss			Common Stock in Treasury			Total SPX FLOW, Inc. Shareholders' Equity			Noncontrolling Interests			Total Equity
	Shares Outstanding	Par		Paid-In Capital		Accumulated Deficit			Accumulated Other Comprehensive Loss			Common Stock in Treasury			Total SPX FLOW, Inc. Shareholders' Equity			Noncontrolling Interests			Total Equity
Balance at June 29, 2019	42.6	$	0.4	$	1,669.4	$	(192.0	)	$	(429.9	)	$	(19.1	)	$	1,028.8		$	9.3		$	1,038.1
Net income (loss)	—	—		—		(31.6		)	—			—			(31.6		)	1.0			(30.6		)
Other comprehensive loss, net	—	—		—		—			(32.9		)	—			(32.9		)	(0.3		)	(33.2		)
Stock-based compensation expense	—	—		3.4		—			—			—			3.4			—			3.4
Restricted stock and restricted stock unit vesting, net of tax withholdings	—	—		—		—			—			(0.2		)	(0.2		)	—			(0.2		)
Balance at September 28, 2019	42.6	$	0.4	$	1,672.8	$	(223.6	)	$	(462.8	)	$	(19.3	)	$	967.5		$	10.0		$	977.5



	Three months ended September 29, 2018
	Common Stock			Paid-In Capital		Accumulated Deficit			Accumulated Other Comprehensive Loss			Common Stock in Treasury			Total SPX FLOW, Inc. Shareholders' Equity			Noncontrolling Interests			Total Equity
	Shares Outstanding	Par		Paid-In Capital		Accumulated Deficit			Accumulated Other Comprehensive Loss			Common Stock in Treasury			Total SPX FLOW, Inc. Shareholders' Equity			Noncontrolling Interests			Total Equity
Balance at June 30, 2018	42.5	$	0.4	$	1,656.7	$	(283.3	)	$	(417.7	)	$	(13.3	)	$	942.8		$	10.5		$	953.3
Net income (loss)	—	—		—		32.7			—			—			32.7			(0.2		)	32.5
Other comprehensive income, net	—	—		—		—			6.1			—			6.1			—			6.1
Stock-based compensation expense	—	—		3.7		—			—			—			3.7			—			3.7
Restricted stock and restricted stock unit vesting, net of tax withholdings	0.1	—		—		—			—			(0.2		)	(0.2		)	—			(0.2		)
Dividends attributable to noncontrolling interests	—	—		—		—			—			—			—			(0.1		)	(0.1		)
Balance at September 29, 2018	42.6	$	0.4	$	1,660.4	$	(250.6	)	$	(411.6	)	$	(13.5	)	$	985.1		$	10.2		$	995.3

SPX FLOW, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (CONTINUED)

(Unaudited; in millions)



	Nine months ended September 28, 2019
	Common Stock			Paid-In Capital		Accumulated Deficit			Accumulated Other Comprehensive Loss			Common Stock in Treasury			Total SPX FLOW, Inc. Shareholders' Equity			Noncontrolling Interests			Total Equity
	Shares Outstanding	Par		Paid-In Capital		Accumulated Deficit			Accumulated Other Comprehensive Loss			Common Stock in Treasury			Total SPX FLOW, Inc. Shareholders' Equity			Noncontrolling Interests			Total Equity
Balance at December 31, 2018	42.5	$	0.4	$	1,662.6	$	(265.6	)	$	(430.7	)	$	(13.9	)	$	952.8		$	10.3		$	963.1
Adoption of lease accounting standard	—	—		—		(8.5		)	—			—			(8.5		)	—			(8.5		)
Net income	—	—		—		50.5			—			—			50.5			1.2			51.7
Other comprehensive loss, net	—	—		—		—			(32.1		)	—			(32.1		)	(0.5		)	(32.6		)
Stock-based compensation expense	—	—		10.2		—			—			—			10.2			—			10.2
Restricted stock and restricted stock unit vesting, net of tax withholdings	0.1	—		—		—			—			(5.4		)	(5.4		)	—			(5.4		)
Dividends attributable to noncontrolling interests	—	—		—		—			—			—			—			(1.0		)	(1.0		)
Balance at September 28, 2019	42.6	$	0.4	$	1,672.8	$	(223.6	)	$	(462.8	)	$	(19.3	)	$	967.5		$	10.0		$	977.5



	Nine months ended September 29, 2018
	Common Stock			Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Common Stock in Treasury			Total SPX FLOW, Inc. Shareholders' Equity			Noncontrolling Interests			Total Equity
	Shares Outstanding	Par		Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Common Stock in Treasury			Total SPX FLOW, Inc. Shareholders' Equity			Noncontrolling Interests			Total Equity
Balance at December 31, 2017	42.4	$	0.4	$	1,650.9		$	(327.5	)	$	(372.8	)	$	(8.9	)	$	942.1		$	9.7		$	951.8
Adoption of accounting standards	—	—		—			5.8			(7.3		)	—			(1.5		)	—			(1.5		)
Net income	—	—		—			71.1			—			—			71.1			0.1			71.2
Other comprehensive loss, net	—	—		—			—			(31.5		)	—			(31.5		)	(0.4		)	(31.9		)
Incentive plan activity	—	—		2.4			—			—			—			2.4			—			2.4
Stock-based compensation expense	—	—		12.8			—			—			—			12.8			—			12.8
Restricted stock and restricted stock unit vesting, net of tax withholdings	0.2	—		—			—			—			(4.6		)	(4.6		)	—			(4.6		)
Acquisition of noncontrolling interest	—	—		(5.7		)	—			—			—			(5.7		)	3.1			(2.6		)
Dividends attributable to noncontrolling interests	—	—		—			—			—			—			—			(2.3		)	(2.3		)
Balance at September 29, 2018	42.6	$	0.4	$	1,660.4		$	(250.6	)	$	(411.6	)	$	(13.5	)	$	985.1		$	10.2		$	995.3

The accompanying notes are an integral part of these statements.

SPX FLOW, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)



	Nine months ended
	September 28, 2019			September 29, 2018
Cash flows from operating activities:
Net income	$	51.7		$	71.2
Less: Income from discontinued operations, net of tax	7.5			18.8
Income from continuing operations	44.2			52.4
Adjustments to reconcile income from continuing operations to net cash from operating activities:
Restructuring and other related charges	7.1			2.9
Asset impairment charges	10.8			—
Deferred income taxes	(4.0		)	4.9
Depreciation and amortization	28.9			31.6
Stock-based compensation	9.4			11.6
Pension and other employee benefits	1.5			4.3
Loss (gain) on asset sales and other, net	(0.4		)	0.1
Gain on change in fair value of investment in equity security	(7.8		)	—
Changes in operating assets and liabilities, net of effects from discontinued operations:
Accounts receivable and other assets	37.0			(21.7		)
Contract assets and liabilities, net	(27.4		)	(10.4		)
Inventories	1.2			(30.3		)
Accounts payable, accrued expenses and other	(41.4		)	(47.1		)
Cash spending on restructuring actions	(6.0		)	(9.9		)
Net cash from (used in) continuing operations	53.1			(11.6		)
Net cash from discontinued operations	46.0			59.6
Net cash from operating activities	99.1			48.0
Cash flows used in investing activities:
Proceeds from asset sales and other, net	1.0			—
Capital expenditures	(17.4		)	(12.3		)
Net cash used in continuing operations	(16.4		)	(12.3		)
Net cash used in discontinued operations	(4.6		)	(5.0		)
Net cash used in investing activities	(21.0		)	(17.3		)
Cash flows used in financing activities:
Borrowings under amended and restated senior credit facilities	134.0			—
Repayments of amended and restated senior credit facilities	(34.0		)	—
Borrowings under former senior credit facilities	33.0			69.8
Repayments of former senior credit facilities	(173.0		)	(134.8		)
Borrowings under former trade receivables financing arrangement	54.0			79.5
Repayments of former trade receivables financing arrangement	(54.0		)	(79.5		)
Borrowings under other financing arrangements	2.8			10.2
Repayments of other financing arrangements	(3.2		)	(4.2		)
Financing fees paid	(3.3		)	—
Minimum withholdings paid on behalf of employees for net share settlements, net	(5.4		)	(4.6		)
Dividends paid to noncontrolling interests in subsidiary	(1.0		)	(2.2		)
Net cash used in continuing operations	(50.1		)	(65.8		)
Net cash used in discontinued operations	(0.3		)	(0.5		)
Net cash used in financing activities	(50.4		)	(66.3		)
Change in cash, cash equivalents and restricted cash due to changes in foreign currency exchange rates	(2.6		)	(6.6		)
Net change in cash, cash equivalents and restricted cash	25.1			(42.2		)
Consolidated cash, cash equivalents and restricted cash, beginning of period	214.3			264.9
Consolidated cash, cash equivalents and restricted cash, end of period	$	239.4		$	222.7

The accompanying notes are an integral part of these statements.

SPX FLOW, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(Unaudited; in millions)



	September 28, 2019		September 29, 2018
Reconciliation of cash, cash equivalents and restricted cash from the condensed consolidated balance sheets at end of period:
Cash and cash equivalents	$	217.6	$	198.1
Cash and cash equivalents included in assets of discontinued operations	20.7		23.5
Restricted cash included in other current assets	—		0.1
Restricted cash included in assets of discontinued operations	1.1		1.0
Consolidated cash, cash equivalents and restricted cash, end of period	$	239.4	$	222.7

SPX FLOW, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited; in millions, except per share data)

(1) BASIS OF PRESENTATION

General Matters

SPX FLOW, Inc. and its consolidated subsidiaries (“SPX FLOW,” ‘‘the Company,’’ “we,” “us,” or “our”) operate in two business segments: the Food and Beverage segment and the Industrial segment.

We prepared the condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information normally required by accounting principles generally accepted in the United States (“GAAP”) can be condensed or omitted. The financial statements represent our accounts after the elimination of intercompany transactions and, in our opinion, include the adjustments (consisting only of normal and recurring items) necessary for their fair presentation.

Preparing financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ from these estimates. The unaudited information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements contained in our 2018 Annual Report on Form 10-K. Interim results are not necessarily indicative of full year results and the condensed consolidated financial statements may not be indicative of the Company’s future performance.

We have reclassified certain prior year amounts, including the results of discontinued operations and reportable segment information, to conform to the current year presentation. Unless otherwise indicated, amounts provided in these Notes pertain to continuing operations. See Note 3 for information on discontinued operations and Note 4 for information on our reportable segments. In addition, amounts previously captioned “Special Charges” in our condensed consolidated financial statements included in our third quarter 2018 Quarterly Report on Form 10-Q are now reported under the caption “Restructuring and other related charges” to conform to the current year presentation.

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 2019 are March 30, June 29, and September 28, compared to the respective March 31, June 30, and September 29, 2018 dates. We had one less day in the first quarter of 2019 and will have one more day in the fourth quarter of 2019 than in the respective 2018 periods.

Revenue Recognition

Contract Balances:

Contract assets include unbilled amounts typically resulting from sales under contracts recognized over time when the cost-to-cost method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer, and right to payment is not just subject to the passage of time. Contract assets are generally classified as current, as we expect to bill the amounts within the next twelve months. Contract liabilities include billings in excess of revenue under contracts recognized over time and advance payments received from customers related to product sales (unearned revenue). We classify contract liabilities generally as a current liability, as we expect to recognize the related revenue within the next twelve months. Our contract assets and liabilities are reported on a contract-by-contract basis at the end of each reporting period. Our contract accounts receivable, assets and liabilities, and changes in such balances, were as follows:



	September 28, 2019			December 31, 2018			Change⁽¹⁾
Contract accounts receivable⁽²⁾	$	248.2		$	263.9		$	(15.7	)
Contract assets	32.8			33.8			(1.0		)
Contract liabilities	(105.1		)	(136.4		)	31.3
Net contract balance	$	175.9		$	161.3		$	14.6

(1) The $14.6 increase in our net contract balance from December 31, 2018 to September 28, 2019 was primarily due to the timing of advance and milestone payments received on certain Food and Beverage contracts recognized over time, and of performance obligations satisfied and the related revenue recognized on such contracts.

(2) Included in “Accounts receivable, net” in our condensed consolidated balance sheets. Amounts are presented before consideration of the allowance for uncollectible accounts.

SPX FLOW, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited; in millions, except per share data)

During the three and nine months ended September 28, 2019, we recognized revenues of $37.7 and $114.5, respectively, related to contract liabilities outstanding as of December 31, 2018.

Remaining Performance Obligations:

Remaining performance obligations represent the transaction price of orders for which (i) control of goods or services has not been transferred to the customer or we have not otherwise met our performance obligations, or (ii) where revenue is accounted for over time, proportional costs have not yet been incurred. Such remaining performance obligations exclude unexercised contract options and potential orders under “blanket order” contracts (e.g., with indefinite delivery dates or quantities). As of September 28, 2019, the aggregate amount of our remaining performance obligations was $481.0. The Company expects to recognize revenue on approximately 93% and substantially all of our remaining performance obligations within the next 12 and 24 months, respectively.

(2) NEW ACCOUNTING PRONOUNCEMENTS

The following is a summary of new accounting pronouncements that apply or may apply to our business.

New Lease Pronouncement

Effects of Adoption - In February 2016, and as subsequently amended, the Financial Accounting Standards Board (the “FASB”) issued a new standard which requires a lessee to recognize on its balance sheet the assets and liabilities associated with the rights and obligations created by leases. Leases will continue to be classified as either financing or operating, with classification affecting the recognition, measurement and presentation of costs and cash flows arising from a lease.

We adopted the standard effective January 1, 2019 using the modified retrospective adoption method which allowed us to initially apply the new standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of accumulated deficit. In connection with our adoption of the new lease pronouncement, we recorded a charge to accumulated deficit of $8.5, reflecting the effects of (1) an impairment of a right-of-use (“ROU”) asset resulting from the rationalization of a business in our Food and Beverage segment during the fourth quarter of 2018 and, to a lesser extent, (2) the reclassification of a former capital lease to an operating lease. See Note 5 for additional information regarding the rationalization of the Food and Beverage business.

We have elected to use the practical expedient package that allows us to not reassess: (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. We additionally elected to use the practical expedients that allow lessees to: (1) treat the lease and non-lease components of leases as a single lease component for all of our leases and (2) not recognize on our balance sheet leases with terms less than twelve months.

We determine if an arrangement is a lease at inception. We lease certain manufacturing facilities, warehouses, administrative offices, sales and service locations, machinery and equipment, vehicles and office equipment under operating leases. Under the new standard, operating leases result in the recognition of ROU assets and lease liabilities on the consolidated balance sheet. ROU assets represent our right to use the leased asset for the lease term and lease liabilities represent our obligation to make lease payments. Under the new standard, operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, upon adoption of the new standard, we used our country-specific estimated incremental borrowing rate based on the information available, including lease term, as of January 1, 2019 to determine the present value of lease payments. Operating lease ROU assets are adjusted for any lease payments made prior to January 1, 2019 and any lease incentives. Certain of our leases may include options to extend or terminate the original lease term. We generally conclude that we are not reasonably certain to exercise these options due primarily to the length of the original lease term and our assessment that economic incentives are not reasonably certain to be realized. Operating lease expense under the new standard is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components and, as noted above, we account for the lease and non-lease components as a single lease component under the new standard. Our current finance lease obligations consist primarily of manufacturing facility leases.

Upon adoption of the new standard, we reclassified a single lease from capital to operating based on specific transition requirements for build-to-suit arrangements recognized as capital leases under the prior accounting standard. Upon derecognizing

SPX FLOW, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited; in millions, except per share data)

the former capital lease asset and liability, we determined the lease to be operating under the new standard. Refer to the “Summary of Effects of Lease Accounting Standard Update Adopted in First Quarter of 2019” below for further details.

Leases accounted for under the new standard have initial remaining lease terms of one to 15 years . Certain of our lease agreements include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The components of operating and finance lease ROU assets and liabilities as of September 28, 2019 were as follows:



	September 28, 2019		Balance Sheet Caption in Which Balance is Reported
Finance lease ROU assets	$	0.5	Property, plant and equipment, net
Operating lease ROU assets	51.3		Other assets
Current portion of operating lease liabilities	16.1		Accrued expenses
Current portion of finance lease liabilities	0.1		Current maturities of long-term debt
Long-term finance lease liabilities	0.5		Long-term debt
Long-term operating lease liabilities	42.2		Other long-term liabilities

The components of lease expense for the three and nine months ended September 28, 2019 were as follows:



	Three months ended		Nine months ended
	September 28, 2019 ⁽¹⁾		September 28, 2019 ⁽¹⁾
Operating lease cost⁽²⁾	$	4.8	14.0
Short-term lease cost⁽²⁾	0.8		2.0
Variable lease cost⁽²⁾	0.1		0.6
Total lease cost	$	5.7	$	16.6


(1)	Finance lease costs, including amortization of finance lease ROU assets and interest on finance lease liabilities, were less than $0.1 individually, for the three and nine months ended September 28, 2019.


(2)	Included in “Cost of products sold” and “Selling, general and administrative” in our condensed consolidated statement of operations.

