UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July ~~2, 2016~~1, 2017



¨	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 1-6948

SPX CORPORATION

(Exact Name of Registrant as Specified in Its Charter)



Delaware		38-1016240
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

13320-A Ballantyne Corporate Place, Charlotte, North Carolina 28277

(Address of Principal Executive Offices) (Zip Code)

Registrant’s Telephone Number, Including Area Code (980) 474-3700

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

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. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). x Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” ~~and~~ “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):



Large ~~Accelerated Filer~~accelerated filer x		Accelerated ~~Filer~~filer ¨

~~Non-Accelerated Filer~~Non-accelerated filer ¨		Smaller ~~Reporting Company~~reporting company ¨
(Do not check if a smaller reporting company)		Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to used 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 x No.

Common shares outstanding July ~~29, 2016, 41,757,798~~28, 2017, 42,522,896

SPX CORPORATION AND SUBSIDIARIES

FORM 10-Q INDEX




PART 1 – FINANCIAL INFORMATION
Item 1 – Financial Statements
Condensed Consolidated Statements of Operations and Comprehensive ~~Loss~~Income (Loss)		3
Condensed Consolidated Balance Sheets		4
Condensed Consolidated Statements of Cash Flows		5
Notes to Condensed Consolidated Financial Statements		6
Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations		2726
Item 3 – Quantitative and Qualitative Disclosures About Market Risk		3735
Item 4 – Controls and Procedures		3735

PART 2 – OTHER INFORMATION
Item 1 – Legal Proceedings		3836
Item 1A – Risk Factors		3836
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds		3836
Item 4 – Mine Safety Disclosures		3836
Item 6 – Exhibits		3937

SIGNATURES		4038

INDEX TO EXHIBITS		4139

PART I—FINANCIAL INFORMATION

ITEM 1. Financial Statements

SPX CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE ~~LOSS~~INCOME (LOSS)

(Unaudited; in millions, except per share amounts)


	Three months ended						Six months ended						Three months ended						Six months ended
	July 2, 2016			June 27, 2015			July 2, 2016			June 27, 2015			July 1, 2017			July 2, 2016			July 1, 2017			July 2, 2016
Revenues	$	412.9		$	459.4		$	802.2		$	835.7		$	349.7		$	371.4		$	690.3		$	732.0
Costs and expenses:
Cost of products sold	318.1			363.4			617.6			665.2			273.6			280.3			526.1			551.0
Selling, general and administrative	81.0			100.7			163.2			215.6			71.4			72.8			141.0			147.1
Intangible amortization	0.9			1.2			1.8			2.6			0.1			0.9			0.3			1.8
Special charges, net	2.0			2.8			2.3			5.6			0.5			2.4			1.0			2.9
Impairment of intangible assets	—			—			4.0			—			—			—			—			4.0
Gain (loss) on sale of dry cooling business	(1.2		)	—			16.7			—			—			(1.2		)	—			16.7
Operating income (loss)	9.7			(8.7		)	30.0			(53.3		)
Operating income													4.1			13.8			21.9			41.9

Other income (expense), net	(0.5		)	1.7			0.3			(2.9		)	(2.1		)	0.1			(2.8		)	1.3
Interest expense	(3.8		)	(6.5		)	(7.3		)	(12.2		)	(4.6		)	(3.8		)	(8.6		)	(7.3		)
Interest income	0.2			0.4			0.4			1.0			0.3			0.2			0.7			0.4
Equity earnings in joint ventures	0.4			0.5			0.8			0.5
Income (loss) from continuing operations before income taxes	6.0			(12.6		)	24.2			(66.9		)	(2.3		)	10.3			11.2			36.3
Income tax (provision) benefit	(2.6		)	0.8			(6.1		)	14.1
Income tax provision													(6.0		)	(3.8		)	(9.2		)	(9.6		)
Income (loss) from continuing operations	3.4			(11.8		)	18.1			(52.8		)	(8.3		)	6.5			2.0			26.7

Income from discontinued operations, net of tax	—			48.7			—			80.1
Loss on disposition of discontinued operations, net of tax	(0.4		)	(0.5		)	(1.5		)	(0.9		)
Loss from discontinued operations, net of tax													—			(3.1		)	—			(8.6		)
Gain (loss) on disposition of discontinued operations, net of tax													(0.7		)	(0.4		)	6.4			(1.5		)
Income (loss) from discontinued operations, net of tax	(0.4		)	48.2			(1.5		)	79.2			(0.7		)	(3.5		)	6.4			(10.1		)

Net income	3.0			36.4			16.6			26.4
Net income (loss)													(9.0		)	3.0			8.4			16.6
Less: Net loss attributable to redeemable noncontrolling interests	(1.0		)	(2.5		)	(0.4		)	(5.4		)	—			(1.0		)	—			(0.4		)
Net income attributable to SPX Corporation common shareholders	4.0			38.9			17.0			31.8
Net income (loss) attributable to SPX Corporation common shareholders													(9.0		)	4.0			8.4			17.0
Adjustment related to redeemable noncontrolling interest (Note 13)	(18.1		)	—			(18.1		)	—			—			(18.1		)	—			(18.1		)
Net income (loss) attributable to SPX Corporation common shareholders after adjustment related to redeemable noncontrolling interest	$	(14.1	)	$	38.9		$	(1.1	)	$	31.8		$	(9.0	)	$	(14.1	)	$	8.4		$	(1.1	)

Amounts attributable to SPX Corporation common shareholders after adjustment related to redeemable noncontrolling interest:
Income (loss) from continuing operations, net of tax	$	(13.7	)	$	(9.7	)	$	0.4		$	(48.1	)	$	(8.3	)	$	(10.6	)	$	2.0		$	9.0
Income (loss) from discontinued operations, net of tax	(0.4		)	48.6			(1.5		)	79.9			(0.7		)	(3.5		)	6.4			(10.1		)
Net income (loss)	$	(14.1	)	$	38.9		$	(1.1	)	$	31.8		$	(9.0	)	$	(14.1	)	$	8.4		$	(1.1	)

Basic income (loss) per share of common stock:
Income (loss) from continuing operations attributable to SPX Corporation common shareholders after adjustment related to redeemable noncontrolling interest	$	(0.33	)	$	(0.24	)	$	0.01		$	(1.19	)	$	(0.19	)	$	(0.25	)	$	0.05		$	0.22
Income (loss) from discontinued operations attributable to SPX Corporation common shareholders	(0.01		)	1.20			(0.04		)	1.97			(0.02		)	(0.09		)	0.15			(0.25		)
Net income (loss) per share attributable to SPX Corporation common shareholders after adjustment related to redeemable noncontrolling interest	$	(0.34	)	$	0.96		$	(0.03	)	$	0.78		$	(0.21	)	$	(0.34	)	$	0.20		$	(0.03	)

Weighted-average number of common shares outstanding — basic	41.594			40.602			41.443			40.553			42.388			41.594			42.249			41.443

Diluted income (loss) per share of common stock:
Income (loss) from continuing operations attributable to SPX Corporation common shareholders after adjustment related to redeemable noncontrolling interest	$	(0.33	)	$	(0.24	)	$	0.01		$	(1.19	)	$	(0.19	)	$	(0.25	)	$	0.04		$	0.22
Income (loss) from discontinued operations attributable to SPX Corporation common shareholders	(0.01		)	1.20			(0.04		)	1.97			(0.02		)	(0.09		)	0.15			(0.25		)
Net income (loss) per share attributable to SPX Corporation common shareholders after adjustment related to redeemable noncontrolling interest	$	(0.34	)	$	0.96		$	(0.03	)	$	0.78		$	(0.21	)	$	(0.34	)	$	0.19		$	(0.03	)

Weighted-average number of common shares outstanding — diluted	41.594			40.602			41.754			40.553			42.388			41.594			43.622			41.754

Comprehensive income (loss)	$	(0.6	)	$	77.3		$	(25.7	)	$	(63.2	)	$	(8.9	)	$	(0.6	)	$	7.5		$	(25.7	)

The accompanying notes are an integral part of these statements.

SPX CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions, except share data)


	July 2, 2016			December 31, 2015			July 1, 2017			December 31, 2016
ASSETS
Current assets:
Cash and equivalents	$	102.0		$	101.4		$	83.5		$	99.6
Accounts receivable, net	340.5			367.0			252.0			251.7
Inventories, net	181.5			170.7			168.3			145.7
Other current assets	36.2			36.1			35.1			30.6
Assets held for sale	—			107.1
Total current assets	660.2			782.3			538.9			527.6
Property, plant and equipment:
Land	16.3			16.3			15.4			15.4
Buildings and leasehold improvements	123.3			120.4			119.5			117.3
Machinery and equipment	362.0			357.2			334.1			329.8
	501.6			493.9			469.0			462.5
Accumulated depreciation	(288.2		)	(274.4		)	(277.4		)	(267.0		)
Property, plant and equipment, net	213.4			219.5			191.6			195.5
Goodwill	343.7			342.8			344.1			340.4
Intangibles, net	146.3			154.2			118.4			117.9
Other assets	623.5			629.6			671.9			680.5
Deferred income taxes	51.8			50.9			64.5			50.6
TOTAL ASSETS	$	2,038.9		$	2,179.3		$	1,929.4		$	1,912.5
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	148.8		$	176.9		$	140.8		$	137.6
Accrued expenses	383.2			403.7			291.2			304.3
Income taxes payable	4.2			1.7			1.3			1.7
Short-term debt	21.5			22.1			33.9			14.8
Current maturities of long-term debt	17.9			9.1			18.1			17.9
Liabilities held for sale	—			41.3
Total current liabilities	575.6			654.8			485.3			476.3
Long-term debt	334.5			340.6			315.4			323.5
Deferred and other income taxes	48.7			55.2			45.6			42.4
Other long-term liabilities	807.5			820.4			874.4			878.7
Total long-term liabilities	1,190.7			1,216.2			1,235.4			1,244.6
Commitments and contingent liabilities (Note 13)
Equity:
SPX Corporation shareholders’ equity:
Common stock (100,539,906 and 41,716,444 issued and outstanding at July 2, 2016, respectively, 100,525,876 and 41,415,909 issued and outstanding at December 31, 2015, respectively)	1.0			1.0
Common stock (51,050,116 and 42,499,436 issued and outstanding at July 1, 2017, respectively, 50,754,779 and 41,940,089 issued and outstanding at December 31, 2016, respectively)							0.5			0.5
Paid-in capital	2,583.2			2,649.6			1,301.5			1,307.9
Retained earnings	914.8			897.8
Retained deficit							(823.2		)	(831.6		)
Accumulated other comprehensive income	242.2			283.3			234.2			235.1
Common stock in treasury (58,823,462 and 59,109,967 shares at July 2, 2016 and December 31, 2015, respectively)	(3,468.6		)	(3,486.3		)
Total SPX Corporation shareholders’ equity	272.6			345.4
Noncontrolling interests	—			(37.1		)
Common stock in treasury (8,550,680 and 8,814,690 shares at July 1, 2017 and December 31, 2016, respectively)							(504.3		)	(520.3		)
Total equity	272.6			308.3			208.7			191.6
TOTAL LIABILITIES AND EQUITY	$	2,038.9		$	2,179.3		$	1,929.4		$	1,912.5

The accompanying notes are an integral part of these statements.

SPX CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)


	Six months ended						Six months ended
	July 2, 2016			June 27, 2015			July 1, 2017			July 2, 2016
Cash flows used in operating activities:
Net income	$	16.6		$	26.4
Net Income							$	8.4		$	16.6
Less: Income (loss) from discontinued operations, net of tax	(1.5		)	79.2			6.4			(10.1		)
Income (loss) from continuing operations	18.1			(52.8		)
Adjustments to reconcile income (loss) from continuing operations to net cash used in operating activities:
Income from continuing operations							2.0			26.7
Adjustments to reconcile income from continuing operations to net cash used in operating activities:
Special charges, net	2.3			5.6			1.0			2.9
Gain on asset sales	—			(1.2		)
Gain on sale of dry cooling business	(16.7		)	—			—			(16.7		)
Impairment of intangible assets	4.0			—			—			4.0
Deferred and other income taxes	1.7			(8.1		)	(3.8		)	1.7
Depreciation and amortization	14.2			21.0			12.6			13.2
Pension and other employee benefits	8.7			11.3			7.5			8.6
Long-term incentive compensation	6.3			25.0			6.8			6.1
Other, net	1.4			1.5			1.7			1.4
Changes in operating assets and liabilities, net of effects from divestiture:
Accounts receivable and other assets	26.6			(91.3		)	6.1			33.9
Inventories	(17.4		)	(35.2		)	(20.3		)	(17.5		)
Accounts payable, accrued expenses and other	(82.3		)	(17.7		)	(22.3		)	(76.8		)
Cash spending on restructuring actions	(4.9		)	(3.8		)	(1.0		)	(1.2		)
Net cash used in continuing operations	(38.0		)	(145.7		)	(9.7		)	(13.7		)
Net cash from (used in) discontinued operations	(1.4		)	46.1
Net cash used in discontinued operations							(5.7		)	(25.7		)
Net cash used in operating activities	(39.4		)	(99.6		)	(15.4		)	(39.4		)
Cash flows from (used in) investing activities:
Net proceeds from sale of dry cooling business	45.9			—
Proceeds from asset sales	0.1			2.0			—			46.0
Increase in restricted cash	(1.7		)	—
Capital expenditures	(4.3		)	(6.8		)	(4.8		)	(3.7		)
Net cash from (used in) continuing operations	40.0			(4.8		)	(4.8		)	42.3
Net cash used in discontinued operations	—			(21.1		)	—			(2.3		)
Net cash from (used in) investing activities	40.0			(25.9		)	(4.8		)	40.0
Cash flows from (used in) financing activities:
Borrowings under senior credit facilities	65.0			325.0			16.0			65.0
Repayments under senior credit facilities	(65.0		)	(224.2		)	(24.7		)	(65.0		)
Borrowings under trade receivables financing arrangement	20.0			95.0			40.0			20.0
Repayments under trade receivables financing arrangement	(20.0		)	(88.0		)	(19.0		)	(20.0		)
Net borrowings (repayments) under other financing arrangements	(0.6		)	1.1
Net repayments under other financing arrangements							(2.7		)	(0.6		)
Minimum withholdings paid on behalf of employees for net share settlements, net of proceeds from the exercise of employee stock options and other	(1.6		)	(5.3		)	(1.8		)	(1.6		)
Dividends paid	—			(30.4		)
Net cash from (used in) continuing operations	(2.2		)	73.2			7.8			(2.2		)
Net cash used in discontinued operations	—			(3.6		)
Net cash from (used in) discontinued operations							—			—
Net cash from (used in) financing activities	(2.2		)	69.6			7.8			(2.2		)
Change in cash and equivalents due to changes in foreign currency exchange rates	2.2			(42.8		)	(3.7		)	2.2
Net change in cash and equivalents	0.6			(98.7		)	(16.1		)	0.6
Consolidated cash and equivalents, beginning of period	101.4			427.6			99.6			101.4
Consolidated cash and equivalents, end of period	$	102.0		$	328.9		$	83.5		$	102.0

The accompanying notes are an integral part of these statements.

SPX CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited; in millions, except per share data)


(1)	BASIS OF PRESENTATION

Unless otherwise indicated, “we,” “us” and “our” mean SPX Corporation and its consolidated subsidiaries (“SPX”).

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

~~Spin-Off~~We account for investments in unconsolidated companies where we exercise significant influence but do not have control using the equity method. In determining whether we are the primary beneficiary of ~~FLOW Business~~

~~On September 26, 2015 (the “Distribution Date”~~a variable interest entity (“VIE”), we ~~completed~~perform a qualitative analysis that considers the ~~spin-off~~design of the VIE, the nature of our involvement and the variable interests held by other parties to ~~our stockholders (the “Spin-Off”)~~determine which party has the power to direct the activities of ~~all~~ the ~~outstanding shares of SPX FLOW, Inc. (“SPX FLOW”), a wholly-owned subsidiary of SPX prior~~VIE that most significantly impact the entity’s economic performance, and which party has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the ~~Spin-Off,~~VIE. We have an interest in a VIE, in which atwe are not the ~~time~~primary beneficiary, as a result of the ~~Spin-Off held the businesses comprising our Flow Technology reportable segment, our Hydraulic Technologies business,~~sale of Balcke Dürr. See below and ~~certain of our corporate subsidiaries (collectively, the “FLOW Business”). On the Distribution Date, each of our stockholders of record as~~in Note 15 for further discussion of the ~~close~~sale of business on September 16, 2015 (the “Record Date”) received one share of common stock of SPX FLOW for every share of SPX common stock held as of the Record Date. SPX FLOW is now an independent public company trading under the symbol “FLOW” on the New York Stock Exchange. Following the Spin-Off, SPX’s common stock continues to be listed on the New York Stock Exchange, but trades under the new ticker symbol, “SPXC”.

~~The financial results of SPX FLOW for the three~~Balcke Dürr. All other VIEs are considered immaterial, individually and six months ended June 27, 2015 have been classified as discontinued operations within the accompanying condensed consolidated financial statements. See Note 3 for additional information regarding discontinued operations.

In connection with the Spin-Off, SPX and SPX FLOW entered into several administrative agreements covering various services, such as information technology, human resources and finance, to be provided by each party for a period of up to 12 months following the Distribution Date. These agreements contain customary mutual indemnification provisions. The financial activity associated with these agreements was not materialin aggregate, to our condensed consolidated financial ~~results for the three and six months ended July 2, 2016.~~statements.

Sale of Dry Cooling Business

On March 30, 2016, we completed the sale of our dry cooling business, a business previously within our Engineered Solutions reportable segment, to Paharpur Cooling Towers Limited (“Paharpur”) for cash proceeds of $45.9 (net of cash transferred with the business of $3.0), resulting in a gain during the quarter ended April 2, 2016 of $17.9. The gain includes a reclassification from “Equity” of other comprehensive income totaling $40.4 related to foreign currency translation.

During the second quarter of 2016, we ~~recorded a charge of~~reduced the gain by $1.2 in connection with adjustments to certain liabilities ~~that~~retained from the sale. During the third quarter of 2016, we ~~retained.~~

~~The~~increased the gain by $1.7 in connection with the settlement of the final ~~sales price for the dry cooling business is subject to adjustment based on~~ working capital ~~existing at the closing date and is subject to agreement~~associated with the ~~buyer. Final agreement of the working capital amount~~business.

In connection with the ~~buyer has yet to occur. Additionally,~~sale, we provided customary indemnifications to ~~Paharpur in connection with the sale.~~Paharpur. Accordingly, it is possible that the sales price and resulting gain for this divestiture may be materially adjusted in subsequent periods.

~~The assets and liabilities~~

Sale of Balcke Dürr Business

On December 30, 2016, we completed the sale of Balcke Dürr to a subsidiary of mutares AG (the “Buyer”) for cash proceeds of less than $0.1. In addition, we left $21.1 of cash in Balcke Dürr at the time of the ~~dry cooling business,~~sale and provided the Buyer with a non-interest bearing loan of $9.1, payable in installments due at the end of 2018 and 2019. The results of Balcke Dürr are presented as ~~of December 31, 2015, have been classified as “held for sale”~~a discontinued operation within the accompanying condensed consolidated ~~balance sheet.~~financial statements. In connection with the sale, we recorded a net loss of $78.6 in the fourth quarter of 2016 to “Gain (loss) on disposition of discontinued operations, net of tax.” During the first quarter of 2017, we reduced the net loss associated with the sale of Balcke Dürr by $7.2. The reduction was comprised of an additional income tax benefit recorded for the sale of $8.4, partially offset by adjustments to liabilities retained in connection with the sale of $1.2. During the second quarter of 2017, we increased the net loss associated with the sale of Balcke Dürr by $0.4, with the increase resulting from adjustments to liabilities retained in connection with the sale.

The purchase agreement provided that existing parent company guarantees of approximately €79.0 and bank and surety bonds of approximately €79.0 would remain in place through each instrument’s expiration date, with such expiration dates ranging from 2017 to 2022. Balcke Dürr and the Buyer have provided us a full indemnity in the event that any of these guarantees or bonds are called. Also, Balcke Dürr has provided cash collateral of €4.0 and mutares AG has provided a guarantee of €5.0 as a security for the above indemnifications. In connection with the sale, we recorded a liability for the estimated fair value of the guarantees and bonds and an asset for the estimated fair value of the cash collateral and indemnities provided. See Note 315 for ~~information~~further details regarding these estimated fair values.

The final sales price for Balcke Dürr is subject to adjustment based on ~~such assets~~cash and ~~liabilities.~~

~~New Segment Reporting Structure~~

~~Prior~~working capital existing at the closing date and is subject to agreement with the Spin-Off, we aggregated certain of our operating segments into two reportable segments, Flow Technology and Thermal Equipment and Services, while our remaining operating segments, which included our Hydraulic Technologies business, were combined within an “All Other” category that we referred to as Industrial Products and Services and Other. As noted above, the Spin-Off included our Flow Technology reportable segment and our Hydraulic Technologies business. In addition, the Spin-Off resulted in a change of our chief operating decision maker (“CODM”).

~~As a result~~Buyer. Final agreement of the ~~Spin-Off, we realigned our segment reporting structure, effective~~cash and working capital amounts with the Buyer has yet to occur. Accordingly, it is possible that the sales price and resulting loss for the quarter ended September 26, 2015. Under the realigned structure, our three reportable segments are as follows: HVAC, Detection and Measurement, and Power. The realigned segment reporting structure reflects the mannerthis divestiture may be materially adjusted in ~~which our new CODM is managing our business.~~subsequent periods.

