Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 27, 2020 | Jul. 24, 2020 | |
Document Information [Line Items] | ||
Entity Central Index Key | 0000088205 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 27, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-6948 | |
Entity Registrant Name | SPX CORP | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 38-1016240 | |
Entity Address, Address Line One | 6325 Ardrey Kell Road | |
Entity Address, Address Line Two | Suite 400 | |
Entity Address, City or Town | Charlotte | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 28277 | |
City Area Code | 980 | |
Local Phone Number | 474-3700 | |
Title of 12(b) Security | Common Stock, par value $0.01 | |
Trading Symbol | SPXC | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 44,690,258 | |
Former Address | ||
Document Information [Line Items] | ||
Entity Address, Address Line One | 13320-A Ballantyne Corporate Place | |
Entity Address, City or Town | Charlotte | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 28277 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2020 | Jun. 29, 2019 | Jun. 27, 2020 | Jun. 29, 2019 | |
Income Statement [Abstract] | ||||
Revenues | $ 373.2 | $ 372.4 | $ 742.5 | $ 716 |
Costs and expenses: | ||||
Cost of products sold | 259.2 | 264.2 | 514.4 | 524.6 |
Selling, general and administrative | 75.8 | 78.2 | 154.7 | 154.9 |
Intangible amortization | 2.4 | 2.4 | 5 | 4 |
Special charges, net | 1.4 | 1.3 | 1.7 | 1.4 |
Other operating (income) expense | 0 | 0 | (0.4) | 1.8 |
Operating income | 34.4 | 26.3 | 67.1 | 29.3 |
Other income, net | 5.8 | 1.9 | 6.5 | 9.1 |
Interest expense | (4.8) | (5.3) | (9.5) | (10.6) |
Interest income | 0.1 | 0.6 | 0.1 | 0.9 |
Income from continuing operations before income taxes | 35.5 | 23.5 | 64.2 | 28.7 |
Income tax provision | (7.1) | (4.1) | (13.1) | (8.7) |
Income from continuing operations | 28.4 | 19.4 | 51.1 | 20 |
Income (loss) from discontinued operations, net of tax | 0 | 0 | 0 | 0 |
Loss on disposition of discontinued operations, net of tax | (1.3) | (0.2) | (1.3) | (1.6) |
Loss from discontinued operations, net of tax | (1.3) | (0.2) | (1.3) | (1.6) |
Net income | $ 27.1 | $ 19.2 | $ 49.8 | $ 18.4 |
Basic income per share of common stock: | ||||
Income from continuing operations (in dollars per share) | $ 0.64 | $ 0.44 | $ 1.15 | $ 0.46 |
Income (loss) from discontinued operations (in dollars per share) | (0.03) | 0 | (0.03) | (0.04) |
Net income per share (in dollars per share) | $ 0.61 | $ 0.44 | $ 1.12 | $ 0.42 |
Weighted-average number of common shares outstanding — basic | 44,590 | 43,914 | 44,452 | 43,767 |
Diluted income per share of common stock: | ||||
Income from continuing operations (in dollars per share) | $ 0.62 | $ 0.43 | $ 1.12 | $ 0.45 |
Income (loss) from discontinued operations (in dollars per share) | (0.03) | 0 | (0.03) | (0.04) |
Net income per share (in dollars per share) | $ 0.59 | $ 0.43 | $ 1.09 | $ 0.41 |
Weighted-average number of common shares outstanding — diluted | 45,648 | 44,892 | 45,620 | 44,750 |
Comprehensive income | $ 31 | $ 15.3 | $ 40.8 | $ 16.2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 27, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and equivalents | $ 190.2 | $ 54.7 |
Accounts receivable, net | 239.5 | 265.9 |
Contract assets | 65.5 | 63.4 |
Inventories, net | 181.6 | 154.9 |
Other current assets (includes income taxes receivable of $24.9 and $23.0 at June 27, 2020 and December 31, 2019, respectively) | 92.2 | 93.2 |
Total current assets | 769 | 632.1 |
Property, plant and equipment: | ||
Land | 19.2 | 18.7 |
Buildings and leasehold improvements | 120.6 | 121.9 |
Machinery and equipment | 349.6 | 342.6 |
Property, plant and equipment, gross | 489.4 | 483.2 |
Accumulated depreciation | (311.3) | (304.1) |
Property, plant and equipment, net | 178.1 | 179.1 |
Goodwill | 451 | 449.3 |
Intangibles, net | 246.5 | 251.7 |
Other assets | 603.6 | 605.9 |
Deferred income taxes | 8.2 | 16.4 |
TOTAL ASSETS | 2,256.4 | 2,134.5 |
Current liabilities: | ||
Accounts payable | 137.9 | 141.6 |
Contract liabilities | 91.1 | 100.8 |
Accrued expenses | 201.4 | 220.4 |
Income taxes payable | 2.7 | 2.2 |
Short-term debt | 266.8 | 142.6 |
Current maturities of long-term debt | 4.1 | 1 |
Total current liabilities | 704 | 608.6 |
Long-term debt | 247 | 249.9 |
Deferred and other income taxes | 26.3 | 26.3 |
Other long-term liabilities | 727 | 747.3 |
Total long-term liabilities | 1,000.3 | 1,023.5 |
Commitments and contingent liabilities (Note 15) | ||
Equity: | ||
Common stock (52,326,394 and 44,652,648 issued and outstanding at June 27, 2020, respectively, and 52,017,204 and 44,202,503 issued and outstanding at December 31, 2019, respectively) | 0.5 | 0.5 |
Paid-in capital | 1,303.4 | 1,302.4 |
Retained deficit | (535.5) | (584.8) |
Accumulated other comprehensive income | 235.3 | 244.3 |
Common stock in treasury (7,673,746 and 7,814,701 shares at June 27, 2020 and December 31, 2019, respectively) | (451.6) | (460) |
Total equity | 552.1 | 502.4 |
TOTAL LIABILITIES AND EQUITY | $ 2,256.4 | $ 2,134.5 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Jun. 27, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Income taxes receivable, current | $ 24.9 | $ 23 |
Common stock issued (shares) | 52,326,394 | 52,017,204 |
Common stock outstanding (shares) | 44,652,648 | 44,202,503 |