The future lease payments under operating and finance leases with initial remaining terms in excess of one year as of September 28, 2019 were as follows:



Year Ending December 31,	Operating leases			Finance leases			Total
2019	$	4.5		$	0.1		$	4.6
2020	16.2			0.2			16.4
2021	11.8			0.1			11.9
2022	8.4			0.1			8.5
2023	6.5			0.1			6.6
2024	5.5			0.1			5.6
Thereafter	14.1			—			14.1
Total lease payments	67.0			0.7			67.7
Less: interest	(8.7		)	(0.1		)	(8.8		)
Present value of lease liabilities	$	58.3		$	0.6		$	58.9

SPX FLOW, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited; in millions, except per share data)

The future lease payments under operating and capital leases as of December 31, 2018 were as follows:



Year Ending December 31,	Operating leases		Capital leases
2019	$	19.0	$	1.0
2020	14.0		1.0
2021	9.5		1.0
2022	6.1		1.0
2023	4.5		1.0
Thereafter	14.8		2.9
Total lease payments	$	67.9	7.9
Less: interest			(0.7		)
Present value of lease liabilities			$	7.2

Key assumptions used in accounting for our operating and finance leases as of September 28, 2019 were as follows:



	September 28, 2019
Weighted-average remaining lease term (years):
Operating leases	6.3
Finance leases	4.4
Weighted-average discount rate:
Operating leases	4.43	%
Finance leases	5.32	%

Cash flows and non-cash activities related to our operating and finance leases for the nine months ended September 28, 2019 were as follows:



	Nine months ended
	September 28, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows paid for operating leases	$	14.2
Operating cash flows paid for finance leases	—
Financing cash flows paid for finance leases	—
Non-cash activities:
Operating lease ROU assets obtained in exchange for new operating lease liabilities	10.9
Finance lease ROU assets obtained in exchange for new finance lease liabilities	0.3

SPX FLOW, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited; in millions, except per share data)

Summary of Effects of Lease Accounting Standard Update Adopted in First Quarter of 2019

The cumulative effects of the changes made to our condensed consolidated balance sheet as of the beginning of the first quarter of 2019 as a result of the adoption of the accounting standard update on leases, including those included in continuing operations and discontinued operations, were as follows:



				Effects of adoption of lease accounting standard update related to:
Balance Sheet	As filed December 31, 2018			Recognition of Operating Leases			Reclassification of Capital Lease to Operating Lease			Impairment of Operating Lease ROU Asset			Total effects of adoption			With effect of lease accounting standard update January 1, 2019
Assets
Other current assets	$	33.3		$	(0.9	)	$	—		$	—		$	(0.9	)	$	32.4
Assets of discontinued operations - current	244.4			(0.3		)	—			—			(0.3		)	244.1
Buildings and leasehold improvements	175.5			—			(7.2		)	—			(7.2		)	168.3
Accumulated depreciation	(284.9		)	—			0.7			—			0.7			(284.2		)
Other assets	111.1			57.2			5.8			(8.4		)	54.6			165.7
Assets of discontinued operations - long-term	412.4			14.6			—			—			14.6			427.0

Liabilities
Accrued expenses	149.0			16.1			0.9			—			17.0			166.0
Current maturities of long-term debt	20.8			—			(0.7		)	—			(0.7		)	20.1
Liabilities of discontinued operations - current	133.4			4.1			—			—			4.1			137.5
Long-term debt	718.3			—			(6.1		)	—			(6.1		)	712.2
Other long-term liabilities	67.5			40.2			5.3			—			45.5			113.0
Liabilities of discontinued operations - long-term	60.6			10.2			—			—			10.2			70.8

Equity
Accumulated deficit	(265.6		)	—			(0.1		)	(8.4		)	(8.5		)	(274.1		)

Other New Accounting Pronouncements

In June 2016, and as subsequently amended, the FASB issued an amendment on the measurement of credit losses. This amendment requires companies to estimate all expected credit losses for certain types of financial instruments, including trade receivables, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. This amendment is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the impact this amendment may have on its condensed consolidated financial statements.

In March 2018, the FASB issued an amendment to update the Codification and XBRL Taxonomy as a result of the Tax Cuts and Jobs Act (the “Tax Act”), and to incorporate the Staff Accounting Bulletin 118 (“SAB 118”) as released by the SEC, which provides guidance for companies that are not able to complete their accounting for the income tax effects of the Tax Act in the period of enactment. This amendment was effective for interim and annual reporting periods beginning after December 15, 2018. The Company completed its accounting for the impact of this tax reform legislation as of December 31, 2018. Our adoption of this amendment had no impact on our condensed consolidated financial statements in the first nine months of 2019.

In August 2018, the FASB issued an amendment to modify the disclosure requirements related to fair value measurements. This amendment removes, modifies and adds certain disclosures required under current guidance. For example, the amendment removes the requirements to disclose the amount of and reason for transfers between Level 1 and Level 2 of the fair value hierarchy as well as the policy for timing of transfers between levels, and requires certain additional disclosures related to Level 3 fair value measurements. This amendment is effective for interim and annual reporting periods beginning after

SPX FLOW, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited; in millions, except per share data)

December 15, 2019, with early adoption permitted. The Company is evaluating the impact this amendment may have on its condensed consolidated financial statements.

In August 2018, the FASB issued an amendment to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). Among other changes in requirements, the amendments in this update also require an entity to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. This amendment is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the impact this amendment may have on its condensed consolidated financial statements.

In August 2018, the FASB issued an amendment to modify the disclosure requirements related to defined benefit plans. This amendment removes, clarifies and adds certain disclosures required under current guidance. For example, the amendment removes the requirement to disclose the effects of a one-percentage point change in assumed health care cost trend rates on postretirement benefit obligations and service and interest cost components of periodic benefit costs, and requires an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. This amendment is effective for interim and annual reporting periods beginning after December 15, 2020, with early adoption permitted. The Company is evaluating the impact this amendment may have on its condensed consolidated financial statements.

(3) DISCONTINUED OPERATIONS

On May 2, 2019, the Company announced that its Board of Directors had initiated a process to divest a substantial portion of the Company’s former Power and Energy reportable segment. In connection with this initiative, the Company intends to narrow its strategic focus by separating its process solutions technologies, comprised of its Food and Beverage and its Industrial reportable segments, and including the Bran+Luebbe product line within its former Power and Energy segment, from its flow control application technologies, comprised of the substantial portion of its former Power and Energy reportable segment. Given the specific capabilities that are unique to each category of technologies and businesses, the further intent of the Company is that each business will, through a process of divestiture and separation, be positioned to further maximize its respective service to customers through the narrowing of such strategic focus.

We report business or asset groups as discontinued operations when, among other things, we commit to a plan to divest the business or asset group, we actively begin marketing the business or asset group, and when the sale of the business or asset group is deemed probable of occurrence within the next twelve months.

SPX FLOW, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited; in millions, except per share data)

Income (loss) from discontinued operations for the three and nine months ended September 28, 2019 and September 29, 2018 was as follows:



	Three months ended						Nine months ended
	September 28, 2019			September 29, 2018			September 28, 2019			September 29, 2018
Revenues	$	115.6		$	123.6		$	361.1		$	369.7
Cost of products sold⁽¹⁾⁽²⁾	94.2			92.3			266.8			264.2
Gross profit	21.4			31.3			94.3			105.5
Selling, general and administrative⁽¹⁾	24.0			19.5			69.4			61.0
Intangible amortization⁽¹⁾	—			1.0			1.9			3.0
Impairment charge⁽³⁾	52.0			—			52.0			—
Restructuring and other related charges	—			—			—			1.0
Operating income (loss)	(54.6		)	10.8			(29.0		)	40.5

Other expense, net	(0.3		)	(1.6		)	(1.7		)	(4.9		)
Interest expense, net⁽⁴⁾	(2.8		)	(3.1		)	(9.2		)	(9.7		)
Income (loss) from discontinued operations before income taxes	(57.7		)	6.1			(39.9		)	25.9
Income tax benefit (provision)⁽⁵⁾	9.6			0.4			47.4			(7.1		)
Income (loss) from discontinued operations, net of tax	(48.1		)	6.5			7.5			18.8
Less: Income (loss) attributable to noncontrolling interests	0.2			(0.3		)	—			(0.6		)
Income (loss) from discontinued operations, net of tax and noncontrolling interests	$	(48.3	)	$	6.8		$	7.5		$	19.4


(1)	During the three months ended September 28, 2019 (and related portion of the nine months then ended), depreciation of property, plant and equipment and amortization of intangible assets, related to our discontinued operations, were ceased, as the assets of the discontinued operations business were classified as held-for-sale for the period.

(2)

During the three and nine months ended September 28, 2019, we recorded a charge to “Cost of products sold” of $17.0 related to the settlement of a previous payment demand from a customer related to a project of the discontinued operations business. The liability associated with this settlement was recorded as a component of “Accrued expenses” of the discontinued operations of the Company and was paid by the Company on September 30, 2019. See Note 12 for further information regarding this settlement and the related payment demand.


(3)	See further discussion regarding this impairment charge in Note 3 to the table below which summarizes the major classes of assets and liabilities of the Company’s discontinued operations.

(4)

In addition to any business-specific interest expense and income, the interest expense, net, of discontinued operations reflects an allocation of interest expense, including the amortization of deferred financing fees, related to the Company’s senior notes, senior credit facilities and former trade receivables financing arrangement. Interest expense related to such debt instruments and allocated to discontinued operations was $2.8 and $3.2 for the three months ended September 28, 2019 and September 29, 2018, respectively, and $9.2 and $10.0 for the nine-month periods then ended, respectively. The allocation of the Company’s interest expense of these debt instruments was determined based on the proportional amount of average net assets of the discontinued operations to the Company’s average net assets during each period, with the Company’s average net assets determined excluding the average outstanding borrowings under such debt instruments during each period.

(5)

During the three months ended September 28, 2019, we recorded an income tax benefit of $9.6 on $(57.7) of pre-tax loss from discontinued operations, resulting in an effective tax rate of 16.6%. This compares to an income tax benefit for the three months ended September 29, 2018 of $0.4 on $6.1 of pre-tax income from discontinued operations, resulting in an effective tax rate of (6.6)%. The effective tax rate for the third quarter of 2019 was impacted by the effect that the majority of the impairment charge will not result in a tax benefit such that only $2.0 of tax benefit was recognized on the impairment charge, as well as by a benefit of $7.5 resulting from basis differences that will be realized through the disposition of the held-for-sale assets. The effective tax rate for the third quarter of 2018 was impacted by a benefit of $0.7 from the cumulative impact of the lower annual effective tax rate for the third quarter compared to prior quarters driven by a higher impact of U.S. permanent adjustments on a lower forecasted pre-tax income.

During the nine months ended September 28, 2019, we recorded an income tax benefit of $47.4 on $(39.9) of pre-tax loss from discontinued operations, resulting in an effective tax rate of 118.8%. This compares to an income tax provision for the nine months ended September 29, 2018 of $7.1 on $25.9 of pre-tax income from discontinued operations, resulting in an effective tax rate of 27.4%. The effective tax rate for the first nine months of 2019 was impacted by (i) a benefit of $48.0 resulting from basis differences that will be realized through the disposition of the held-for-sale assets and (ii) the effect that the majority of the impairment charge will not result in a tax benefit such that only $2.0 of tax benefit was recognized on the impairment charge. The effective tax rate for the first nine months of 2018 was impacted by an expense of $1.1 resulting from an adjustment to the valuation allowance on certain deferred tax assets for which no benefit is expected to be recognized.

SPX FLOW, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited; in millions, except per share data)

The major classes of assets and liabilities, excluding intercompany balances, of the business reported as a discontinued operation included in the accompanying condensed consolidated balance sheets, were as follows:



	September 28, 2019			December 31, 2018
ASSETS
Current assets:
Cash and equivalents	$	20.7		$	16.3
Accounts receivable, net	100.9			97.3
Contract assets	38.9			35.5
Inventories, net	74.0			84.3
Other current assets	13.3			11.0
Total current assets	247.8			244.4
Property, plant and equipment, net	82.0			84.2
Goodwill	190.8			193.9
Intangibles, net	89.6			93.1
Other assets⁽¹⁾	54.6			41.2
Total long-term assets⁽²⁾	417.0			412.4
Total assets, before valuation allowance	664.8			656.8
Less: valuation allowance⁽³⁾	(52.0		)	—
TOTAL ASSETS, net of valuation allowance⁽²⁾	$	612.8		$	656.8

LIABILITIES
Current liabilities:
Accounts payable	$	45.0		$	46.7
Contract liabilities	37.9			38.5
Accrued expenses⁽¹⁾	68.4			46.3
Income taxes payable	1.9			1.5
Current maturities of long-term debt	0.4			0.4
Total current liabilities	153.6			133.4
Long-term debt	3.5			3.8
Deferred and other income taxes	13.0			12.1
Other long-term liabilities⁽¹⁾	54.5			44.7
Total long-term liabilities⁽²⁾	71.0			60.6
TOTAL LIABILITIES⁽²⁾	$	224.6		$	194.0

(1)

As of September 28, 2019, “other assets” included $13.2 of operating lease ROU assets, “accrued expenses” included $3.9 of current portion of operating lease liabilities and “other long-term liabilities” included $9.5 of long-term operating lease liabilities, each related to the Company’s adoption of the new lease pronouncement effective January 1, 2019. Also, as of September 28, 2019, “Accrued expenses” included a liability of $17.0 related to the settlement of a previous payment demand from a customer related to a project of the discontinued operations business. See Note 12 for further information regarding this settlement and the related payment demand.

(2)

The total assets and liabilities of discontinued operations are classified in current assets and liabilities, respectively, in our condensed consolidated balance sheet as of September 28, 2019, as our planned disposition of the discontinued operation is expected to occur within twelve months of that date. The assets and liabilities of discontinued operations are classified in their respective current or long-term classifications, respectively, in our condensed consolidated balance sheet as of December 31, 2018, in accordance with the nature and underlying classification of such assets and liabilities, as our planned disposition of the discontinued operations was not expected to occur within twelve months of that date.

(3)

As of September 28, 2019, management has evaluated indicators of fair value of the Company’s discontinued operations, including indications of fair value received from third parties in connection with the marketing of the business through the end of the third quarter. Based on developments associated with the marketing and sale process that arose during the Company’s third quarter, and indications of fair value received through the conclusion of the third quarter, the Company recorded a pre-tax charge of $52.0 to reduce the carrying value of the net assets of the discontinued operations, including relevant foreign currency translation adjustment balances, to estimated fair value less costs to sell. As this impairment charge was determined not to be attributable to any individual components of the Company’s net assets, it has been reflected as a valuation allowance against the total assets of the discontinued operations as of September 28, 2019, as reflected in

SPX FLOW, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited; in millions, except per share data)

the table above. Our assessment of the fair value of our discontinued operations is an accounting estimate which involves significant and complex judgment, including estimating the effect of inherent uncertainties associated with the marketing and sale of the business. Accordingly, future changes in the operations of the business, global market and economic conditions, and the marketing and sale process itself, among other items, could result in a significant change in our assessment of the fair value of the business and in a future impairment charge if a reduction in fair value of the business were to be determined to occur in a future period.

The following table summarizes the significant non-cash operating items and capital expenditures reflected in cash flows of discontinued operations for the nine months ended September 28, 2019 and September 29, 2018:



	Nine months ended
	September 28, 2019			September 29, 2018
Impairment charges⁽¹⁾	$	52.0		$	—
Depreciation and amortization⁽²⁾	7.8			12.8
Capital expenditures	(4.6		)	(5.0		)


(1)	See further discussion regarding this impairment charge in Note 3 to the table above which summarizes the major classes of assets and liabilities of the Company’s discontinued operations.


(2)	During the three months ended September 28, 2019 (and related portion of the nine months then ended), depreciation of property, plant and equipment and amortization of intangible assets, related to our discontinued operations, were ceased, as the assets of the discontinued operations business were classified as held-for-sale for the period.

(4) INFORMATION ON REPORTABLE SEGMENTS, CORPORATE EXPENSE AND OTHER

We innovate with customers to help feed and enhance the world by designing, delivering and servicing high value process solutions at the heart of growing and sustaining our diverse communities with operations in over 30 countries and sales in over 140 countries around the world. The Company's product offering is concentrated in process technologies that perform mixing, blending, fluid handling, separation, thermal heat transfer and other activities that are integral to processes performed across a wide variety of sanitary and industrial markets.

Prior to the second quarter of 2019, we aggregated our operating segments into three reportable segments; however, in connection with the planned disposition of a substantial portion of our former Power and Energy reportable segment and its reclassification as a discontinued operation, we are no longer reporting the remaining business of Power and Energy as a separate reportable segment, as the operating results of that business have not been, and are not expected to be, material to our consolidated financial results. The results of that remaining business have been reclassified into the Industrial reportable segment in all periods presented.

Accordingly, we have two reportable segments: the Food and Beverage segment and the Industrial segment. In determining our reportable segments, we apply the threshold criteria of the Segment Reporting Topic of the Codification to operating income or loss of each segment before considering asset impairment charges, restructuring and other related charges, pension and postretirement service costs and other indirect corporate expenses (including corporate stock-based compensation). This is consistent with the way our chief operating decision maker evaluates the results of each segment.

Food and Beverage

The Food and Beverage reportable segment operates in a regulated, global industry with customers who demand highly engineered, process solutions. Key demand drivers include dairy consumption, emerging market capacity expansion, sustainability and productivity initiatives, customer product innovation and food safety. Key products for the segment include homogenizers, pumps, valves, separators and heat exchangers. We also design and assemble process systems that integrate many of these products for our customers. Key brands include APV, Gerstenberg Schroeder, Seital and Waukesha Cherry-Burrell.

Industrial

The Industrial reportable segment primarily serves customers in the chemical, air treatment, mining, pharmaceutical, marine, shipbuilding, infrastructure construction, general industrial and water treatment industries. Key demand drivers of this segment are tied to macroeconomic conditions and growth in the respective end markets we serve. Key products for the segment are air dryers, filtration equipment, mixers, pumps, hydraulic technologies and heat exchangers. Key brands include Airpel, APV, Bolting Systems, Bran+Luebbe, Deltech, Hankison, Jemaco, Johnson Pump, LIGHTNIN, Power Team and Stone.

SPX FLOW, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited; in millions, except per share data)

Corporate Expense

Corporate expense generally relates to the cost of our Charlotte, North Carolina corporate headquarters and our Asia Pacific center in Shanghai, China. Corporate expense also reflects stock-based compensation costs associated with corporate employees.