~~See Note 4 for additional information regarding our realigned segment reporting structure.~~

Other

Preparing financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ from these estimates. The unaudited information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements contained in our ~~2015~~ Annual Report on Form ~~10-K.~~10-K for the year ended December 31, 2016. Interim results are not necessarily indicative of full year results. We have reclassified certain prior year amounts, including ~~(i)~~ the results of discontinued operations, ~~(ii) information on reportable segments, and (iii) debt issuance costs associated with the term loan under our senior credit facilities (see Note 2),~~ to conform to the current year presentation. Unless otherwise indicated, amounts provided in these Notes pertain to continuing operations only. See Note 3 for information on discontinued operations.

We establish actual interim closing dates using a fiscal calendar, which requires our businesses to close their books on the Saturday closest to the end of the first calendar quarter, with the second and third quarters being 91 days in length. Our fourth quarter ends on December 31. The interim closing dates for the first, second and third quarters of ~~2016~~2017 are April 1, July 1 and September 30, compared to the respective April 2, July 2 and October 1, ~~compared to the respective March 28, June 27 and September 26, 2015~~2016 dates. We had ~~six more~~two fewer days in the first quarter of ~~2016~~2017 and will have ~~five fewer days~~one more day in the fourth quarter of ~~2016~~2017 than in the respective ~~2015~~2016 periods. We do not believe the ~~six additional~~two fewer days during the first quarter of ~~2016~~2017 had a material impact on our consolidated operating results for the first half of ~~2016,~~2017, when compared to the consolidated operating results for the first half of ~~2015.~~2016.

(2) NEW ACCOUNTING PRONOUNCEMENTS

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

In May 2014, the Financial Accounting Standards Board (“FASB”)issued a new standard on revenue recognition that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new standard contains a five-step approach that entities will apply to determine the measurement of revenue and timing of when it is recognized, including (i) identifying the contract(s) with a customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to separate performance obligations, and (v) recognizing revenue when (or as) each performance obligation is satisfied. The new standard requires a number of disclosures intended to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue, and the related cash flows. The disclosures include qualitative and quantitative information about contracts with customers, significant judgments made in applying the revenue guidance, and assets recognized from the costs to obtain or fulfill a contract. The standard is effective for interim and annual reporting periods beginning after December 15, ~~2017.~~2017 and we currently plan to adopt the standard using the modified retrospective transition method. The modified retrospective transition approach will recognize any changes from the beginning of the year of initial application through retained earnings with no restatement of comparative periods. We are ~~currently evaluating~~continuing to assess the potential effect ~~this new~~that the standard ~~will~~is expected to have on our ~~condensed~~ consolidated financial statements.

~~In April 2015,~~ We believe the ~~FASB issued a~~more significant effects on our existing accounting policies will be associated with our power transformer business. Under the new standard, ~~that requires debt issuance costs related to~~revenue for our power transformers will be recognized over time, which is a ~~recognized debt liability to be reported~~change from our current accounting policy of recognizing revenue for power transformers at a point in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. An amendment to this standard was issued in August 2015 that permits entities to present debt issuance costs related to line-of-credit arrangements as an asset and subsequently amortize such debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The standard was effective for interim and annual reporting periods beginning after December 15, 2015, and shall be applied retrospectively. We adopted this guidance on January 1, 2016 and, thus, the debt issuance costs associated with the term loan under our senior credit facilities have been presented as a direct deduction from the carrying amount of the term loan in the accompanying condensed consolidated balance sheets. See Note 10 for additional details.time.

In February 2016, the FASB issued an amendment to existing guidance that requires lessees to recognize assets and liabilities for the rights and obligations created by long-term leases. In addition, this amendment requires new qualitative and quantitative disclosures about leasing arrangements. This standard is effective for annual periods beginning on or after December 15, 2018 for public business entities, and interim periods within those fiscal years. Early adoption is permitted, and adoption must be applied on a modified retrospective basis. We are currently evaluating the effect this new standard will have on our condensed consolidated financial statements.

In March 2016, the FASB issued an amendment to existing guidance that simplifies several aspects of the accounting for employee ~~shared-based~~share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This standard is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those annual reporting periods. ~~Early adoption is permitted.~~ We adopted this guidance on January 1, 2017, and, thus, excess income tax benefits recognized on stock-based compensation awards are ~~currently evaluating the effect this new standard will have~~now being reflected, on a prospective basis, in our condensed consolidated ~~financial statements.~~


~~(3)~~	~~DISCONTINUED OPERATIONS AND SALE OF DRY COOLING BUSINESS~~

~~Spin-Off~~statement of ~~SPX FLOW~~

~~As indicated in Note 1, we completed the spin-off of SPX FLOW on September 26, 2015. The results of SPX FLOW are presented~~operations as a ~~discontinued operation~~component of the provision for income taxes (versus the previous requirement to reflect such amounts within ~~the accompanying~~“equity”). In accordance with this prospective adoption, we recognized income tax benefits of $0.2 and $1.2 in our condensed consolidated statements of operations for the three and six months ended ~~June 27, 2015 and~~July 1, 2017, respectively. In addition, we prospectively adopted the amendment to present excess income tax benefits on share-based compensation awards as an operating activity within our condensed consolidated statement of cash flows (versus the previous requirement to reflect such amounts as a financing activity), which resulted in the classification of $1.2 of such income tax benefits within operating activities of the condensed consolidated statement of cash flows for the six months ended ~~June 27, 2015.~~July 1, 2017. Cash paid on employees’ behalf related to shares withheld for income taxes payable continues to be classified

as a financing activity. Lastly, we elected to continue estimating stock-based compensation award forfeitures in determining the amount of compensation expense to be recognized in each period.

In August 2016, the FASB issued an amendment to existing guidance to reduce diversity in practice in how certain cash receipts and cash payments are presented in the statement of cash flows. This amendment provides clarification on eight specific cash flow presentation issues. The issues include, but are not limited to, debt prepayment or extinguishment costs, settlement of zero-coupon debt, proceeds from the settlement of insurance claims, and cash receipts from payments on beneficial interests in securitization transactions. This amendment is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods. Early adoption is permitted. We are currently evaluating the effect this amendment will have on our condensed consolidated financial statements.

In January 2017, the FASB issued an amendment to simplify the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires that an entity recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. This amendment is effective for annual reporting periods beginning after December 31, 2019, including interim periods within those annual reporting periods. Early adoption is permitted. The impact of this amendment on our consolidated financial statements will depend on the results of future goodwill impairment tests.

In March 2017, the FASB issued an amendment to revise the presentation of net periodic pension and postretirement benefit cost. The amendment requires the service cost component to be presented separately from the other components of net periodic pension and postretirement benefit cost. Service cost will be presented with other employee compensation costs within operations. The other components of net periodic pension and postretirement benefit cost, such as interest cost, expected return on plan assets, amortization of prior service cost/credits, and gains or losses, are required to be separately presented outside of operations. This amendment is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual periods. The amendment to the presentation in the income statement of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost shall be applied retrospectively. Early adoption is permitted. We will adopt the standard effective January 1, 2018. The adoption is not expected to have a material impact on our condensed consolidated financial statements. See Note 9 for details of our pension and postretirement expense.


(3)	DISCONTINUED OPERATIONS

As indicated in Note 1, the results of Balcke Dürr are presented as a discontinued operation within the accompanying condensed consolidated financial statements for the three and six months ended July 2, 2016. Major classes of line items constituting pre-tax ~~income~~loss and after-tax ~~income~~loss of ~~SPX FLOW~~Balcke Dürr for the three and six months ended July 2, 2016 are shown below:

Three months ended Six months ended
June 27, 2015 June 27, 2015
Revenues $ 615.0
$ 1,185.6
Costs and expenses:

Cost of products sold 404.8
788.0
Selling, general and administrative⁽¹⁾
128.3
246.6
Intangible amortization 5.9
11.8
Special charges 3.3
7.1
Other income (expense), net (1.7 ) 3.7
Interest expense, net (11.1 ) (21.7 )
Income before taxes 59.9
114.1
Income tax provision (11.2 ) (34.0 )
Income from discontinued operations, net of tax 48.7
80.1
Less: Net loss attributable to noncontrolling interest (0.4 ) (0.7 )
Income from discontinued operations attributable to SPX Corporation common shareholders, net of tax $ 49.1
$ 80.8

~~___________________________~~

⁽¹⁾



	Three months ended			Six months ended
	July 2, 2016			July 2, 2016
Revenues	$	41.5		$	70.2
Costs and expenses:
Cost of products sold	37.8			66.6
Selling, general and administrative	8.2			16.1
Special charges (credits), net	(0.4		)	(0.6		)
Other expense, net	(0.2		)	(0.2		)
Loss before taxes	(4.3		)	(12.1		)
Income tax benefit	1.2			3.5
Loss from discontinued operations, net of tax	$	(3.1	)	$	(8.6	)

~~Includes $9.0 and $14.0 for the three and six months ended June 27, 2015 of professional fees and other costs that were incurred in connection with the Spin-Off.~~

The following table presents selected financial information ~~regarding cash flows of SPX FLOW~~for Balcke Dürr that ~~are~~is included within discontinued operations in the condensed consolidated statement of cash flows for the six months ended ~~June 27, 2015:~~July 2, 2016:


Non-cash items included in loss from discontinued operations:
Depreciation and amortization	$	29.5	$	1.0
Capital expenditures	22.6		0.6

~~Other Discontinued Operations Activity~~

months ended July 1, 2017, and $0.4 and $1.5 during the three and six months ended July 2, 2016, respectively, ~~and net losses of $0.5 and $0.9 during the three and six months ended June 27, 2015, respectively,~~ resulting from revisions to liabilities retained from businesses discontinued prior to ~~2015.~~2016.

For the three and six months ended July 1, 2017 and July 2, 2016, ~~and June 27, 2015,~~ the table below presents a reconciliation of discontinued operations activity to the related amounts in the condensed consolidated statements of operations:

Three months ended Six months ended
July 2,
2016 June 27,
2015 July 2,
2016 June 27,
2015
SPX FLOW
Income from discontinued operations $ —

$ 59.9

$ —

$ 114.1
Income tax provision —

(11.2 )
—

(34.0 )
Income from discontinued operations, net —

48.7

—

80.1

All other

Loss from discontinued operations (0.6 )
(2.1 )
(1.8 )
(2.5 )
Income tax benefit 0.2

1.6

0.3

1.6
Loss from discontinued operations, net (0.4 )
(0.5 )
(1.5 )
(0.9 )

Total

Income (loss) from discontinued operations (0.6 )
57.8

(1.8 )
111.6
Income tax (provision) benefit 0.2

(9.6 )
0.3

(32.4 )
Income (loss) from discontinued operations, net $ (0.4 )
$ 48.2

$ (1.5 )
$ 79.2

~~Sale of Dry Cooling Business~~

On November 20, 2015, we entered into an agreement for the sale of our dry cooling business. The assets and liabilities of our dry cooling business are presented as “held for sale” within the accompanying condensed consolidated balance sheet as of December 31, 2015. The major classes of assets and liabilities held for sale as of December 31, 2015 are shown below:

Assets:
   Accounts receivable, net $ 49.2
   Inventories, net 12.9
   Other current assets 13.9
   Property, plant and equipment, net 3.3
   Goodwill 10.7
   Intangibles, net 8.3
   Other assets 8.8
      Assets held for sale $ 107.1
Liabilities:
   Accounts payable $ 13.7
   Accrued expenses 25.3
   Other long-term liabilities 2.3
      Liabilities held for sale $ 41.3

As indicated in Note 1, on March 30, 2016, we completed the sale of our dry cooling business to Paharpur for cash proceeds of $45.9 (net of cash transferred with the business of $3.0), resulting in a gain of $17.9 during the first quarter of 2016. As previously indicated, the gain includes a reclassification from “Equity” of other comprehensive income totaling $40.4 related to foreign currency translation. During the second quarter of 2016, we recorded a charge of $1.2 in connection with adjustments to certain liabilities that we retained.



	Three months ended						Six months ended
	July 1, 2017			July 2, 2016			July 1, 2017			July 2, 2016
Balcke Dürr
Loss from discontinued operations	$	(0.5	)	$	(4.3	)	$	(2.6	)	$	(12.1	)
Income tax benefit	0.1			1.2			9.4			3.5
Income (loss) from discontinued operations, net	(0.4		)	(3.1		)	6.8			(8.6		)

All other
Loss from discontinued operations	(0.4		)	(0.6		)	(0.9		)	(1.8		)
Income tax benefit	0.1			0.2			0.5			0.3
Loss from discontinued operations, net	(0.3		)	(0.4		)	(0.4		)	(1.5		)

Total
Loss from discontinued operations	(0.9		)	(4.9		)	(3.5		)	(13.9		)
Income tax benefit	0.2			1.4			9.9			3.8
Income (loss) from discontinued operations, net	$	(0.7	)	$	(3.5	)	$	6.4		$	(10.1	)

(4) INFORMATION ON REPORTABLE SEGMENTS

We are a global supplier of highly specialized engineered solutions with operations in over 2015 countries and sales in over 100 countries around the world.

~~As indicated in Note 1, during the third quarter of 2015, we realigned our segment reporting structure. Under the realigned structure, we~~We have aggregated our operating segments into the following three reportable segments: HVAC, Detection and Measurement, and ~~Power.~~Engineered Solutions. The factors considered in determining our aggregated segments are the economic similarity of the businesses, the nature of products sold or services provided, production processes, types of customers, distribution methods, and regulatory environment. In determining our segments, we apply the threshold criteria of the Segment Reporting Topic of the ~~Codification to operating~~Codification. Operating income or loss for each of ~~each segment~~our segments is determined before considering ~~gains/losses on sales of businesses,~~ impairment and special charges, pension and postretirement expense/income, long-term incentive compensation and other indirect corporate expenses. This is consistent with the way our ~~CODM~~chief operating decision maker evaluates the results of each segment.

HVAC Reportable Segment

Our HVAC reportable segment engineers, designs, manufactures, installs and services cooling products for the HVAC and industrial markets, as well as boilers, comfort heating and ventilation products for the residential and commercial markets. The primary distribution channels for the segment’s products are direct to customers, independent manufacturing representatives, third-party distributors, and retailers. The segment ~~primarily~~ serves a customer base in North ~~American customer base.~~

America, Europe, and Asia Pacific.

Detection and Measurement Reportable Segment

Our Detection and Measurement reportable segment engineers, designs, manufactures and installs underground pipe and cable locators and inspection equipment, bus fare collection systems, communication technologies, and specialty lighting. The primary distribution channels for the segment’s products are direct to customers and third-party distributors. The segment serves a global customer base, with a strong presence in North America, Europe, and ~~Asia.~~Asia Pacific.

~~Power~~Engineered Solutions Reportable Segment

Our ~~Power~~Engineered Solutions reportable segment engineers, designs, manufactures, installs and services ~~evaporative and hybrid cooling systems, rotating and stationary heat exchangers, and pollution control systems for the power generation market, and~~ transformers for the power transmission and distribution ~~market.~~market and process cooling equipment and stationary heat exchangers for the industrial and power generation markets. The primary distribution channels for the segment’s products are direct to customers and third-party representatives. The segment ~~serves a global customer base, with~~has a strong presence in North America ~~Europe, Asia Pacific,~~ and South Africa.

Corporate Expense

Corporate expense generally relates to the cost of our Charlotte, NCNorth Carolina corporate headquarters. Corporate expense for the three and six months ended June 27, 2015 also included costs related to our former Asia Pacific center in Shanghai, China, which was part of the Spin-Off, costs that were previously allocated to the FLOW Business that do not meet the requirements to be presented within discontinued operations, and the cost of corporate employees who became employees of SPX FLOW at the time of the Spin-Off.

Financial data for our reportable segments for the three and six months ended July 1, 2017 and July 2, 2016 ~~and June 27, 2015~~ are presented below:


	Three months ended						Six months ended						Three months ended						Six months ended
	July 2, 2016			June 27, 2015			July 2, 2016			June 27, 2015			July 1, 2017			July 2, 2016			July 1, 2017			July 2, 2016
Revenues:⁽¹⁾
HVAC segment	$	121.9		$	118.3		$	233.5		$	226.0		$	120.3		$	121.9		$	230.4		$	233.5
Detection and Measurement segment	60.1			58.2			115.5			110.1			64.5			60.1			118.1			115.5
Power segment	230.9			282.9			453.2			499.6
Engineered Solutions segment ⁽²⁾													164.9			189.4			341.8			383.0
Consolidated revenues	$	412.9		$	459.4		$	802.2		$	835.7		$	349.7		$	371.4		$	690.3		$	732.0

Income (Loss):
Income (loss):
HVAC segment	$	17.1		$	13.0		$	33.0		$	25.9		$	15.4		$	17.1		$	31.9		$	33.0
Detection and Measurement segment	12.1			10.2			23.1			19.1			17.3			12.1			28.5			23.1
Power segment	(1.8		)	1.6			(7.3		)	(9.8		)
Engineered Solutions segment ⁽²⁾													(12.0		)	3.0			(5.4		)	5.9
Total income for segments	27.4			24.8			48.8			35.2			20.7			32.2			55.0			62.0

Corporate expense	(8.2		)	(26.2		)	(19.1		)	(56.9		)	(11.3		)	(8.6		)	(22.7		)	(20.0		)
Long-term incentive compensation expense	(3.5		)	(4.0		)	(6.3		)	(25.0		)	(3.6		)	(3.4		)	(6.8		)	(6.1		)
Pension and postretirement expense	(2.8		)	(0.5		)	(3.8		)	(1.0		)	(1.2		)	(2.8		)	(2.6		)	(3.8		)
Special charges, net	(2.0		)	(2.8		)	(2.3		)	(5.6		)	(0.5		)	(2.4		)	(1.0		)	(2.9		)
Impairment of intangible assets	—			—			(4.0		)	—			—			—			—			(4.0		)
Gain (loss) on sale of dry cooling business	(1.2		)	—			16.7			—			—			(1.2		)	—			16.7

Consolidated operating income (loss)	$	9.7		$	(8.7	)	$	30.0		$	(53.3	)
Consolidated operating income													$	4.1		$	13.8		$	21.9		$	41.9

___________________________

⁽¹⁾

Under the percentage-of-completion method, we recognized revenues of ~~$110.6~~$65.8 and ~~$120.9~~$80.1 in the three months ended July 1, 2017 and July 2, 2016, ~~and June 27, 2015,~~ respectively. For the six months ended July 1, 2017 and July 2, 2016, ~~and June 27, 2015,~~ revenues under the ~~percentage of completion~~percentage-of-completion method were ~~$236.6~~$144.6 and ~~$246.3,~~$184.4, respectively. Costs and estimated earnings in excess of billings on uncompleted contracts accounted for under the percentage-of-completion method were ~~$91.7~~$31.3 and ~~$106.3~~$33.9 as of July ~~2, 2016~~1, 2017 and December 31, ~~2015,~~2016, respectively, and

are reported as a component of ‘‘Accounts receivable, net’’ in the condensed consolidated balance sheets. Billings in excess of costs and estimated earnings on uncompleted contracts accounted for under the percentage-of-completion method were $87.9 and $116.3 as of July 2, are reported as a component of ‘‘Accounts receivable, net’’ in the condensed consolidated balance sheets. Billings in excess of costs and estimated earnings on uncompleted contracts accounted for under the percentage-of-completion method were $42.0 and $53.3 as of July 1, 2017 and December 31, 2016, ~~and December 31, 2015,~~ respectively, and are reported as a component of ‘‘Accrued expenses’’ in the condensed consolidated balance sheets.


⁽²⁾	As further discussed in Note 13, during the second quarter of 2017, we made revisions to our expected revenues and profits on our large power projects in South Africa. As a result of these revisions, we reduced revenue and segment income by $13.5 and $22.9, respectively, for the three and six months ended July 1, 2017.


(5)	SPECIAL CHARGES, NET

Special charges, net, for the three and six months ended July 1, 2017 and July 2, 2016 ~~and June 27, 2015~~ are described in more detail below:


	Three months ended					Six months ended				Three months ended				Six months ended
	July 2, 2016		June 27, 2015			July 2, 2016		June 27, 2015		July 1, 2017		July 2, 2016		July 1, 2017		July 2, 2016
HVAC segment	$	—	$	(0.2	)	$	—	$	1.2	$	0.3	$	—	$	0.4	$	—
Detection and Measurement segment	—		0.1			0.2		0.6		—		—		0.3		0.2
Power segment	2.0		2.9			2.1		3.8
Engineered Solutions segment										0.2		2.4		0.2		2.7
Corporate										—		—		0.1		—
Total	$	2.0	$	2.8		$	2.3	$	5.6	$	0.5	$	2.4	$	1.0	$	2.9

HVAC Segment— Charges for the three and six months ended ~~June 27, 2015~~July 1, 2017 related primarily to ~~facility consolidation efforts in Asia Pacific.~~severance costs associated with a restructuring action at the segment’s Cooling Americas business.

Detection and Measurement Segment — Charges for the six months ended July 1, 2017 related to severance costs associated with a restructuring action at the segment’s communication technologies business during the first quarter of 2017. Charges for the six months ended July 2, 2016 related to severance costs associated with ~~our~~a restructuring action at the segment’s bus fare collection systems ~~business, while charges for the three and six months ended June 27, 2015 related primarily to severance and other costs associated with restructuring initiatives at our specialty lighting~~ business.