Treasury stock (shares) | 7,673,746 | 7,814,701 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Paid-In Capital | Retained Deficit | Retained DeficitCumulative Effect, Period of Adoption, Adjustment | Accum. Other Comprehensive Income | Common Stock In Treasury |
Beginning balance at Dec. 31, 2018 | $ 414.9 | $ 0.5 | $ 1,295.4 | $ (650.1) | $ 244.9 | $ (475.8) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 18.4 | 18.4 | ||||||
Other comprehensive income, net | (2.2) | (2.2) | ||||||
Incentive plan activity | 6.9 | 6.9 | ||||||
Long-term incentive compensation expense | 5.3 | 5.3 | ||||||
Restricted stock and restricted stock unit vesting | (6.6) | (22.3) | 15.7 | |||||
Ending balance at Jun. 29, 2019 | 436.7 | 0.5 | 1,285.3 | (631.7) | 242.7 | (460.1) | ||
Beginning balance at Mar. 30, 2019 | 415.3 | 0.5 | 1,279.9 | (650.9) | 246.6 | (460.8) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 19.2 | 19.2 | ||||||
Other comprehensive income, net | (3.9) | (3.9) | ||||||
Incentive plan activity | 3.5 | 3.5 | ||||||
Long-term incentive compensation expense | 2.7 | 2.7 | ||||||
Restricted stock and restricted stock unit vesting | (0.1) | (0.8) | 0.7 | |||||
Ending balance at Jun. 29, 2019 | 436.7 | 0.5 | 1,285.3 | (631.7) | 242.7 | (460.1) | ||
Beginning balance at Dec. 31, 2019 | 502.4 | $ (0.5) | 0.5 | 1,302.4 | (584.8) | $ (0.5) | 244.3 | (460) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 49.8 | 49.8 | ||||||
Other comprehensive income, net | (9) | (9) | ||||||
Incentive plan activity | 7.6 | 7.6 | ||||||
Long-term incentive compensation expense | 6.1 | 6.1 | ||||||
Restricted stock and restricted stock unit vesting | (4.3) | (12.7) | 8.4 | |||||
Ending balance at Jun. 27, 2020 | $ 552.1 | 0.5 | 1,303.4 | (535.5) | 235.3 | (451.6) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | |||||||
Beginning balance at Mar. 28, 2020 | $ 515.1 | 0.5 | 1,298.5 | (562.6) | 231.4 | (452.7) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 27.1 | 27.1 | ||||||
Other comprehensive income, net | 3.9 | 3.9 | ||||||
Incentive plan activity | 2.9 | 2.9 | ||||||
Long-term incentive compensation expense | 3.1 | 3.1 | ||||||
Restricted stock and restricted stock unit vesting | 0 | (1.1) | 1.1 | |||||
Ending balance at Jun. 27, 2020 | $ 552.1 | $ 0.5 | $ 1,303.4 | $ (535.5) | $ 235.3 | $ (451.6) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 27, 2020 | Jun. 29, 2019 | |
Cash flows from (used in) operating activities: | ||
Net income | $ 49.8 | $ 18.4 |
Less: Loss from discontinued operations, net of tax | (1.3) | (1.6) |
Income from continuing operations | 51.1 | 20 |
Adjustments to reconcile income from continuing operations to net cash from operating activities: | ||
Special charges, net | 1.7 | 1.4 |
Gain on change in fair value of equity security | (5.3) | (7.9) |
Deferred and other income taxes | 11 | 4.4 |
Depreciation and amortization | 18.5 | 16.6 |
Pension and other employee benefits | 3.6 | 5.1 |
Long-term incentive compensation | 6.8 | 6.8 |
Other, net | 2.4 | 0.6 |
Changes in operating assets and liabilities, net of effects from acquisitions: | ||
Accounts receivable and other assets | 48.8 | 71 |
Inventories | (28.1) | (18) |
Accounts payable, accrued expenses and other | (78.9) | (69.8) |
Cash spending on restructuring actions | (1.8) | (2.2) |
Net cash from continuing operations | 29.8 | 28 |
Net cash used in discontinued operations | (3.5) | (1.5) |
Net cash from operating activities | 26.3 | 26.5 |
Cash flows from (used in) investing activities: | ||
Proceeds from company-owned life insurance policies, net | 1.1 | 2.4 |
Business acquisition, net of cash acquired | 0 | (77.2) |
Net proceeds from sales of assets | 0 | 5.5 |
Capital expenditures | (9.4) | (6.2) |
Net cash used in continuing operations | (8.3) | (75.5) |
Net cash from discontinued operations | 0 | 0 |
Net cash used in investing activities | (8.3) | (75.5) |
Cash flows from (used in) financing activities: | ||
Borrowings under senior credit facilities | 178.7 | 101.6 |
Repayments under senior credit facilities | (88.7) | (86.8) |
Borrowings under trade receivables financing arrangement | 65 | 45 |
Repayments under trade receivables financing arrangement | (30) | (44) |
Net borrowings (repayments) under other financing arrangements | (1.4) | 2.7 |
Payment of contingent consideration | (1.5) | 0 |
Minimum withholdings paid on behalf of employees for net share settlements, net of proceeds from the exercise of employee stock options | (2.3) | (4.8) |
Net cash from continuing operations | 119.8 | 13.7 |
Net cash from discontinued operations | 0 | 0 |
Net cash from financing activities | 119.8 | 13.7 |
Change in cash and equivalents due to changes in foreign currency exchange rates | (2.3) | 1.1 |
Net change in cash and equivalents | 135.5 | (34.2) |
Consolidated cash and equivalents, beginning of period | 54.7 | 68.8 |