Reportable Segment Financial Data

Financial data for our reportable segments for the three and nine months ended September 28, 2019 and September 29, 2018 were as follows:



	Three months ended				Nine months ended
	September 28, 2019		September 29, 2018		September 28, 2019		September 29, 2018
Revenues:
Food and Beverage	$	178.9	$	194.8	$	530.0	$	548.9
Industrial	204.6		211.9		612.3		633.2
Total revenues	$	383.5	$	406.7	$	1,142.3	$	1,182.1

Income:
Food and Beverage	$	27.1	$	27.4	$	59.6	$	65.3
Industrial	28.7		29.5		87.9		77.0
Total income for reportable segments	55.8		56.9		147.5		142.3

Corporate expense⁽¹⁾	18.1		11.4		44.8		41.5
Pension and postretirement service costs	0.3		0.3		0.7		0.9
Asset impairment charges⁽²⁾	10.8		—		10.8		—
Restructuring and other related charges	0.2		0.2		7.1		2.9
Consolidated operating income	$	26.4	$	45.0	$	84.1	$	97.0

(1)

Includes $2.7 and $2.6 for the three months ended September 28, 2019 and September 29, 2018, respectively, and $5.8 and $6.3 for the nine month periods then ended, respectively, related to costs for certain centralized functions/services provided and/or administered by SPX FLOW that were previously charged to business units of which the related financial results of operations have been reclassified to discontinued operations. These centralized functions/services included, but were not limited to, information technology, shared services for accounting, payroll services, supply chain, and manufacturing and process improvement operations/services. These costs generally represent the costs of employees who provided such centralized functions/services to the business units reclassified as discontinued operations but who are expected to remain employees of SPX FLOW upon the planned disposition of the discontinued operations.

(2)

Asset impairment charges of $10.8, during the three and nine months ended September 28, 2019, resulted from management’s decision to market a corporate asset for sale. Those assets, which had an estimated fair value of $4.0 at September 28, 2019, were marketed for sale beginning in the third quarter, and were reclassified from “Property, plant and equipment” to “Other current assets” as of September 28, 2019.

Revenues recognized over time:

The following table provides revenues recognized over time by reportable segment for the three and nine months ended September 28, 2019 and September 29, 2018:



	Three months ended				Nine months ended
	September 28, 2019		September 29, 2018		September 28, 2019		September 29, 2018
Revenues recognized over time:
Food and Beverage	$	54.2	$	74.9	$	207.2	$	218.9
Industrial	11.2		21.9		40.7		70.1
Total revenues recognized over time	$	65.4	$	96.8	$	247.9	$	289.0

SPX FLOW, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited; in millions, except per share data)

Disaggregated Information about Revenues:

Our aftermarket revenues generally include sales of parts and service/maintenance support, and original equipment (“OE”) revenues generally include all other revenue streams. The following tables provide disaggregated information about our OE, including Food and Beverage systems, and aftermarket revenues by reportable segment for the three and nine months ended September 28, 2019 and September 29, 2018:



	Three months ended September 28, 2019							Three months ended September 29, 2018
	Original Equipment			Aftermarket		Total Revenues		Original Equipment			Aftermarket		Total Revenues
Food and Beverage	$	118.6	⁽¹⁾	$	60.3	$	178.9	$	134.7	⁽¹⁾	$	60.1	$	194.8
Industrial	138.1			66.5		204.6		144.2			67.7		211.9
Total revenues	$	256.7		$	126.8	$	383.5	$	278.9		$	127.8	$	406.7


(1)	Includes $63.6 and $81.8 for the three months ended September 28, 2019 and September 29, 2018, respectively, of revenue realized from the sale of highly engineered Food and Beverage systems.



	Nine months ended September 28, 2019							Nine months ended September 29, 2018
	Original Equipment			Aftermarket		Total Revenues		Original Equipment			Aftermarket		Total Revenues
Food and Beverage	$	348.1	⁽¹⁾	$	181.9	$	530.0	$	364.3	⁽¹⁾	$	184.6	$	548.9
Industrial	415.0			197.3		612.3		429.5			203.7		633.2
Total revenues	$	763.1		$	379.2	$	1,142.3	$	793.8		$	388.3	$	1,182.1


(1)	Includes $188.6 and $202.4 for the nine months ended September 28, 2019 and September 29, 2018, respectively, of revenue realized from the sale of highly engineered Food and Beverage systems.

(5) RESTRUCTURING AND OTHER RELATED CHARGES

Restructuring and other related charges for the three and nine months ended September 28, 2019 and September 29, 2018 were as follows:



	Three months ended						Nine months ended
	September 28, 2019			September 29, 2018			September 28, 2019		September 29, 2018
Food and Beverage	$	(0.8	)	$	0.3		$	5.4	$	1.0
Industrial	0.6			(0.1		)	1.3		1.9
Other	0.4			—			0.4		—
Total	$	0.2		$	0.2		$	7.1	$	2.9

Restructuring and Other Related Charges By Reportable Segment

Food and Beverage — The credit for the three months ended September 28, 2019 related primarily to a revision of estimates for previously recognized charges related to prior actions, initiated (i) during the fourth quarter of 2018 which impacted a business based primarily in the EMEA region, and (ii) during the second quarter of 2019 which related to the closure of a facility in South America.

Charges for the nine months ended September 28, 2019 related primarily to severance and other costs associated with (i) additional charges associated with the further rationalization, initiated during the fourth quarter of 2018, of a business based primarily in the EMEA region, as well as (ii) the closure of a facility in South America.

Charges for the three months ended September 29, 2018 related primarily to severance and other costs related to the reorganization of the segment's commercial aftermarket function in the EMEA region. Charges for the nine months ended September 29, 2018 related primarily to this reorganization as well as a further consolidation of our facilities in Poland, including the termination and other exit costs associated with a leased facility.

Industrial — Charges for the three months ended September 28, 2019 related primarily to severance and other costs associated primarily with the closure of a sales office and service center in North America.

SPX FLOW, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited; in millions, except per share data)

Charges for the nine months ended September 28, 2019 related primarily to severance and other costs associated with (i) certain operations personnel in the EMEA region, and (ii) the closure of a sales office and service center in North America.

Charges for the nine months ended September 29, 2018 related primarily to severance and other costs associated with (i) operations and commercial personnel in North America and the Asia Pacific region, partially offset by (ii) revisions of estimates related to certain previously announced restructuring activities.

Other — Charges for the three and nine months ended September 28, 2019 related to severance and other costs associated with the rationalization of a corporate support function.

Expected charges still to be incurred under actions approved as of September 28, 2019 were approximately $0.2.

The following is an analysis of our restructuring liabilities (included in “Accrued expenses” in our condensed consolidated balance sheets) for the nine months ended September 28, 2019 and September 29, 2018:



	Nine months ended
	September 28, 2019			September 29, 2018
Balance at beginning of year	$	7.2		$	10.7
Restructuring and other related charges⁽¹⁾	6.8			2.9
Utilization — cash	(6.0		)	(9.9		)
Currency translation adjustment and other	(0.3		)	(0.2		)
Balance at end of period	$	7.7		$	3.5


(1)	Amounts that impacted restructuring and other related charges but not the restructuring liabilities included $0.3 of other related charges during the nine months ended September 28, 2019.

(6) INVENTORIES, NET

Inventories at September 28, 2019 and December 31, 2018 comprised the following:



	September 28, 2019			December 31, 2018
Finished goods	$	86.9		$	79.1
Work in process	49.0			57.3
Raw materials and purchased parts	84.2			91.3
Total FIFO cost	220.1			227.7
Excess of FIFO cost over LIFO inventory value	(7.2		)	(7.2		)
Total inventories	$	212.9		$	220.5

Inventories include material, labor and factory overhead costs and are reduced, when necessary, to estimated net realizable values. Certain domestic inventories are valued using the last-in, first-out (“LIFO”) method. These inventories were approximately 11% of total inventory at September 28, 2019 and December 31, 2018. Other inventories are valued using the first-in, first-out (“FIFO”) method.

SPX FLOW, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited; in millions, except per share data)

(7) GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The changes in the carrying amount of goodwill by reportable segment during the nine months ended September 28, 2019 were as follows:



	December 31, 2018		Impairments		Foreign Currency Translation and Other			September 28, 2019
Food and Beverage	$	261.5	$	—	$	(8.9	)	$	252.6
Industrial⁽¹⁾	288.9		—		(6.8		)	282.1
Total	$	550.4	$	—	$	(15.7	)	$	534.7


(1)	The carrying amount of goodwill included $132.7 and $133.6 of accumulated impairments as of September 28, 2019 and December 31, 2018.

As of September 28, 2019, there were no indicators necessitating an interim impairment test of our reporting units, based on management's review of operating performance. Refer to Note 3 for further discussion of management's evaluation of interim impairment indicators associated with discontinued operations.

We will perform our annual impairment testing of goodwill (and indefinite-lived intangible assets that are not amortized), during the fourth quarter of 2019 in conjunction with our annual financial planning process. In performing that annual impairment testing, we will assess, among other items, order trends and the operating cash flow performance of our reporting units.

Other Intangibles, Net

Identifiable intangible assets were as follows:



	September 28, 2019							December 31, 2018
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Intangible assets with determinable lives:
Customer relationships	$	122.9	$	(94.1	)	$	28.8	$	125.8	$	(90.2	)	$	35.6
Technology	60.3		(44.8		)	15.5		62.1		(43.5		)	18.6
Patents	5.5		(4.4		)	1.1		5.7		(4.3		)	1.4
Other	7.9		(7.9		)	—		8.1		(8.1		)	—
	196.6		(151.2		)	45.4		201.7		(146.1		)	55.6
Trademarks with indefinite lives	161.3		—			161.3		163.6		—			163.6
Total	$	357.9	$	(151.2	)	$	206.7	$	365.3	$	(146.1	)	$	219.2

As of September 28, 2019, the net carrying value of intangible assets with determinable lives consisted of the following by reportable segment: $28.6 in Food and Beverage and $16.8 in Industrial. Trademarks with indefinite lives consisted of the following by reportable segment: $95.4 in Food and Beverage and $65.9 in Industrial.

No intangible asset impairment charges were recorded during the nine months ended September 28, 2019 or September 29, 2018. Changes in the gross carrying values of trademarks and other identifiable intangible assets during the nine months ended September 28, 2019 related to foreign currency translation.

(8) EMPLOYEE BENEFIT PLANS

SPX FLOW sponsors a number of defined benefit pension plans and a postretirement plan. For all of these plans, changes in the fair value of plan assets and actuarial gains and losses are recognized to earnings in the fourth quarter of each year, unless earlier remeasurement is required. The remaining components of pension and postretirement expense, primarily service and interest costs and expected return on plan assets, are recorded on a quarterly basis.

SPX FLOW, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited; in millions, except per share data)

Components of Net Periodic Pension and Postretirement Benefit Expense

Net periodic benefit expense for our foreign pension plans and our domestic pension and postretirement plans for the three and nine months ended September 28, 2019 and September 29, 2018 included the following components:



	Foreign Pension Plans				Domestic Pension and Postretirement Plans				Total				Statement of Operations Caption in Which Expense is Reported
	Three months ended
	September 28, 2019		September 29, 2018		September 28, 2019		September 29, 2018		September 28, 2019		September 29, 2018
Service cost	$	0.3	0.1		$	—	$	0.2	$	0.3	$	0.3	Selling, general and administrative
Interest cost	0.1		0.2		0.1		0.1		0.2		0.3		Other income (expense), net
Total net periodic benefit expense	$	0.4	$	0.3	$	0.1	$	0.3	$	0.5	$	0.6



	Foreign Pension Plans				Domestic Pension and Postretirement Plans				Total				Statement of Operations Caption in Which Expense is Reported
	Nine Months Ended
	September 28, 2019		September 29, 2018		September 28, 2019		September 29, 2018		September 28, 2019		September 29, 2018
Service cost	$	0.7	0.2		$	—	$	0.7	$	0.7	$	0.9	Selling, general and administrative
Interest cost	0.3		0.5		0.3		0.4		0.6		0.9		Other income (expense), net
Recognized net actuarial loss⁽¹⁾	—		0.6		0.2		—		0.2		0.6		Other income (expense), net
Total net periodic benefit expense	$	1.0	$	1.3	$	0.5	$	1.1	$	1.5	$	2.4

(1)

For the nine months ended September 28, 2019, the $0.2 charge reflects the effects of a partial settlement and remeasurement of our domestic pension plan, resulting from the lump sum payment of a former officer’s pension obligation during the second quarter of 2019. For the nine months ended September 29, 2018, the $0.6 charge represents a cumulative charge related to a change in the accounting for certain foreign benefit plans from defined contribution plans to defined benefit plans. These plans include approximately 50 active participants.

Employer Contributions

During the nine months ended September 28, 2019 and September 29, 2018, contributions to the foreign and domestic pension plans we sponsor were less than $0.1.

(9) INDEBTEDNESS

Debt at September 28, 2019 and December 31, 2018 was comprised of the following:



	September 28, 2019			December 31, 2018
Term loan, due in June 2022	$	100.0		$	—
Former term loan⁽¹⁾	—			140.0
5.625% senior notes, due in August 2024	300.0			300.0
5.875% senior notes, due in August 2026	300.0			300.0
Other indebtedness⁽²⁾	26.2			33.1
Less: deferred financing fees⁽³⁾	(7.2		)	(8.0		)
Total debt	719.0			765.1
Less: short-term debt	25.6			26.0
Less: current maturities of long-term debt	0.1			20.8
Total long-term debt	$	693.3		$	718.3


(1)	This formerly outstanding term loan was fully repaid during the second quarter of 2019, as described further below under “Senior Credit Facilities.”


(2)	Primarily includes finance lease obligations (previously “capital lease obligations” in 2018 under prior accounting guidance) of $0.6 and $7.2 and balances under a purchase card program of $24.7 and $23.0 as of September 28, 2019 and December 31, 2018, respectively. The

SPX FLOW, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited; in millions, except per share data)

purchase card program allows for payment beyond customary 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. See Note 2 for further discussion regarding our adoption of a new lease accounting standard during the first quarter of 2019 and the impact of such adoption on our capital lease obligations.

(3)

Deferred financing fees were comprised of fees related to the term loan and senior notes. As described further below under “Senior Credit Facilities,” we amended and restated our senior credit facilities in June 2019. In connection with this amendment, we recognized $1.0 of expense, classified as a component of “Interest expense, net” in our accompanying condensed consolidated statements of operations during the nine months ended September 28, 2019, related to the write-off of deferred financing fees resulting from the extinguishment of the term loan and other facilities of our former senior credit facility.

Senior Credit Facilities

On June 27, 2019, we amended and restated our senior credit facilities with a syndicate of lenders that provide for committed senior secured financing in the aggregate initial principal amount of $750.0, consisting of the following:


•	A term loan facility in an aggregate initial principal amount of $100.0, with a final maturity of June 27, 2022;


•	A domestic revolving credit facility, available for loans and letters of credit, in an aggregate principal amount up to $200.0, with a final maturity of June 27, 2024;


•	A global revolving credit facility, available for loans in Euros, Sterling and other currencies, in an aggregate principal amount up to the equivalent of $300.0, with a final maturity of June 27, 2024; and


•	A bilateral foreign credit instrument facility, available for performance letters of credit and guarantees in Euros, Sterling and other currencies, in an aggregate principal amount up to the equivalent of $150.0, with a final maturity of June 27, 2024.

We also may seek additional commitments, without consent from the existing lenders, to add an incremental term loan facility and/or increase the commitments in respect of the domestic revolving credit facility, the global revolving credit facility, and/or the bilateral foreign credit instrument facility by an aggregate principal amount not to exceed (a) the greater of (i) $275.0 and (ii) an amount equal to 100% of consolidated adjusted EBITDA for the four fiscal quarters ended most recently before such date plus (b) an unlimited amount so long as, immediately after giving effect thereto, our Consolidated Senior Secured Leverage Ratio (as defined in the amended and restated credit agreement generally as the ratio of consolidated total debt (excluding the face amount of undrawn letters of credit, bank undertakings, or analogous instruments and net of cash and cash equivalents) at the date of determination secured by liens to consolidated adjusted EBITDA for the four fiscal quarters ended most recently before such date) does not exceed 2.75:1.00 plus (c) an amount equal to all voluntary prepayments of the term loan facility and voluntary prepayments accompanied by permanent commitment reductions of the domestic revolving credit facility, the global revolving credit facility, and the bilateral foreign credit instrument facility.

We are the borrower under all of the senior credit facilities, and we may designate certain of our foreign subsidiaries to be co-borrowers under the global revolving credit facility and the bilateral foreign credit instrument facility (“FCI”). All borrowings and other extensions of credit under our senior credit facilities are subject to the satisfaction of customary conditions, including absence of defaults and accuracy in material respects of representations and warranties.

SPX FLOW, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited; in millions, except per share data)

The interest rates applicable to loans under our senior credit facilities are, at our option, equal to either (x) an alternate base rate (the highest of (a) the federal funds effective rate plus 0.5%, (b) the prime rate of Bank of America, N.A., and (c) the one-month LIBOR rate plus 1.0%) or (y) a reserve-adjusted LIBOR rate for dollars (Eurodollar) plus, in each case, an applicable margin percentage, which varies based on our Consolidated Leverage Ratio (as defined in the amended and restated credit agreement generally as the ratio of consolidated total debt (excluding the face amount of undrawn letters of credit, bank undertakings or analogous instruments and net of cash and cash equivalents) at the date of determination to consolidated adjusted EBITDA, as defined in the amended and restated credit agreement, for the four fiscal quarters ended most recently before such date). We may elect interest periods of one, two, three or six months (and, if consented to by all relevant lenders, twelve months or less) for Eurodollar rate borrowings. The per annum fees charged and the interest rate margins applicable to Eurodollar rate and alternate base rate loans are as follows:



Consolidated Leverage Ratio	Domestic Revolving Commitment Fee	Global Revolving Commitment Fee	Financial Letter of Credit Fee	FCI Commitment Fee	FCI Fee and Non-Financial Letter of Credit Fee	Eurodollar Rate Loans	ABR Loans
Greater than or equal to 3.50 to 1.0	0.300%	0.300%	2.000%	0.300%	1.200%	2.000%	1.000%
Between 3.50 to 1.0 and 2.50 to 1.0	0.275%	0.275%	1.750%	0.275%	1.050%	1.750%	0.750%
Between 2.50 to 1.0 and 1.50 to 1.0	0.250%	0.250%	1.500%	0.250%	0.900%	1.500%	0.500%
Less than 1.50 to 1.0	0.225%	0.225%	1.250%	0.225%	0.750%	1.250%	0.250%

The fees for bilateral foreign credit commitments are as specified above for foreign credit instrument commitments unless otherwise agreed with the bilateral foreign issuing lender. We also pay fronting fees on the outstanding amounts of letters of credit at the rate of 0.125% per annum.