~~Power~~Engineered Solutions Segment — Charges for the three and six months ended July ~~2, 2016~~1, 2017 related primarily to ~~cost incurred in connection~~severance costs associated with a restructuring action at the segment’s process cooling business. Charges for the three and six months ended July 2, 2016 related to a restructuring actions at the segment’s SPX Heat Transfer ("(“Heat ~~Transfer"~~Transfer”) ~~business in order to reduce the cost base of the business in response to reduced demand, partially offset by a reduction in the expected cost of the restructuring actions at our Balcke Duerr~~ business. The ~~cost~~costs incurred for the Heat Transfer business restructuring action included asset impairment charges of $2.6 associated with the discontinuance of a product line and severance costs.

Corporate — Charges for the ~~three and~~ six months ended ~~June 27, 2015~~July 1, 2017 related ~~primarily~~ to severance ~~and other~~ costs ~~associated~~incurred in connection with ~~facility consolidation efforts in Asia Pacific and restructuring actions at our~~the sale of Balcke ~~Duerr and dry cooling businesses.~~Dürr.

Expected charges still to be incurred under actions approved as of July ~~2, 2016 were~~1, 2017 are approximately ~~$0.3.~~$0.1.

The following is an analysis of our restructuring liabilities for the six months ended July 1, 2017 and July 2, ~~2016 and June 27, 2015:~~2016:


	Six months ended						Six months ended
	July 2, 2016			June 27, 2015			July 1, 2017			July 2, 2016
Balance at beginning of year	$	11.3		$	5.1		$	0.9		$	1.6
Special charges⁽¹⁾	(0.3		)	5.3			1.0			0.3
Utilization — cash	(4.9		)	(3.8		)	(1.0		)	(1.2		)
Currency translation adjustment and other	(0.1		)	(0.1		)	—			(0.1		)
Balance at end of period	$	6.0		$	6.5		$	0.9		$	0.6

___________________________


⁽¹⁾	The six months ended July 1, 2017 and July 2, 2016 included $0.0 and ~~June 27, 2015 included~~ $2.6 ~~and $0.3~~ of non-cash charges, respectively, that did not impact the restructuring liability.


(6)	INVENTORIES, NET

Inventories at July ~~2, 2016~~1, 2017 and December 31, ~~2015~~2016 comprised the following:

July 2,
2016 December 31,
2015
Finished goods $ 54.7
$ 58.4
Work in process 61.6
58.2
Raw materials and purchased parts 77.8
79.4
Total FIFO cost 194.1
196.0
Excess of FIFO cost over LIFO inventory value (12.6 ) (12.4 )
Total inventories, net⁽¹⁾
$ 181.5
$ 183.6

~~___________________________~~



	July 1, 2017			December 31, 2016
Finished goods	$	49.7		$	43.0
Work in process	59.8			50.0
Raw materials and purchased parts	70.9			64.9
Total FIFO cost	180.4			157.9
Excess of FIFO cost over LIFO inventory value	(12.1		)	(12.2		)
Total inventories, net	$	168.3		$	145.7


⁽¹⁾	The balance at December 31, 2015 includes $12.9 related to our dry cooling business. As previously noted, the assets and liabilities of the dry cooling business have been classified as “held for sale” in the accompanying condensed consolidated balance sheet as of December 31, 2015. See Note 3 for information on the assets and liabilities of the dry cooling business as of December 31, 2015.

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 ~~52%~~55% and ~~46%~~51% of total inventory at July ~~2, 2016~~1, 2017 and December 31, ~~2015,~~2016, respectively. Other inventories are valued using the first-in, first-out (“FIFO”) method.


(7)	GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The changes in the carrying amount of goodwill, by reportable segment, were as follows:



	December 31, 2016			Impairments		Foreign Currency Translation and Other			July 1, 2017
HVAC segment
Gross goodwill	$	258.5		$	—	$	3.3		$	261.8
Accumulated impairments	(144.2		)	—		(0.3		)	(144.5		)
Goodwill	114.3			—		3.0			117.3

Detection and Measurement segment
Gross goodwill	214.4			—		1.4			215.8
Accumulated impairments	(134.2		)	—		(1.1		)	(135.3		)
Goodwill	80.2			—		0.3			80.5

Engineered Solutions segment
Gross goodwill	351.4			—		4.6			356.0
Accumulated impairments	(205.5		)	—		(4.2		)	(209.7		)
Goodwill	145.9			—		0.4			146.3

Total
Gross goodwill	824.3			—		9.3			833.6
Accumulated impairments	(483.9		)	—		(5.6		)	(489.5		)
Goodwill	$	340.4		$	—	$	3.7		$	344.1

December 31,
2015
Goodwill
Resulting from
Business
Combinations
Impairments
Disposition of Business⁽²⁾

Foreign
Currency
Translation
and Other
July 2,
2016
HVAC segment

Gross goodwill $ 261.3
$ —
$ —
$ —
$ (0.1 ) $ 261.2
Accumulated impairments (145.2 ) —
—
—
0.5
(144.7 )
Goodwill 116.1
—
—
—
0.4
116.5

Detection and Measurement segment

Gross goodwill 219.1
—
—
—
(2.3 ) 216.8
Accumulated impairments (138.0 ) —
—
—
1.9
(136.1 )
Goodwill 81.1
—
—
—
(0.4 ) 80.7

Power segment

Gross goodwill 405.3
—
—
(36.1 ) 1.8
371.0
Accumulated impairments (249.0 ) —
—
25.9
(1.4 ) (224.5 )
Goodwill⁽¹⁾
156.3
—
—
(10.2 ) 0.4
146.5

Total

Gross goodwill 885.7
—
—
(36.1 ) (0.6 ) 849.0
Accumulated impairments (532.2 ) —
—
25.9
1.0
(505.3 )
Goodwill⁽¹⁾
$ 353.5
$ —
$ —
$ (10.2 ) $ 0.4
$ 343.7

~~___________________________~~


⁽¹⁾	The balance at December 31, 2015 includes $10.7 related to our dry cooling business. As previously noted, the assets and liabilities of the dry cooling business have been classified as “held for sale” in the accompanying condensed consolidated balance sheet as of December 31, 2015. See Note 3 for information on the assets and liabilities of the dry cooling business as of December 31, 2015.


⁽²⁾	~~Represents goodwill allocated to our dry cooling business upon its disposition.~~

Other Intangibles, Net

Identifiable intangible assets at July ~~2, 2016~~1, 2017 and December 31, ~~2015~~2016 comprised the following:


	July 2, 2016							December 31, 2015							July 1, 2017							December 31, 2016
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Intangible assets with determinable lives:
Customer relationships	$	25.4	$	(10.2	)	$	15.2	$	25.4	$	(9.5	)	$	15.9	$	1.4	$	(1.4	)	$	—	$	1.4	$	(1.4	)	$	—
Technology⁽¹⁾	20.8		(9.8		)	11.0		40.7		(25.2		)	15.5		2.1		(0.4		)	1.7		2.1		(0.4		)	1.7
Patents	4.6		(4.6		)	—		4.6		(4.6		)	—		4.5		(4.5		)	—		4.5		(4.5		)	—
Other	14.1		(8.3		)	5.8		14.2		(8.1		)	6.1		12.7		(7.7		)	5.0		12.7		(7.4		)	5.3
	64.9		(32.9		)	32.0		84.9		(47.4		)	37.5		20.7		(14.0		)	6.7		20.7		(13.7		)	7.0
Trademarks with indefinite lives^{(1) (2)}	114.3		—			114.3		125.0		—			125.0
Trademarks with indefinite lives															111.7		—			111.7		110.9		—			110.9
Total⁽³⁾⁽¹⁾	$	179.2	$	(32.9	)	$	146.3	$	209.9	$	(47.4	)	$	162.5	$	132.4	$	(14.0	)	$	118.4	$	131.6	$	(13.7	)	$	117.9

___________________________

⁽¹⁾

The balance at December 31, 2015 includes $2.4 and $5.9 of technology and trademarks, respectively, related to our dry cooling business. As previously noted, the assets and liabilities of the dry cooling business have been classified as “held for sale” in the accompanying condensed consolidated balance sheet as of December 31, 2015. See Note 3 for information on the assets and liabilities of the dry cooling business as of December 31, 2015.


⁽²⁾	~~As noted below, we recorded an impairment charge of $4.0 during the first quarter of 2016 related to the trademarks of our Heat Transfer business.~~


⁽³⁾	Changes in the gross carrying values of “Other Intangibles, Net” during the six months ended July ~~2, 2016~~1, 2017 related to ~~the sale of our dry cooling business, the impairment charge related to the Heat Transfer trademarks noted above, and, to a lesser extent,~~ foreign currency translation.

At July ~~2, 2016,~~1, 2017, the net carrying value of intangible assets with determinable lives consisted of ~~$4.4~~$4.0 in the HVAC segment ~~$0.2~~and $2.7 in the Engineered Solutions segment. At July 1, 2017, trademarks with indefinite lives consisted of $89.3 in the HVAC segment, $10.0 in the Detection and Measurement segment and ~~$27.4~~$12.4 in the ~~Power segment. At July 2, 2016, trademarks with indefinite lives consisted of $89.2 in the HVAC segment, $10.5 in the Detection and Measurement segment and $14.6 in the Power~~Engineered Solutions segment.

We perform our annual goodwill impairment testing during the fourth quarter in conjunction with our annual financial planning process, with such testing based primarily on events and circumstances existing as of the end of the third quarter. In addition, we test goodwill for impairment on a more frequent basis if there are indications of potential impairment. A significant amount of judgment is involved in determining if an indication of impairment has occurred between annual testing dates. Such indication may include: a significant decline in expected future cash flows; a significant adverse change in legal factors or the business climate; unanticipated competition; and a more likely than not expectation of selling or disposing all, or a portion, of a reporting unit.

We perform our annual trademarks impairment testing during the fourth quarter, or on a more frequent basis if there are indications of potential impairment. The fair values of our trademarks are determined by applying estimated royalty rates to projected revenues, with the resulting cash flows discounted at a rate of return that reflects current market conditions (fair value based on unobservable inputs - Level 3, as defined in Note 15). The primary basis for these projected revenues is the annual operating plan for each of the related businesses, which is prepared in the fourth quarter of each year. Based on our annual impairment testing during the fourth quarter of 2015, the estimated fair value of the trademarks for Heat Transfer was comparable to their carrying value of $9.5. The revenue projections used in the 2015 annual impairment analysis were based on the most recent historical trends for Heat Transfer. At the end of

In the first quarter of 2016, we concluded that the more recent trends were indicating that Heat Transfer’s revenues for the foreseeable future would be significantly less than the projected amounts included in the 2015 annual analysis. In response to this new information, we performed an impairment analysis of Heat Transfer’s trademarks as of April 2, 2016. Based on such analysis, we recorded an impairment charge of $4.0 related to ~~our consolidated results~~trademarks of ~~operations during the first quarter of 2016.~~

~~In addition to its trademarks,~~our Heat Transfer has definite-lived intangible assets with an aggregate carrying value at July 2, 2016 of $27.3. Although there are no current indications of impairment associated with Heat Transfer’s intangible assets, further deterioration in the business’s financial results could lead to impairment charges in subsequent periods.

business. No impairment charges were recorded in the first half of ~~2015.~~ 2017.


(8)	WARRANTY

The following is an analysis of our product warranty accrual for the periods presented:


	Six months ended						Six months ended
	July 2, 2016			June 27, 2015			July 1, 2017			July 2, 2016
Balance at beginning of year	$	39.6		$	37.5		$	35.8		$	36.3
Provisions	6.3			7.4			5.2			6.6
Usage	(8.3		)	(9.0		)	(8.1		)	(8.2		)
Currency translation adjustment	(0.3		)	—			0.2			(0.3		)
Balance at end of period	37.3			35.9			33.1			34.4
Less: Current portion of warranty	18.7			19.5			12.7			15.8
Non-current portion of warranty	$	18.6		$	16.4		$	20.4		$	18.6


(9)	EMPLOYEE BENEFIT PLANS

In connection with the ~~Spin-Off,~~spin-off of SPX Flow, Inc. (“SPX Flow”) on September 26, 2015, participants in the SPX U.S. Pension Plan (the “U.S. Plan”) that were transferred to SPX FLOW became eligible to elect a lump-sum payment option in lieu of a future pension benefit under the U.S. Plan. During the second quarter of 2016, approximately 9%, or $25.2, of the projected benefit obligation of the U.S. Plan was settled as a result of lump-sum payments. In connection with these lump-sum payments, we remeasured the assets and liabilities of the U.S. Plan as of May 31, 2016, which resulted in a charge to net periodic pension benefit expense of $1.0 during the quarter.

During the second quarter of 2016, we made lump-sum payments to certain participants of the Supplemental Individual Account Retirement Plan (“SIARP”), settling approximately 22%, or $2.7, of the ~~SIARP's~~SIARP’s projected benefit obligation. In connection with these lump-sum payments, we remeasured the liabilities of the SIARP as of June 30, 2016, which resulted in a charge to net periodic pension benefit expense of $0.8 during the quarter.

Net periodic benefit expense (income) for our pension and postretirement plans included the following components:

Domestic Pension Plans


	Three months ended						Six months ended						Three months ended						Six months ended
	July 2, 2016			June 27, 2015			July 2, 2016			June 27, 2015			July 1, 2017			July 2, 2016			July 1, 2017			July 2, 2016
Service cost	$	0.1		$	0.9		$	0.2		$	1.8		$	0.1		$	0.1		$	0.2		$	0.2
Interest cost	3.5			4.3			7.1			8.6			3.3			3.5			6.6			7.1
Expected return on plan assets	(3.2		)	(4.9		)	(6.4		)	(9.8		)	(2.5		)	(3.2		)	(5.0		)	(6.4		)
Recognized net actuarial loss	1.8			—			1.8			—			—			1.8			—			1.8
Total net periodic pension benefit expense	$	2.2		$	0.3		$	2.7		$	0.6		$	0.9		$	2.2		$	1.8		$	2.7

Foreign Pension Plans


	Three months ended						Six months ended						Three months ended						Six months ended
	July 2, 2016			June 27, 2015			July 2, 2016			June 27, 2015			July 1, 2017			July 2, 2016			July 1, 2017			July 2, 2016
Service cost	$	—		$	0.4		$	—		$	0.8		$	—		$	—		$	—		$	—
Interest cost	1.5			2.0			2.9			4.0			1.2			1.5			2.4			2.9
Expected return on plan assets	(1.8		)	(2.5		)	(3.5		)	(4.9		)	(1.6		)	(1.8		)	(3.1		)	(3.5		)
Total net periodic pension benefit income	(0.3		)	(0.1		)	(0.6		)	(0.1		)
Less: Net periodic pension benefit expense of discontinued operations	—			0.6			—			1.3
Net periodic pension benefit income of continuing operations	$	(0.3	)	$	(0.7	)	$	(0.6	)	$	(1.4	)
Net periodic pension benefit income													$	(0.4	)	$	(0.3	)	$	(0.7	)	$	(0.6	)

Postretirement Plans


	Three months ended						Six months ended						Three months ended						Six months ended
	July 2, 2016			June 27, 2015			July 2, 2016			June 27, 2015			July 1, 2017			July 2, 2016			July 1, 2017			July 2, 2016
Service cost	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Interest cost	1.1			1.1			2.1			2.2			0.9			1.1			1.9			2.1
Amortization of unrecognized prior service credits	(0.2		)	(0.2		)	(0.4		)	(0.4		)	(0.2		)	(0.2		)	(0.4		)	(0.4		)
Net periodic postretirement benefit expense	$	0.9		$	0.9		$	1.7		$	1.8		$	0.7		$	0.9		$	1.5		$	1.7


(10)	INDEBTEDNESS

The following summarizes our debt activity (both current and non-current) for the six months ended July ~~2, 2016:~~1, 2017:


	December 31, 2015		Borrowings		Repayments			Other⁽⁴⁾		July 2, 2016		December 31, 2016		Borrowings		Repayments			Other⁽⁴⁾		July 1, 2017
Revolving loans	$	—	$	65.0	$	(65.0	)	$	—	$	—	$	—	$	16.0	$	(16.0	)	$	—	$	—
Term loan⁽¹⁾	348.0		—		—			0.2		348.2		339.6		—		(8.7		)	0.2		331.1
Trade receivables financing arrangement⁽²⁾	—		20.0		(20.0		)	—		—		—		40.0		(19.0		)	—		21.0
Other indebtedness⁽³⁾	23.8		8.6		(9.2		)	2.5		25.7		16.6		21.4		(24.1		)	1.4		15.3
Total debt	371.8		$	93.6	$	(94.2	)	$	2.7	373.9		356.2		$	77.4	$	(67.8	)	$	1.6	367.4
Less: short-term debt	22.1									21.5		14.8									33.9
Less: current maturities of long-term debt	9.1									17.9		17.9									18.1
Total long-term debt	$	340.6								$	334.5	$	323.5								$	315.4

___________________________

⁽¹⁾

The term loan is repayable in quarterly installments of ~~5.0% annually, beginning in~~1.25% of the ~~third fiscal quarter~~original loan balance of ~~2016.~~$350.0. The remaining balance is repayable in full on September 24, 2020. Balances are net of unamortized debt issuance costs of ~~$1.8~~$1.4 and ~~$2.0~~$1.6 at July ~~2, 2016~~1, 2017 and December 31, ~~2015,~~2016, respectively. ~~See Notes 1 and 2 for additional details.~~


⁽²⁾	Under this arrangement, we can borrow, on a continuous basis, up to $50.0, as available. At July ~~2, 2016,~~1, 2017, we had ~~$32.1~~$22.9 of available borrowing capacity under this facility.

⁽³⁾

Primarily includes balances under a purchase card program of ~~$4.3~~$3.0 and ~~$4.8,~~$3.9, capital lease obligations of ~~$4.2~~$2.4 and $1.7, and borrowings under ~~a line~~lines of credit in South Africa and China ~~of $14.7~~totaling $9.2 and ~~$17.3~~$10.2 at July ~~2, 2016~~1, 2017 and December 31, ~~2015,~~2016, respectively. The purchase card program allows for payment beyond the normal payment terms for goods and services acquired under the program. As this arrangement extends the payment of these purchases beyond their normal payment terms through third-party lending institutions, we have classified these amounts as short-term debt.


⁽⁴⁾	“Other” primarily includes debt assumed, foreign currency translation on any debt instruments denominated in currencies other than the U.S. dollar, and the impact of amortization of debt issuance costs associated with the term loan.

Senior Credit Facilities

On March 20, 2017, we entered into an amendment to our senior credit facilities. Among other things, the amendment extended the period during which we may reinvest the net proceeds from the disposition of our dry cooling business. A detailed description of our senior credit facilities is included in our ~~2015~~2016 Annual Report on Form 10-K.

At July ~~2, 2016,~~1, 2017, we had ~~$45.9~~$36.1 and ~~$203.0~~$195.2 of outstanding letters of credit issued under our revolving credit and our foreign credit instrument facilities of our senior credit agreement, respectively.

The weighted-average interest rate of outstanding borrowings under our senior credit agreement was approximately ~~2.2%~~3.0% at July ~~2, 2016.~~1, 2017.

At July ~~2, 2016,~~1, 2017, we were in compliance with all covenants of our senior credit agreement.


(11)	DERIVATIVE FINANCIAL INSTRUMENTS

Interest Rate Swaps

During the second quarter of 2016, we entered into interest rate swap agreements (“Swaps”) to hedge the interest rate risk on our variable rate term loan. These Swaps, which we designate and account for as cash flow hedges, have effective dates beginning in January 2017 and maturities through September 2020 and effectively convert 50% of the borrowing under the variable rate term loan to a fixed rate of 1.2895% plus the applicable margin. These are amortizing Swaps; therefore, the outstanding notional value is scheduled to decline commensurate with the scheduled maturities of the term loan. As of July ~~2, 2016,~~1, 2017, the aggregate notional amounts of the Swaps was ~~$170.8~~$166.9 and the unrealized ~~loss,~~gain, net of tax, recorded in accumulated other comprehensive income (“AOCI”) was ~~$1.5.~~$0.9. In addition, we have recorded a long-term ~~liability~~asset of ~~$2.5~~$1.9 to recognize the fair value of these Swaps. These changes in fair value are reclassified into earnings as a component of interest expense, when the forecasted transaction impacts earnings.

Currency Forward Contracts and Currency Forward Embedded Derivatives

From time to time, we enter into forward contracts to manage the exposure on contracts with forecasted transactions denominated in non-functional currencies and to manage the risk of transaction gains and losses associated with assets/liabilities denominated in currencies other than the functional currency of certain subsidiaries (“FX forward contracts”). In addition, some of our contracts contain currency forward embedded derivatives (“FX embedded derivatives”), because the currency of exchange is not “clearly and closely” related to the functional currency of either party to the transaction. Certain of our FX forward contracts are designated as cash flow hedges. To the extent these derivatives are effective in offsetting the variability of the hedged cash flows, changes in the derivatives’ fair value are not included in current earnings, but are included in ~~AOCI.~~accumulated other comprehensive income (“AOCI”). These changes in fair

value are reclassified into earnings as a component of revenues or cost of products sold, as applicable, when the forecasted transaction impacts earnings. In addition, if the forecasted transaction is no longer probable, the cumulative change in the derivatives’ fair value is recorded as a component of “Other income (expense), net” in the period in which the transaction is no longer considered probable of occurring. To the extent a previously designated hedging transaction is no longer an effective hedge, any ineffectiveness measured in the hedging relationship is recorded in earnings in the period in which it occurs.