Consolidated cash and equivalents, end of period | $ 190.2 | $ 34.6 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 27, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Unless otherwise indicated, “we,” “us” and “our” mean SPX Corporation and its consolidated subsidiaries (“SPX”). We prepared the condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information normally required by accounting principles generally accepted in the United States (“GAAP”) can be condensed or omitted. The financial statements represent our accounts after the elimination of intercompany transactions and, in our opinion, include the adjustments (consisting only of normal and recurring items) necessary for their fair presentation. We account for investments in unconsolidated companies where we exercise significant influence but do not have control using the equity method. In determining whether we are the primary beneficiary of a variable interest entity (“VIE”), we perform a qualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties to determine which party has the power to direct the activities of the VIE that most significantly impact the entity’s economic performance, and which party has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. We have an interest in a VIE, in which we are not the primary beneficiary, as a result of the 2016 sale of Balcke Dürr. All other VIEs are considered immaterial, individually and in aggregate, to our condensed consolidated financial statements. Acquisition of Sabik On February 1, 2019, we completed the acquisition of Sabik Marine (“Sabik”), primarily a manufacturer of obstruction lighting products, for a purchase price of $77.2, net of cash acquired of $0.6. The post-acquisition operating results of Sabik are reflected within our Detection and Measurement reportable segment. Acquisition of SGS On July 3, 2019, we completed the acquisition of SGS Refrigeration Inc. (“SGS”), a manufacturer of industrial refrigeration products in North America, for cash proceeds of $11.5, including contingent considerat ion of $1.5 that was paid during the first quarter of 2020. The assets acquired and liabilities assumed have been recorded at estimates of fair value as determined by management, based on information currently available and on current assumptions as to future operations and are subject to change upon completion of acquisition accounting. The post-acquisition operating results of SGS are reflected within our HVAC reportable segment. Acquisition of Patterson-Kelley On November 12, 2019, we completed the acquisition of Patterson-Kelley, LLC (“Patterson-Kelley”), a manufacturer and distributor of commercial boilers and water heaters, for cash proceeds of $59.9. The assets acquired and liabilities assumed have been recorded at estimates of fair value as determined by management, based on information available and on assumptions as to future operations and are subject to change upon completion of acquisition accounting. The post-acquisition operating results of Patterson-Kelley are reflected within our HVAC reportable segment. Impact of the Coronavirus Disease (the “COVID-19 pandemic”) We began to experience modest adverse impacts of the COVID-19 pandemic in March of 2020 and these adverse impacts are expected to continue during the second half of 2020, and possibly longer. Despite the adverse impacts, there are no indications that the COVID-19 pandemic has resulted in a material decline in the carrying value of any assets, or a material change in the estimate of any contingent amounts, recorded in our condensed consolidated balance sheet as of June 27, 2020. However, there is uncertainty as to the duration and overall impact of the COVID-19 pandemic, which could result in an adverse material change in a future period to the estimates we have made for the valuation of assets and contingent amounts. Other Preparing financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ from these estimates. The unaudited information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2019. Interim results are not necessarily indicative of full year results. 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 2020 are March 28, June 27 and September 26, compared to the respective March 30, June 29 and September 28, 2019 dates. We had one less day in the first quarter of 2020 and will have two more days in the fourth quarter of 2020 than in the respective 2019 periods. We do not believe the one less day during the first quarter of 2020 had a material impact on our consolidated operating results for the six months ended June 27, 2020, when compared to the consolidated operating results for the six months ended June 29, 2019. |
NEW ACCOUNTING PRONOUNCEMENTS
NEW ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jun. 27, 2020 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
NEW ACCOUNTING PRONOUNCEMENTS | NEW ACCOUNTING PRONOUNCEMENTS The following is a summary of new accounting pronouncements that apply or may apply to our business. In February 2016, the Financial Accounting Standards Board (“FASB”) issued an amendment to existing guidance, Accounting Standards Codification (“ASC”) 842, that requires lessees to recognize assets and liabilities for the rights and obligations created by leases. Under the amendment, additional qualitative and quantitative disclosures are required to allow users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. Effective January 1, 2019, we adopted ASC 842 using the modified retrospective transition approach, which entails recognizing the initial effect of adoption in retained earnings. The adoption of ASC 842 had no impact on our retained deficit. In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13. ASU 2016-13 changes how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income, based on historical experience, current conditions and reasonable and supportable forecasts. The requirements of ASU 2016-13 We adopted ASU 2016-13 $0.5. 