Our senior credit facilities require mandatory prepayments in amounts equal to the net proceeds from the sale or other disposition of, including from any casualty to, or governmental taking of, property in excess of specified values (other than in the ordinary course of business and subject to other exceptions) by the Company or its subsidiaries. Mandatory prepayments are applied to repay, first, amounts outstanding under any term loans and, then, amounts (or cash collateralize letters of credit) outstanding under the global revolving credit facility and the domestic revolving credit facility (without reducing the commitments thereunder). No prepayment is required generally to the extent the net proceeds are reinvested (or committed to be reinvested) in permitted acquisitions, permitted investments or assets to be used in our business within 360 days (and if committed to be reinvested, actually reinvested within 180 days after the end of such 360-day period) of the receipt of such proceeds. In the case of our planned divestiture of a substantial portion of the Company’s former Power and Energy reportable segment, the divestiture is allowed under the credit agreement; however, if, after giving effect on a Pro Forma basis (as defined in the amended and restated credit agreement), our Consolidated Leverage Ratio (as defined in the amended and restated credit agreement) is greater than 3.75 to 1.0, then 100% of the net proceeds received in connection with the disposition shall be used first, for the prepayment of then-outstanding long-term indebtedness, and second, for the prepayment of any then-outstanding domestic revolving loans and global revolving loans.

We may voluntarily prepay loans under our senior credit facilities, in whole or in part, without premium or penalty. Any voluntary prepayment of loans is subject to reimbursement of the lenders’ breakage costs in the case of a prepayment of Eurodollar rate borrowings other than on the last day of the relevant interest period.

Indebtedness under our senior credit facilities is guaranteed by:


•	Each existing and subsequently acquired or organized domestic material subsidiary with specified exceptions; and


•	The Company with respect to the obligations of our foreign borrower subsidiaries under the global revolving credit facility and the bilateral foreign credit instrument facility.

Indebtedness under our senior credit facilities is secured by (i) a first-priority pledge and security interest in 100% of the capital stock of our domestic subsidiaries (with certain exceptions) held by the Company or its domestic subsidiary guarantors and 65% of the capital stock of our material first-tier foreign subsidiaries (with certain exceptions) and (ii) first-priority security interests, mortgages, and other liens on substantially all of the assets of the Company and its domestic subsidiary guarantors. If the Company’s corporate credit rating is “Baa3” or better by Moody’s or “BBB-” or better by S&P and no defaults exist or would result therefrom, then all collateral security will be released and the indebtedness under our senior credit facilities will be unsecured.

SPX FLOW, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited; in millions, except per share data)

Our senior credit facilities require that we maintain:


•	A Consolidated Interest Coverage Ratio (as defined in the amended and restated 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 3.00 to 1.00; and


•	A Consolidated Leverage Ratio (as defined in the amended and restated credit agreement) as of the last day of any fiscal quarter of not more than 4.00 to 1.00.

Our senior credit facilities also contain covenants that, among other things, restrict our ability to incur additional indebtedness, grant liens, make investments, loans, guarantees, or advances, make restricted junior payments, including dividends, redemptions of capital stock, and voluntary prepayments or repurchase of certain other indebtedness, engage in mergers, acquisitions or sales of assets, or engage in certain transactions with affiliates, and otherwise restrict certain corporate activities. Our senior credit facilities contain customary representations, warranties, affirmative covenants and events of default.

We are permitted under our senior credit facilities to repurchase our capital stock and pay cash dividends in an unlimited amount if our Consolidated Leverage Ratio, as defined in the amended and restated credit agreement, is (after giving pro forma effect to such payments) less than 2.50 to 1.00. If our Consolidated Leverage Ratio is (after giving pro forma effect to such payments) greater than or equal to 2.50 to 1.00, the aggregate amount of such repurchases and dividend declarations cannot exceed (a) $100.0 in any fiscal year plus (b) an additional amount for all such repurchases and dividend declarations made after June 27, 2019 equal to the Available Amount (as defined in the amended and restated credit agreement as the sum of (i) $300.0 plus (ii) a positive amount equal to 50% of cumulative Consolidated Net Income (as defined in the amended and restated credit agreement generally as consolidated net income subject to certain adjustments solely for the purposes of determining this basket) during the period from June 27, 2019, to the end of the most recent fiscal quarter preceding the date of such repurchase or dividend declaration for which financial statements have been (or were required to be) delivered (or, in case such Consolidated Net Income is a deficit, minus 100% of such deficit) plus (iii) certain other amounts specified in the amended and restated credit agreement.

The proceeds of the initial borrowing under the senior credit facilities were used in substantial part to refinance indebtedness outstanding under our former senior credit facilities.

A detailed description of our senior notes and former senior credit facilities is included in our consolidated financial statements included in our 2018 Annual Report on Form 10-K.

The weighted-average interest rate of outstanding borrowings under our senior credit facilities was approximately 3.5% and 4.3% at September 28, 2019 and December 31, 2018, respectively.

At September 28, 2019, we had $494.1 of borrowing capacity under our revolving credit facilities after giving effect to $5.9 reserved for outstanding letters of credit. In addition, at September 28, 2019, we had $65.8 of available issuance capacity under our foreign credit instrument facilities after giving effect to $84.2 reserved for outstanding bank guarantees. In addition, we had $15.3 of bank guarantees outstanding under the senior credit facilities that, once satisfied, cannot be reissued.

At September 28, 2019, in addition to the revolving lines of credit described above, we had approximately $10.0 of letters of credit outstanding under separate arrangements in China and India.

At September 28, 2019, we were in compliance with all covenants of our senior credit facilities and senior notes.

(10) DERIVATIVE FINANCIAL INSTRUMENTS

We manufacture and sell our products in a number of countries and, as a result, are exposed to movements in foreign currency (“FX”) exchange rates. Our objective is to preserve the economic value of non-functional currency-denominated cash flows and to minimize the impact of changes as a result of currency fluctuations. Our principal currency exposures relate to the Euro, Chinese Yuan and British Pound.

SPX FLOW, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited; in millions, except per share data)

other comprehensive loss related to FX forward contracts as of September 28, 2019 and December 31, 2018, respectively. The net gains (losses) recorded in “Other income (expense), net” related to FX gains (losses) totaled $0.1 and $(0.9) for the three months ended September 28, 2019 and September 29, 2018, respectively, and $(0.1) and $(1.7) for the nine months then ended.

We enter into arrangements designed to provide the right of setoff in the event of counterparty default or insolvency, and have elected to offset the fair values of our FX forward contracts in our condensed consolidated balance sheets. The gross fair values of our FX forward contracts and FX embedded derivatives, in aggregate, were $0.2 and $0.7 (gross assets) and $0.1 and $0.2 (gross liabilities) at September 28, 2019 and December 31, 2018, respectively.

(11) EQUITY AND STOCK-BASED COMPENSATION

Income (Loss) Per Share

The following table sets forth the number of weighted-average shares outstanding used in the computation of basic and diluted income (loss) per share:



	Three months ended		Nine months ended
	September 28, 2019	September 29, 2018	September 28, 2019	September 29, 2018
Weighted-average shares outstanding, basic	42.434	42.229	42.418	42.169
Dilutive effect of share-based awards	0.263	0.467	0.212	0.438
Weighted-average shares outstanding, dilutive⁽¹⁾	42.697	42.696	42.630	42.607

(1)

Unvested restricted stock shares/units not included in the computation of diluted income per share because required market thresholds for vesting (as discussed below) were not met, were 0.063 and 0.133 for the three and nine months ended September 28, 2019, respectively. Unvested restricted stock shares/units not included in the computation of diluted income per share because required internal performance thresholds for vesting (as discussed below) were not met, were 0.118 and 0.247 for the three months ended September 28, 2019 and September 29, 2018, respectively, and 0.135 and 0.232 for the nine months then ended. Stock options outstanding excluded from the computation of diluted income per share because their exercise price was greater than the average market price of common shares, were 0.342 for the three and nine months ended September 28, 2019 and September 29, 2018.

Stock-Based Compensation

SPX FLOW stock-based compensation awards may be granted to certain eligible employees or non-employee directors under the SPX FLOW Stock Compensation Plan (the “Stock Plan”). Under the Stock Plan, up to 2.674 unissued shares of our common stock were available for future grant as of September 28, 2019. The Stock Plan permits the issuance of authorized but unissued shares or shares from treasury upon the vesting of restricted stock units, granting of restricted stock shares or exercise of stock options. Each restricted stock share, restricted stock unit and stock option granted reduces share availability under the Stock Plan by one share.

Restricted stock shares or restricted stock units may be granted to certain eligible employees or non-employee directors in accordance with the Stock Plan and applicable award agreements. Subject to participants' continued service and other award terms and conditions, the restrictions lapse and awards generally vest over a period of time, generally three years (or one year for awards to non-employee directors). In some instances, such as death, disability, or retirement, awards may vest concurrently with or following an employee's termination. Approximately half of such restricted stock shares and restricted stock unit awards vest based on performance thresholds, while the remaining portion vest based on the passage of time since grant date.

Eligible employees, including officers, were granted 2019 target performance awards, primarily during the three months ended March 30, 2019, in which the employee can earn between 50% and 150% of the target performance award in the event, and to the extent, the award meets the required performance vesting criteria. Such awards are generally subject to the employees’ continued employment during the three-year vesting period, and may be completely forfeited if the threshold performance criteria are not met. Vesting for the 2019 target performance awards is based on SPX FLOW shareholder return versus the performance of a composite group of companies, as established under the awards (the “Composite Group”), over the three-year period from January 1, 2019 through December 31, 2021. In addition, certain eligible employees, including officers, were granted 2019 target performance awards during the three months ended March 30, 2019 that vest subject to attainment of stated improvements in a three-year average annual return on invested capital (as defined under the awards) measured at the conclusion of the measurement period ending December 31, 2021 (including eligible employees’ continued employment during the measurement period). These target performance awards were issued as restricted stock units to eligible employees, including officers.

SPX FLOW, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited; in millions, except per share data)

Eligible employees, including officers, also were granted 2019 awards, primarily during the three months ended March 30, 2019, that vest ratably over three years, subject to the passage of time and the employees’ continued employment during such period. An officer also was granted a 2019 award during the three months ended March 30, 2019 that vests at the end of three years, subject to the passage of time and the officer’s continued employment during such period. In some instances, such as death, disability, or retirement, awards may vest concurrently with or following an employee's termination. These awards were issued as restricted stock units to eligible employees, including officers.

Non-employee directors received restricted stock share awards in the three months ended June 29, 2019 that vest at the close of business on the day before the date of the Company's next regular annual meeting of shareholders held after the date of the grant, subject to the passage of time and the directors' continued service during such period.

Restricted stock unit awards granted to eligible employees, including officers, primarily during the three months ended March 30, 2019, include early retirement provisions which permit recipients to be eligible for vesting generally upon reaching the age of 60 and completing ten years of service (and, if applicable, subject to the attainment of performance measures).

Restricted stock units that do not vest within the applicable vesting period are forfeited.

Stock options may be granted to eligible employees in the form of incentive stock options or nonqualified stock options. The option price per share may be no less than the fair market value of our common stock at the close of business on the date of grant. Upon exercise, the employee has the option to surrender previously owned shares at current value in payment of the exercise price and/or for withholding tax obligations.

The recognition of compensation expense for share-based awards is based on their grant-date fair values. The fair value of each award is amortized over the lesser of the award's requisite or derived service period, which is generally up to three years as noted above. For the three and nine months ended September 28, 2019 and September 29, 2018, we recognized compensation expense related to share-based programs in “Selling, general and administrative” expense in the accompanying condensed consolidated statements of operations as follows:



	Three months ended						Nine months ended
	September 28, 2019			September 29, 2018			September 28, 2019			September 29, 2018
Stock-based compensation expense - continuing and discontinued operations	$	3.4		$	3.7		10.2			12.8
Less: stock-based compensation expense recognized in discontinued operations	0.2			0.4			0.8			1.2
Stock-based compensation expense recognized in continuing operations	3.2			3.3			9.4			11.6
Income tax benefit	(0.8		)	(0.8		)	(2.2		)	(2.8		)
Stock-based compensation expense, net of income tax benefit	$	2.4		$	2.5		$	7.2		$	8.8

Restricted Stock Unit Awards

The Monte Carlo simulation model valuation technique was used to determine the fair value of our 2019 restricted stock units that contain a “market condition.” The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each restricted stock unit award.

SPX FLOW, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited; in millions, except per share data)

The following table summarizes the unvested restricted stock share and restricted stock unit activity for the nine months ended September 28, 2019:



	Unvested Restricted Stock Shares and Restricted Stock Units	Weighted-Average Grant-Date Fair Value Per Share
Outstanding at December 31, 2018	1.176	$36.40
Granted	0.546	34.51
Vested	(0.462)	32.95
Forfeited and other	(0.250)	31.20
Outstanding at September 28, 2019	1.010	$38.24

As of September 28, 2019, there was $21.1 of unrecognized compensation cost related to restricted stock share and restricted stock unit compensation arrangements, of which $19.6 related to awards of employees associated with continuing operations. We expect this cost to be recognized over a weighted-average period of 1.9 years, including 1.9 years for awards of employees associated with continuing operations.

Stock Options

There were 0.342 of SPX FLOW stock options outstanding as of September 28, 2019 and December 31, 2018, all of which were exercisable as of September 28, 2019. The weighted-average exercise price per share of the stock options is $61.29 and the weighted-average grant-date fair value per share is $19.33. The term of these options expires on January 2, 2025 (subject to earlier expiration upon a recipient's termination of service as provided under the awards). There was no unrecognized compensation cost related to these stock options as of September 28, 2019.

Accumulated Other Comprehensive Loss

Substantially all of accumulated other comprehensive loss (“AOCL”) as of September 28, 2019 and December 31, 2018 was foreign currency translation adjustment (there were unrealized losses of $0.2 and $0.3, net of taxes, recorded in AOCL related to FX forward contracts as of September 28, 2019 and December 31, 2018, respectively, as discussed in Note 10). See the condensed consolidated statements of comprehensive income (loss) for changes in AOCL for the three and nine months ended September 28, 2019 and September 29, 2018.

Common Stock in Treasury

During the nine months ended September 28, 2019 and September 29, 2018, “Common stock in treasury” was increased by $5.4 and $4.6, respectively, for common stock that was surrendered by recipients of restricted stock as a means of funding the related applicable income tax withholding requirements.

(12) LITIGATION, CONTINGENT LIABILITIES AND OTHER MATTERS

Various claims, complaints and proceedings arising in the ordinary course of business, including those relating to litigation matters (e.g., class actions, derivative lawsuits and contracts, intellectual property and competitive claims, and claims to certain indemnification obligations arising from previous acquisitions/dispositions), have been filed or are pending against us and certain of our subsidiaries. We believe these matters are either without merit or of a kind that should not have a material effect, individually or in the aggregate, on our financial position, results of operations or cash flows.

During the first quarter of 2019, the Company received a payment demand from a customer related to a project in the Power and Energy business which is classified as discontinued operations. The demand and related claims arose from the Company’s supply of equipment used in a series of long-term nuclear power projects that are substantially complete in terms of our production, revenue recognition and receipt of payment. On September 30, 2019, the Company entered into a settlement agreement with the customer and paid $17.0 in accordance with the terms of the agreement. Accordingly, during the three and nine months ended September 28, 2019, we recorded a charge of $17.0 to “Cost of products sold” within the results of discontinued operations, related to the settlement. The liability associated with this agreement was recorded as a component of “Accrued expenses” of discontinued operations of the Company as of September 28, 2019. The agreement releases the Company from further claims by the customer, beyond the ordinary warranty obligations that are associated with the underlying project.

SPX FLOW, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited; in millions, except per share data)

We are subject to domestic and international environmental protection laws and regulations with respect to our business operations and are operating in compliance with, or taking action aimed at ensuring compliance with, these laws and regulations. We believe our compliance obligations with environmental protection laws and regulations should not have a material effect, individually or in the aggregate, on our financial position, results of operations or cash flows.

Mezzanine Equity

Independent noncontrolling shareholders in certain foreign subsidiaries of the Company have put options under their respective joint venture operating agreements that allow them to sell their common stock to the controlling shareholders (wholly-owned subsidiaries of SPX FLOW) upon the satisfaction of certain conditions, including the passage of time. The respective carrying values presented in “Mezzanine equity” of our condensed consolidated balance sheets as of September 28, 2019 and December 31, 2018 are stated at the current exercise value of the put options, irrespective of whether the options are currently exercisable. To the extent the noncontrolling interests' put option price is correlated with the estimated fair value of the subsidiary, we have used the market method to estimate such fair values. This represents a Level 3 fair value measurement as described in Note 14. Of the $20.2 of current exercise value of the put options outstanding as of September 28, 2019, options with a value of $11.3 became exercisable during 2018. If and when such options are exercised, we expect to settle the option value in cash.