We had FX forward contracts with an aggregate notional amount of ~~$60.8~~$5.3 and ~~$139.8~~$8.8 outstanding as of July ~~2, 2016~~1, 2017 and December 31, ~~2015,~~2016, respectively, with all of ~~which are~~the $5.3 scheduled to mature within one year. We also had FX embedded derivatives with an aggregate notional amount of ~~$22.5~~$0.4 and ~~$120.8~~$0.9 at July ~~2, 2016~~1, 2017 and December 31, ~~2015,~~2016, respectively, with ~~notional amounts~~all of ~~$15.7 and $6.8~~the $0.4 scheduled to mature within one ~~and two years thereafter, respectively. The decline in the notional amount of FX forward contracts and FX embedded derivatives was due primarily to the sale of our dry cooling business. The~~year. There were no unrealized gains or losses ~~net of tax,~~ recorded in AOCI related to FX forward contracts ~~were $0.0 and $0.6~~ as of July ~~2, 2016~~1, 2017 and December 31, ~~2015, respectively.~~2016.

~~With regard to our FX forward contacts, these arrangements are designed to provide the right of setoff in the event of counterparty default or insolvency, and, thus, we have elected to offset the~~The fair ~~values of these instruments in our condensed consolidated balance sheets. The gross fair values~~value of our FX forward contracts ~~were $0.0~~ and ~~$0.1 (gross assets) and $0.8 and $1.5 (gross liabilities) at July 2, 2016 and December 31, 2015, respectively.~~

~~The fair values of our~~FX embedded derivative instruments were not material in relation to our condensed consolidated balance sheets as of July ~~2, 2016~~1, 2017 and December 31, ~~2015.~~2016.

Commodity Contracts

From time to time, we enter into commodity contracts to manage the exposure on forecasted purchases of commodity raw materials. At July ~~2, 2016~~1, 2017 and December 31, ~~2015,~~2016, the outstanding notional amount of commodity contracts was ~~2.4~~4.3 and ~~4.2~~4.1 pounds of copper, respectively. We designate and account for these contracts as cash flow hedges and, to the extent these commodity contracts are effective in offsetting the variability of the forecasted purchases, the change in fair value is included in AOCI. We reclassify AOCI associated with our commodity contracts to cost of products sold when the forecasted transaction impacts earnings. As of July ~~2, 2016~~1, 2017 and December 31, ~~2015,~~2016, the fair value of these contracts was ~~$0.1~~$0.5 (current ~~liability)~~asset) and ~~$1.7~~$1.1 (current ~~liability)~~asset), respectively. The unrealized ~~losses,~~gains, net of tax, recorded in AOCI were ~~$0.1~~$0.4 and ~~$1.2~~$0.8 as of July ~~2, 2016~~1, 2017 and December 31, ~~2015,~~2016, respectively. We anticipate reclassifying the unrealized ~~losses~~gains as of July ~~2, 2016~~1, 2017 to income over the next 12 months.


(12)	SHAREHOLDERS’ EQUITY AND LONG-TERM INCENTIVE COMPENSATION

Income (Loss) Per Share

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

Three months ended Six months ended
July 2,
2016 June 27,
2015 July 2,
2016 June 27,
2015
Weighted-average number of common shares used in basic income (loss) per share 41.594
40.602
41.443
40.553
Dilutive securities — Restricted stock shares and restricted stock units —
—
0.311
—
Weighted-average number of common shares and dilutive securities used in diluted income (loss) per share 41.594
40.602
41.754
40.553



	Three months ended		Six months ended
	July 1, 2017	July 2, 2016	July 1, 2017	July 2, 2016
Weighted-average number of common shares used in basic income per share	42.388	41.594	42.249	41.443
Dilutive securities — Employee stock options, restricted stock shares and restricted stock units	—	—	1.373	0.311
Weighted-average number of common shares and dilutive securities used in diluted income per share	42.388	41.594	43.622	41.754

The weighted-average number of restricted stock shares/units and stock options excluded from the computation of diluted income per share because the assumed proceeds for these instruments exceed the average market value of the underlying common stock for the related ~~periods~~period was 0.476 and 1.037, respectively, for the three months ended July 1, 2017, and 0.435 and 1.010, respectively, for the six months ended July 1, 2017. In addition, for the three months ended July 1, 2017, 0.804 and 0.597 of restricted stock shares/units and stock options, respectively, were excluded from the related computation of diluted income per share due to the net loss from continuing operations attributable to SPX common shareholders during the period.

The weighted-average number of restricted stock shares/units and stock options excluded from the computation of diluted income per share because the assumed proceeds for these instruments exceed the average market value of the underlying common stock for the related period was 1.365 and 1.417, respectively, for the three months ended July 2, 2016 and 1.254 and 1.251, respectively, for the six months ended July 2, 2016. In addition, for the three months ended July 2, 2016, 0.359 and 0.001 of restricted stock shares/units and stock options, respectively, were excluded from the related computation of diluted income per share due to the net loss from continuing operations attributable to SPX common shareholders during the period.

For the three and six months ended June 27, 2015, 0.853 and 0.845 of unvested restricted stock shares/units, respectively, and 0.323 of outstanding stock options were excluded from the computation of diluted income (loss) per share as we incurred losses from continuing operations after adjustment related to redeemable noncontrolling interest during the periods.

Long-Term Incentive Compensation

Long-term incentive compensation awards may be granted to certain eligible employees or non-employee directors. A detailed description of the awards granted prior to ~~2016~~2017 is included in our ~~2015~~2016 Annual Report on Form 10-K.

Awards granted on March ~~2, 2016~~1, 2017 to executive officers and other members of senior management were comprised of performance stock units (“PSU’s”), stock options, time-based restricted stock units (“RSU’s”), and long-term cash awards, while other eligible employees were granted RSU’s and long-term cash awards. The PSU’s are eligible to vest at the end of a three-year performance period, with performance based on the total return of our stock over the three-year performance period against the S&P 600 Capital Goods Index. Stock options and RSU’s vest ratably over the three-year period subsequent to the date of grant. Long-term cash awards are eligible to vest at the end of a three-year performance measurement period, with performance based on our achieving a target segment income amount over the three-year measurement period.

Effective May ~~24, 2016,~~8, 2017, we granted ~~0.049 RSU's~~0.024 RSU’s to our Non-employee directors, which vest in their entirety immediately prior to the annual meeting of stockholders in May ~~2017.~~2018.

Compensation expense within income from continuing operations related to long-term incentive awards totaled ~~$3.5~~$3.6 and ~~$4.0~~$3.4 for the three months ended July 1, 2017 and July 2, 2016, ~~and June 27, 2015,~~ respectively, and ~~$6.3~~$6.8 and ~~$25.0~~$6.1 for the six months ended July 1, 2017 and July 2, 2016, ~~and June 27, 2015,~~ respectively. The related tax benefit was $1.4 and ~~$1.5~~$1.3 for the three months ended July 1, 2017 and July 2, 2016, ~~and June 27, 2015,~~ respectively, and ~~$2.4~~$2.6 and ~~$9.6~~$2.3 for the six months ended July 1, 2017 and July 2, 2016, ~~and June 27, 2015,~~ respectively.

Accumulated Other Comprehensive Income (Loss)

The changes in the components of accumulated other comprehensive income, net of tax, for the three months ended July 1, 2017 were as follows:



	Foreign Currency Translation Adjustment		Net Unrealized Gains on Qualifying Cash Flow Hedges⁽¹⁾			Pension and Postretirement Liability Adjustment⁽²⁾			Total
Balance at beginning of period	$	228.2	$	2.2		$	3.7		$	234.1
Other comprehensive income (loss) before reclassifications	1.1		(0.6		)	—			0.5
Amounts reclassified from accumulated other comprehensive income	—		(0.3		)	(0.1		)	(0.4		)
Current-period other comprehensive income (loss)	1.1		(0.9		)	(0.1		)	0.1
Balance at end of period	$	229.3	$	1.3		$	3.6		$	234.2

__________________________


⁽¹⁾	Net of tax provision of $0.8 and $1.3 as of July 1, 2017 and April 1, 2017, respectively.


⁽²⁾	Net of tax provision of $2.6 and $2.7 as of July 1, 2017 and April 1, 2017, respectively. The balances as of July 1, 2017 and April 1, 2017 represent net unamortized prior service credits.

The changes in the components of accumulated other comprehensive income, net of tax, for the six months ended July 1, 2017 were as follows:



	Foreign Currency Translation Adjustment			Net Unrealized Gains on Qualifying Cash Flow Hedges⁽¹⁾			Pension and Postretirement Liability Adjustment⁽²⁾			Total
Balance at beginning of period	$	229.7		$	1.5		$	3.9		$	235.1
Other comprehensive income (loss) before reclassifications	(0.4		)	0.5			—			0.1
Amounts reclassified from accumulated other comprehensive income	—			(0.7		)	(0.3		)	(1.0		)
Current-period other comprehensive loss	(0.4		)	(0.2		)	(0.3		)	(0.9		)
Balance at end of period	$	229.3		$	1.3		$	3.6		$	234.2

_________________________


⁽¹⁾	Net of tax provision of $0.8 and $0.9 as of July 1, 2017 and December 31, 2016, respectively.


⁽²⁾	Net of tax provision of $2.6 and $2.7 as of July 1, 2017 and December 31, 2016. The balances as of July 1, 2017 and December 31, 2016 represent net unamortized prior service credits.

The changes in the components of accumulated other comprehensive income, net of tax, for the three months ended July 2, 2016 were as follows:


	Foreign Currency Translation Adjustment			Net Unrealized Losses on Qualifying Cash Flow Hedges⁽¹⁾			Pension and Postretirement Liability Adjustment⁽²⁾			Total			Foreign Currency Translation Adjustment			Net Unrealized Losses on Qualifying Cash Flow Hedges⁽¹⁾			Pension and Postretirement Liability Adjustment⁽²⁾			Total
Balance at beginning of period	$	241.9		$	(0.6	)	$	4.3		$	245.6		$	241.9		$	(0.6	)	$	4.3		$	245.6
Other comprehensive loss before reclassifications	(2.3		)	(1.5		)	—			(3.8		)	(2.3		)	(1.5		)	—			(3.8		)
Amounts reclassified from accumulated other comprehensive income (loss)	—			0.5			(0.1		)	0.4			—			0.5			(0.1		)	0.4
Current-period other comprehensive loss	(2.3		)	(1.0		)	(0.1		)	(3.4		)	(2.3		)	(1.0		)	(0.1		)	(3.4		)
Balance at end of period	$	239.6		$	(1.6	)	$	4.2		$	242.2		$	239.6		$	(1.6	)	$	4.2		$	242.2

~~__________________________~~___________________________


⁽¹⁾	Net of tax benefit of $1.0 and $0.4 as of July 2, 2016 and April 2, 2016, respectively.


⁽²⁾	Net of tax provision of $3.0 and $3.1 as of July 2, 2016 and April 2, 2016, respectively. The balances as of July 2, 2016 and April 2, 2016 ~~represent~~include net unamortized prior service credits.

The changes in the components of accumulated other comprehensive income, net of tax, for the six months ended July 2, 2016 were as follows:

Foreign
Currency
Translation
Adjustment
Net Unrealized Losses
on Qualifying Cash
Flow Hedges⁽²⁾

Pension and
Postretirement
Liability Adjustment⁽³⁾
Total
Balance at beginning of period $ 280.6
$ (1.8 ) $ 4.5
$ 283.3
Other comprehensive loss before reclassifications (0.6 ) (1.7 ) —
(2.3 )
Amounts reclassified from accumulated other comprehensive income (loss)⁽¹⁾
(40.4 ) 1.9
(0.3 ) (38.8 )
Current-period other comprehensive income (loss) (41.0 ) 0.2
(0.3 ) (41.1 )
Balance at end of period $ 239.6
$ (1.6 ) $ 4.2
$ 242.2



	Foreign Currency Translation Adjustment			Net Unrealized Losses on Qualifying Cash Flow Hedges⁽²⁾			Pension and Postretirement Liability Adjustment⁽³⁾			Total
Balance at beginning of period	$	280.6		$	(1.8	)	$	4.5		$	283.3
Other comprehensive loss before reclassifications	(0.6		)	(1.7		)	—			(2.3		)
Amounts reclassified from accumulated other comprehensive income (loss)⁽¹⁾	(40.4		)	1.9			(0.3		)	(38.8		)
Current-period other comprehensive income (loss)	(41.0		)	0.2			(0.3		)	(41.1		)
Balance at end of period	$	239.6		$	(1.6	)	$	4.2		$	242.2

__________________________


⁽¹⁾	In connection with the sale of our dry cooling business, we reclassified $40.4 of other comprehensive income related to foreign currency translation to “Gain (loss) on sale of dry cooling business.”


⁽²⁾	Net of tax benefit of $1.0 and $0.8 as of July 2, 2016 and December 31, 2015, respectively.


⁽³⁾	Net of tax provision of $3.0 and $3.1 as of July 2, 2016 and December 31, ~~2015.~~2015, respectively. The balances as of July 2, 2016 and December 31, 2015 ~~represent net unamortized prior service credits.~~

~~The changes in the components of accumulated other comprehensive loss, net of tax, for the three months ended June 27, 2015 were as follows:~~

Foreign
Currency
Translation
Adjustment

Net Unrealized
Losses
on Qualifying Cash Flow Hedges⁽¹⁾

Pension and
Postretirement
Liability
Adjustment⁽²⁾
Total
Balance at beginning of period $ (72.1 ) $ (0.6 ) $ 4.7
$ (68.0 )
Other comprehensive income before reclassifications 41.7
—
—
41.7
Amounts reclassified from accumulated other comprehensive income (loss) —
(0.8 ) (0.1 ) (0.9 )
Current-period other comprehensive income (loss) 41.7
(0.8 ) (0.1 ) 40.8
Balance at end of period $ (30.4 ) $ (1.4 ) $ 4.6
$ (27.2 )

~~___________________________~~


⁽¹⁾	~~Net of tax benefit of $0.4 and $0.5 as of June 27, 2015 and March 28, 2015, respectively.~~


⁽²⁾	~~Net of tax provision of $2.9 and $3.0 as of June 27, 2015 and March 28, 2015, respectively. The balances as of June 27, 2015 and March 28, 2015 include net unamortized prior service credits.~~

~~The changes in the components of accumulated other comprehensive income (loss), net of tax, for the six months ended June 27, 2015 were as follows:~~

Foreign
Currency
Translation
Adjustment
Net Unrealized Losses
on Qualifying Cash Flow Hedges⁽¹⁾

Pension and
Postretirement
Liability
Adjustment⁽²⁾
Total
Balance at beginning of period $ 59.0
$ (1.3 ) $ 4.9
$ 62.6
Other comprehensive income (loss) before reclassifications (89.4 ) 0.1
—
(89.3 )
Amounts reclassified from accumulated other comprehensive income (loss) —
(0.2 ) (0.3 ) (0.5 )
Current-period other comprehensive loss (89.4 ) (0.1 ) (0.3 ) (89.8 )
Balance at end of period $ (30.4 ) $ (1.4 ) $ 4.6
$ (27.2 )

~~__________________________~~


⁽¹⁾	~~Net of tax benefit of $0.4 and $1.1 as of June 27, 2015 and December 31, 2014, respectively.~~


⁽²⁾	~~Net of tax provision of $2.9 and $3.0 as of June 27, 2015 and December 31, 2014, respectively. The balances as of June 27, 2015 and December 31, 2014~~ include net unamortized prior service credits.

The following summarizes amounts reclassified from each component of accumulated comprehensive income ~~(loss)~~ for the three months ended July 1, 2017 and July 2, ~~2016 and June 27, 2015:~~2016:


	Amount Reclassified from AOCI							Amount Reclassified from AOCI
	Three months ended							Three months ended
	July 2, 2016			June 27, 2015			Affected Line Item in the Condensed Consolidated Statements of Operations	July 1, 2017			July 2, 2016			Affected Line Item in the Condensed Consolidated Statements of Operations
(Gains) losses on qualifying cash flow hedges:
FX forward contracts	$	—		$	(1.1	)	Revenues	$	—		$	—		Revenues
Commodity contracts	0.9			0.5			Cost of products sold	(0.7		)	0.9			Cost of products sold
Swaps								0.2			—			Interest expense
Pre-tax	0.9			(0.6		)		(0.5		)	0.9
Income taxes	(0.4		)	(0.2		)		0.2			(0.4		)
	$	0.5		$	(0.8	)		$	(0.3	)	$	0.5

Gains on pension and postretirement items:
Amortization of unrecognized prior service credits	$	(0.2	)	$	(0.2	)	Selling, general and administrative	$	(0.2	)	$	(0.2	)	Selling, general and administrative
Pre-tax	(0.2		)	(0.2		)		(0.2		)	(0.2		)
Income taxes	0.1			0.1				0.1			0.1
	$	(0.1	)	$	(0.1	)		$	(0.1	)	$	(0.1	)

The following summarizes amounts reclassified from each component of accumulated comprehensive income (loss) for the six months ended July 1, 2017 and July 2, ~~2016 and June 27, 2015:~~2016:


	Amount Reclassified from AOCI							Amount Reclassified from AOCI
	Six months ended							Six months ended
	July 2, 2016			June 27, 2015			Affected Line Item in the Condensed Consolidated Statements of Operations	July 1, 2017			July 2, 2016			Affected Line Item in the Condensed Consolidated Statements of Operations
(Gains) losses on qualifying cash flow hedges:
FX forward contracts	$	1.0		$	(1.1	)	Revenues	$	—		$	1.0		Revenues
Commodity contracts	1.6			1.2			Cost of products sold	(1.4		)	1.6			Cost of products sold
Swaps								0.3			—			Interest expense
Pre-tax	2.6			0.1				(1.1		)	2.6
Income taxes	(0.7		)	(0.3		)		0.4			(0.7		)
	$	1.9		$	(0.2	)		$	(0.7	)	$	1.9

Gains on pension and postretirement items:
Amortization of unrecognized prior service credits	$	(0.4	)	$	(0.4	)	Selling, general and administrative	$	(0.4	)	$	(0.4	)	Selling, general and administrative
Pre-tax	(0.4		)	(0.4		)		(0.4		)	(0.4		)
Income taxes	0.1			0.1				0.1			0.1
	$	(0.3	)	$	(0.3	)		$	(0.3	)	$	(0.3	)

Gain on sale of dry cooling business:
Recognition of foreign currency translation adjustment associated with the sale of our dry cooling business	$	(40.4	)	$	—		Gain (loss) on sale of dry cooling business	$	—		$	(40.4	)	Gain (loss) on sale of dry cooling business

Common Stock in Treasury

During the six months ended July 1, 2017 and July 2, 2016, ~~and June 27, 2015,~~ “Common stock in treasury” was decreased by the settlement of restricted stock units issued from treasury stock of $16.0 and $17.7, and $5.7, respectively, and increased by $0.0 and $1.2, respectively, for common stock that was surrendered by recipients of restricted stock as a means of funding the related minimum income tax withholding requirements.

~~Dividends~~

In connection with the Spin-Off, we discontinued dividend payments immediately following the second quarter dividend payment for 2015, which occurred on July 1, 2015. Dividends declared and paid for the first six months of 2015 totaled $30.9 and $30.4, respectively.