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. The impact of this amendment on our consolidated financial statements will depend on the results of future goodwill impairment tests. In August 2017, the FASB issued significant amendments to hedge accounting. The FASB’s new guidance will make more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. We adopted this guidance during the first quarter of 2019, with such adoption having no material impact to our condensed consolidated financial statements. In August 2018, the FASB issued amended guidance to simplify fair value measurement disclosure requirements. The new provisions eliminate the requirements to disclose (i) transfers between Level 1 and Level 2 of the fair value hierarchy, (ii) policies related to valuation processes and the timing of transfers between levels of the fair value hierarchy, and (iii) net asset value disclosure of estimates of timing of future liquidity events. The FASB also modified disclosure requirements of Level 3 fair value measurements. This guidance is effective for annual periods beginning after December 15, 2019. We adopted this guidance on January 1, 2020 with no impact on our condensed consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). This ASU simplifies the accounting for income taxes by, among other things, eliminating certain existing exceptions related to the general approach in ASC 740 relating to franchise taxes, reducing complexity in the interim-period accounting for year-to-date loss limitations and changes in tax laws, and clarifying the accounting for the step-up in the tax basis of goodwill. The transition requirements are primarily prospective and the effective date is for interim and annual reporting periods beginning after December 15, 2020, with early adoption permitted. We are currently evaluating the impact of the new guidance on our condensed consolidated financial statements. The London Interbank Offered Rate (“LIBOR”) is scheduled to be discontinued on December 31, 2021. In an effort to address the various challenges created by such discontinuance, the FASB issued an amendment to existing guidance, ASU No. 2020-04, Reference Rate Reform. The amended guidance is designed to provide relief from the accounting analysis and impacts that may otherwise be required for modifications to agreements (e.g., loans, debt securities, derivatives, borrowings) necessitated by the reference rate reform. It also provides optional expedients to enable companies to continue to apply hedge accounting to certain hedging relationships impacted by the reference rate reform. Application of the guidance in the |
AQUISITIONS AND DISCONTINUED OP
AQUISITIONS AND DISCONTINUED OPERATIONS | 6 Months Ended |
Jun. 27, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
AQUISITIONS AND DISCONTINUED OPERATIONS | ACQUISITIONS AND DISCONTINUED OPERATIONSAs indicated in Note 1, on February 1, 2019, July 3, 2019, and November 12, 2019, we completed the acquisitions of Sabik, SGS, and Patterson-Kelley, respectively. The pro forma effects of these acquisitions are not material to our condensed consolidated results of operations for the three and six months ended June 29, 2019.We recognized a net loss of $1.3 during the three and six months ended June 27, 2020, and net losses during the three and six months ended June 29, 2019 of $0.2 and $1.6, respectively, within “Loss on disposition of discontinued operations, net of tax” resulting primarily from revisions to liabilities retained in connection with prior business divestitures. |
REVENUES FROM CONTRACTS
REVENUES FROM CONTRACTS | 6 Months Ended |
Jun. 27, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts | REVENUES FROM CONTRACTS Disaggregated Revenues We disaggregate revenue from contracts with customers by major product line and based on the timing of recognition for each of our reportable segments and other operating segments, as we believe such disaggregation best depicts how the nature, amount, timing, and uncertainty of our revenues and cash flows are affected by economic factors, with such disaggregation presented below for the three and six months ended June 27, 2020 and June 29, 2019: Three months ended June 27, 2020 Reportable Segments and All Other HVAC Detection and Measurement Engineered Solutions All Other Total Major product lines Cooling $ 76.6 $ — $ — $ — $ 76.6 Boilers, comfort heating, and ventilation 55.7 — — — 55.7 Underground locators and inspection and rehabilitation — 47.3 — — 47.3 Signal monitoring, obstruction lighting, and bus fare collection systems — 44.8 — — 44.8 Power transformers — — 113.9 — 113.9 Process cooling equipment and services, and heat exchangers — — 32.9 1.7 34.6 South African projects — — — 0.3 0.3 $ 132.3 $ 92.1 $ 146.8 $ 2.0 $ 373.2 Timing of Revenue Recognition Revenues recognized at a point in time $ 132.3 $ 85.7 $ 11.6 $ 0.7 $ 230.3 Revenues recognized over time — 6.4 135.2 1.3 142.9 $ 132.3 $ 92.1 $ 146.8 $ 2.0 $ 373.2 Six months ended June 27, 2020 Reportable Segments and All Other HVAC Detection and Measurement Engineered Solutions All Other Total Major product lines Cooling $ 134.5 $ — $ — $ — $ 134.5 Boilers, comfort heating, and ventilation 116.3 — — — 116.3 Underground locators and inspection and rehabilitation equipment — 96.0 — — 96.0 Signal monitoring, obstruction lighting, and bus fare collection systems — 88.0 — — 88.0 Power transformers — — 224.5 — 224.5 Process cooling equipment and services, and heat exchangers — — 77.2 3.6 80.8 South African projects — — — 2.4 2.4 $ 250.8 $ 184.0 $ 301.7 $ 6.0 $ 742.5 Timing of Revenue Recognition