(13) INCOME TAXES

Unrecognized Tax Benefits

As of September 28, 2019, we had gross unrecognized tax benefits of $4.9 (net unrecognized tax benefits of $2.7), of which $2.7, if recognized, would impact our effective tax rate from continuing operations.

We classify interest and penalties related to unrecognized tax benefits as a component of our income tax provision. As of September 28, 2019, gross accrued interest totaled $0.4 (net accrued interest of $0.3), and there was no accrual for penalties included in our unrecognized tax benefits.

Based on the outcome of certain examinations or as a result of the expiration of statutes of limitations for certain jurisdictions, we believe that within the next 12 months it is reasonably possible that our previously unrecognized tax benefits could decrease by $1.0 to $2.0. The previously unrecognized tax benefits relate to transfer pricing matters.

The unrecognized tax benefits described above represent amounts that were included in tax returns filed by the Company. Historically, a portion of the Company's operations were included in tax returns filed by SPX Corporation (the “former Parent”) or its subsidiaries that were not part of our spin-off from the former Parent effected on September 26, 2015 (the “Spin-Off”). As a result, some uncertain tax positions related to the Company's operations resulted in unrecognized tax benefits that are now potential obligations of the former Parent or its subsidiaries that were part of the Spin-Off. In addition, some of the Company's tax returns included the operations of the former Parent's subsidiaries that were not part of the Spin-Off. In certain of these cases, these subsidiaries' activities gave rise to unrecognized tax benefits for which the Company could be potentially liable. When required under the Income Taxes Topic of the Codification, we have recorded a liability for these uncertain tax positions within our condensed consolidated balance sheets.

Other Tax Matters

During the three months ended September 28, 2019, we recorded an income tax provision of $2.5 on $20.0 of pre-tax income, resulting in an effective tax rate of 12.5%. This compares to an income tax provision for the three months ended September 29, 2018 of $9.6 on $35.6 of pre-tax income, resulting in an effective tax rate of 27.0%. The effective tax rate for the third quarter of 2019 was impacted by benefits of (i) $2.4 resulting from the cumulative impact of a reduction to GILTI amount included in our annual effective tax rate computation and (ii) $1.5 resulting from income occurring in the quarter in certain jurisdictions with year to date losses where the tax benefit of those losses is not expected to be realized, which were partially offset by a charge of $1.0 resulting from a change to the indefinite reinvestment assertion on the earnings of a certain subsidiary. The effective tax rate for the third quarter of 2018 was impacted by income tax benefits of (i) $1.1 resulting from the net impact of an election made related to the basis generated under the transition tax and the impact of that election on earnings not considered indefinitely reinvested and (ii) $1.0 resulting from a refinement of the transition tax calculation, which were partially offset by income tax charges of $1.4 resulting from the addition of a valuation allowance for a subsidiary for which the benefit of previously incurred losses is not expected to be realized.

SPX FLOW, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited; in millions, except per share data)

During the nine months ended September 28, 2019, we recorded an income tax provision of $24.7 on $68.9 of pre-tax income, resulting in an effective tax rate of 35.8%. This compares to an income tax provision for the nine months ended September 29, 2018 of $14.8 on $67.2 of pre-tax income, resulting in an effective tax rate of 22.0%. The effective tax rate for the first nine months of 2019 was impacted by charges of (i) $5.5 resulting from losses occurring in certain jurisdictions where the tax benefit of those losses is not expected to be realized, (ii) $5.1 resulting from the addition of a valuation allowance for certain subsidiaries for which the benefit of previously incurred losses is not expected to be realized and (iii) $1.0 resulting from a change to the indefinite reinvestment assertion on the earnings of a certain subsidiary, which were partially offset by benefits of (i) $2.0 resulting from an outside basis difference from continuing operations that will be realized through the disposition of held-for-sale assets, (ii) $1.7 resulting from adjustments related to the German tax returns filed by certain of the Company’s subsidiaries and (iii) $1.0 resulting from the impact of a tax incentive received by one of the Company’s Chinese subsidiaries related to its 2018 tax return. During the nine months ended September 29, 2018, our income tax provision was impacted by income tax benefits of (i) $8.6 resulting from additional foreign tax credits available to the Company arising from distributions of income taxed under the transition tax provisions of the Tax Act and (ii) $2.3 resulting from the finalization of the transfer pricing analysis on intercompany transactions to be reported on tax returns of the Company and its subsidiaries, which were partially offset by income tax charges of (i) $1.6 resulting from a refinement of the transition tax calculation, (ii) $1.3 resulting from losses occurring in certain jurisdictions where the tax benefit of those losses is not expected to be realized, and (iii) $1.4 resulting from the addition of a valuation allowance for a subsidiary for which the benefit of previously incurred losses is not expected to be realized.

During the fourth quarter of 2018, the U.S. Treasury issued additional guidance regarding a provision of the Tax Act which effectively eliminated the $8.6 benefit related to the foreign tax credits arising from distributions of income taxed under the transition tax provisions of the Tax Act and recorded in the nine months ended September 29, 2018 as described above. Refer to the notes to our consolidated financial statements in our 2018 Annual Report on Form 10-K for additional information regarding the Tax Act and its impact on our income tax provision.

We review our income tax positions on a continuous basis and record unrecognized tax benefits for potential uncertain positions when we determine that an uncertain position meets the criteria of the Income Taxes Topic of the Codification. As events change and resolutions occur, adjustments are made to amounts previously provided, such as in the case of audit settlements with taxing authorities.

In connection with the Spin-Off, we and the former Parent entered into a Tax Matters Agreement which, among other matters, addresses the allocation of certain tax adjustments that might arise upon examination of the 2013, 2014 and the pre-Spin-Off portion of the 2015 federal income tax returns of the former Parent. Of these returns, the 2014 and pre-Spin-Off portion of the 2015 federal income tax returns are currently under audit, and we believe any contingencies have been adequately provided for.

State income tax returns generally are subject to examination for a period of three to five years after filing the respective tax returns. The impact on such tax returns of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. We have a limited number of state income tax returns in the process of examination. We believe any uncertain tax positions related to these examinations have been appropriately reflected as unrecognized tax benefits.

We have various non-U.S. income tax returns under examination. The most significant of these is the examination in Germany for the 2010 through 2014 tax years. We expect this examination will conclude in 2019. We believe that any uncertain tax positions related to these examinations have been appropriately reflected as unrecognized tax benefits.

An unfavorable resolution of one or more of the above matters could have a material adverse effect on our results of operations or cash flows in the quarter and year in which an adjustment is recorded or the tax is due or paid. As audits and examinations are still in process or we have not yet reached the final stages of the appeals process, the timing of the ultimate resolution and any payments that may be required for the above matters cannot be determined at this time.

(14) FAIR VALUE

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information consistent with what market participants would use in a hypothetical transaction that occurs at the measurement

SPX FLOW, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited; in millions, except per share data)

date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Preference is given to observable inputs. These two types of inputs create the following fair value hierarchy:


•	Level 1 — Quoted prices for identical instruments in active markets.


•	Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.


•	Level 3 — Significant inputs to the valuation model are unobservable.

There were no changes during the periods presented to the valuation techniques we use to measure asset and liability fair values on a recurring basis. There were no transfers between the three levels of the fair value hierarchy during the periods presented.

The following section describes the valuation methodologies we use to measure different financial instruments at fair value on a recurring basis.

Derivative Financial Instruments

Our derivative financial assets and liabilities include FX forward contracts and FX embedded derivatives, valued using valuation models based on observable market inputs such as forward rates, interest rates, our own credit risk and the credit risk of our counterparties, which comprise investment-grade financial institutions. Based on these inputs, the derivative assets and liabilities are classified within Level 2 of the valuation hierarchy. We have not made any adjustments to the inputs obtained from the independent sources. Based on our continued ability to enter into forward contracts, we consider the markets for our fair value instruments active. We primarily use the income approach, which uses valuation techniques to convert future amounts to a single present amount.

As of September 28, 2019 and December 31, 2018, the gross fair values of our derivative financial assets and liabilities, in aggregate, were $0.2 and $0.7 (gross assets) and $0.1 and $0.2 (gross liabilities), respectively. As of September 28, 2019, there had been no significant impact to the fair value of our derivative liabilities due to our own credit risk as the related instruments are collateralized under our senior credit facilities. Similarly, there had been no significant impact to the fair value of our derivative assets based on our evaluation of our counterparties’ credit risks.

Equity Security Investment

In connection with an adoption of new accounting guidance, we adjusted an investment in an equity security from its historical cost to estimated fair value during the fourth quarter of 2018. Utilizing a practical expedient, the fair value of our equity security was based on our ownership percentage, applied to the net asset value derived from the investee's most currently issued, audited financial statements at that time. Our investment in the equity security is reflected at its net asset value in “other assets” in our condensed consolidated balance sheets as of September 28, 2019 and December 31, 2018 and the change in our investment, if any, based on the equity security’s most recently determined net asset value, is reflected in “Other income (expense), net” in our condensed consolidated statements of operations during the three and nine months ended September 28, 2019. We are restricted from transferring this investment without approval of the manager of the investee.

The table below represents a reconciliation of our investment in the equity security, measured at net asset value using a practical expedient to fair value guidance, for the nine months ended September 28, 2019, including the increase in net asset value recorded to “Other income (expense), net.” As noted above, this investment was recognized at its historical cost until the fourth quarter of 2018.



	Nine months ended
	September 28, 2019
Balance at beginning of year	$	16.6
Increase in net asset value recorded to earnings	7.8
Proceeds received from partial distribution of investee	(2.6		)
Balance at end of period	$	21.8

SPX FLOW, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited; in millions, except per share data)

Mezzanine Equity

To the extent the noncontrolling interests' put option price is correlated with the estimated fair value of the subsidiary, we use the market method to estimate the fair values of noncontrolling interest put options reported in “Mezzanine equity” using unobservable inputs (Level 3) on a recurring basis. Changes to the noncontrolling interest put option values are reflected as adjustments to “Mezzanine equity” and “Accumulated deficit.” Refer to Note 12 for further discussion.

Goodwill, Indefinite-Lived Intangible and Other Long-Lived Assets

Certain of our non-financial assets are subject to impairment analysis, including long-lived assets, indefinite-lived intangible assets and goodwill. We review the carrying amounts of such assets whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable or at least annually for indefinite-lived intangible assets and goodwill. Any resulting impairment would require that the asset be recorded at its fair value. During the three and nine months ended September 28, 2019, the Company recorded a pre-tax charge of $52.0 to reduce the carrying value of the net assets of its discontinued operations, including relevant foreign currency translation adjustment balances, to estimated fair value less costs to sell. As this impairment charge was determined not to be attributable to any individual components of the Company’s net assets, it has been reflected as a valuation allowance against the total assets of the discontinued operations as of September 28, 2019. The fair value of the Company’s discontinued operations included consideration of indications of fair value received from third parties in connection with the marketing of the business through the end of the third quarter and, as such, has been valued using unobservable inputs (Level 3). No other significant non-financial assets or liabilities were required to be measured at fair value on a recurring or non-recurring basis as of September 28, 2019. See Note 3 for further information regarding this impairment charge and related valuation allowance. Refer to Note 7 for further discussion pertaining to our annual evaluation of goodwill and other intangible assets for impairment.

Indebtedness and Other

The estimated fair values of other financial liabilities (excluding finance leases and deferred financing fees) not measured at fair value on a recurring basis as of September 28, 2019 and December 31, 2018 were as follows:



	September 28, 2019				December 31, 2018
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Term loan⁽¹⁾	$	100.0	$	100.0	$	—	$	—
Former term loan⁽¹⁾	—		—		140.0		140.0
5.625% Senior notes⁽¹⁾	300.0		310.5		300.0		283.5
5.875% Senior notes⁽¹⁾	300.0		313.5		300.0		279.4
Other indebtedness	25.6		25.6		25.9		25.9


(1)	Carrying amount reflected herein excludes related deferred financing fees.

The following methods and assumptions were used in estimating the fair value of these financial instruments:


•	The fair values of the senior notes were determined using Level 2 inputs within the fair value hierarchy and were based on quoted market prices for the same or similar instruments or on current rates offered to us for debt with similar maturities, subordination and credit default expectations.


•	The fair values of amounts outstanding under our term loans approximated carrying value due primarily to the variable-rate nature and credit spread of these instruments, when compared to other similar instruments.


•	The fair values of other indebtedness approximated carrying value due primarily to the short-term nature of these instruments.

The carrying amounts of cash and equivalents, receivables and contract assets reported in our condensed consolidated balance sheets as of September 28, 2019 and December 31, 2018 approximate fair value due to the short-term nature of those instruments.

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (in millions, unless otherwise noted)

FORWARD-LOOKING STATEMENTS

Some of the statements in this document and any documents incorporated by reference, including any statements as to operational and financial projections, constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our businesses’ or our industries’ actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by any forward-looking statements. Such statements may address our plans, our strategies, our prospects, or changes and trends in our business and the markets in which we operate under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) or in other sections of this document. In some cases, you can identify forward-looking statements by terminology such as “may,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “project,” “potential” or “continue” or the negative of those terms or similar expressions. Particular risks facing us include business, internal operations, legal and regulatory risks, costs of raw materials, pricing pressures and changes in the economy. These statements are only predictions. Actual events or results may differ materially because of market conditions in our industries or other factors, and forward-looking statements should not be relied upon as a prediction of actual results. In addition, management’s estimates of future operating results are based on our current complement of continuing operations, which is subject to change as management selects strategic markets.

All the forward-looking statements in this document are qualified in their entirety by reference to the factors discussed herein and under the heading “Risk Factors” in our 2018 Annual Report on Form 10-K and in any other documents subsequently filed by us under the Exchange Act that describe risks and factors that could cause results to differ materially from those projected in these forward-looking statements. We caution you that these risk factors may not be exhaustive. We operate in a continually changing business environment and frequently enter into new businesses and product lines. We cannot predict these new risk factors, and we cannot assess the impact, if any, of these new risk factors on our businesses or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those projected in any forward-looking statements. Accordingly, you should not rely on forward-looking statements as a prediction of actual results. We undertake no obligation to update or publicly revise any forward-looking statements to reflect events or circumstances that arise after the date of this document.

EXECUTIVE OVERVIEW

Discontinued Operations

On May 2, 2019, SPX FLOW, Inc. and its consolidated subsidiaries (“SPX FLOW,” “the Company,” “we,” “us,” or “our”) announced that its Board of Directors had initiated a process to divest a substantial portion of the Company’s former Power and Energy reportable segment. In connection with this initiative, the Company intends to narrow its strategic focus by separating its process solutions technologies, comprised of its Food and Beverage and its Industrial reportable segments, and including the Bran+Luebbe product line within its former Power and Energy segment, from its flow control application technologies, comprised of the substantial portion of its former Power and Energy reportable segment. Given the specific capabilities that are unique to each category of technologies and businesses, the further intent of the Company is that each business will, through a process of divestiture and separation, be positioned to further maximize its respective service to customers through the narrowing of such strategic focus.

Accordingly, beginning in the second quarter of 2019, we have classified the results of these operations as discontinued operations and reclassified certain prior year amounts, including the results of discontinued operations, to conform to our current year presentation in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below and the accompanying condensed consolidated financial statements.

Prior to the second quarter of 2019, we aggregated our operating segments into three reportable segments; however, in connection with the planned disposition of the substantial portion of the former Power and Energy reportable segment and its classification as a discontinued operation, we are no longer reporting the remaining business of Power and Energy as a separate reportable segment, as the operating results of that business have not been, and are not expected to be, material to our consolidated

financial results. The results of that remaining business have been reclassified into the Industrial reportable segment in all periods presented.

Unless otherwise indicated, amounts provided in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below pertain to continuing operations.

Our Business

SPX FLOW operates in two business segments: the Food and Beverage segment and the Industrial segment. Based in Charlotte, North Carolina, SPX FLOW innovates with customers to help feed and enhance the world by designing, delivering and servicing high value process solutions at the heart of growing and sustaining our diverse communities. The Company's product offering is concentrated in process technologies that perform mixing, blending, fluid handling, separation, thermal heat transfer and other activities that are integral to processes performed across a wide variety of sanitary and industrial markets. In 2018, SPX FLOW had approximately $1.6 billion in annual revenues with operations in more than 30 countries and sales in more than 140 countries, with approximately 38%, 34% and 28% from sales into the Americas, EMEA and Asia Pacific regions, respectively.

Our product portfolio of pumps, valves, mixers, filters, air dryers, hydraulic tools, homogenizers, separators and heat exchangers, along with the related aftermarket parts and services, supports global industries, including food and beverage, chemical processing, compressed air and mining. From an end market perspective, in 2018, approximately 47% of our revenues were from sales into the food and beverage end markets and approximately 53% were from sales into the industrial end markets. Our core strengths include expertise in rotating, actuating and hydraulic equipment, a highly skilled workforce, global capabilities, product breadth, and a deep application knowledge that enables us to optimize configuration and create custom-engineered solutions for diverse processes.

The following summary describes the products and services offered by our reportable segments:

Food and Beverage: The Food and Beverage reportable segment operates in a regulated, global industry with customers who demand highly engineered, process solutions. Key demand drivers include dairy consumption, emerging market capacity expansion, sustainability and productivity initiatives, customer product innovation and food safety. Key products for the segment include homogenizers, pumps, valves, separators and heat exchangers. We also design and assemble process systems that integrate many of these products for our customers. Key brands include APV, Gerstenberg Schroeder, Seital and Waukesha Cherry-Burrell. The segment's primary competitors are Alfa Laval AB, Fristam Pumps, GEA Group AG, Krones AG, Südmo, Tetra Pak International S.A. and various regional companies.