Changes in Equity

A summary of the changes in equity for the three months ended July 1, 2017 and July 2, 2016 ~~and June 27, 2015~~ is provided below:


	July 2, 2016									June 27, 2015									July 1, 2017								July 2, 2016
	SPX Corporation Shareholders’ Equity			Noncontrolling Interests			Total Equity			SPX Corporation Shareholders’ Equity			Noncontrolling Interests			Total Equity			SPX Corporation Shareholders’ Equity			Noncontrolling Interests		Total Equity			SPX Corporation Shareholders’ Equity			Noncontrolling Interests			Total Equity
Equity, beginning of period	$	322.8		$	(37.5	)	$	285.3		$	1,678.6		$	(0.1	)	$	1,678.5		$	211.0		$	—	$	211.0		$	322.8		$	(37.5	)	$	285.3
Net income (loss)	4.0			(1.0		)	3.0			38.9			(2.5		)	36.4			(9.0		)	—		(9.0		)	4.0			(1.0		)	3.0
Net unrealized losses on qualifying cash flow hedges, net of tax (provision) benefit of $0.6 and $(0.1) for the three months ended July 2, 2016 and June 27, 2015, respectively	(1.0		)	—			(1.0		)	(0.8		)	—			(0.8		)
Pension and postretirement liability adjustment, net of tax benefit of $0.1 for the three months ended July 2, 2016 and June 27, 2015.	(0.1		)	—			(0.1		)	(0.1		)	—			(0.1		)
Net unrealized losses on qualifying cash flow hedges, net of tax benefit of $0.5 and $0.6 for the three months ended July 1, 2017 and July 2, 2016, respectively																			(0.9		)	—		(0.9		)	(1.0		)	—			(1.0		)
Pension and postretirement liability adjustment, net of tax benefit of $0.1 for the three months ended July 2, 2017 and July 2, 2016																			(0.1		)	—		(0.1		)	(0.1		)	—			(0.1		)
Foreign currency translation adjustments	(2.3		)	(0.2		)	(2.5		)	41.7			0.1			41.8			1.1			—		1.1			(2.3		)	(0.2		)	(2.5		)
Total comprehensive income (loss), net	0.6			(1.2		)	(0.6		)	79.7			(2.4		)	77.3			(8.9		)	—		(8.9		)	0.6			(1.2		)	(0.6		)
Dividends declared	—			—			—			(15.5		)	—			(15.5		)
Incentive plan activity	1.9			—			1.9			4.1			—			4.1			3.6			—		3.6			1.9			—			1.9
Stock-based long-term incentive compensation expense (includes amounts recorded to discontinued operations of $1.5 for the three months ended June 27, 2015)	3.2			—			3.2			5.5			—			5.5
Restricted stock and restricted stock unit vesting, net of tax withholdings, and related tax (provision) benefit of $0.1 and $(0.1) for the three months ended July 2, 2016 and June 27, 2015, respectively	0.1			—			0.1			(0.3		)	—			(0.3		)
Long-term incentive compensation expense																			3.0			—		3.0			3.2			—			3.2
Restricted stock and restricted stock unit vesting, net of tax withholdings, and related tax benefit of $0.0 and $0.1 for the three months ended July 1, 2017 and July 2, 2016, respectively																			—			—		—			0.1			—			0.1
Adjustment related to redeemable noncontrolling interest (see Note 13)	(56.0		)	38.7			(17.3		)	—			—			—			—			—		—			(56.0		)	38.7			(17.3		)
Other changes in noncontrolling interests	—			—			—			—			0.3			0.3
Equity, end of period	$	272.6		$	—		$	272.6		$	1,752.1		$	(2.2	)	$	1,749.9		$	208.7		$	—	$	208.7		$	272.6		$	—		$	272.6

A summary of the changes in equity for the six months ended July 1, 2017 and July 2, 2016 ~~and June 27, 2015~~ is provided below:

July 2, 2016 June 27, 2015
SPX
Corporation
Shareholders’
Equity Noncontrolling
Interests Total
Equity SPX
Corporation
Shareholders’
Equity Noncontrolling
Interests Total
Equity
Equity, beginning of period $ 345.4
$ (37.1 ) $ 308.3
$ 1,808.7
$ 3.2
$ 1,811.9
Net income (loss) 17.0
(0.4 ) 16.6
31.8
(5.4 ) 26.4
Net unrealized gains (losses) on qualifying cash flow hedges, net of tax (provision)benefit of $0.2 and $(0.7) for the six months ended July 2, 2016 and June 27, 2015, respectively 0.2
—
0.2
(0.1 ) —
(0.1 )
Pension and postretirement liability adjustment, net of tax benefit of $0.1 the six months ended July 2, 2016 and June 27, 2015. (0.3 ) —
(0.3 ) (0.3 ) —
(0.3 )
Foreign currency translation adjustments (41.0 ) (1.2 ) (42.2 ) (89.4 ) 0.2
(89.2 )
Total comprehensive loss, net (24.1 ) (1.6 ) (25.7 ) (58.0 ) (5.2 ) (63.2 )
Dividends declared —
—
—
(30.9 ) —
(30.9 )
Incentive plan activity 4.6
—
4.6
9.0
—
9.0
Stock-based long-term incentive compensation expense (includes amounts recorded to discontinued operations of $4.1 for the six months ended June 27, 2015) 5.9
—
5.9
29.1
—
29.1
Restricted stock and restricted stock unit vesting, net of tax withholdings, and related tax (provision) benefit of $(1.5) and $0.3 for the six months ended July 2, 2016 and June 27, 2015, respectively (3.2 ) —
(3.2 ) (5.8 ) —
(5.8 )
Adjustment related to redeemable noncontrolling interest (see Note 13) (56.0 ) 38.7
(17.3 ) —
—
—
Other changes in noncontrolling interests —
—
—
—
(0.2 ) (0.2 )
Equity, end of period $ 272.6
$ —
$ 272.6
$ 1,752.1
$ (2.2 ) $ 1,749.9



	July 1, 2017								July 2, 2016
	SPX Corporation Shareholders’ Equity			Noncontrolling Interests		Total Equity			SPX Corporation Shareholders’ Equity			Noncontrolling Interests			Total Equity
Equity, beginning of period	$	191.6		$	—	$	191.6		$	345.4		$	(37.1	)	$	308.3
Net income (loss)	8.4			—		8.4			17.0			(0.4		)	16.6
Net unrealized gains (losses) on qualifying cash flow hedges, net of tax benefit of $0.1 and $0.2 for the six months ended July 1, 2017 and July 2, 2016, respectively	(0.2		)	—		(0.2		)	0.2			—			0.2
Pension and postretirement liability adjustment, net of tax benefit of $0.1 for the six months ended July 1, 2017 and July 2, 2016	(0.3		)	—		(0.3		)	(0.3		)	—			(0.3		)
Foreign currency translation adjustments	(0.4		)	—		(0.4		)	(41.0		)	(1.2		)	(42.2		)
Total comprehensive income (loss), net	7.5			—		7.5			(24.1		)	(1.6		)	(25.7		)
Incentive plan activity	7.4			—		7.4			4.6			—			4.6
Long-term incentive compensation expense	5.8			—		5.8			5.9			—			5.9
Restricted stock and restricted stock unit vesting, net of tax withholdings, and related tax provision of $0.0 and $1.5 for the six months ended July 1, 2017 and July 2, 2016, respectively	(3.6		)	—		(3.6		)	(3.2		)	—			(3.2		)
Adjustment related to redeemable noncontrolling interest (see Note 13)	—			—		—			(56.0		)	38.7			(17.3		)
Equity, end of period	$	208.7		$	—	$	208.7		$	272.6		$	—		$	272.6


(13)	CONTINGENT LIABILITIES AND OTHER MATTERS

General

Numerous claims, complaints and proceedings arising in the ordinary course of business have been asserted or are pending against us or certain of our subsidiaries (collectively, “claims”). These claims relate to litigation matters (e.g., class actions ~~derivative lawsuits~~ and contracts, intellectual property, and competitive claims), environmental matters, product liability matters (predominately associated with alleged exposure to asbestos-containing materials), and other risk management matters (e.g., general liability, automobile, and workers’ compensation claims). Additionally, we may become subject to other claims of which we are currently unaware, which may be significant, or the claims of which we are aware may result in our incurring significantly greater loss than we anticipate. While we (and our subsidiaries) maintain property, cargo, auto, product, general liability, environmental, and directors’ and officers’ liability insurance and have acquired rights under similar policies in connection with acquisitions that we believe cover a significant portion of these claims, this insurance may be insufficient or unavailable (e.g., in the case of insurer insolvency) to protect us against potential loss exposures. Also, while we believe we are entitled to indemnification from third parties for some of these claims, these rights may be insufficient or unavailable to protect us against potential loss exposures.

Our recorded liabilities related to these matters totaled ~~$585.4~~$651.4 (including ~~$531.6~~$606.1 for asbestos product liability matters) and ~~$591.1~~$653.5 (including ~~$534.4~~$605.6 for asbestos product liability matters) at July ~~2, 2016~~1, 2017 and December 31, ~~2015,~~2016, respectively. Of these amounts, ~~$549.5~~$615.7 and ~~$552.8~~$621.0 are included in “Other long-term liabilities” within our condensed consolidated balance sheets at July ~~2, 2016~~1, 2017 and December 31, ~~2015,~~2016, respectively, with the remainder included in “Accrued expenses.” The liabilities we record for these claims are based on a number of assumptions, including historical claims and payment experience and, with respect to asbestos claims, actuarial estimates of the future period during which additional claims are reasonably foreseeable. While we base our assumptions on facts currently known to us, they entail inherently subjective judgments and uncertainties. As a result, our current assumptions for estimating these liabilities may not prove accurate, and we may be required to adjust these liabilities in the future, which could result in charges to earnings. These variances relative to current expectations could have a material impact on our financial position and results of operations.

Our asbestos-related claims are typical in certain of the industries in which we operate or pertain to legacy businesses we no longer operate. It is not unusual in these cases for fifty or more corporate entities to be named as defendants. We vigorously defend these claims, many of which are dismissed without payment, and the significant majority of costs related to these claims have historically been paid pursuant to our insurance arrangements. During the three months ended July 1, 2017 and July 2, 2016, ~~and June 27, 2015,~~ our payments for asbestos-related matters, net of insurance recoveries, were $1.2 and $1.3, ~~and $1.9,~~ respectively. During the six months

ended July 1, 2017, our insurance recoveries for asbestos-related matters, net of payments, were $7.8, which included cash proceeds received during the first quarter of 2017 of $8.5 related to a settlement reached with an insurance carrier. During the six months ended July 2, 2016, ~~and June 27, 2015,~~ our payments for asbestos-related matters, net of insurance recoveries, were ~~$3.0 and $3.9, respectively.~~$3.0. A significant increase in claims, costs and/or issues with existing insurance coverage (e.g., dispute with or insolvency of insurer(s)) could have a material adverse impact on our share of future payments related to these matters, and, as such, have a material impact on our financial position, results of operations and cash flows.

We have recorded insurance recovery assets associated with the asbestos product liability matters, with such amounts totaling ~~$493.2~~$554.0 and ~~$493.3~~$564.4 at July ~~2, 2016~~1, 2017 and December 31, ~~2015,~~2016, respectively, and included in “Other assets” within our condensed consolidated balance sheets. These assets represent amounts that we believe we are or will be entitled to recover under agreements we have with insurance companies. The assets we record for these insurance recoveries are based on a number of assumptions, including the continued solvency of the insurers, and are subject to a variety of uncertainties. Our current assumptions for estimating these assets may not prove accurate, and we may be required to adjust these assets in the future, which could result in additional charges to earnings. These variances relative to current expectations could have a material impact on our financial position and results of operations.

During the three and six months ended July 1, 2017, we recorded a charge to “Other income (expense), net” of $3.0 associated with the settlement of a group of asbestos-related claims, while there were no such charges during the three and six months ended July 2, ~~2016 and June 27, 2015, there were no changes in estimates associated with the liabilities and assets related to our asbestos product liability matters.~~2016.

Large Power Projects in South Africa

The business environment surrounding our large power projects in South Africa remains difficult, as we have experienced delays, cost over-runs, and various other challenges associated with a complex set of contractual relationships among the end customer, prime contractors, various subcontractors (including us and our subcontractors), and various suppliers. We currently are involved in a number of claim disputes relating to these challenges. We are pursuing various commercial alternatives for addressing these challenges, in an attempt to mitigate our overall financial exposure.

Over the last two years, we have implemented various controls and initiatives that have reduced the risk associated with our large power projects in South Africa, including more recent steps to accelerate the timeline for completing certain portions of the projects. In addition, we have experienced higher than expected costs as we complete certain scopes of work. Lastly, during the second quarter of 2017, we became aware of financial challenges facing one of our sub-contractors, which will negatively impact the ultimate cost of the related project scope. As a result of these efforts to accelerate certain timelines, the higher than expected costs on certain scopes of work, and the aforementioned sub-contractor financial challenges, we determined during the second quarter of 2017 that additional cost would be required in order to complete certain remaining portions of the projects. As such, we revised our estimates of revenues, costs and profits associated with the projects. These revisions resulted in a charge to “Income (loss) from continuing operations before income taxes” of $22.9 during the three and six months ended July 1, 2017, which is comprised of a reduction in revenue of $13.5 and an increase in cost of products sold of $9.4.

We recognize revenue associated with unapproved change orders and claims to the extent the related costs have been incurred and the amount of expected of recovery is probable and reasonably estimable. At July ~~2, 2016,~~1, 2017, the projected revenues related to our large power projects in South Africa included approximately ~~$24.0~~$27.6 related to claims and unapproved change orders. We believe these amounts are recoverable under the provisions of the related contracts and reflect our best estimate of recoverable amounts.

Although we believe that our current estimates of revenues, costs and profits relating to these projects are reasonable, it is possible that future revisions of such estimates could have a material effect on our condensed consolidated financial statements.

Noncontrolling Interest in South African Subsidiary

Our South African subsidiary, DBT Technologies (PTY) LTD (“DBT”), has a Black Economic Empowerment shareholder (the “BEE Partner”) that holds a 25.1% noncontrolling interest in DBT. Under the terms of the shareholder agreement between the BEE Partner and SPX Technologies (PTY) LTD (“SPX Technologies”), the ~~majority shareholder of DBT, the~~ BEE Partner ~~has~~had the option to put its ownership interest in DBT to SPX Technologies, the majority shareholder of DBT, at a redemption amount determined in accordance with the terms of the shareholder agreement (the ~~"Put Option"~~“Put Option”). The BEE Partner notified SPX Technologies of its intention to exercise the Put Option and, on July 6, 2016, an Arbitration Tribunal declared that the BEE Partner was entitled to South African Rand 287.3 ~~(or $19.4)~~ in connection with the exercise of the Put Option, having not considered an amount due from the BEE Partner under a promissory note of South African Rand 30.3 ~~(or $2.1)~~ held by SPX Technologies. As a result, we have reflected the net redemption amount of ~~$17.3~~South African Rand 257.0 (or $19.8) within “Accrued expenses” on our condensed consolidated balance sheet as of July ~~2, 2016,~~1, 2017, with the related offset recorded to ~~“Paid-in capital.~~“Paid-in-capital” and “Accumulated other comprehensive income.” In addition, we reclassified $38.7 from “Noncontrolling Interests” to “Paid-in ~~capital” (see Note 12).~~capital.” Lastly, under the two-class method of calculating earnings per share, we ~~have~~ reflected an adjustment of $18.1 to “Net income (loss) attributable to SPX Corporation common shareholders” for

the excess redemption amount of the Put Option (i.e., the increase in the redemption amount during the ~~three and six months ended July 2,~~second quarter of 2016 in excess of fair value) in our calculations of basic and diluted earnings per share for the three and six months ended July 2, 2016.

SPX Technologies disagrees with the arbitration determination and will continue to pursue all available legal recourse in this matter.

Patent Infringement Lawsuit

Our subsidiary, SPX Cooling Technologies, Inc. (“SPXCT”), is a defendant in a legal action brought by Baltimore Aircoil Company (“BAC”) alleging that a SPXCT product infringes United States Patent No. 7,107,782, entitled “Evaporative Heat Exchanger and Method.” BAC filed suit on July 16, 2013 in the United States District Court for the District of Maryland (the “District Court”) seeking monetary damages and injunctive relief.

On November 4, 2016, the jury for the trial in the District Court found in favor of SPXCT. The verdict by the District Court is currently under appeal by BAC. We believe that we will ultimately be successful in any future judicial processes; however, to the extent we are not successful, the outcome could have a material adverse effect on our financial position, results of operations, and cash flows.

Litigation Matters

We are subject to other legal matters that arise in the normal course of business. We believe these matters are either without merit or of a kind that should not have a material effect, individually or in the aggregate, on our financial position, results of operations or cash flows; however, we cannot assure you that these proceedings or claims will not have a material effect on our financial position, results of operations or cash flows.

Environmental Matters

Our operations and properties are subject to federal, state, local and foreign regulatory requirements relating to environmental protection. It is our policy to comply fully with all applicable requirements. As part of our effort to comply, we have a comprehensive environmental compliance program that includes environmental audits conducted by internal and external independent professionals, as well as regular communications with our operating units regarding environmental compliance requirements and anticipated regulations. Based on current information, we believe that our operations are in substantial compliance with applicable environmental laws and regulations, and we are not aware of any violations that could have a material effect, individually or in the aggregate, on our business, financial condition, and results of operations or cash flows. As of July ~~2, 2016,~~1, 2017, we had liabilities for site investigation and/or remediation at 3428 sites ~~(35~~(30 sites at December 31, ~~2015)~~2016) that we own or control. In addition, while we believe that we maintain adequate accruals to cover the costs of site investigation and/or remediation, we cannot provide assurance that new matters, developments, laws and regulations, or stricter interpretations of existing laws and regulations will not materially affect our business or operations in the future.

Our environmental accruals cover anticipated costs, including investigation, remediation, and operation and maintenance of clean-up sites. Our estimates are based primarily on investigations and remediation plans established by independent consultants, regulatory agencies and potentially responsible third parties. Accordingly, our estimates may change based on future developments, including new or changes in existing environmental laws or policies, differences in costs required to complete anticipated actions from estimates provided, future findings of investigation or remediation actions, or alteration to the expected remediation plans. It is our policy to revise an estimate once itthe revision becomes probable and the amount of change can be reasonably estimated. We generally do not discount our environmental accruals and do not reduce them by anticipated insurance recoveries. We take into account third-party indemnification from financially viable parties in determining our accruals where there is no dispute regarding the right to indemnification.

In the case of contamination at offsite, third-party disposal sites, as of July ~~2, 2016,~~1, 2017, we have been notified that we are potentially responsible and have received other notices of potential liability pursuant to various environmental laws at 2422 sites at which the liability has not been settled, of which 78 sites have been active in the past few years. These laws may impose liability on certain persons that are considered jointly and severally liable for the costs of investigation and remediation of hazardous substances present at these sites, regardless of fault or legality of the original disposal. These persons include the present or former owners or operators of the site and companies that generated, disposed of or arranged for the disposal of hazardous substances at the site. We are considered a “de minimis” potentially responsible party at most of the sites, and we estimate that our aggregate liability, if any, related to these sites is not material to our condensed consolidated financial statements. We conduct extensive environmental due diligence with respect to potential acquisitions, including environmental site assessments and such further testing as we may deem warranted. If an environmental matter is identified, we estimate the cost and either establish a liability, purchase insurance or obtain an indemnity from a financially sound seller; however, in connection with our acquisitions or dispositions, we may assume or retain significant environmental liabilities, some of which we may be unaware. The potential costs related to these environmental matters and the possible impact on future operations are uncertain due in part to the complexity of government laws and regulations and their interpretations, the varying costs and effectiveness of various clean-up technologies, the uncertain level of insurance or other types of recovery, and the questionable level of our responsibility. We record a liability when it is both probable and the amount can be reasonably estimated.

In our opinion, after considering accruals established for such purposes, the cost of remedial actions for compliance with the present laws and regulations governing the protection of the environment are not expected to have a material impact, individually or in the aggregate, on our financial position, results of operations or cash flows.

Self-insured Risk Management Matters

We are self-insured for certain of our workers’ compensation, automobile, product and general liability, disability and health costs, and we believe that we maintain adequate accruals to cover our retained liability. Our accruals for risk management matters are determined by us, are based on claims filed and estimates of claims incurred but not yet reported, and generally are not discounted. We consider a number of factors, including third-party actuarial valuations, when making these determinations. We maintain third-party stop-loss insurance policies to cover certain liability costs in excess of predetermined retained amounts.

~~Collaborative Arrangements~~

~~Collaborative arrangements are defined as a contractual arrangement in which the parties are (1) active participants~~ The insurance may be insufficient or unavailable (e.g., because of insurer insolvency) to the arrangements and (2) exposed to significant risks and rewards that depend on the commercial success of the endeavor. Costs incurred and revenues generated from transactions with third parties are required to be reported by the collaborators on the appropriate line item in their respective statements of operations.

We enter into consortium arrangements for certain projects within our Power segment. Under such arrangements, each consortium member is responsible for performing certain discrete items of work within the total scope of the contracted work and the consortium expires when all contractual obligations are completed. The revenues for these discrete items of work are defined in the contract with the project owner and each consortium member bearing the profitability risk associated with its own work. Our consortium arrangements typically provide that each consortium member assumes responsibility for its share of any damages or losses associated with the project; however, the use of a consortium arrangement typically results in joint and several liability for the consortium members. If responsibility cannot be determined or a consortium member defaults, then the consortium members are responsible according to their share of the contract value. Within our condensed consolidated financial statements, we account for our share of the revenues and profits under the consortium arrangements. As of July 2, 2016, our share of the aggregate contract value on open consortium arrangements was $93.9 (of which approximately 82% had been recognized as revenue), and the aggregate contract value on open consortium arrangements was $348.0. As of December 31, 2015, our share of the aggregate contract value on open consortium arrangements was $100.2 (of which approximately 68% had been recognized as revenue), and the aggregate contract value on open consortium arrangements was $371.7. At July 2, 2016 and December 31, 2015, we recorded liabilities of $0.6 representing the estimated fair value of our potential obligation under the joint and several liability provisions associated with the consortium arrangements.

protect us against loss exposure.


(14)	INCOME TAXES

Uncertain Tax Benefits

As of July ~~2, 2016,~~1, 2017, we had gross unrecognized tax benefits of ~~$44.8~~$37.9 (net unrecognized tax benefits of ~~$25.9), all of which, if recognized,~~$25.2). Of these net unrecognized tax benefits, $20.3 would impact our effective tax rate from continuing ~~operations.~~operations if recognized.

We classify interest and penalties related to unrecognized tax benefits as a component of our income tax provision. As of July ~~2, 2016,~~1, 2017, gross accrued interest totaled ~~$3.5~~$4.5 (net accrued interest of ~~$2.2)~~$2.9). As of July ~~2, 2016,~~1, 2017, we had no accrual for penalties included in our unrecognized tax benefits.

Based on the outcome of certain examinations or as a result of the expiration of statutes of limitations for certain jurisdictions, we believe that within the next 12 months it is reasonably possible that our previously unrecognized tax benefits could decrease by approximately $6.0 to $10.0. The previously unrecognized tax benefits relate to a variety of tax matters relating to deemed income inclusions, transfer pricing and various state matters.

Other Tax Matters

For the three months ended July ~~2, 2016,~~1, 2017, we recorded an income tax provision of ~~$2.6~~$6.0 on ~~$6.0 of pre-tax income from continuing operations, resulting in an effective rate of 43.3%. This compares to an income tax benefit for the three months ended June 27, 2015 of $0.8 on $12.6~~$2.3 of a pre-tax loss from continuing operations, resulting in an effective tax rate of ~~6.3%~~(260.9)%. This compares to an income tax provision for the three months ended July 2, 2016 of $3.8 on $10.3 of pre-tax income from continuing operations, resulting in an effective tax rate of 36.9%. The most significant item impacting the income tax provision for the second quarter of 2017 was $24.6 of foreign losses generated during the period for which no tax benefit was recognized, as future realization of any such tax benefit is considered unlikely. The most significant item impacting the income tax provision for the second quarter of 2016 was $5.0 of foreign losses generated during the period for which no tax benefit was recognized, as future realization of any such tax benefit is considered unlikely.