Revenues recognized at a point in time $ 250.8 $ 169.2 $ 23.2 $ 2.0 $ 445.2 Revenues recognized over time — 14.8 278.5 4.0 297.3 $ 250.8 $ 184.0 $ 301.7 $ 6.0 $ 742.5 Three months ended June 29, 2019 Reportable Segments and All Other HVAC Detection and Measurement Engineered Solutions All Other Total Major product lines Cooling $ 67.0 $ — $ — $ — $ 67.0 Boilers, comfort heating, and ventilation 63.9 — — — 63.9 Underground locators and inspection and rehabilitation — 52.6 — — 52.6 Signal monitoring, obstruction lighting, and bus fare collection systems — 49.1 — — 49.1 Power transformers — — 104.6 — 104.6 Process cooling equipment and services, and heat exchangers — — 34.4 3.1 37.5 South African projects (1) — — — (2.3) (2.3) $ 130.9 $ 101.7 $ 139.0 $ 0.8 $ 372.4 Timing of Revenue Recognition Revenues recognized at a point in time $ 130.9 $ 96.1 $ 12.9 $ 0.5 $ 240.4 Revenues recognized over time (1) — 5.6 126.1 0.3 132.0 $ 130.9 $ 101.7 $ 139.0 $ 0.8 $ 372.4 Six months ended June 29, 2019 Reportable Segments and All Other HVAC Detection and Measurement Engineered Solutions All Other Total Major product lines Cooling $ 125.9 $ — $ — $ — $ 125.9 Boilers, comfort heating, and ventilation 133.4 — — — 133.4 Underground locators and inspection and rehabilitation equipment — 99.7 — — 99.7 Signal monitoring, obstruction lighting, and bus fare collection systems — 87.1 — — 87.1 Power transformers — — 203.4 — 203.4 Process cooling equipment and services, and heat exchangers — — 73.6 6.8 80.4 South African projects (1) — — — (13.9) (13.9) $ 259.3 $ 186.8 $ 277.0 $ (7.1) $ 716.0 Timing of Revenue Recognition Revenues recognized at a point in time $ 259.3 $ 175.7 $ 25.4 $ 1.6 $ 462.0 Revenues recognized over time (1) — 11.1 251.6 (8.7) 254.0 $ 259.3 $ 186.8 $ 277.0 $ (7.1) $ 716.0 __________________________ (1) As further discussed below, during the three and six months ended June 29, 2019, we reduced the amount of revenue associated with the large power projects in South Africa by $6.0 and $23.5, respectively. Contract Balances Our customers are invoiced for products and services at the time of delivery or based on contractual milestones, resulting in outstanding receivables with payment terms from these customers (“Contract Accounts Receivable”). In some cases, the timing of revenue recognition, particularly for revenue recognized over time, differs from when such amounts are invoiced to customers, resulting in a contract asset (revenue recognition precedes the invoicing of the related revenue amount) or a contract liability (payment from the customer precedes recognition of the related revenue amount). Contract assets and liabilities are generally classified as current. On a contract-by-contract basis, the contract assets and contract liabilities are reported net within our condensed consolidated balance sheets. Our contract balances consisted of the following as of June 27, 2020 and December 31, 2019: Contract Balances June 27, 2020 December 31, 2019 Change Contract Accounts Receivable (1) $ 231.4 $ 260.8 $ (29.4) Contract Assets 65.5 63.4 2.1 Contract Liabilities - current (91.1) (100.8) 9.7 Contract Liabilities - non-current (2) (3.0) (3.3) 0.3 Net contract balance $ 202.8 $ 220.1 $ (17.3) ___________________________ (1) Included in “Accounts receivable, net” within the accompanying condensed consolidated balance sheets. (2) Included in “Other long-term liabilities” within the accompanying condensed consolidated balance sheets. The $17.3 decrease in our net contract balance from December 31, 2019 to June 27, 2020 was due primarily to cash payments received from customers during the period, partially offset by revenue recognized during the period. During the three and six months ended June 27, 2020, we recognized revenues of $19.6 and $64.2 , respectively, related to our contract liabilities at December 31, 2019. Performance Obligations As of June 27, 2020, the aggregate amount allocated to remaining performance obligations was $ 79.7 . We expect to recognize revenue on approximately 47% and 64% of remaining performance obligations over the next 12 and 24 months, respectively, with the remaining recognized thereafter. Variable Consideration During February, March, and April of 2019, we received a number of claims from the prime contractors on the large power projects in South Africa asserting various amounts of damages. In consideration of these claims (including the magnitude of the claims and claims in areas that had not been previously identified by the prime contractors), and in accordance with ASC 606, we analyzed the risk of a significant revenue reversal associated with the amount of variable consideration that had been recorded for the projects. Based on such analysis, we reduced the amount of cumulative revenue associated with the variable consideration on the large power projects in South Africa by $17.5 during the first quarter of 2019, as it was no longer probable that such amounts of revenue would not be reversed. On June 28, 2019, our South African subsidiary, DBT, reached an agreement with Alstom S&E Africa (PTY) LTD (“Alstom/GE”), one of the prime contractors on the large power projects in South Africa, to, among other things, settle all material outstanding claims between the parties (other than certain pass-through claims relating to third parties). In connection with the agreement, we reduced the amount of cumulative revenue associated with variable consideration on the large power projects in South Africa by $5.8 during the three months ended June 29, 2019. As of June 27, 2020, there was $0.3 |