Industrial: The Industrial reportable segment primarily serves customers in the chemical, air treatment, mining, pharmaceutical, marine, shipbuilding, infrastructure construction, general industrial and water treatment industries. Key demand drivers of this segment are tied to macroeconomic conditions and growth in the respective end markets we serve. Key products for the segment are air dryers, filtration equipment, mixers, pumps, hydraulic technologies and heat exchangers. Key brands include Airpel, APV, Bolting Systems, Bran+Luebbe, Deltech, Hankison, Jemaco, Johnson Pump, LIGHTNIN, Power Team and Stone. The segment's primary competitors are Actuant, Alfa Laval AB, Chemineer Inc., EKATO, Enerpac, IDEX Viking Pump, KSB AG, Lewa, Milton Roy, Parker Domnick Hunter, Prominent and various regional companies.

Summary of Operating Results

Non-GAAP Measures - Throughout the following segment discussion, we use organic revenue growth (decline) to facilitate explanation of the operating performance of our segments. Organic revenue growth (decline) is a non-GAAP financial measure, and is not a substitute for net revenue growth (decline). Refer to the explanation of this measure and purpose of use by management under “Results of Continuing Operations-Non-GAAP Measures.”

The financial information discussed below and included in this Quarterly Report on Form 10-Q may not necessarily reflect what our financial condition, results of operations and cash flows may be in the future.

The following summary is intended to provide a few highlights of the discussion and analysis that follows (all comparisons are to the related period in the prior year):

Revenues — For the three months ended September 28, 2019, revenues decreased $23.2 (5.7%). The decrease in revenues was due to a decrease in organic revenue and a strengthening of the U.S. dollar during the period against various foreign

currencies. The decrease in organic revenue was due primarily to a decline in revenue from large dry-dairy systems projects in the Food and Beverage segment, consistent with the Company's strategy to methodically reduce its exposure to that market. Partially offsetting this decline was organic growth of OE components across various Industrial product lines as well as of aftermarket sales.

For the nine months ended September 28, 2019, revenues decreased $39.8 (3.4%). The decrease in revenue was due to a strengthening of the U.S. dollar during the period against various foreign currencies. The decrease in organic revenue discussed above was offset by an increase in systems revenue in the Food and Beverage segment during the first quarter and growth in mixers, hydraulic tools and heat exchangers in the Industrial segment.

Income from Continuing Operations before Income Taxes — Income from continuing operations before income taxes decreased $15.6 (43.8%) in the three months ended September 28, 2019. The decrease in pre-tax income was due primarily to (i) asset impairment charges of $10.8 that resulted from management’s decision to market a corporate asset for sale and (ii) an increase in corporate expense, primarily related to professional fees to further develop the Company's enterprise strategy, partially offset by a decrease in interest expense.

Income from continuing operations before income taxes increased $1.7 (2.5%) in the nine months ended September 28, 2019. The modest improvement in pre-tax income was primarily driven by (i) an increase in other income related to an increase in the fair value of an investment in an equity security during the 2019 period, (ii) an increase in income from our reportable segments and (iii) a decrease in interest expense, which were partially offset by (i) asset impairment charges of $10.8 that resulted from management’s decision to market a corporate asset for sale, (ii) an increase in restructuring and other related charges and (iii) an increase in corporate expense, primarily related to professional fees to further develop the Company's enterprise strategy.

Cash Flows from (used in) Continuing Operations — For the nine months ended September 28, 2019, cash flows from (used in) continuing operations increased to $53.1 from $(11.6) primarily as a result of (i) a reduced investment in inventories, reflective of lower order intake in the 2019 period, compared to the respective 2018 period, and lower backlog levels as of September 28, 2019, compared to September 29, 2018 and (ii) reduced payments for incentive compensation.

RESULTS OF CONTINUING OPERATIONS

The unaudited information included in this Quarterly Report on Form 10-Q should be read in conjunction with our annual consolidated financial statements included in our 2018 Annual Report on Form 10-K. Interim results are not necessarily indicative of results for a full year. 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 2019 are March 30, June 29, and September 28, compared to the respective March 31, June 30, and September 29, 2018 dates. We had one less day in the first quarter of 2019 and will have one more day in the fourth quarter of 2019 than in the respective 2018 periods.

Cyclicality of End Markets, Seasonality and Competition - The financial results of many of our businesses closely follow changes in the industries and end markets they serve.

In our Food and Beverage reportable segment, system revenues are highly correlated to timing on capital projects, which may cause significant fluctuations in our financial performance from period to period. Fluctuations in dairy commodity prices and production of dairy related products, particularly those aimed at serving the China market, can influence the timing of capital spending by many end customers in our Food and Beverage reportable segment.

Although our businesses operate in highly competitive markets, our competitive position cannot be determined accurately in the aggregate or by segment since our competitors do not offer all the same product lines or serve all the same markets. In addition, specific reliable comparative figures are not available for many of our competitors. In most product groups, competition comes from numerous concerns, both large and small. The principal methods of competition are service, product performance, technical innovation and price. These methods vary with the type of product sold. We believe we compete effectively on the basis of each of these factors. See “Executive Overview - Our Business” for a discussion of our competitors.

Non-GAAP Measures - Organic revenue growth (decline) presented herein is defined as revenue growth (decline) excluding the effects of foreign currency fluctuations. We believe this metric is a useful financial measure for investors in

evaluating our operating performance for the periods presented as, when read in conjunction with our revenues, it presents a tool to evaluate our ongoing operations and provides investors with a metric they can use to evaluate our management of assets held from period to period. In addition, organic revenue growth (decline) is one of the factors we use in internal evaluations of the overall performance of our business. This metric, however, is not a measure of financial performance under accounting principles generally accepted in the United States (“GAAP”), should not be considered a substitute for net revenue growth (decline) as determined in accordance with GAAP and may not be comparable to similarly titled measures reported by other companies.

The following table provides selected financial information for the three and nine months ended September 28, 2019 and September 29, 2018, respectively, including the reconciliation of organic revenue growth (decline) to net revenue decline:



	Three months ended								Nine months ended
	September 28, 2019			September 29, 2018			% Change		September 28, 2019			September 29, 2018			% Change
Revenues	$	383.5		$	406.7		(5.7	)	$	1,142.3		$	1,182.1		(3.4	)
Gross profit	134.6			131.8			2.1		388.6			386.0			0.7
% of revenues	35.1		%	32.4		%			34.0		%	32.7		%
Selling, general and administrative	94.3			83.3			13.2		278.0			276.1			0.7
% of revenues	24.6		%	20.5		%			24.3		%	23.4		%
Intangible amortization	2.9			3.3			(12.1	)	8.6			10.0			(14.0	)
Asset impairment charges	10.8			—			*		10.8			—			*
Restructuring and other related charges	0.2			0.2			—		7.1			2.9			144.8
Other income (expense), net	0.1			(1.2		)	*		7.3			(3.3		)	*
Interest expense, net	(6.5		)	(8.2		)	(20.7	)	(22.5		)	(26.5		)	(15.1	)
Income from continuing operations before income taxes	20.0			35.6			(43.8	)	68.9			67.2			2.5
Income tax provision	(2.5		)	(9.6		)	(74.0	)	(24.7		)	(14.8		)	66.9
Income from continuing operations	17.5			26.0			(32.7	)	44.2			52.4			(15.6	)
Income (loss) from discontinued operations, net of tax	(48.1		)	6.5			*		7.5			18.8			*
Net income (loss)	(30.6		)	32.5			*		51.7			71.2			(27.4	)
Less: Net income (loss) attributable to noncontrolling interests	1.0			(0.2		)	*		1.2			0.1			*
Net income (loss) attributable to SPX FLOW, Inc.	(31.6		)	32.7			*		50.5			71.1			(29.0	)

Components of consolidated revenue decline:
Organic growth (decline)							(2.9	)							—
Foreign currency							(2.8	)							(3.4	)
Net revenue decline							(5.7	)							(3.4	)
*Not meaningful for comparison purposes

Revenues - For the three months ended September 28, 2019, the decrease in revenues, compared to the respective 2018 period, was due to a decrease in organic revenue and a strengthening of the U.S. dollar during the period against various foreign currencies. The decrease in organic revenue was due primarily to a decline in revenue from large dry-dairy systems projects in the Food and Beverage segment, consistent with the Company's strategy to methodically reduce its exposure to that market. Partially offsetting this decline was organic growth of OE components across various Industrial product lines as well as of aftermarket sales.

For the nine months ended September 28, 2019, the decrease in revenues, compared to the respective 2018 period, was due to a strengthening of the U.S. dollar during the period against various foreign currencies. The decrease in organic revenue discussed above was offset by an increase in systems revenue in the Food and Beverage segment during the first quarter and growth in mixers, hydraulic tools and heat exchangers in the Industrial segment.

See “Results of Reportable Segments” for additional details.

Gross Profit - The increase in gross profit and margin for the three months ended September 28, 2019, compared to the respective 2018 period, was due primarily to a favorable change in the mix of revenue as well as net benefits realized from price improvements/sourcing savings and improved operational execution, partially offset by a strengthening of the U.S. dollar during the periods against various foreign currencies.

The increase in gross profit and margin for the nine months ended September 28, 2019, compared to the respective 2018 period, reflected the effects of the items noted above, as well as costs associated with the repair of a large mixer incurred in our Industrial segment in the 2018 period that did not recur in the current period.

See “Results of Reportable Segments” for additional details.

Selling, General and Administrative (“SG&A”) Expense - For the three months ended September 28, 2019, the increase in SG&A expense, compared to the respective 2018 period, was due primarily to (i) an increase in incentive compensation, based on the Company's performance relative to certain incentive targets in 2019, as compared to 2018's performance relative to that year's targets and (ii) an increase in professional fees related to the further development of the Company's enterprise strategy, partially offset by (i) savings from cost reduction actions within the Food and Beverage segment and (ii) the effects of a strengthening of the U.S. dollar during the period against various currencies.

For the nine months ended September 28, 2019, the increase in SG&A expense, compared to the respective 2018 period, was due primarily to the effects of the matters noted above, partially offset by a decrease in stock compensation expense for the nine-month period.

Intangible Amortization - For the three and nine months ended September 28, 2019, the decrease in intangible amortization, compared to the respective periods in 2018, was due to (i) a reduction in intangible assets subject to amortization that resulted from the impairment of certain such assets of our Food and Beverage reportable segment during the fourth quarter of 2018 and (ii) a strengthening of the U.S. dollar during the periods against various foreign currencies.

Asset Impairment Charges - Charges for the three and nine months ended September 28, 2019 resulted from management’s decision to market a corporate asset for sale. The asset, which had an estimated fair value of $4.0 at September 28, 2019, was marketed for sale beginning in the third quarter of 2019.

Restructuring and Other Related Charges - Charges for the nine months ended September 28, 2019 related primarily to severance and other costs associated with (i) additional charges associated with the further rationalization, initiated during the fourth quarter of 2018, of a Food and Beverage business based primarily in the EMEA region, (ii) the closure of a Food and Beverage facility in South America, (iii) certain Industrial segment operations personnel in the EMEA region, and (iv) the closure of an Industrial segment sales office and service center in North America.

Charges for the nine months ended September 29, 2018 related primarily to severance and other costs associated with (i) Industrial segment operations and commercial personnel in North America and the Asia Pacific region, (ii) a reorganization of the Food and Beverage segment’s commercial aftermarket function in the EMEA region, (iii) a further consolidation of our Food and Beverage facilities in Poland, including the termination and other exit costs associated with a leased facility, partially offset by revisions of estimates related to certain previously announced restructuring activities in our Industrial segment.

See Note 5 to our condensed consolidated financial statements for further details of actions taken during the three and nine months ended September 28, 2019 and September 29, 2018.

Other Income (Expense), net - Other income, net, for the three months ended September 28, 2019 was composed of net gains on asset sales and other of $0.2 and foreign currency (“FX”) gains of $0.1, partially offset by non-service-related pension and postretirement costs of $0.2.

Other expense, net, for the three months ended September 29, 2018 was composed of FX losses of $0.9 and non-service-related pension and postretirement costs of $0.3.

Other income, net, for the nine months ended September 28, 2019 was composed of investment-related gains of $7.8 and net gains on asset sales and other of $0.4, partially offset by non-service-related pension and postretirement costs of $0.8 and FX losses of $0.1. The investment-related gains related to an increase in the net asset value of our investment in an equity security. See Note 14 to our condensed consolidated financial statements for additional details.

Other expense, net, for the nine months ended September 29, 2018 was composed of FX losses of $1.7, non-service-related pension and postretirement costs of $1.5 and net losses on asset sales and other of $0.1.

Interest Expense, net - Interest expense, net, for the three and nine months ended September 28, 2019 and September 29, 2018, was composed primarily of interest expense related to our senior notes and senior credit facilities and, to a lesser extent, interest expense related to our former trade receivables financing arrangement, finance lease obligations and miscellaneous lines of credit, partially offset by interest income on cash and cash equivalents.

Interest expense, net, included interest expense of $8.7 and $10.0, and interest income of $2.2 and $1.8, respectively, during the three months ended September 28, 2019 and September 29, 2018 and interest expense of $28.5 and $31.2, and interest income of $6.0 and $4.7, respectively, during the nine months ended September 28, 2019 and September 29, 2018. The decrease in interest expense, net, during the three and nine months ended September 28, 2019, compared to the respective 2018 periods, was due primarily to a lower level of average outstanding borrowings under our term loan facilities, partially offset by a $1.0 charge related to the write-off of deferred financing fees resulting from the extinguishment of the term loan and other facilities of our former senior credit facility during the nine months ended September 28, 2019, related to the amendment and restatement of our senior credit facilities in June 2019. The reduction in our term loan borrowings was due primarily to voluntary principal repayments of $20.0 and $60.0, respectively, during the second and fourth quarters of 2018.

See Note 9 to our condensed consolidated financial statements for additional details on our third-party debt, including further discussion of the amendment and restatement of our senior credit facilities during the second quarter of 2019 and Note 3 for additional details regarding our allocation of certain interest expense to discontinued operations.

Income Tax Provision - During the three months ended September 28, 2019, we recorded an income tax provision of $2.5 on $20.0 of pre-tax income, resulting in an effective tax rate of 12.5%. This compares to an income tax provision for the three months ended September 29, 2018 of $9.6 on $35.6 of pre-tax income, resulting in an effective tax rate of 27.0%. The effective tax rate for the third quarter of 2019 was impacted by benefits of (i) $2.4 resulting from the cumulative impact of a reduction to GILTI amount included in our annual effective tax rate computation and (ii) $1.5 resulting from income occurring in the quarter in certain jurisdictions with year to date losses where the tax benefit of those losses is not expected to be realized, which were partially offset by a charge of $1.0 resulting from a change to the indefinite reinvestment assertion on the earnings of a certain subsidiary. The effective tax rate for the third quarter of 2018 was impacted by income tax benefits of (i) $1.1 resulting from the net impact of an election made related to the basis generated under the transition tax and the impact of that election on earnings not considered indefinitely reinvested and (ii) $1.0 resulting from a refinement of the transition tax calculation, which were partially offset by income tax charges of $1.4 resulting from the addition of a valuation allowance for a subsidiary for which the benefit of previously incurred losses is not expected to be realized.

to the notes to our consolidated financial statements in our 2018 Annual Report on Form 10-K for additional information regarding the Tax Act and its impact on our income tax provision.

Our future effective tax rate may vary, particularly during the first quarter of each year, based on tax charges or benefits that could result from potential future vestings of restricted stock shares and restricted stock units.

Income (Loss) from Discontinued Operations, Net of Tax - See “Results of Discontinued Operations” for additional details.

RESULTS OF REPORTABLE SEGMENTS

The following information should be read in conjunction with our condensed consolidated financial statements and related notes.

Food and Beverage



	As of and for the three months ended								As of and for the nine months ended
	September 28, 2019			September 29, 2018			% Change		September 28, 2019			September 29, 2018			% Change
Backlog	$	248.1		$	343.3		(27.7	)	$	248.1		$	343.3		(27.7	)
Orders	160.2			157.9			1.5		467.1			528.4			(11.6	)

Revenues	178.9			194.8			(8.2	)	530.0			548.9			(3.4	)
Income	27.1			27.4			(1.1	)	59.6			65.3			(8.7	)
% of revenues	15.1		%	14.1		%			11.2		%	11.9		%
Components of revenue decline:
Organic decline							(5.4	)							(0.1	)
Foreign currency							(2.8	)							(3.3	)
Net revenue decline							(8.2	)							(3.4	)

Revenues - For the three months ended September 28, 2019, the decrease in revenues, compared to the respective 2018 period, was due to a decrease in organic revenue and, to a lesser extent, a strengthening of the U.S. dollar during the period against various foreign currencies. The decrease in organic revenue was due primarily to a lower level of revenue from large dry-dairy systems, consistent with the company’s strategy to reduce its exposure to this market. Partially offsetting the dry-dairy systems decline was organic growth in process component shipments and aftermarket sales.

For the nine months ended September 28, 2019, the decrease in revenues, compared to the respective 2018 period, was primarily due to a strengthening of the U.S. dollar during the period against various foreign currencies and a modest decrease in organic revenue. The modest decrease in organic revenue was due primarily to a lower level of revenue from large dry-dairy systems mentioned above, substantially offset by organic growth in process component shipments and aftermarket sales and the execution of large dry-dairy systems projects, recorded as orders in 2017, during the first quarter of 2019.

Income - For the three months ended September 28, 2019, income modestly declined and margin increased, compared to the respective 2018 period. The modest decrease in income was primarily due to the organic revenue decline and an increase in incentive compensation expense, which were partially offset by a more favorable mix of revenue and savings from cost reduction initiatives. The increase in margin reflects a higher margin mix of revenue including the reduction of large dry-dairy systems revenue.

For the nine months ended September 28, 2019, income and margin declined, compared to the respective 2018 period, primarily due to the effects of the mix of the organic revenue growth described above (execution of large dry-dairy systems), an increase in incentive compensation expense, and charges recognized in the second quarter of 2019 associated with (i) certain large dry-dairy projects and, to a lesser extent, (ii) the rationalization of the segment's geographical presence in South America and related closure of a facility in that region.