For the six months ended July 1, 2017, we recorded an income tax provision of $9.2 on $11.2 of pre-tax income from continuing operations, resulting in an effective tax rate of 82.1%. This compares to an income tax provision for the six months ended July 2, 2016 of $9.6 on $36.3 of pre-tax income from continuing operations, resulting in an effective tax rate of 26.4%. The most significant items impacting the ~~effective~~income tax ~~rate~~provision for the ~~second quarter~~first six months of ~~2015~~2017 were $3.5 of tax benefits related to net reductions in valuation allowances recorded against certain foreign deferred income tax assets, including $2.9 for which the benefit was realized due to legal entity reorganization actions that were undertaken in connection with the planned spin-off transaction, with such benefits more than offset by the impact of $18.8(i) $29.6 of foreign losses generated during the ~~quarter~~period for which no ~~tax~~ benefit was recognized, as future realization of any such tax benefit is considered ~~unlikely.~~

~~For~~unlikely, and (ii) $1.2 of excess tax benefits resulting from stock-based compensation awards which vested in the ~~six months ended~~ July 2, 2016, we recorded an income tax provision of $6.1 on $24.2 of pre-tax income from continuing operations, resulting in an effective rate of 25.2%. This compares to an income tax benefit for the six months ended June 27, 2015 of $14.1 on $66.9 of a pre-tax loss from continuing operations, resulting in an effective rate of 21.1%.period. The most significant items impacting the income tax provision for the first six months of 2016 were (i) $0.3 of income taxes that were provided in connection with the $16.7 gain that was recorded on the sale of the dry cooling business and (ii) $9.7 of foreign losses generated during the period for which no tax benefit was recognized, as future realization of any such tax benefit is considered unlikely.The most significant items impacting the effective tax rate for the first six months of 2015 were (i) $3.4 of foreign income taxes related to reorganization actions undertaken to facilitate the spin-off and (ii) the effects of approximately $28.4 of pre-tax losses generated during the period for which no tax benefit was recognized, as future realization of any such tax benefit is considered unlikely, partially offset by the tax benefits realized in the second quarter of 2015 discussed above.

We perform reviews of our income tax positions on a continuous basis and accrue for potential uncertain positions when we determine that an uncertain position meets the criteria of the Income Taxes Topic of the Codification. Accruals for these uncertain tax positions are recorded in “Income taxes payable” and “Deferred and other income taxes” in the accompanying condensed consolidated balance sheets based on the expectation as to the timing of when the matters will be resolved. As events change and resolutions occur, these accruals are adjusted, such as in the case of audit settlements with taxing authorities.

We have filed our federal income tax returns for the 2013, 2014 and ~~2014~~2015 tax years and those returns are subject to examination. With regard to all open tax years, we believe any contingencies are adequately provided for.

State income tax returns generally are subject to examination for a period of three to five years after filing the respective tax returns. The impact on such tax returns of any federal ~~return~~ changes remains subject to examination by various states for a period of up to one year after formal notification to the states. We have various state income tax returns in the process of ~~examination or administrative appeal.~~examination. We believe any uncertain tax positions related to these examinations have been adequately provided for.

We have various foreign income tax returns under examination. The most significant of these isare in Germany for the 2010 through ~~2013~~2014 tax years. We believe that any uncertain tax positions related to these examinations have been adequately provided for.

An unfavorable resolution of one or more of the above matters could have a material adverse effect on our results of operations or cash flows in the quarter and year in which an adjustment is recorded or the tax is due or paid. As audits and examinations are still in ~~process 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.


(15)	FAIR VALUE

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Preference is given to observable inputs. These two types of inputs create the following fair value hierarchy:

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

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

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

There were no changes during the periods presented to the valuation techniques we use to measure asset and liability fair values on a recurring or nonrecurring basis.

~~The following section describes the valuation methodologies we use~~Valuation Methodologies Used to ~~measure different financial instruments at fair value~~Measure Fair Value on a ~~recurring basis.~~Non-Recurring Basis

~~Derivative Financial Instruments~~

~~Our derivative financial assets~~Parent Guarantees and ~~liabilities include FX forward contracts, FX embedded derivatives, commodity contracts~~Bonds Associated with Balcke Dürr —As indicated in Note 1, in connection with the sale of Balcke Dürr, parent company guarantees of approximately €79.0 and ~~interest rate swaps, valued using valuation models based~~bank and surety bonds of approximately €79.0 existing at the time of the sale will remain in place through each instrument’s expiration date, with such expiration dates ranging from 2017 to 2022. These guarantees and bonds provide protections for Balcke Dürr customers in regard to advance payments, performance, and warranties on ~~observable market inputs such as forward rates, interest rates, our own credit risk~~projects in existence at the time of sale. In addition, certain bonds relate to lease obligations and foreign tax matters in existence at the time of sale. Balcke Dürr and the ~~credit risk~~Buyer have provided us a full indemnity in the event that any of ~~our counterparties, which comprise investment-grade financial institutions. Based on~~ these ~~inputs,~~guarantees or bonds are called. Also, Balcke Dürr has provided cash collateral of €4.0 and mutares AG has provided a guarantee of €5.0 as a security for the ~~derivative assets and liabilities~~above indemnifications. Summarized below are ~~classified within Level 2 of~~ the ~~valuation hierarchy. We have not made any~~liability (related to the parent company guarantees

~~adjustments~~and bank and surety bonds) and asset (related to the ~~inputs obtained from~~cash collateral and guarantee provided by mutares AG) recorded at the ~~independent sources. Based on our continued ability to enter into forward contracts, we consider~~time of sale, along with the ~~markets for our fair value instruments active. We primarily use~~change in the ~~income approach, which uses valuation techniques to convert future amounts to a single present amount.~~liability and the asset during the six months ended July 1, 2017.



	Six months ended July 1, 2017
	Guarantees and Bonds Liability			Indemnification Assets
Balance as of December 31, 2016 ^{(1) (2)}	$	9.9		$	4.8
Reduction/Amortization for the period ⁽³⁾	(1.1		)	(1.3		)
Impact of changes in foreign currency rates	0.9			0.5
Balance as of July 1, 2017 ⁽²⁾	$	9.7		$	4.0

___________________________

⁽¹⁾

In connection with the sale, we estimated the fair value of the existing parent company guarantees and bank and surety bonds considering the probability of default by Balcke Dürr and an estimate of the amount we would be obligated to pay in the event of a default. Additionally, we estimated the fair value of the cash collateral provided by Balcke Dürr and guarantee provided by mutares AG based on the terms and conditions and relative risk associated with each of these securities (unobservable inputs - Level 3).


⁽²⁾	Balance associated with the guarantees and bonds is reflected within “Other long-term liabilities,” while the balance associated with the indemnification assets is reflected within “Other assets.”


⁽³⁾	We reduce the liability generally at the earlier of the completion of the related underlying project milestones or the expiration of the guarantees or bonds. We amortize the asset based on the expiration terms of each of the securities. We record the reduction of the liability and the amortization of the asset to “Other income (expense), net.”

As of July ~~2, 2016, there has been no significant impact~~1, 2017, the outstanding parent company guarantees and bank and surety bonds totaled €79.0 and €64.5, respectively. In addition, the cash collateral of €4.0 and the guarantee provided by mutares AG of €5.0 continue to serve as security for the fair value of our derivative liabilities due to our own credit risk, as the related instruments are collateralized under our senior credit facilities. Similarly, there has been no significant impact to the fair value of our derivative assets based on our evaluation of our counterparties’ credit risks.indemnifications noted above.

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

—Certain of our non-financial assets are subject to impairment analysis, including long-lived assets, indefinite-lived intangible assets and goodwill. We review the carrying amounts of such assets whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable or at least annually for indefinite-lived intangible assets and goodwill. Any resulting asset impairment would require that the instrument be recorded at its fair value.

Valuation Methodologies Used to Measure Fair Value on a Recurring Basis

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

As of July 1, 2017, there has been no significant impact to the fair value of our derivative liabilities due to our own credit risk, as the related instruments are collateralized under our senior credit facilities. Similarly, there has been no significant impact to the fair value of our derivative assets based on our evaluation of our counterparties’ credit risks.

Indebtedness and Other

— The estimated fair value of our debt instruments as of July ~~2, 2016~~1, 2017 and December 31, ~~2015~~2016 approximated the related carrying values due primarily to the variable market-based interest rates for such instruments. See Note 10 for further details.

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

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, 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 other comparable terminology. Particular risks facing us include economic, business and other risks stemming from ~~changes in the economy,~~our internal operations, legal and regulatory risks, costs of raw materials, pricing pressures, our international operations, our recent spin-off transaction, the effectiveness, success and timing of restructuring and divestiture plans related to our power generation business, our ability to manage changes and measure and estimate the expected revenue and cost associated with our power projects in South Africa, pension funding requirements, ~~and~~ integration of ~~acquisitions.~~acquisitions 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 businesses, which is subject to change as management selects strategic markets.

All the forward-looking statements are qualified in their entirety by reference to the factors discussed under the heading “Risk Factors” in our ~~2015~~2016 Annual Report on Form 10-K, in any subsequent filing with the ~~Securities and Exchange Commission,~~SEC, as well as in any documents incorporated by reference 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 disclaim any responsibility to update or publicly revise any forward-looking statements to reflect events or circumstances that arise after the date of this document.

~~EXECUTIVE~~ OVERVIEW

~~Spin-Off of SPX FLOW~~

On September 26, 2015, we completed the spin-off of SPX FLOW, Inc. (the “Spin-Off”). The results of SPX FLOW, Inc. (“SPX FLOW”) for the three and six months ended June 27, 2015 are presented as discontinued operations. See Notes 1 and 3 to the condensed consolidated financial statements for additional information regarding the Spin-Off and the financial results of SPX FLOW.

~~Summary of Operating Results~~ OF OPERATING RESULTS

Revenues for the three and six months ended July ~~2, 2016~~1, 2017 decreased by ~~$46.5~~$21.7 (or ~~10.1%~~5.8%) and ~~$33.5~~$41.7 (or ~~4.0%~~5.7%), respectively, when compared to the same periods in ~~2015. Revenues~~2016. The decrease in revenues was primarily driven by a reduction in revenue of $13.5 during the second quarter of 2017 resulting from a revision to the expected revenues and profits on the large power projects in South Africa (see Note 13 to our condensed consolidated financial statements herein for ~~the three~~additional details) and ~~six months ended July 2, 2016 were impacted by the sale of our dry cooling business on March 30, 2016. In addition, our HVAC and Detection and Measurement segments had~~a decline in organic revenue ~~growth during the three and six months ended July 2, 2016, while~~within our ~~Power segment experienced organic revenue declines during these periods attributable to the segment’s power generation businesses.~~Engineered Solutions reportable segment.

During the three and six months ended July ~~2, 2016,~~1, 2017, we generated operating income of ~~$9.7~~$4.1 and ~~$30.0,~~$21.9, respectively, compared to ~~an operating loss of $8.7~~$13.8 and ~~$53.3 during~~$41.9 for the same periods in ~~2015.~~2016. Operating ~~results~~income for the three and six months ended July ~~2, 2016 were impacted favorably by increases~~1, 2017 included a charge of $22.9 related to our large power projects in ~~income associated with our HVAC and Detection and Measurement segments.~~

South Africa. In addition, operating ~~results~~income for the three and six months ended July ~~2, 2016~~1, 2017 was impacted favorably by a more profitable mix of projects within our process cooling business, the impact of organic revenue growth within our Detection and ~~June 27, 2015 were impacted by~~Measurement segment, and cost reductions associated with restructuring actions implemented over the ~~following:~~

~~Three~~past year within our Detection and Measurement and Engineered Solutions segments. Operating income for the six months ended July 2, 2016


◦	Net pension charges/actuarial losses of $1.8 recorded during the second quarter of 2016 related to the remeasurement of the SPX U.S. Pension Plan (the “U.S. Plan”) and Supplemental Individual Account Retirement Plan (“SIARP”) resulting from lump sum benefit payments to certain participants.

◦

On March 30, 2016, we completed the sale of our dry cooling business for cash proceeds of $45.9 (net of cash transferred with the business of $3.0). In connection with the sale, we recorded a gain of $17.9. The gain includes a reclassification from “Equity” of other comprehensive income totaling $40.4 related to foreign currency translation. During the second quarter, we recorded a charge of $1.2 in connection with adjustments to certain liabilities that we retained.


◦	~~During the first quarter, we recorded an impairment charge of $4.0 associated with the trademarks of our SPX Heat Transfer business (“Heat Transfer”).~~

~~Three and six months ended June 27, 2015 - Corporate expense and long-term incentive compensation~~ included a ~~significant amount~~gain on the sale of ~~costs~~the dry cooling business of $16.7, an impairment charge of $4.0 associated with ~~corporate employees~~the trademarks of our SPX Heat Transfer (“Heat Transfer”) business, and ~~other corporate support that transferred~~operating losses for the dry cooling business prior to ~~SPX FLOW~~its sale at the ~~time~~end of the ~~Spin-Off.~~first quarter of 2016.

Cash flows used in continuing operations totaled ~~$38.0~~$9.7 during the first six months of ~~2016,~~2017, compared to ~~$145.7~~$13.7 during the first six months of ~~2015.~~2016. The decrease in ~~cash outflows was due primarily to a reduction in working capital, particularly within our Power segment. In addition,~~ cash flows used in continuing operations ~~for~~was due primarily to additional operating cash flows across our businesses resulting from (i) efforts to reduce working capital and (ii) the impact of the sale of dry cooling business, as the dry cooling business used cash in operating activities during the first ~~six months~~quarter of ~~2015 included disbursements for general corporate overhead costs related to~~2016. In addition, we reached a ~~corporate structure that supported~~settlement with an insurance carrier which resulted in the ~~SPX business prior to~~receipt of $8.5 in cash proceeds during the ~~Spin-Off. A significant portion~~first quarter of ~~this corporate structure transferred to SPX FLOW at the time of the Spin-Off and, thus, was no longer part of our company~~2017. These additional operating cash flows during the first half of ~~2016.~~2017 were offset partially by a year-over-year increase in income tax payments ($16.4 in the first half of 2017, compared to $2.0 in the first half of 2016) and an increase in cash outflows associated with our large power projects in South Africa.

RESULTS OF CONTINUING OPERATIONS

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 ~~2015~~2016 Annual Report on Form 10-K. Interim results are not necessarily indicative

of results for athe 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 ~~2016~~2017 are April 1, July 1 and September 30, compared to the respective April 2, July 2 and October 1, ~~compared to the respective March 28, June 27 and September 26, 2015~~2016 dates. We had ~~six more~~two fewer days in the first quarter of ~~2016~~2017 and will have ~~five fewer days~~one more day in the fourth quarter of ~~2016~~2017 than in the respective ~~2015~~2016 periods. We do not believe the ~~six additional~~two fewer days during the first quarter of ~~2016~~2017 had a material impact on our consolidated operating results for the first half of ~~2016,~~2017, when compared to the consolidated operating results for the first half of ~~2015.~~2016.

Cyclicality of End Markets, Seasonality and Competition — The financial results of our businesses closely follow changes in the industries in which they operate and end markets in which they serve. In addition, certain of our businesses have seasonal fluctuations. ~~Our~~For example, our boiler and heating and ventilation businesses tend to be stronger in the third and fourth quarters, as customer buying habits are driven largely by seasonal weather patterns. Demand for cooling towers used in power generation applications, along with the related services, is highly correlated to the timing of large construction contracts and power plant outages, which may cause significant fluctuations from period to period. In aggregate, our businesses ~~generally~~ tend to be stronger in the second half of the year.

Although our businesses operate in highly competitive markets, our competitive position cannot be determined accurately in the aggregate or by segment since none of our competitors offer all the same product lines or serve all the same markets as we do. 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.

Non-GAAP Measures — Organic revenue growth (decline) presented herein is defined as revenue growth (decline) excluding the effects of foreign currency fluctuations, acquisitions/divestitures, and ~~acquisitions/divestitures.~~the impact of the revenue reduction that resulted from the second quarter 2017 revision to the expected revenues and profits on our large power projects in South Africa, which resulted in a reduction in revenues of $13.5 for the three and six months ended July 1, 2017. 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 useful tool to evaluate our ongoing operations and provides investors with a tool 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 six months ended July 1, 2017 and July 2, 2016, ~~and June 27, 2015,~~ respectively, including the reconciliation of organic revenue ~~growth (decline)~~decline to net revenue decrease:


	Three months ended								Six months ended								Three months ended								Six months ended
	July 2, 2016			June 27, 2015			% Change		July 2, 2016			June 27, 2015			% Change		July 1, 2017			July 2, 2016			% Change		July 1, 2017			July 2, 2016			% Change
Revenues	$	412.9		$	459.4		(10.1	)	$	802.2		$	835.7		(4.0	)	$	349.7		$	371.4		(5.8	)	$	690.3		$	732.0		(5.7	)
Gross profit	94.8			96.0			(1.3	)	184.6			170.5			8.3		76.1			91.1			(16.5	)	164.2			181.0			(9.3	)
% of revenues	23.0		%	20.9		%			23.0		%	20.4		%			21.8		%	24.5		%			23.8		%	24.7		%
Selling, general and administrative expense	81.0			100.7			(19.6	)	163.2			215.6			(24.3	)	71.4			72.8			(1.9	)	141.0			147.1			(4.1	)
% of revenues	19.6		%	21.9		%			20.3		%	25.8		%			20.4		%	19.6		%			20.4		%	20.1		%
Intangible amortization	0.9			1.2			(25.0	)	1.8			2.6			(30.8	)	0.1			0.9			(88.9	)	0.3			1.8			(83.3	)
Special charges, net	2.0			2.8			(28.6	)	2.3			5.6			(58.9	)	0.5			2.4			(79.2	)	1.0			2.9			(65.5	)
Impairment of intangible assets	—			—			*		4.0			—			*		—			—			*		—			4.0			*
Gain (loss) on sale of dry cooling business	(1.2		)	—			*		16.7			—			*		—			(1.2		)	*		—			16.7			*
Other income (expense), net	(0.5		)	1.7			*		0.3			(2.9		)	*		(2.1		)	0.1			*		(2.8		)	1.3			*
Interest expense, net	(3.6		)	(6.1		)	(41.0	)	(6.9		)	(11.2		)	(38.4	)	(4.3		)	(3.6		)	19.4		(7.9		)	(6.9		)	14.5
Equity earnings in joint ventures	0.4			0.5			(20.0	)	0.8			0.5			60.0
Income (loss) from continuing operations before income taxes	6.0			(12.6		)	*		24.2			(66.9		)	*		(2.3		)	10.3			*		11.2			36.3			*
Income tax (provision) benefit	(2.6		)	0.8			*		(6.1		)	14.1			*
Income tax provision																	(6.0		)	(3.8		)	*		(9.2		)	(9.6		)	*
Income (loss) from continuing operations	3.4			(11.8		)	*		18.1			(52.8		)	*		(8.3		)	6.5			*		2.0			26.7			*

Components of consolidated revenue decrease:
Organic growth (decline)							(2.1	)							1.4
Organic decline																							(2.7	)							(3.5	)
Foreign currency							(2.3	)							(2.3	)							0.5								0.5
Sale of dry cooling business							(5.7	)							(3.1	)							—								(0.9	)
South Africa revenue revision																							(3.6	)							(1.8	)
Net revenue decrease							(10.1	)							(4.0	)							(5.8	)							(5.7	)

___________________________

* Not meaningful for comparison purposes.

Revenues — For the three and six months ended July ~~2, 2016,~~1, 2017, the decrease in revenues, compared to the respective ~~period~~periods in ~~2015,~~2016, was primarily due to ~~the impact~~a reduction in revenue of ~~the sale of the dry cooling business on March 30, 2016, the impact of a stronger U.S. dollar~~$13.5 during the ~~period,~~second quarter of 2017 resulting from a revision to the expected revenues and profits on the large power projects in South Africa and a ~~decrease~~decline in organic revenue. The ~~decrease~~decline in organic revenue was due primarily to lower sales ~~by certain businesses~~ within our ~~Power~~Engineered Solutions reportable segment. In addition, revenues for the six months ended July 1, 2017 were lower, compared to the respective period in 2016, as a result of the sale of the dry cooling business at the end of the first quarter of 2016. See “Results of Reportable Segments” for additional details.

For the six months ended July 2, 2016, the decrease in revenues, compared to the respective period in 2015, was due to the aforementioned sale of the dry cooling business and the impact of a stronger U.S. dollar during the period, partially offset by an increase in organic revenue. The increase in organic revenue was due primarily to higher sales by businesses within our HVAC and Detection and Measurement segments. See “Results of Reportable Segments” for additional details.

Gross Profit — The decrease in gross profit for the three months ended July 2, 2016, compared to the respective period in 2015, was due primarily to the impact of the sale of the dry cooling business, a less profitable mix of projects within our power generation businesses, and, to a lesser extent, the decline in organic revenue, partially offset by cost reductions and the impact of operating efficiencies at our power transformer and boiler products businesses, and a more profitable sales mix within certain of our businesses.