LEASES
LEASES | 6 Months Ended |
Jun. 27, 2020 | |
Leases [Abstract] | |
LEASES | LEASES We entered into a ten Aggregate scheduled payments under the agreement total $17.6. As a result of this agreement, the weighted-average remaining lease term and weighted-average discount rate of our operating leases are now 7 years and 3.1%, respectively. There have been no other material changes to our operating and finance leases during the six months ended June 27, 2020. |
INFORMATION ON REPORTABLE AND O
INFORMATION ON REPORTABLE AND OTHER OPERATING SEGMENTS | 6 Months Ended |
Jun. 27, 2020 | |
Segment Reporting [Abstract] | |
INFORMATION ON REPORTABLE AND OTHER OPERATING SEGMENTS | INFORMATION ON REPORTABLE AND OTHER OPERATING SEGMENTS We are a global supplier of highly specialized, engineered solutions with operations in 17 countries and sales in over 100 countries around the world. Our DB Thermal (“DBT”) and Heat Transfer operating segments are being reported in an “All Other” category for segment reporting purposes. We have aggregated our other operating segments into the following three reportable segments: HVAC, Detection and Measurement, and Engineered Solutions. The factors considered in determining our aggregated segments are the economic similarity of the businesses, the nature of products sold or services provided, production processes, types of customers, distribution methods, and regulatory environment. In determining our reportable segments, we apply the threshold criteria of the Segment Reporting Topic of the ASC. Operating income or loss for each of our operating segments is determined before considering impairment and special charges, long-term incentive compensation, certain other operating income/expenses, and other indirect corporate expenses. This is consistent with the way our chief operating decision maker evaluates the results of each segment. HVAC Reportable Segment Our HVAC reportable segment engineers, designs, manufactures, installs and services cooling products for the HVAC and industrial markets, as well as boilers and comfort heating and ventilation products for the residential and commercial markets. The primary distribution channels for the segment’s products are direct to customers, independent manufacturing representatives, third-party distributors, and retailers. The segment serves a customer base in North America, Europe, and Asia Pacific. Detection and Measurement Reportable Segment Our Detection and Measurement reportable segment engineers, designs, manufactures and installs underground pipe and cable locators, inspection and rehabilitation equipment, bus fare collection systems, communication technologies, and obstruction 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, Africa and Asia Pacific. Engineered Solutions Reportable Segment Our Engineered Solutions reportable segment engineers, designs, manufactures, installs and services transformers for the power transmission and distribution market and process cooling equipment for the industrial and power generation markets. The primary distribution channels for the segment’s products are direct to customers and third-party representatives. The segment has a strong presence in North America. All Other Our “All Other” group of operating segments engineer, design, manufacture, install and service equipment, including heat exchangers, primarily for the industrial and power generation markets. The primary distribution channels for the group’s products are direct to customers and third-party representatives. These operating segments have a presence in North America and South Africa. Corporate Expense Corporate expense generally relates to the cost of our Charlotte, North Carolina corporate headquarters. Financial data for our reportable segments and other operating segments for the three and six months ended June 27, 2020 and June 29, 2019 are presented below: Three months ended Six months ended June 27, June 29, June 27, June 29, Revenues: HVAC reportable segment $ 132.3 $ 130.9 $ 250.8 $ 259.3 Detection and Measurement reportable segment 92.1 101.7 184.0 186.8 Engineered Solutions reportable segment 146.8 139.0 301.7 277.0 All Other (1) 2.0 0.8 6.0 (7.1) Consolidated revenues $ 373.2 $ 372.4 $ 742.5 $ 716.0 Income (loss): HVAC reportable segment $ 18.2 $ 16.7 $ 33.2 $ 35.1 Detection and Measurement reportable segment 16.0 21.7 34.2 38.7 Engineered Solutions reportable segment 17.6 13.0 35.5 21.0 All Other (1) (4.2) (10.0) (8.1) (32.6) Total income for segments 47.6 41.4 94.8 62.2 Corporate expense (8.5) (10.5) (19.6) (22.9) Long-term incentive compensation expense (3.3) (3.3) (6.8) (6.8) Special charges, net (1.4) (1.3) (1.7) (1.4) Other operating income (expense) — — 0.4 (1.8) Consolidated operating income $ 34.4 $ 26.3 $ 67.1 $ 29.3 _____________________ (1) As indicated in Note 4, during the three and six months ended June 29, 2019, we reduced the amount of cumulative revenue associated with the variable consideration on the large power projects in South Africa by $6.0 and $23.5, respectively. |
SPECIAL CHARGES, NET
SPECIAL CHARGES, NET | 6 Months Ended |
Jun. 27, 2020 | |
Restructuring and Related Activities [Abstract] | |