Backlog - The segment had backlog of $248.1 and $343.3 as of September 28, 2019 and September 29, 2018, respectively. Of the $95.2 year-over-year decrease in backlog, $79.8 was attributable to organic decline and $15.4 was attributable

to the impact of fluctuations in foreign currencies relative to the U.S. dollar. The organic decline was due largely to the execution of systems projects in backlog combined with a lower level of systems orders, consistent with the Company's strategy to methodically reduce its exposure in large, dry-dairy applications and focus on growth in orders of higher-value, liquid-processing applications. To a lesser extent, the backlog for components also declined.

Industrial



	As of and for the three months ended								As of and for the nine months ended
	September 28, 2019			September 29, 2018			% Change		September 28, 2019			September 29, 2018			% Change
Backlog	$	232.9		$	276.8		(15.9	)	$	232.9		$	276.8		(15.9	)
Orders	189.9			217.9			(12.8	)	596.3			656.1			(9.1	)

Revenues	204.6			211.9			(3.4	)	612.3			633.2			(3.3	)
Income	28.7			29.5			(2.7	)	87.9			77.0			14.2
% of revenues	14.0		%	13.9		%			14.4		%	12.2		%
Components of revenue decline:
Organic growth (decline)							(0.6	)							—
Foreign currency							(2.8	)							(3.3	)
Net revenue decline							(3.4	)							(3.3	)

Revenues - For the three months ended September 28, 2019, the decrease in revenues, compared to the respective 2018 period, was due to a strengthening of the U.S. dollar during the period against various foreign currencies and, to a lesser extent, a decrease in organic revenue. The decrease in organic revenue was due primarily to a lower level of capital project revenue and a decline in shipments of pumps. These declines were partially offset by organic growth in mixers.

For the nine months ended September 28, 2019, the decrease in revenues, compared to the respective 2018 period, was due to a strengthening of the U.S. dollar during the period against various foreign currencies. The decrease in organic revenue discussed above was offset by increased shipments of mixers, hydraulic tools, heat exchangers and dehydration equipment.

Income - For the three months ended September 28, 2019, income decreased and margin increased compared to the respective 2018 period, due primarily to an increase in incentive compensation expense and the organic decline in revenue, which were partially offset by a more favorable revenue mix and net benefits from cost/price realization.

For the nine months ended September 28, 2019, income and margin increased compared to the respective 2018 period, primarily due to income from (i) the mix of revenue change noted above, (ii) improved operational execution and (iii) costs associated with the repair of a large mixer incurred in the 2018 period that did not recur in the current-year period, partially offset by an increase in incentive compensation expense.

Backlog - The segment had backlog of $232.9 and $276.8 as of September 28, 2019 and September 29, 2018, respectively. Of the $43.9 year-over-year decrease in backlog, $35.6 was attributable to organic decline and $8.3 was attributable to the impact of fluctuations in foreign currencies relative to the U.S. dollar. The organic decline was due primarily to a lower level of small-to-medium sized capital orders over the past year and softness in short cycle industrial demand through the first three quarters of 2019.

CORPORATE EXPENSE AND PENSION AND POSTRETIREMENT SERVICE COSTS



	Three months ended								Nine months ended
	September 28, 2019			September 29, 2018			% Change		September 28, 2019			September 29, 2018			% Change
Total consolidated revenues	$	383.5		$	406.7		(5.7	)	$	1,142.3		$	1,182.1		(3.4	)
Corporate expense	18.1			11.4			58.8		44.8			41.5			8.0
% of revenues	4.7		%	2.8		%			3.9		%	3.5		%
Pension and postretirement service costs	0.3			0.3			—		0.7			0.9			(22.2	)

Corporate Expense - Corporate expense generally relates to the cost of our Charlotte, North Carolina corporate headquarters and our Asia Pacific center in Shanghai, China. Corporate expense also reflects stock-based compensation costs associated with corporate employees.

The increase in corporate expense for the three months ended September 28, 2019, compared to the respective 2018 period, was due primarily to an increase in professional fees associated with the further development of the Company's enterprise strategy, as well as an increase in incentive compensation, based on the Company's performance relative to certain incentive targets in 2019, as compared to 2018's performance relative to that year's targets.

The increase in corporate expense for the nine months ended September 28, 2019, compared to the respective 2018 period, was due primarily to the changes noted above, partially offset by a decrease in the number of executive employees whose stock-based compensation awards became fully vested and were fully recognized as compensation expense based on early retirement provisions during the first quarter of 2019 compared to the first quarter of 2018.

See Note 11 to our condensed consolidated financial statements for further details regarding our stock-based compensation awards.

Pension and Postretirement Service Costs - SPX FLOW sponsors a number of defined benefit pension plans and a postretirement plan. For all of these plans, changes in the fair value of plan assets and actuarial gains and losses are recognized to earnings in the fourth quarter of each year as a component of net periodic benefit expense, unless earlier remeasurement is required. The remaining components of pension and postretirement expense, primarily service and interest costs and expected return on plan assets, are recorded on a quarterly basis. Non-service-related pension and postretirement costs are reported in “Other income (expense), net.”

See Note 8 to our condensed consolidated financial statements for further details regarding our pension and postretirement plans.

RESULTS OF DISCONTINUED OPERATIONS

Income from discontinued operations for the three and nine months ended September 28, 2019 and September 29, 2018 was as follows:



	As of and for the three months ended								As of and for the nine months ended
	September 28, 2019			September 29, 2018			% Change		September 28, 2019			September 29, 2018			% Change
Backlog	$	389.0		$	395.7		(1.7	)	$	389.0		$	395.7		(1.7	)
Orders	136.4			124.2			9.8		381.5			399.8			(4.6	)

Revenues	115.6			123.6			(6.5	)	361.1			369.7			(2.3	)
Operating income (loss)	(54.6		)	10.8			*		(29.0		)	40.5			*
% of revenues	(47.2		)%	8.7		%			(8.0		)%	11.0		%
Other expense, net	(0.3		)	(1.6		)	(81.3	)	(1.7		)	(4.9		)	(65.3	)
Interest expense, net	(2.8		)	(3.1		)	(9.7	)	(9.2		)	(9.7		)	(5.2	)
Income tax benefit (provision)	9.6			0.4			*		47.4			(7.1		)	*
Income (loss) from discontinued operations, net of tax	(48.1		)	6.5			*		7.5			18.8			(60.1	)
Components of revenue decline:
Organic growth (decline)							(3.6	)							—
Foreign currency							(2.9	)							(2.3	)
Revenue decline							(6.5	)							(2.3	)
*Not meaningful for comparison purposes

Revenues - For the three months ended September 28, 2019, the decrease in revenues, compared to the respective 2018 period, was driven by a decrease in organic revenue and a strengthening of the U.S. dollar during the period against various foreign currencies. The decrease in organic revenue was primarily driven by a decrease in OE and aftermarket revenue for pumps and partially offset by increased shipments of OE valves in the North American midstream oil market.

For the nine months ended September 28, 2019, the decrease in revenues, compared to the respective 2018 period, was due to a strengthening of the U.S. dollar during the period against various foreign currencies during the period. Organic revenue was substantially unchanged compared to the prior year period as declines in pumps shipments were offset by increased shipment of valves.

Operating Income (Loss) - For the three and nine months ended September 28, 2019, both income and margin declined, compared to the respective 2018 periods, primarily due the impact of a pre-tax impairment charge of $52.0 to reduce the carrying value of the net assets of the discontinued operations, including relevant foreign currency translation adjustment balances, to estimated fair value less costs to sell. The pre-tax impairment charge was recorded in the three and nine months ended September 28, 2019 based on developments associated with the marketing and sale process that arose during the Company’s third quarter, and indications of fair value received through the conclusion of the third quarter. Future changes in the operations of the business, global market and economic conditions, and the marketing and sale process itself, among other items, could result in a significant change in our assessment of the fair value of the business and in a future impairment charge if a reduction in fair value of the business were to be determined to occur in a future period. See Note 3 to our condensed consolidated financial statements for further information regarding this impairment charge.

In addition, income and margin declined, compared to the respective 2018 periods, due to a $17.0 charge related to the settlement of a customer claim (see Notes 3 and 12 to our condensed consolidated financial statements for further information regarding this settlement and the customer’s demand) and, to a lesser extent, the mix of organic revenue noted in the respective periods above.

Other expense, net - Other expense consisted primarily of FX losses in each period presented. Of the $0.3 and $1.6 of other expense, net, recognized during the three months ended September 28, 2019 and September 29, 2018, $0.3 and $1.2 related to the effect of the devaluation of the Angolan Kwanza against the U.S. dollar during each period, respectively, and the impact of that devaluation on certain Kwanza-denominated cash and cash equivalents held by the Company. Of the $1.7 and $4.9 of other expense, net, recognized during the nine months ended September 28, 2019 and September 29, 2018, $0.8 and $5.3 related to the effect of the devaluation of the Angolan Kwanza against the U.S. dollar during each period, respectively.

Interest expense, net - In addition to any business-specific interest expense and income, the interest expense, net, of discontinued operations reflects an allocation of interest expense, including the amortization of deferred financing fees, related to the Company’s senior notes, senior credit facilities and former trade receivables financing arrangement. Interest expense related to such debt instruments and allocated to discontinued operations was $2.8 and $3.2 for the three months ended September 28, 2019 and September 29, 2018, respectively, and $9.2 and $10.0 for the nine months then ended, respectively. See Note 3 to the accompanying condensed consolidated financial statements for further information about the allocation of such interest expense to discontinued operations.

Income tax benefit (provision) - During the three months ended September 28, 2019, we recorded an income tax benefit of $9.6 on $(57.7) of pre-tax loss from discontinued operations, resulting in an effective tax rate of 16.6%. This compares to an income tax benefit for the three months ended September 29, 2018 of $0.4 on $6.1 of pre-tax income from discontinued operations, resulting in an effective tax rate of (6.6)%. The effective tax rate for the third quarter of 2019 was impacted by the effect that the majority of the impairment charge will not result in a tax benefit such that only $2.0 of tax benefit was recognized on the impairment charge, as well as by a benefit of $7.5 resulting from basis differences that will be realized through the disposition of the held-for-sale assets. The effective tax rate for the third quarter of 2018 was impacted by a benefit of $0.7 from the cumulative impact of the lower annual effective tax rate for the third quarter compared to prior quarters driven by a higher impact of U.S. permanent adjustments on a lower forecasted pre-tax income.

charge. The effective tax rate for the first nine months of 2018 was impacted by an expense of $1.1 resulting from an adjustment to the valuation allowance on certain deferred tax assets for which no benefit is expected to be recognized.

Backlog - The segment had backlog of $389.0 and $395.7 as of September 28, 2019 and September 29, 2018, respectively. Of the $6.7 year-over-year decrease in backlog, $15.1 was attributable to the impact of fluctuations in foreign currencies relative to the U.S. dollar, partially offset by $8.4 attributable to organic growth. The organic growth was due primarily to an increase in backlog for OE projects and pumps.

LIQUIDITY AND FINANCIAL CONDITION

Listed below are the cash flows from (used in) operating, investing and financing activities, as well as the net change in cash, cash equivalents and restricted cash, for the nine months ended September 28, 2019 and September 29, 2018.

Cash Flow



	Nine months ended
	September 28, 2019			September 29, 2018
Cash flows from (used in) continuing operations:
Cash flows from (used in) operating activities	$	53.1		$	(11.6	)
Cash flows used in investing activities	(16.4		)	(12.3		)
Cash flows used in financing activities	(50.1		)	(65.8		)
Cash flows from discontinued operations	41.1			54.1
Change in cash, cash equivalents and restricted cash due to changes in foreign currency exchange rates	(2.6		)	(6.6		)
Net change in cash, cash equivalents and restricted cash	$	25.1		$	(42.2	)

Operating Activities - During the nine months ended September 28, 2019, the increase in cash flows from operating activities, compared to the same period in 2018, was primarily attributable to (i) a reduced investment in inventories, reflective of lower order intake in the 2019 period, compared to the respective 2018 period, and lower backlog levels as of September 28, 2019, compared to September 29, 2018 and (ii) reduced payments for incentive compensation.

Investing Activities - During the nine months ended September 28, 2019 and September 29, 2018, cash flows used in investing activities were comprised primarily of capital expenditures associated generally with the upgrades of manufacturing facilities and information technology.

Financing Activities - During the nine months ended September 28, 2019, cash flows used in financing activities related primarily to (i) net repayments under our former senior credit facilities of $140.0, including the extinguishment of those former facilities in June 2019, (ii) payments of minimum withholdings on behalf of employees in connection with net share settlements of $5.4 and (iii) financing fees paid in connection with entering into our amended and restated senior credit facilities of $3.3, partially offset by net borrowings under our amended and restated senior credit facilities of $100.0. During the nine months ended September 29, 2018, cash flows used in financing activities related primarily to net repayments of our former senior credit facilities of $65.0, including voluntary prepayments in the amount of $50.0 under our former term loan facility.

Discontinued Operations - During the nine months ended September 28, 2019, the decrease in cash flows from discontinued operations, compared to the same period in 2018, was primarily attributable to a decrease in cash flows from operating activities of $13.6, due primarily to changes in working capital driven by the timing of project execution and associated milestone payments.

Change in Cash, Cash Equivalents and Restricted Cash due to Changes in Foreign Currency Exchange Rates - The decrease in cash, cash equivalents and restricted cash due to foreign currency exchange rates of $2.6 in the nine months ended September 28, 2019, reflected primarily a decrease in U.S. dollar equivalent balances of foreign-denominated cash, cash equivalents and restricted cash as a result of changes in the U.S. dollar against various foreign currencies during the period.

The decrease in cash, cash equivalents and restricted cash due to foreign currency exchange rates of $6.6 in the nine months ended September 29, 2018, reflected primarily a decrease in U.S. dollar equivalent balances of foreign-denominated

cash, cash equivalents and restricted cash as a result of the strengthening of the U.S. dollar against the Angolan Kwanza and, to a lesser extent, the modest strengthening of the U.S. dollar against certain other foreign currencies during the period.

Borrowings and Availability

Borrowings —Debt at September 28, 2019 and December 31, 2018 was comprised of the following:



	September 28, 2019			December 31, 2018
Term loan, due in June 2022	$	100.0		$	—
Former term loan⁽¹⁾	—			140.0
5.625% senior notes, due in August 2024	300.0			300.0
5.875% senior notes, due in August 2026	300.0			300.0
Other indebtedness⁽²⁾	26.2			33.1
Less: deferred financing fees⁽³⁾	(7.2		)	(8.0		)
Total debt	719.0			765.1
Less: short-term debt	25.6			26.0
Less: current maturities of long-term debt	0.1			20.8
Total long-term debt	$	693.3		$	718.3


(1)	This formerly outstanding term loan was fully repaid during the second quarter of 2019, as described further below under “Senior Credit Facilities.”

(2)

Primarily includes finance lease obligations (previously “capital lease obligations” in 2018 under prior accounting guidance) of $0.6 and $7.2 and balances under a purchase card program of $24.7 and $23.0 as of September 28, 2019 and December 31, 2018, respectively. The purchase card program allows for payment beyond customary 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. See Note 2 to our condensed consolidated financial statements for further discussion regarding our adoption of a new lease accounting standard during the three months ended September 28, 2019 and the impact of such adoption on our capital lease obligations.

(3)

Senior Credit Facilities


•	A term loan facility in an aggregate initial principal amount of $100.0, with a final maturity of June 27, 2022;


•	A domestic revolving credit facility, available for loans and letters of credit, in an aggregate principal amount up to $200.0, with a final maturity of June 27, 2024;


•	A global revolving credit facility, available for loans in Euros, Sterling and other currencies, in an aggregate principal amount up to the equivalent of $300.0, with a final maturity of June 27, 2024; and


•	A bilateral foreign credit instrument facility, available for performance letters of credit and guarantees in Euros, Sterling and other currencies, in an aggregate principal amount up to the equivalent of $150.0, with a final maturity of June 27, 2024.

Availability — At September 28, 2019, we had $494.1 of borrowing capacity under our revolving credit facilities after giving effect to $5.9 reserved for outstanding letters of credit. In addition, at September 28, 2019, we had $65.8 of available issuance capacity under our foreign credit instrument facilities after giving effect to $84.2 reserved for outstanding bank guarantees. In addition, we had $15.3 of bank guarantees outstanding under the senior credit facilities that, once satisfied, cannot be reissued.

At September 28, 2019, in addition to the revolving lines of credit described above, we had approximately $10.0 of letters of credit outstanding under separate arrangements in China and India.

Refer to Note 9 for further information on our borrowings as of September 28, 2019.

At September 28, 2019, we were in compliance with all covenants of our senior credit facilities and senior notes.

Financial Instruments

We measure our financial assets and liabilities on a recurring basis, and nonfinancial assets and liabilities on a non-recurring basis, at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We utilize market data or assumptions that we believe market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2) or significant unobservable inputs (Level 3).

Our derivative financial assets and liabilities include FX forward contracts and FX embedded derivatives measured at fair value using observable market inputs such as forward rates, interest rates, our own credit risk and our counterparties' credit risks. Based on these inputs, the derivative assets and liabilities are classified within Level 2 of the valuation hierarchy. Based on our continued ability to enter into forward contracts, we consider the markets for our fair value instruments active.

As of September 28, 2019, there had been no significant impact to the fair value of our derivative liabilities due to our own credit risk as the related instruments were collateralized under our senior credit facilities. Similarly, there had been no significant impact to the fair value of our derivative assets based on our evaluation of our counterparties' credit risks.

We primarily use the income approach, market approach, or both approaches, as appropriate. The income approach uses valuation techniques to convert future amounts to a single present amount. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including the sale of a business). Assets and liabilities measured at fair value on a recurring basis are further discussed below.