~~The increase in gross profit during the six months ended July 2, 2016~~ and gross profit as a percentage of revenues ~~during~~for the three and six months ended July ~~2, 2016,~~1, 2017, compared to the respective periods in ~~2015,~~2016, was due primarily to a reduction in gross profit of $22.9 during the ~~cost reductions, operating efficiencies~~second quarter of 2017 resulting from a revision to the expected revenues and profits of our large power projects in South Africa, partially offset by a more profitable ~~sales~~ mix ~~noted above.~~of projects with our process cooling business.

Selling, General and Administrative (“SG&A”) Expense — For the three and six months ended July ~~2, 2016,~~1, 2017, the decrease in SG&A expense, compared to the respective periods in ~~2015,~~2016, was due primarily to ~~a decrease in corporate expense~~the impact of the sale of the dry cooling business at the end of the first quarter of 2016 and long-term incentive compensation, partially offset by an increase in pension and postretirement expense resulting from the remeasurement of our U.S. Plan and SIARP. As previously noted, corporate expense for the three and six months ended June 27, 2015 included a significant amount of costscost reductions associated with ~~corporate employees and other corporate support that transferred to SPX FLOW at~~restructuring actions implemented over the ~~time of the Spin-Off.~~past year.

Intangible Amortization — For the three and six months ended July ~~2, 2016,~~1, 2017, the decline in intangible amortization was primarily due to the ~~result~~impact of ~~discontinuing amortization on~~ the ~~long-term assets~~$23.9 impairment charge recorded in the fourth quarter of 2016 associated with our ~~dry cooling business in connection with classifying the~~Heat Transfer business’s ~~assets and liabilities as “held for sale,” effective December 31, 2015.~~definite-lived intangible assets.

Special Charges, net — Special charges, net, related primarily to restructuring initiatives to ~~consolidate manufacturing, distribution, sales and administrative facilities,~~ reduce workforce and rationalize certain product lines. See Note 5 to our condensed consolidated financial statements for the details of actions taken in ~~2016~~2017 and ~~2015.~~2016.

Impairment of Intangible Assets — For the six months ended July 2, 2016, we recorded an impairment charge of $4.0 related to the trademarks of our Heat ~~Transfer.~~Transfer business. See Note 7 to our condensed consolidated financial statements for additional details.

Gain ~~(Loss)~~(loss) on Sale of Dry Cooling Business — On March 30, 2016, we completed the sale of our dry cooling business for cash proceeds of $45.9 (net of cash transferred with the business of $3.0), resulting in a gain of $17.9. During the second quarter of 2016, we recorded a charge of $1.2 in connection with an adjustment to certain liabilities that we retained. See ~~Notes~~Note 1 ~~and 3~~ to our condensed consolidated financial statements for additional details.

Other Income (Expense), net — Other expense, net, for the three months ended July ~~2, 2016~~1, 2017 was composed primarily of ~~losses on~~a charge of $3.0 associated with the settlement of a group of asbestos-related claims and foreign currency ~~forward contracts (“FX forward contracts”)~~transaction losses of ~~$3.4,~~$0.8, partially offset by income derived from company-owned life insurance policies of $0.7, income associated with transition services provided in connection with business dispositions of $0.4, gains on currency forward embedded derivatives (“FX embedded derivatives”) of $0.2, and equity earnings in joint ventures of $0.2.

Other income, net, for the three months ended July 2, 2016 was composed of income derived from company-owned life insurance policies of $1.1, income associated with transition services provided in connection with business dispositions of $0.5, equity earnings in joint ventures of $0.4, and foreign currency transaction gains of $0.3, partially offset by losses on FX forward contracts of $2.2.

Other expense, net, for the six months ended July 1, 2017 was composed primarily of a charge of $3.0 associated with the settlement of a group of asbestos-related claims, foreign currency transaction losses of $1.2, and losses on FX embedded derivatives of $0.4, partially offset by income derived from company-owned life insurance policies of $1.0, income associated with transition services provided in connection with ~~the sale~~business dispositions of ~~the dry cooling business~~$0.6, and equity earnings in joint ventures of ~~$0.5, and gains on currency forward embedded derivatives (“FX embedded derivatives”) of~~ $0.3.

Other income, net, for the three months ended June 27, 2015 was composed primarily of gains on FX forward contracts of $2.5 and FX embedded derivatives of $0.2, gains on asset sales of $1.2, and income derived from company-owned life insurance policies of $0.2, partially offset by foreign currency translation losses of $2.5.

Other income, net, for the six months ended July 2, 2016 was composed ~~primarily~~ of income derived from company-owned life insurance policies of $1.6, foreign currency transaction gains of ~~$2.0~~$1.5, equity earnings in joint ventures of $0.7, and income associated with transition services provided in connection with ~~the sale of the dry cooling~~ business dispositions of $0.5, partially offset by losses on FX forward contracts of ~~$2.2~~$1.8 and losses on FX embedded derivatives of ~~$1.6.~~

Other expense, net, for the six months ended June 27, 2015 was composed primarily of losses on FX forward contracts of $7.1 and foreign currency translation losses of $3.0, partially offset by gains on FX embedded derivatives of $5.6, gains on asset sales of $1.2, and income derived from company-owned life insurance policies of $0.4.$1.2.

Interest Expense, net — Interest expense, net, includes both interest expense and interest income. The ~~decrease~~increase in interest expense, net, during the three and six months ended July ~~2, 2016,~~1, 2017, compared to the same periods in ~~2015,~~2016, was primarily a result of a ~~decline in~~higher weighted-average interest ~~expense resulting from lower~~rate and higher average debt balances during the ~~three and~~first six months ~~ended July 2, 2016~~of 2017, compared to the ~~respective periods~~same period in ~~2015.~~2016.

Income Tax ~~(Provision) Benefit~~Provision — For the three months ended July ~~2, 2016,~~1, 2017, we recorded an income tax provision of ~~$2.6~~$6.0 on ~~$6.0 of pre-tax income from continuing operations, resulting in an effective rate of 43.3%. This compares to an income tax benefit for the three months ended June 27, 2015 of $0.8 on $12.6~~$2.3 of a pre-tax loss from continuing operations, resulting in an effective tax rate of ~~6.3%~~(260.9)%. This compares to an income tax provision for the three months ended July 2, 2016 of $3.8 on $10.3 of pre-tax income from continuing operations, resulting in an effective tax rate of 36.9%. The most significant item impacting the income tax provision for the second quarter of 2017 was $24.6 of foreign losses generated during the period for which no tax benefit was recognized, as future realization of any such tax benefit is considered unlikely. The most significant item impacting the income tax provision for the second quarter of 2016 was $5.0 of foreign losses generated during the period for which no tax benefit was recognized, as future realization of any such tax benefit is considered unlikely.

~~For~~unlikely, and (ii) $1.2 of excess tax benefits resulting from stock-based compensation awards which vested in the six months ended July 2, 2016, we recorded an income tax provision of $6.1 on $24.2 of pre-tax income from continuing operations, resulting in an effective rate of 25.2%. This compares to an income tax benefit for the six months ended June 27, 2015 of $14.1 on $66.9 of a pre-tax loss from continuing operations, resulting in an effective rate of 21.1%.period. The most significant items impacting the income tax provision for the first six months of 2016 were (i) $0.3 of income taxes that were provided in connection with the $16.7 gain that was recorded on the sale of the dry cooling business and (ii) $9.7 of foreign losses generated during the period for which no tax benefit was recognized, as future realization of any such tax benefit is considered unlikely.The most significant items impacting the effective tax rate for the first six months of 2015 were (i) $3.4 of foreign income taxes related to reorganization actions undertaken to facilitate the spin-off and (ii) the effects of approximately $28.4 of pre-tax losses generated during the period for which no tax benefit was recognized, as future realization of any such tax benefit is considered unlikely, partially offset by the tax benefits realized in the second quarter of 2015 discussed above.

RESULTS OF DISCONTINUED OPERATIONS ~~AND SALE OF DRY COOLING BUSINESS~~

~~Spin-Off of SPX FLOW~~

WeAs indicated in Note 1 to our condensed consolidated financial statements, we completed the ~~spin-off~~sale of ~~SPX FLOW~~Balcke Dürr on ~~September 26, 2015. The~~December 30, 2016 and the results of ~~SPX FLOW~~Balcke Dürr are presented as a discontinued operation for ~~the three and six months ended June 27, 2015.~~all periods presented. Major classes of line items constituting pre-tax ~~income~~loss and after-tax ~~income~~loss of ~~SPX FLOW~~Balcke Dürr for the three and six months ended July 2, 2016 are shown below:

Three months ended Six months ended
June 27,
2015 June 27,
2015
Revenues $ 615.0
$ 1,185.6
Costs and expenses:

Cost of products sold 404.8
788.0
Selling, general and administrative⁽¹⁾
128.3
246.6
Intangible amortization 5.9
11.8
Special charges 3.3
7.1
Other income (expense), net (1.7 ) 3.7
Interest expense, net (11.1 ) (21.7 )
Income before taxes 59.9
114.1
Income tax provision (11.2 ) (34.0 )
Income from discontinued operations, net of tax 48.7
80.1
Less: Net loss attributable to noncontrolling interest (0.4 ) (0.7 )
Income from discontinued operations attributable to SPX Corporation common shareholders, net of tax $ 49.1
$ 80.8

~~___________________________~~


⁽¹⁾	~~Includes $9.0 and $14.0 for the three and six months ended June 27, 2015 of professional fees and other costs that were incurred in connection with the Spin-Off.~~

~~Other Discontinued Operations Activity~~



	Three months ended			Six months ended
	July 2, 2016			July 2, 2016
Revenues	$	41.5		$	70.2
Costs and expenses:
Cost of products sold	37.8			66.6
Selling, general and administrative	8.2			16.1
Special charges (credits), net	(0.4		)	(0.6		)
Other expense, net	(0.2		)	(0.2		)
Loss before taxes	(4.3		)	(12.1		)
Income tax benefit	1.2			3.5
Loss from discontinued operations, net of tax	$	(3.1	)	$	(8.6	)

The following table presents selected financial information for Balcke Dürr that is included within discontinued operations in the condensed consolidated statement of cash flows for the six months ended July 2, 2016:



Non-cash items included in loss from discontinued operations:
Depreciation and amortization	$	1.0
Capital expenditures	0.6

During the first quarter of 2017, we reduced the net loss associated with the sale of Balcke Dürr by $7.2. The reduction was comprised of an additional income tax benefit recorded for the sale of $8.4, partially offset by adjustments to liabilities retained in connection with the sale of $1.2. During the second quarter of 2017, we increased the net loss associated with the sale of Balcke Dürr by $0.4, with the increase resulting from adjustments to liabilities retained in connection with the sale. In addition to the ~~Spin-Off of SPX FLOW,~~adjustment for the net loss related to the Balcke Dürr sale, we recognized net losses of $0.3 and $0.4 during the three and six months ended July 1, 2017, and $0.4 and $1.5 during the three and six months ended July 2, 2016, respectively, ~~and net losses of $0.5 and $0.9 during the three and six months ended June 27, 2015, respectively,~~ resulting from revisions to liabilities retained from businesses discontinued prior to ~~2015.~~2016.

Three months ended Six months ended
July 2,
2016 June 27,
2015 July 2,
2016 June 27,
2015
SPX FLOW
Income from discontinued operations $ —
$ 59.9
$ —
$ 114.1
Income tax provision —
(11.2 ) —
(34.0 )
Income from discontinued operations, net —
48.7
—
80.1

All other

Loss from discontinued operations (0.6 ) (2.1 ) (1.8 ) (2.5 )
Income tax benefit 0.2
1.6
0.3
1.6
Loss from discontinued operations, net (0.4 ) (0.5 ) (1.5 ) (0.9 )

Total

Income (loss) from discontinued operations (0.6 ) 57.8
(1.8 ) 111.6
Income tax (provision) benefit 0.2
(9.6 ) 0.3
(32.4 )
Income (loss) from discontinued operations, net $ (0.4 ) $ 48.2
$ (1.5 ) $ 79.2

~~Sale of Dry Cooling Business~~

On November 20, 2015, we entered into an agreement for the sale of our dry cooling business. On March 30, 2016, we completed the sale of the business to Paharpur Cooling Towers Limited (“Paharpur”) for cash proceeds of $45.9 (net of cash transferred with the business of $3.0), resulting in a gain during the first quarter of 2016 of $17.9. The gain includes a reclassification

from “Equity” of other comprehensive income totaling $40.4 related to foreign currency translation. During the second quarter of 2016, we recorded a charge of $1.2 in connection with adjustments to certain liabilities that we retained.

The final sales price for the dry cooling business is subject to adjustment based on working capital existing at the closing date and is subject to agreement with the buyer. Final agreement of the working capital amount with the buyer has yet to occur. Additionally, we provided customary indemnifications to Paharpur in connection with the sale. Accordingly, it is possible that the sales price and resulting gain for this divestiture may be materially adjusted in subsequent periods.



	Three months ended						Six months ended
	July 1, 2017			July 2, 2016			July 1, 2017			July 2, 2016
Balcke Dürr
Loss from discontinued operations	$	(0.5	)	$	(4.3	)	$	(2.6	)	$	(12.1	)
Income tax benefit	0.1			1.2			9.4			3.5
Income (loss) from discontinued operations, net	(0.4		)	(3.1		)	6.8			(8.6		)

All other
Loss from discontinued operations	(0.4		)	(0.6		)	(0.9		)	(1.8		)
Income tax benefit	0.1			0.2			0.5			0.3
Loss from discontinued operations, net	(0.3		)	(0.4		)	(0.4		)	(1.5		)

Total
Loss from discontinued operations	(0.9		)	(4.9		)	(3.5		)	(13.9		)
Income tax benefit	0.2			1.4			9.9			3.8
Income (loss) from discontinued operations, net	$	(0.7	)	$	(3.5	)	$	6.4		$	(10.1	)

RESULTS OF REPORTABLE SEGMENTS

The following information should be read in conjunction with our condensed consolidated financial statements and related notes. These results exclude the operating results of discontinued operations for all periods presented. See Note 4 to the condensed consolidated financial statements for a description of each of our reportable segments.

Non-GAAP Measures — Throughout the following discussion of segment results, 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 revenue growth (decline). Refer to the explanation of this measure and purpose of use by management under “Results of Continuing Operations—Non-GAAP Measures.”

HVAC Reportable Segment


	Three months ended								Six months ended								Three months ended								Six months ended
	July 2, 2016			June 27, 2015			% Change		July 2, 2016			June 27, 2015			% Change		July 1, 2017			July 2, 2016			% Change		July 1, 2017			July 2, 2016			% Change
Revenues	$	121.9		$	118.3		3.0		$	233.5		$	226.0		3.3		$	120.3		$	121.9		(1.3	)	$	230.4		$	233.5		(1.3	)
Income	17.1			13.0			31.5		33.0			25.9			27.4		15.4			17.1			(9.9	)	31.9			33.0			(3.3	)
% of revenues	14.0		%	11.0		%			14.1		%	11.5		%			12.8		%	14.0		%			13.8		%	14.1		%
Components of revenue increase:
Organic							4.5								4.5
Components of revenue decrease:
Organic decline																							(0.7	)							(0.6	)
Foreign currency							(1.5	)							(1.2	)							(0.6	)							(0.7	)
Net revenue increase							3.0								3.3
Net revenue decrease																							(1.3	)							(1.3	)

Revenues — For the three months ended July 1, 2017, the decrease in revenues, compared to the respective period in 2016, was due to a decline in organic revenue and the impact of a stronger U.S. dollar during the 2017 period. The decline in organic revenue was primarily the result of a decrease in sales of cooling products, partially offset by an increase in sales of boilers and heating and ventilation products.

For the six months ended July 1, 2017, the decrease in revenues, compared to the respective period in 2016, was due to the impact of a stronger U.S. dollar during the period and a decline in organic revenue. The decline in organic revenue was primarily the result of a decrease in sales of cooling products and boilers, partially offset by an increase in sales of heating and ventilation products.

Income — For the three and six months ended July 1, 2017, the decrease in income and margin, compared to the respective periods in 2016, was due primarily to the revenue decline noted above and a less profitable sales mix associated with cooling products during 2017.

Backlog — The segment had backlog of $39.8 and $46.5 as of July 1, 2017 and July 2, 2016, respectively.

Detection and Measurement Reportable Segment



	Three months ended								Six months ended
	July 1, 2017			July 2, 2016			% Change		July 1, 2017			July 2, 2016			% Change
Revenues	$	64.5		$	60.1		7.3		$	118.1		$	115.5		2.3
Income	17.3			12.1			43.0		28.5			23.1			23.4
% of revenues	26.8		%	20.1		%			24.1		%	20.0		%
Components of revenue increase:
Organic growth							8.8								4.4
Foreign currency							(1.5	)							(2.1	)
Net revenue increase							7.3								2.3

Revenues — For the three months ended July 1, 2017, the increase in revenues, compared to the respective ~~periods~~period in ~~2015,~~2016, was due to an increase in organic revenue, partially offset by the impact of a stronger U.S. dollar during the ~~2016 periods.~~2017 period. The increase in organic revenue was ~~due~~ primarily tothe result of an increase in sales of ~~cooling products in the Americas, partially offset by a decrease in sales of comfort heating~~bus fare collection systems and ~~ventilation~~specialty lighting products.

~~Income~~ — For the ~~three and~~ six months ended July 2, 2016, income and margin increased, compared to the respective periods in 2015, primarily as a result of (i) the organic revenue growth noted above, (ii) a more profitable sales mix within certain businesses of the segment, and (iii) improved operating efficiency and other cost reductions within the segment’s boiler products business.

~~Backlog~~ ~~— The segment had backlog of $46.5 and $66.0 as of July 2, 2016 and June 27, 2015, respectively.~~

~~Detection and Measurement Reportable Segment~~

Three months ended Six months ended
July 2, 2016 June 27, 2015 % Change July 2, 2016 June 27, 2015 % Change
Revenues $ 60.1
$ 58.2
3.3
$ 115.5
$ 110.1
4.9
Income 12.1
10.2
18.6
23.1
19.1
20.9
% of revenues 20.1 % 17.5 %
20.0 % 17.3 %
Components of revenue increase:

Organic

5.0

6.4
Foreign currency

(1.7 )

(1.5 )
Net revenue increase

3.3

4.9

~~Revenues~~ ~~— For the three and six months ended July 2, 2016,~~1, 2017, the increase in revenues, compared to the respective ~~periods~~period in ~~2015,~~2016, was due to an increase in organic revenue, partially offset by the impact of a stronger U.S. dollar during the ~~2016 periods.~~2017 period. The increase in organic revenue was due primarily to ~~an increase~~increases in sales of bus fare collection systems and specialty lighting products, partially offset by a ~~decline~~decrease in sales of communication ~~technologies.~~technologies products.

Income — For the three and six months ended July ~~2, 2016,~~1, 2017, the increase in income and margin, ~~increased,~~ compared to the respective periods in ~~2015,~~2016, was due primarily ~~as a result of the organic revenue growth noted above. In addition, margins for the three and six months~~

~~ended July 2, 2016 were impacted favorably, compared~~ to the ~~same periods in 2015, by a more profitable sales mix within the segment’s~~revenue increase noted above and lower SG&A costs resulting from restructuring actions at our bus fare collection systems’ and communication ~~technologies business.~~technologies’ businesses.

Backlog — The segment had backlog of ~~$39.1~~$81.4 and ~~$39.5~~$39.1 as of as of July 1, 2017 and July 2, 2016, ~~and June 27, 2015,~~ respectively.

~~Power~~Engineered Solutions Reportable Segment


	Three months ended								Six months ended								Three months ended								Six months ended
	July 2, 2016			June 27, 2015			% Change		July 2, 2016			June 27, 2015			% Change		July 1, 2017			July 2, 2016			% Change		July 1, 2017			July 2, 2016			% Change
Revenues	$	230.9		$	282.9		(18.4	)	$	453.2		$	499.6		(9.3	)	$	164.9		$	189.4		(12.9	)	$	341.8		$	383.0		(10.8	)
Income (loss)	(1.8		)	1.6			(212.5	)	(7.3		)	(9.8		)	(25.5	)	(12.0		)	3.0			(500.0	)	(5.4		)	5.9			(191.5	)
% of revenues	(0.8		)%	0.6		%			(1.6		)%	(2.0		)%			(7.3		)%	1.6		%			(1.6		)%	1.5		%
Components of revenue decrease:
Organic							(6.4	)							(1.0	)
Organic decline																							(7.5	)							(7.5	)
Foreign currency							(2.8	)							(3.1	)							1.7								2.0
Sale of dry cooling business							(9.2	)							(5.2	)							—								(1.7	)
South Africa revenue revision																							(7.1	)							(3.6	)
Net revenue decrease							(18.4	)							(9.3	)							(12.9	)							(10.8	)

Revenues — For the three months ended July ~~2, 2016,~~1, 2017, the decrease in revenues, compared to the respective period in ~~2015,~~2016, was due primarily to ~~the impact of the sale of the segment’s dry cooling business on March 30, 2016,~~ a decline in organic revenue and to a ~~lesser extent, the impact~~reduction in revenue of ~~a stronger U.S. dollar~~$13.5 during the second quarter of ~~2016.~~2017 resulting from a revision to the expected revenues and profits of the segment’s large power projects in South Africa, partially offset by the impact of a weaker U.S. dollar versus the South African Rand during the period. The decline in organic revenue was ~~due~~ primarily tothe result of lower sales of ~~(i) wet cooling products in Asia Pacific associated primarily with a large project that generated $11.4~~power transformers related to the timing of ~~revenues in the second quarter of 2015 and (ii) heat transfer equipment, partially offset by higher sales of wet cooling products in the U.S.~~shipments.