SPECIAL CHARGES, NET | SPECIAL CHARGES, NET Special charges, net, for the three and six months ended June 27, 2020 and June 29, 2019 are described in more detail below: Three months ended Six months ended June 27, June 29, June 27, June 29, HVAC reportable segment $ 0.4 $ 0.6 $ 0.5 $ 0.7 Detection and Measurement reportable segment 0.1 — 0.1 — Engineered Solutions reportable segment — 0.4 — 0.4 All Other 0.4 0.3 0.6 0.3 Corporate 0.5 — 0.5 — Total $ 1.4 $ 1.3 $ 1.7 $ 1.4 HVAC — Charges for the three and six months ended June 27, 2020 related primarily to severance costs associated with restructuring actions at the segment's Patterson-Kelley and Cooling Americas businesses. Charges for the three and six months ended June 29, 2019 related primarily to severance and asset impairment charges associated with the planned relocation of certain operations and severance costs associated with a restructuring action at the segment’s Cooling EMEA business. Detection and Measurement — Charges for the three and six months ended June 27, 2020 related to severance costs for a restructuring action at the segment's bus fare collection systems business. Engineered Solutions — Charges for the three and six months ended June 29, 2019 related primarily to an asset impairment charge. All Other — Charges for the three and six months ended June 27, 2020 related primarily to severance costs incurred in connection with the wind-down activities at DBT, our South African subsidiary, and Heat Transfer. Charges for the three and six months ended June 29, 2019 related primarily to severance costs incurred in connection with the continuation of a restructuring action at DBT. Corporate – Charges for the three and six months ended June 27, 2020 related to asset impairment and other charges associated with the move to a new corporate headquarters. No significant charges are expected to be incurred under actions approved as of June 27, 2020. The following is an analysis of our restructuring liabilities for the six months ended June 27, 2020 and June 29, 2019: Six months ended June 27, June 29, Balance at beginning of year $ 1.7 $ 2.7 Special charges (1) 1.5 0.6 Utilization — cash (1.8) (2.2) Currency translation adjustment and other (0.2) — Balance at end of period $ 1.2 $ 1.1 _____________________ (1) For the six months ended June 27, 2020 and June 29, 2019, excludes $0.2 and $0.8, respectively, of non-cash charges that impacted “Special charges” but not the restructuring liabilities. |
INVENTORIES, NET
INVENTORIES, NET | 6 Months Ended |
Jun. 27, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES, NET | INVENTORIES, NET Inventories at June 27, 2020 and December 31, 2019 comprised the following: June 27, December 31, Finished goods $ 67.4 $ 57.6 Work in process 22.1 19.3 Raw materials and purchased parts 105.4 90.3 Total FIFO cost 194.9 167.2 Excess of FIFO cost over LIFO inventory value (13.3) (12.3) Total inventories, net $ 181.6 $ 154.9 Inventories include material, labor and factory overhead costs and are reduced, when necessary, to estimated net realizable values. Certain inventories are valued using the last-in, first-out (“LIFO”) method. These inventories were approximately 42% and 36% of total inventory at June 27, 2020 and December 31, 2019, respectively. Other inventories are valued using the first-in, first-out (“FIFO”) method. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Jun. 27, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The changes in the carrying amount of goodwill for the six months ended June 27, 2020 were as follows: December 31, Goodwill Resulting from Business Combinations (1) Impairments Foreign June 27, HVAC reportable segment Gross goodwill $ 277.1 $ 1.3 $ — $ (0.1) $ 278.3 Accumulated impairments (144.6) — — 0.3 (144.3) Goodwill 132.5 1.3 — 0.2 134.0 Detection and Measurement reportable segment Gross goodwill 304.1 — — (1.2) 302.9 Accumulated impairments (133.6) — — 1.4 (132.2) Goodwill 170.5 — — 0.2 170.7 Engineered Solutions reportable segment Gross goodwill 334.2 — — 0.7 334.9 Accumulated impairments (187.9) — — (0.7) (188.6) Goodwill 146.3 — — — 146.3 All Other Gross goodwill 20.8 — — — 20.8 Accumulated impairments (20.8) — — — (20.8) Goodwill — — — — — Total Gross goodwill 936.2 1.3 — (0.6) 936.9 Accumulated impairments (486.9) — — 1.0 (485.9) Goodwill $ 449.3 $ 1.3 $ — $ 0.4 $ 451.0 ___________________________ (1) Reflects an increase in Patterson-Kelley's goodwill during the period of $1.4 resulting from revisions to the valuation of certain liabilities and an increase in SGS's goodwill during the period of $0.4 resulting from revisions to the valuation of certain income tax accounts, partially offset by a decrease to goodwill during the period from revisions to the valuation of certain tangible assets at Patterson-Kelley of $0.5. As indicated in Note 1, the acquired assets, including goodwill, and liabilities assumed in the SGS and Patterson-Kelley acquisitions have been recorded at estimates of fair value and are subject to change upon completion of acquisition accounting. Other Intangibles, Net Identifiable intangible assets at June 27, 2020 and December 31, 2019 comprised the following: June 27, 2020 December 31, 2019 Gross Accumulated Net Gross Accumulated Net Intangible assets with determinable lives: Customer relationships $ 77.5 $ (12.0) $ 65.5 $ 77.4 $ (8.7) $ 68.7 Technology 29.6 (4.7) 24.9 29.5 (3.3) 26.2 Patents 4.5 (4.5) — 4.5 (4.5) — Other 12.3 (9.6) 2.7 12.6 (9.2) 3.4 123.9 (30.8) 93.1 124.0 (25.7) 98.3 Trademarks with indefinite lives 153.4 — 153.4 153.4 — 153.4 Total $ 277.3 $ (30.8) $ 246.5 $ 