Currency Forward Contracts and Currency Forward Embedded Derivatives

We manufacture and sell our products in a number of countries and, as a result, are exposed to movements in foreign currency exchange rates. Our objective is to preserve the economic value of non-functional currency-denominated cash flows and to minimize the impact of changes as a result of currency fluctuations (see Note 10 to our condensed consolidated financial statements). Our principal currency exposures relate to the Euro, Chinese Yuan and British Pound.

We had FX forward contracts with an aggregate notional amount of $82.5 and $65.3 outstanding as of September 28, 2019 and December 31, 2018, respectively, with all such contracts scheduled to mature within one year. We also had FX embedded derivatives with an aggregate notional amount of $2.8 and $3.1 at September 28, 2019 and December 31, 2018, respectively, with all such contracts scheduled to mature within one year. There were unrealized losses of $0.2 and $0.3 recorded in accumulated other comprehensive loss related to FX forward contracts as of September 28, 2019 and December 31, 2018, respectively. The net gains (losses) recorded in “Other income (expense), net” related to FX gains (losses) totaled $0.1 and $(0.9) for the three months ended September 28, 2019 and September 29, 2018, respectively, and $(0.1) and $(1.7) for the nine months then ended.

The net fair values of our FX forward contracts and FX embedded derivatives were $0.1 (asset) and $0.5 (asset) at September 28, 2019 and December 31, 2018, respectively.

Other Fair Value Financial Assets and Liabilities

The carrying amounts of cash and equivalents, receivables and contract assets reported in our condensed consolidated balance sheets approximate fair value due to the short-term nature of those instruments.

The fair value of our debt instruments (excluding finance leases and deferred financing fees), based on borrowing rates available to us at September 28, 2019 for similar debt, was $749.6, compared to our carrying value of $725.6.

Concentrations of Credit Risk

Financial instruments that potentially subject us to significant concentrations of credit risk consist of cash and equivalents, trade accounts receivable, contract assets and FX forward contracts. These financial instruments, other than trade accounts receivable and contract assets, are placed with high-quality financial institutions throughout the world. We periodically evaluate the credit standing of these financial institutions.

We maintain cash levels in bank accounts that, at times, may exceed federally-insured limits. We have not experienced, and believe we are not exposed to significant risk of, loss in these accounts.

We have credit loss exposure in the event of nonperformance by counterparties to the above financial instruments, but have no other off-balance-sheet credit risk of accounting loss. Except as is provided for in our accompanying condensed consolidated balance sheets through an allowance for uncollectible accounts for certain accounts receivable, we anticipate that counterparties will be able to fully satisfy their obligations under the contracts. We do not obtain collateral or other security to support financial instruments subject to credit risk, but we do monitor the credit standing of counterparties.

Concentrations of credit risk arising from trade accounts receivable and contract assets are due to selling to customers in a particular industry. Credit risks are mitigated by performing ongoing credit evaluations of our customers' financial conditions and obtaining collateral, advance payments, or other security when appropriate. No one customer, or group of customers that, to our knowledge, are under common control, accounted for more than 10% of our revenues for any period presented.

Other Matters

Contractual Obligations - As of September 28, 2019, there were no material changes in our contractual obligations from those disclosed in our 2018 Annual Report on Form 10-K, except as noted below:

As described under “Liquidity and Financial Condition—Borrowings and Availability”, we entered into an amended and restated senior credit facility in June 2019. Under the amended and restated senior credit facility, our $100.0 term loan is repayable in full in June 2022. Under the former credit facility, our former term loan with a balance of $140.0 at December 31, 2018, was repayable in quarterly installments of $5.0, with the remaining balance repayable in full in September 2020.

The following amounts of our primary contractual obligations as of December 31, 2018 reported in our 2018 Annual Report on Form 10-K related to the business we have reclassified as discontinued operations:


•	Pension and postretirement benefit plan contributions and payments — previously reported obligations of $82.0, of which $3.0 related to discontinued operations;


•	Purchase and other contractual obligations — previously reported obligations of $177.4, of which $46.9 related to discontinued operations;


•	Future minimum operating lease payments — previously reported obligations of $84.1, of which $16.2 related to discontinued operations.

Our total net liabilities for unrecognized tax benefits including interest were $3.0 as of September 28, 2019. Of that amount, we believe that within the next 12 months it is reasonably possible that our previously unrecognized tax benefits (including interest) could decrease by $1.5 to $2.5.

Contingencies and Other Matters - Various claims, complaints and proceedings arising in the ordinary course of business, including those relating to litigation matters (e.g., class actions, derivative lawsuits and contracts, intellectual property and competitive claims, and claims to certain indemnification obligations arising from previous acquisitions/dispositions), have been filed or are pending against us and certain of our subsidiaries. We believe these matters are either without merit or of a kind that should not have a material effect, individually or in the aggregate, on our financial position, results of operations or cash flows.

We are subject to domestic and international environmental protection laws and regulations with respect to our business operations and are operating in compliance with, or taking action aimed at ensuring compliance with, these laws and regulations. None of our compliance obligations with environmental protection laws and regulations, individually or in the aggregate, is expected to have a material adverse effect on our financial position, results of operations or cash flows.

Refer to Note 12 for discussion regarding amounts reported in “Mezzanine equity” on the condensed consolidated balance sheets as of September 28, 2019 and December 31, 2018. Subsequent changes, if any, in amounts reported are not expected to have a material adverse effect on our financial position, results of operations or cash flows.

Critical Accounting Policies and Use of Estimates

General - The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities. The accounting policies that we believe are most critical to the portrayal of our financial condition and results of operations and that require our most difficult, subjective or complex judgments in estimating the effect of inherent uncertainties are discussed in our consolidated financial statements included in our 2018 Annual Report on Form 10-K.

During the three months ended September 28, 2019, we recorded a pre-tax impairment charge of $52.0 to reduce the carrying value of the net assets of our discontinued operations, including relevant foreign currency translation adjustment balances, to estimated fair value less costs to sell. The fair value of the Company’s discontinued operations included consideration of indications of fair value received from third parties in connection with the marketing of the business through the end of the third quarter. As discussed further in Note 3 to our condensed consolidated financial statements, we consider our assessment of the fair value of our discontinued operations to be an accounting estimate which involves significant and complex judgment, including estimating the effect of inherent uncertainties associated with the marketing and sale of the business.

Effective January 1, 2019, we adopted the FASB's new standard on accounting for leases, which requires a lessee to recognize on its balance sheet the assets and liabilities associated with the rights and obligations created by leases. Refer to Note 2 of our condensed consolidated financial statements for further information regarding estimates and assumptions associated with our adoption of the new standard on accounting for leases.

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risk related to changes in interest rates, foreign currency exchange rates and commodity raw material prices, and we selectively use financial instruments to manage certain of these risks. We do not enter into financial instruments for speculative or trading purposes; however, these instruments may be deemed speculative if the future cash flows originally hedged are no longer probable of occurring as anticipated. Our currency exposures vary, but are primarily concentrated in the Euro, Chinese Yuan and British Pound. We generally do not hedge currency translation exposures. Our exposures for commodity raw materials vary, with the highest concentration relating to steel. See Note 10 to our condensed consolidated financial statements for further details.

The following table provides information, as of September 28, 2019, about our primary outstanding debt obligations and presents principal cash flows by expected maturity dates, weighted-average interest rates and fair values.



	Due Within 1 Year		Due Within 2 Years		Due Within 3 Years		Due Within 4 Years		Due Within 5 Years		Thereafter		Total			Fair Value
Term loan	$	—	$	—	$	100.0	$	—	$	—	$	—	$	100.0		$	100.0
Average interest rate													3.475		%
5.625% senior notes	—		—		—		—		300.0		—		300.0			310.5
Average interest rate													5.625		%
5.875% senior notes	—		—		—		—		—		300.0		300.0			313.5
Average interest rate													5.875		%

We believe that cash and equivalents, cash flows from operations, and availability under revolving credit facilities will be sufficient to fund working capital needs, planned capital expenditures, dividend payments (if declared), other operational cash requirements and required debt service obligations for at least the next 12 months.

We had FX forward contracts with an aggregate notional amount of $82.5 outstanding as of September 28, 2019, with all such contracts scheduled to mature within one year. We also had FX embedded derivatives with an aggregate notional amount of $2.8 at September 28, 2019, with all such contracts scheduled to mature within one year. The gross fair values of our FX forward contracts and FX embedded derivatives, in aggregate, were $0.2 (gross assets) and $0.1 (gross liabilities) as of September 28, 2019.

ITEM 4. Controls and Procedures

SPX FLOW management, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of disclosure controls and procedures, pursuant to Exchange Act Rules 13a-15 and 15d-15, as of September 28, 2019. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 28, 2019.

No changes during the quarter ended September 28, 2019 were identified that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II—OTHER INFORMATION

ITEM 1. Legal Proceedings

The information required by this Item is incorporated by reference from the footnotes to the condensed consolidated financial statements, specifically Note 12, “Litigation, Contingent Liabilities and Other Matters,” included under Part I of this Form 10-Q.

ITEM 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in Part I, “Item 1A. Risk Factors” in our 2018 Annual Report on Form 10-K and in Part II, “Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the period ended June 29, 2019, which could materially affect our business, financial condition, future results of operations or cash flows.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

The following table summarizes the repurchases of common stock during the three months ended September 28, 2019:



Period	Total Number of Shares Purchased⁽¹⁾	Average Price Per Share		Total Number of Shares Purchased as Part of a Publicly Announced Plan or Program	Maximum Approximate Dollar Value of Shares That May Yet be Purchased Under the Plan or Program
6/30/19 - 7/31/19	—	$	—	—
8/1/19 - 8/31/19	3,906	39.13		—
9/1/19 - 9/28/19	264	38.85		—
Total	4,170			—


(1)	Reflects the surrender to us of shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock shares and restricted stock units.

ITEM 6. Exhibits

The exhibits to this Quarterly Report on Form 10-Q are listed in the accompanying Index to Exhibits.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		SPX FLOW, Inc.
		(Registrant)

Date: October 30, 2019	By		/s/ Marcus G. Michael
			President and Chief Executive Officer

Date: October 30, 2019	By		/s/ Jaime M. Easley
			Vice President, Chief Financial Officer and Chief Accounting Officer

INDEX TO EXHIBITS



Item No.		Description
10.1		Letter Agreement between Jose Larios and SPX FLOW, Inc.
11.1		Statement regarding computation of earnings per share. See condensed consolidated statements of operations on page 1 of this Form 10-Q.
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in the Interactive Data Files submitted as Exhibits 101.*)

__________________________________________________________________

Exhibit 10.1

COMPANY CONFIDENTIAL

TO: Jose Larios

FROM: Peter J. Ryan

DATE: June 12, 2019

SUBJECT: Sale of Power & Energy Business

As you know, SPX FLOW, Inc. (the "Company') is actively pursuing the sale of its Power and Energy business ("P&E"), whether through the sale of stock or of assets or a combination thereof ("Sale of P&E"). We recognize the additional burden this places on you as the leader of the P&E executive team, and would like to help ensure your commitment to the process by providing you with the below supplemental compensation and severance protections associated with the Sale of P&E:


1.	Retention Incentive


2.	Special Vesting


3.	Pre-Closing Severance Payment


4.	Post-Closing Severance Payment

This compensation is subject to the terms and conditions described below, as well as the terms and conditions of the relevant documents relating to compensation and benefit plans that you are currently eligible for, and there is no guarantee that each will be earned and paid.


1.	Retention Incentive: an incentive payment equal to one hundred percent (100%) of your annual base salary in effect as of the final closing date of an agreed upon Sale of P&E (the "Closing"), payable within sixty (60) days after the Closing (the "Retention Incentive"); and

Special Vesting: your unvested time-based restricted stock and restricted stock units which would have vested within the one (1) year period following the Closing (had you remained employed by the Company) shall become fully vested as of the Closing (the "Special Vesting"), and shall be settled within thirty (30) days after the Closing. All other unvested restricted stock and restricted stock units granted to you by the Company shall be subject to the terms (including forfeiture) of the applicable award agreement and equity plan. (collectively the Retention Incentive and Special Vesting are referred to herein as the "Incentive Payments").

Pre-Closing Severance Payment: in the event that the Company terminates your employment without Cause (as defined in your Change of Control Agreement dated August 29, 2016) during the period from May 21, 2019 through the earlier of (i) the Closing or (ii) May 31, 2020, you will be eligible to receive a severance payment (the "Pre-Closing Severance Payment") equal to (A) one (1) year of your base salary in effect as of the date of termination plus (B) your target bonus in effect as of the date of termination. The Pre-Closing Severance Payment shall be payable, subject to the execution and non-revocation of a release as described below, in a lump sum payment within sixty (60) days following the termination of your employment without Cause.

Post-Closing Severance Payment: in the event that the purchaser of P&E terminates your employment without Cause within one (1) year following the Closing, you will be eligible to receive a severance payment (the "Post-Closing Severance Payment") equal to (A) one (1) year of your base salary in effect as of the Closing plus (B) your target bonus in effect as of the Closing. The Post-Closing Severance Payment shall be payable, subject to the execution and nonrevocation of a release as described below, in a lump sum payment within sixty (60) days following the termination of your employment without Cause. For the avoidance of doubt, in no event will you be entitled to both a Pre-Closing Severance Payment and a Post-Closing Severance Payment.

The Pre-Closing Severance Payment, the Post-Closing Severance Payment and the Incentive Payments (collectively, the "Payments") shall be subject to applicable taxes and withholdings. The Payments shall not be considered as compensation eligible for deferral under any tax-qualified retirement savings plan or supplemental non-qualified plan, nor as pensionable compensation under any defined benefit retirement plan in which you participate. In addition, the Payments shall not be considered compensation for purposes of calculating any incentive for which you may be eligible. Each Payment made pursuant to this letter agreement are

separate payments (within the meaning of Section 409A of the Internal Revenue Code (the "Code")) and are intended to be exempt from, or be made in compliance with, Section 409A of the Code. For purposes of this letter, the terms "terminate," "terminated" and "termination" mean a termination of your employment that constitutes a "separation from service" within the meaning of the default rules under Section 409A of the Code.

The Incentive Payments and the Post-Closing Severance Payment provided hereunder will be contingent upon (1) the consummation of the Sale of P&E to an unrelated third party on or before May 31, 2020, (2) your active cooperation in supporting the sale process, and (3) your active employment and satisfactory performance, as determined by the Company in its sole discretion, throughout the period from now through and including the Closing.

The Pre-Closing Severance Payment will be contingent upon your signing, and not revoking, a general release satisfactory to the Company (the "Release"), which will be given to you for your consideration prior to or on the date of the termination of your employment.

In addition, (i) the Incentive Payments will be contingent upon your signing, and not revoking, a Release, which will be given to you for your consideration on or after the Closing and (ii) the Post-Closing Severance Payment will be contingent upon your signing, and not revoking, a Release, which will be given to you for your consideration prior to or on the date of the termination of your employment and will be in substantially the same form as that provided by the Company prior to the Closing. To the extent that the applicable consideration period for a required Release spans two calendar years, the applicable Payment will always be made in the second calendar year. In the event that you breach any provision of such general release, all Payments under this arrangement shall cease and the Company shall be entitled to the immediate return of any Payments previously made.

Nothing contained herein shall be deemed a guarantee of employment or continued employment by the Company or by the purchaser, regardless of whether the contemplated sale is consummated. Either the Company or you may terminate your employment with or without Cause at any time prior to the Closing. Nothing contained herein shall be deemed to obligate the Company to sell P&E. The Company's determination whether to consummate such a transaction shall be final and binding, and the consummation of any such sale must ultimately be approved or rejected by the SPX FLOW Board of Directors in its sole and exclusive discretion.

The Payments shall be in lieu of any and all rights or entitlements to severance pay under any Company plan, policy, benefit or procedure, or any agreement between you and the Company or you and the purchaser of P&E; provided, however, the Payments shall not be in lieu of the bonus (if any) payable to you under the SPX FLOW 2019 Enterprise Incentive Plan.

This document states the entire agreement between you and the Company regarding the subject matter hereof; provided, however, that this arrangement shall not supersede any confidentiality, non-competition or other protective covenants you have with the Company, all of which shall remain in full force and effect.

Any other statements, whether verbal or written, which are inconsistent with the terms and conditions set forth in this document are unauthorized by the Company. Any amendments or modifications to this arrangement shall be in writing and designated as such and signed by both parties.

Kindly indicate your acknowledgment and acceptance of this arrangement by signing below and returning a copy to me.

Sincerely,

/s/ Marcus G. Michael

Marcus G. Michael

President and Chief Executive Officer

ACKNOWLEDGE AND ACCEPTED

/s/ Jose Larios

Jose Larios

President, Power & Energy

EXHIBIT 31.1

Certification

I, Marcus G. Michael, certify that:

1. I have reviewed this report on Form 10-Q of SPX FLOW, Inc.;

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 conclusion 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: October 30, 2019	/s/ MARCUS G. MICHAEL

	President and Chief Executive Officer

EXHIBIT 31.2

Certification

I, Jaime M. Easley, certify that:

1. I have reviewed this report on Form 10-Q of SPX FLOW, Inc.;


c.	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusion 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

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: October 30, 2019	/s/ JAIME M. EASLEY

	Vice President, Chief Financial Officer and Chief Accounting Officer

EXHIBIT 32.1

The following statement is being made to the U.S. Securities and Exchange Commission solely for purposes of Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350), which carries with it certain criminal penalties in the event of a knowing or willful misrepresentation.

U.S. Securities and Exchange Commission

100 F. Street N.E.

Washington, DC 20549

Re: SPX FLOW, Inc.

Ladies and Gentlemen:

In accordance with the requirements of Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350), each of the undersigned hereby certifies that:

(i) this Quarterly Report on Form 10-Q, for the period ended September 28, 2019, 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 FLOW, Inc.



Date: October 30, 2019

/s/ MARCUS G. MICHAEL		/s/ JAIME M. EASLEY

Marcus G. Michael		Jaime M. Easley
President and Chief Executive Officer		Vice President, Chief Financial Officer and Chief Accounting Officer