For the six months ended July ~~2, 2016,~~1, 2017, the decrease in revenues, compared to the respective period in ~~2015,~~2016, was due primarily to a decline in organic revenue, a reduction in revenue of $13.5 during the second quarter of 2017 resulting from a revision to the ~~reasons noted above for~~expected revenues and profits of the segment’s large power projects in South Africa, and the impact of the sale of the dry cooling business at the end of the first quarter of 2016, partially offset by the impact of a weaker U.S. dollar versus the South African Rand during the period. The decline in organic revenue was primarily the result of lower sales of power transformers related to the timing of shipments, as well as a decrease in sales of process cooling products.

Income (Loss) — For the three and six months ended July ~~2, 2016.~~1, 2017, the decrease in income and margin, compared to the respective periods in 2016, was due primarily to a reduction in profit of $22.9 associated with a revision during the second quarter of 2017 of the expected revenues and profits of the segment’s large power projects in South Africa. For the three and six months ended July 1, 2017, the segment’s operating results were impacted favorably, compared to the respective periods in 2016, by a more profitable mix of projects within the segment’s process cooling business, cost reductions at the segment’s Heat Transfer

business associated with a restructuring action implemented in 2016, and improved operating efficiency within the segment’s power transformer business. In addition, ~~organic revenue~~the segment’s operating results for the six months ended July ~~2, 2016 was~~1, 2017 were impacted favorably, compared to the respective period in 2016, by ~~higher sales~~the aforementioned sale of ~~power transformers.~~

~~Income (loss)~~ ~~— During~~ the ~~three months ended July 2, 2016,~~dry cooling business, as the ~~segment~~business incurred a loss ~~versus income for the comparable period in 2015. The decline in profitability~~ during the ~~three months ended July 2, 2016, compared to the same period in 2015, was due to a decrease in organic revenue and a less profitable mix~~first quarter of ~~projects within the power generation businesses, partially offset by improved profitability within the segment’s power transformer business as a result of improved operating efficiency.~~

During the six months ended July 2, 2016, the loss for the segment declined, compared to the same period in 2015, primarily due to improved profitability within the segment’s power transformer business resulting from organic revenue growth and improved operating efficiency, partially offset by the less profitable project mix noted above.2016.

Backlog — The segment had backlog of ~~$648.1~~$393.7 and ~~$845.0~~$484.1 as of July ~~2, 2016~~1, 2017 and ~~June 27, 2015, respectively. Of the $196.9 year-over-year decline in backlog, $30.5 was attributable to the impact of a stronger U.S. dollar as of~~ July 2, 2016, ~~as compared to June 27, 2015. In addition, the balance at June 27, 2015 included $154.2 of backlog associated with our dry cooling business.~~respectively. Portions of the segment’s backlog are long-term in nature, with the related revenues expected to be recorded through ~~2016~~2017 and beyond.

CORPORATE AND OTHER EXPENSES


	Three months ended								Six months ended								Three months ended								Six months ended
	July 2, 2016			June 27, 2015			% Change		July 2, 2016			June 27, 2015			% Change		July 1, 2017			July 2, 2016			% Change		July 1, 2017			July 2, 2016			% Change
Total consolidated revenues	$	412.9		$	459.4		(10.1	)	$	802.2		$	835.7		(4.0	)	$	349.7		$	371.4		(5.8	)	$	690.3		$	732.0		(5.7	)
Corporate expense	8.2			26.2			(68.7	)	19.1			56.9			(66.4	)	11.3			8.6			31.4		22.7			20.0			13.5
% of revenues	2.0		%	5.7		%			2.4		%	6.8		%			3.2		%	2.3		%			3.3		%	2.7		%
Long-term incentive compensation expense	3.5			4.0			(12.5	)	6.3			25.0			(74.8	)	3.6			3.4			5.9		6.8			6.1			11.5
Pension and postretirement expense	2.8			0.5			460.0		3.8			1.0			280.0		1.2			2.8			(57.1	)	2.6			3.8			(31.6	)

Corporate Expense — Corporate expense generally relates to the cost of our Charlotte, NCNorth Carolina corporate headquarters. Corporate expense for the three and six months ended June 27, 2015 also included costs related to our former Asia Pacific center in Shanghai, China, which was part of the Spin-Off, costs that were previously allocated to the FLOW Business that do not meet the requirements to be presented within discontinued operations, and the cost of corporate employees who became employees of SPX FLOW at the time of the Spin-Off. The ~~decrease~~increase in corporate expense for the three and six months ended July ~~2, 2016,~~

1, 2017, compared to the respective periods in ~~2015,~~2016, was due primarily to ~~the elimination of costs~~higher incentive compensation expense resulting from a year-over-year increase in ~~connection with the Spin-Off, including the cost of the corporate employees who became employees of SPX FLOW.~~profitability, as well as, higher professional fees.

Long-Term Incentive Compensation Expense — Long-term incentive compensation expense represents our consolidated expense, which we do not allocate for segment reporting purposes. ~~Long-term~~The increase in long-term incentive compensation expense ~~for~~during the three and six months ended ~~June 27, 2015 included $2.4~~July 1, 2017, compared to the respective periods in 2016, was due primarily to the timing and ~~$18.9, respectively, related~~extent of compensation expense associated with awards granted to ~~corporate employees who became employees~~the members of our senior management team following the spin-off of SPX FLOW atInc. in the time of the Spin-Off or retired in connection with the Spin-Off. In addition, our 2016 long-term incentive awards were not granted until March 2, 2016. Accordingly, there was only a month of related compensation expense reflected in our operating results for the firstthird quarter of ~~2016. In prior years, long-term incentive awards were granted at the beginning of the first quarter.~~2015.

Pension and Postretirement Expense — Pension and postretirement expense represents our consolidated expense, which we do not allocate for segment reporting purposes. The ~~increase~~decrease in pension and postretirement expense during the three and six months ended July ~~2, 2016,~~1, 2017, compared to the respective periods in ~~2015,~~2016, was due primarily to ~~actuarial losses of $1.8 in connection with the remeasurement of our U.S. Plan and SIARP and, to a lesser extent, a decrease in the expected return on plan assets, partially offset by~~ the impact of ~~transfer~~charges of $1.8 during the second quarter of 2016 associated with lump-sum benefit payments during the period to ~~SPX FLOW~~certain participants of the ~~“Top Management Plan” obligation related to~~ SPX ~~FLOW’s executive officers. The actuarial losses were primarily due to decreased discount rates since December 31, 2015, partially offset by higher than expected returns on plan assets.~~U.S. Pension Plan and the Supplemental Individual Account Retirement Plan. See Note 9 to our condensed consolidated financial statements for additional information on pension and postretirement expense.

LIQUIDITY AND FINANCIAL CONDITION

Listed below are the cash flows from (used in) operating, investing, and financing activities and discontinued operations, as well as the net change in cash and equivalents for the six months ended July 1, 2017 and July 2, ~~2016 and June 27, 2015.~~2016.


	Six months ended						Six months ended
	July 2, 2016			June 27, 2015			July 1, 2017			July 2, 2016
Continuing operations:
Cash flows used in operating activities	$	(38.0	)	$	(145.7	)	$	(9.7	)	$	(13.7	)
Cash flows from (used in) investing activities	40.0			(4.8		)	(4.8		)	42.3
Cash flows from (used in) financing activities	(2.2		)	73.2			7.8			(2.2		)
Cash flows from (used in) discontinued operations	(1.4		)	21.4
Cash flows used in discontinued operations							(5.7		)	(28.0		)
Change in cash and equivalents due to changes in foreign currency exchange rates	2.2			(42.8		)	(3.7		)	2.2
Net change in cash and equivalents	$	0.6		$	(98.7	)	$	(16.1	)	$	0.6

Operating Activities — The decrease in cash flows used in operating activities during the six months ended July ~~2, 2016,~~1, 2017, as compared to the same period in ~~2015,~~2016, was due primarily to ~~a reduction in~~additional operating cash flows across our businesses resulting from (i) efforts to reduce working capital ~~particularly within our Power segment. In addition,~~and (ii) the impact of the sale of dry cooling business, as the dry cooling business used cash ~~flows used~~ in operating activities for the first six months of 2015 included disbursements for general corporate overhead costs related to a corporate structure that supported the SPX business prior to the Spin-Off. As previously noted, a significant portion of this corporate structure transferred to SPX FLOW at the time of the Spin-Off and, thus, was no longer part of our company during the first ~~six months~~quarter of 2016. In addition, we reached a settlement with an insurance carrier which resulted in the receipt of $8.5 in cash proceeds during the first quarter of 2017. These additional operating cash flows during the first half of 2017 were offset partially by a year-over-year increase in income tax payments ($16.4 in the first half of 2017, compared to $2.0 in the first half of 2016) and an increase in cash outflows associated with our large power projects in South Africa.

Investing Activities — Cash flows used in investing activities for the six months ended July 1, 2017 were comprised of capital expenditures of $4.8. Cash flows from investing activities for the six months ended July 2, 2016 ~~were comprised~~related to proceeds from asset sales of $46.0 (including proceeds from the sale of ~~our~~the dry cooling business of ~~$45.9,~~$45.9), partially offset by capital expenditures of ~~$4.3 and an increase in restricted cash of $1.7.~~$3.7.

Financing Activities — Cash flows ~~used in investing~~from financing activities for the six months ended ~~June 27, 2015~~July 1, 2017 primarily related to ~~capital expenditures~~net borrowings under our various debt instruments of ~~$6.8, partially offset by proceeds from asset sales of $2.0.~~

~~Financing Activities~~ —$9.6. Cash flows used in financing activities for the six months ended July 2, 2016 related to withholdings paid on behalf of employees for net share settlements of $1.6 and net repayments under our various ~~other~~ debt instruments of $0.6. Cash flows from financing activities for the six months ended June 27, 2015 primarily related to net borrowings under our senior credit facilities and trade receivables financing arrangement of $107.8, partially offset by dividend payments of $30.4.

Discontinued Operations — Cash flows used in discontinued operations for the six months ended July ~~2, 2016~~1, 2017 related ~~primarily~~ to disbursements for liabilities retained in connection with ~~dispositions prior to 2015.~~dispositions. Cash flows used in discontinued operations for the six months ended ~~June 27, 2015~~July 2, 2016 related ~~primarily~~ to the ~~cash flows associated~~operations of Balcke Dürr and, to a lesser extent, disbursements for liabilities retained in connection with ~~the FLOW Business.~~dispositions prior to 2016.

Change in Cash and Equivalents due to Changes in Foreign Currency Exchange Rates — Changes in foreign currency exchange rates did not have a significant impact on our cash and equivalents during the ~~six months ended July 2,~~first half of 2017 and 2016. The decrease of $42.8 in cash and equivalents due to foreign currency exchange rates for the six months ended June 27, 2015 reflected primarily a reduction in U.S. dollar equivalent balances of our Euro-denominated cash and equivalents as a result of the strengthening of the U.S. dollar against the Euro during the period.

Borrowings and Availability

Borrowings —The following summarizes our debt activity (both current and non-current) for the six months ended July ~~2, 2016.~~1, 2017.


	December 31, 2015		Borrowings		Repayments			Other⁽⁴⁾		July 2, 2016		December 31, 2016		Borrowings		Repayments			Other⁽⁴⁾		July 1, 2017
Revolving loans	$	—	$	65.0	$	(65.0	)	$	—	$	—	$	—	$	16.0	$	(16.0	)	$	—	$	—
Term loan⁽¹⁾	348.0		—		—			0.2		348.2		339.6		—		(8.7		)	0.2		331.1
Trade receivables financing arrangement⁽²⁾	—		20.0		(20.0		)	—		—		—		40.0		(19.0		)	—		21.0
Other indebtedness⁽³⁾	23.8		8.6		(9.2		)	2.5		25.7		16.6		21.4		(24.1		)	1.4		15.3
Total debt	371.8		$	93.6	$	(94.2	)	$	2.7	373.9		356.2		$	77.4	$	(67.8	)	$	1.6	367.4
Less: short-term debt	22.1									21.5		14.8									33.9
Less: current maturities of long-term debt	9.1									17.9		17.9									18.1
Total long-term debt	$	340.6								$	334.5	$	323.5								$	315.4

___________________________

⁽¹⁾


⁽²⁾	Under this arrangement, we can borrow, on a continuous basis, up to $50.0, as available. At July ~~2, 2016,~~1, 2017, we had ~~$32.1~~$22.9 of available borrowing capacity under this facility.

⁽³⁾

Primarily includes balances under a purchase card program of ~~$4.3~~$3.0 and ~~$4.8,~~$3.9, capital lease obligations of ~~$4.2~~$2.4 and $1.7, and borrowings under ~~a line~~lines of credit in South Africa and China of ~~$14.7~~$9.2 and ~~$17.3~~$10.2 at July ~~2, 2016~~1, 2017 and December 31, ~~2015,~~2016, respectively. The purchase card program allows for payment beyond the normal payment terms for goods and services acquired under the program. As this arrangement extends the payment of these purchases beyond their normal payment terms through third-party lending institutions, we have classified these amounts as short-term debt.


⁽⁴⁾	“Other” primarily includes debt assumed, foreign currency translation on any debt instruments denominated in currencies other than the U.S. dollar, and the impact of amortization of debt issuance costs associated with the term loan.

At July ~~2, 2016,~~1, 2017, we were in compliance with all covenant provisions of our senior credit agreement.

Availability — At July ~~2, 2016,~~1, 2017, we had ~~$304.1~~$313.9 of available borrowing capacity under our revolving credit facilities after giving effect to ~~$45.9~~$36.1 reserved for outstanding letters of credit. In addition, at July ~~2, 2016,~~1, 2017, we had ~~$297.0~~$104.8 of available issuance capacity under our foreign ~~trade~~credit facilities after giving effect to ~~$203.0~~$195.2 reserved for outstanding letters of credit.

Financing instruments may be used from time to time including, but not limited to, public and private debt and equity offerings, operating leases, capital leases and securitizations. We expect that we will continue to access these markets as appropriate to maintain liquidity and to provide sources of funds for general corporate purposes, acquisitions or to refinance existing debt.

Concentrations of Credit Risk

Financial instruments that potentially subject us to significant concentrations of credit risk consist of cash and equivalents, trade accounts receivable, and interest rate ~~swaps,~~swap, foreign currency ~~forwards~~forward, and commodity contracts. These financial instruments, other than trade accounts receivable, 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, ~~significant,~~ 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. We anticipate, however, 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 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 — There have been no material changes in the amounts of our contractual obligations from those disclosed in our ~~2015~~2016 Annual Report on Form 10-K. Our total net liabilities for unrecognized tax benefits including interest were ~~$26.7~~$27.2 as of July ~~2, 2016. Of that amount,~~1, 2017. 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 weour previously unrecognized tax benefits could ~~pay~~decrease by approximately $6.0 to ~~$10.0 relating to uncertain tax positions, which includes an estimate of interest and penalties.~~$10.0.

Contingencies and Other Matters — Numerous claims, complaints and proceedings arising in the ordinary course of business have been asserted or are pending against us or certain of our subsidiaries (collectively, “claims”). These claims relate to litigation matters (e.g., class actions ~~derivative lawsuits~~ and contracts, intellectual property and competitive claims), environmental matters, product liability matters (predominately associated with alleged exposure to asbestos-containing materials), and other risk management matters (e.g., general liability, automobile, and workers’ compensation claims). Additionally, we may become subject to other claims of which we are currently unaware, which may be significant, or the claims of which we are aware may result in our incurring significantly greater loss than we anticipate. We accrue for these contingencies when we believe a liability is probable and can be reasonably estimated. As events change and resolutions occur, these accruals may be adjusted and could differ materially from amounts originally estimated. See Note 13 to the condensed consolidated financial statements for a further discussion of contingencies and other matters.

Our Certificate of Incorporation provides that we shall indemnify our officers and directors to the fullest extent permitted by the Delaware General Corporation Law for any personal liability in connection with their employment or service with us. While we maintain insurance for this type of liability, the liability could exceed the amount of the insurance coverage.

In addition, you should read “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Other Matters” and “Risk Factors” in our ~~2015~~2016 Annual Report on Form 10-K, as well as similar sections in any future filings for an understanding of the risks, uncertainties, and trends facing our businesses.

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 ~~2015~~2016 Annual Report on Form 10-K. We have affected no material change in either our critical accounting policies or use of estimates since the filing of our ~~2015~~2016 Annual Report on Form 10-K.

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

Management does not believe our exposure to market risk has significantly changed since December 31, ~~2015~~2016 and does not believe that such risks will result in significant adverse impacts to our financial condition, results of operations or cash flows.

ITEM 4. Controls and Procedures

SPX 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 Rule 13a-15(b), as of July ~~2, 2016.~~1, 2017. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of July ~~2, 2016.~~1, 2017.

In connection with the evaluation by SPX management, including the Chief Executive Officer and the Chief Financial Officer, of our internal control over financial reporting, pursuant to Exchange Act Rule 13a-15(d), no changes during the quarter ended July ~~2, 2016~~1, 2017 were identified that have materially affected, or are reasonably likely to materially affect, our internal control 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 13, ~~under the heading “Litigation 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 factors discussed in Part I, “Item 1A. Risk Factors” in our ~~2015~~2016 Annual Report on Form 10-K, which could materially affect our business, financial condition or future results.

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

None.

ITEM 4. Mine Safety Disclosures

None.

ITEM 6. Exhibits



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 Section 906 of the Sarbanes-Oxley Act of 2002.

101.1	SPX Corporation financial information from its Form 10-Q for the quarterly period ended July ~~2, 2016,~~1, 2017, formatted in XBRL, including: (i) Condensed Consolidated Statements of Operations for the three and six months ended July 1, 2017 and July 2, ~~2016 and June 27, 2015;~~2016; (ii) Condensed Consolidated Balance Sheets at July ~~2, 2016~~1, 2017 and December 31, ~~2015;~~2016; (iii) Condensed Consolidated Statements of Cash Flows for the six months ended July 1, 2017 and July 2, ~~2016 and June 27, 2015;~~2016; and (iv) Notes to Condensed Consolidated Financial Statements.

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 CORPORATION
		(Registrant)

Date: August ~~5, 2016~~3, 2017	By		/s/ Eugene J. Lowe, III
			President and Chief Executive Officer


Date: August ~~5, 2016~~3, 2017	By		/s/ Scott W. Sproule
			Vice President, Chief Financial Officer and Treasurer

INDEX TO EXHIBITS



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 Section 906 of the Sarbanes-Oxley Act of 2002.

101.1	SPX Corporation financial information from its Form 10-Q for the quarterly period ended July ~~2, 2016,~~1, 2017, formatted in XBRL, including: (i) Condensed Consolidated Statements of Operations for the three and six months ended July 1, 2017 and July 2, ~~2016 and June 27, 2015;~~2016; (ii) Condensed Consolidated Balance Sheets at July ~~2, 2016~~1, 2017 and December 31, ~~2015;~~2016; (iii) Condensed Consolidated Statements of Cash Flows for the six months ended July 1, 2017 and July 2, ~~2016 and June 27, 2015;~~2016; and (iv) Notes to Condensed Consolidated Financial Statements.

4139



Assets:
Accounts receivable, net	$	49.2
Inventories, net	12.9
Other current assets	13.9
Property, plant and equipment, net	3.3
Goodwill	10.7
Intangibles, net	8.3
Other assets	8.8
Assets held for sale	$	107.1
Liabilities:
Accounts payable	$	13.7
Accrued expenses	25.3
Other long-term liabilities	2.3
Liabilities held for sale	$	41.3



	December 31, 2015			Goodwill Resulting from Business Combinations		Impairments		Disposition of Business⁽²⁾			Foreign Currency Translation and Other			July 2, 2016
HVAC segment
Gross goodwill	$	261.3		$	—	$	—	$	—		$	(0.1	)	$	261.2
Accumulated impairments	(145.2		)	—		—		—			0.5			(144.7		)
Goodwill	116.1			—		—		—			0.4			116.5

Detection and Measurement segment
Gross goodwill	219.1			—		—		—			(2.3		)	216.8
Accumulated impairments	(138.0		)	—		—		—			1.9			(136.1		)
Goodwill	81.1			—		—		—			(0.4		)	80.7

Power segment
Gross goodwill	405.3			—		—		(36.1		)	1.8			371.0
Accumulated impairments	(249.0		)	—		—		25.9			(1.4		)	(224.5		)
Goodwill⁽¹⁾	156.3			—		—		(10.2		)	0.4			146.5

Total
Gross goodwill	885.7			—		—		(36.1		)	(0.6		)	849.0
Accumulated impairments	(532.2		)	—		—		25.9			1.0			(505.3		)
Goodwill⁽¹⁾	$	353.5		$	—	$	—	$	(10.2	)	$	0.4		$	343.7



	Foreign Currency Translation Adjustment			Net Unrealized Losses on Qualifying Cash Flow Hedges⁽¹⁾			Pension and Postretirement Liability Adjustment⁽²⁾			Total
Balance at beginning of period	$	(72.1	)	$	(0.6	)	$	4.7		$	(68.0	)
Other comprehensive income before reclassifications	41.7			—			—			41.7
Amounts reclassified from accumulated other comprehensive income (loss)	—			(0.8		)	(0.1		)	(0.9		)
Current-period other comprehensive income (loss)	41.7			(0.8		)	(0.1		)	40.8
Balance at end of period	$	(30.4	)	$	(1.4	)	$	4.6		$	(27.2	)