277.4 $ (25.7) $ 251.7 At June 27, 2020, the net carrying valu e of intangible assets with determinable lives consisted of $25.9 in the HVAC reportable segment and $67.2 in the Detection and Measurement reportable segment. At June 27, 2020, trademarks with indefinite lives consisted of $96.3 in the HVAC reportable segment, $48.0 in the Detection and Measurement reportable segment, and $9.1 in the Engineered Solutions reportable 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. Based on our annual goodwill impairment testing in the fourth quarter of 2019, we concluded that the estimated fair value of our Cues reporting unit exceeded the carrying value of its net assets by approximately 10%. An adverse change in any of the assumptions used in testing Cues’ goodwill for impairment (e.g., projected revenue and profit, discount rates, industry price multiples, etc.) could result in Cues’ estimated fair value being less than the carrying value of its net assets. If Cues is unable to achieve the financial forecasts included in its 2019 annual goodwill impairment analysis, we may be required to record an impairment charge related to Cues’ goodwill. Cues’ goodwill was $47.9 at June 27, 2020. 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 17) . 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. As indicated in Note 1, the COVID-19 pandemic is expected to have an adverse impact on our consolidated financial results in the second half of 2020, and possibly longer. As of June 27, 2020, there were no indications that the carrying value of our goodwill and other intangible assets may not be recoverable. However, a prolonged adverse impact of the COVID-19 pandemic on our consolidated financial results may require an impairment charge related to one or more of these assets in a future period. |
WARRANTY
WARRANTY | 6 Months Ended |
Jun. 27, 2020 | |
Product Warranties Disclosures [Abstract] | |
WARRANTY | WARRANTY The following is an analysis of our product warranty accrual for the periods presented: Six months ended June 27, June 29, Balance at beginning of year $ 35.1 $ 34.0 Acquisitions 1.4 0.1 Provisions 5.7 6.0 Usage (6.7) (6.7) Currency translation adjustment 0.1 — Balance at end of period 35.6 33.4 Less: Current portion of warranty 13.5 11.8 Non-current portion of warranty $ 22.1 $ 21.6 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 6 Months Ended |
Jun. 27, 2020 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Net periodic benefit expense (income) for our pension and postretirement plans include the following components: Domestic Pension Plans Three months ended Six months ended June 27, June 29, June 27, June 29, Service cost $ — $ — $ — $ — Interest cost 2.7 3.3 5.4 6.6 Expected return on plan assets (2.4) (2.4) (4.8) (4.9) Net periodic pension benefit expense $ 0.3 $ 0.9 $ 0.6 $ 1.7 Foreign Pension Plans Three months ended Six months ended June 27, June 29, June 27, June 29, Service cost $ — $ — $ — $ — Interest cost 1.0 1.1 2.0 2.3 Expected return on plan assets (1.5) (1.6) (3.0) (3.2) Net periodic pension benefit income $ (0.5) $ (0.5) $ (1.0) $ (0.9) Postretirement Plans Three months ended Six months ended June 27, June 29, June 27, June 29, Service cost $ — $ — $ — $ — Interest cost 0.4 0.6 0.8 1.2 Amortization of unrecognized prior service credits (1.2) (1.0) (2.4) (2.0) Net periodic postretirement benefit income $ (0.8) $ (0.4) $ (1.6) $ (0.8) |
INDEBTEDNESS
INDEBTEDNESS | 6 Months Ended |
Jun. 27, 2020 | |
Debt Disclosure [Abstract] | |
INDEBTEDNESS | INDEBTEDNESS The following summarizes our debt activity (both current and non-current) for the six months ended June 27, 2020: December 31, Borrowings Repayments Other (5) June 27, Revolving loans (1) $ 140.0 $ 178.7 $ (88.7) $ — $ 230.0 Term loan (2) 248.2 — — 0.2 248.4 Trade receivables financing arrangement (3) — 65.0 (30.0) — 35.0 Other indebtedness (4) 5.3 — (1.4) 0.6 4.5 Total debt 393.5 $ 243.7 $ (120.1) $ 0.8 517.9 Less: short-term debt 142.6 266.8 Less: current maturities of long-term debt 1.0 4.1 Total long-term debt $ 249.9 $ 247.0 ___________________________ (1) In March 2020, we borrowed $100.0 against our domestic revolving loan facility to preempt any potential concerns about cash availability in the bank markets as a result of the COVID-19 pandemic. In addition, while not due for repayment until December 2024 under the terms of our senior credit agreement, we have classified the outstanding balances for the revolving loans as a current liability in our condensed consolidated balance sheets, as it is reasonably expected that such balances will be repaid within one year with available cash and cash that is expected to be generated from operations. (2) The term loan is repayable in quarterly installments beginning in the first quarter of 2021, with the quarterly installments equal to 0.625% of the initial term loan balance of $250.0 during 2021, 1.25% in each of the four quarters of 2022 and 2023, and 1.25% during the first three quarters of 2024. The remaining balance is payable in full on December 17, 2024. Balances are net of unamortized debt issuance costs of $1.6 and $1.8 at June 27, 2020 and December 31, 2019, respectively. (3) Under this arrangement, we can borrow, on a continuous basis, up to $50.0, as available. At June 27, 2020, we had $9.3 of available borrowing capacity under this facility after giving effect to outstanding borrowings of $35.0. Borrowings under this arrangement are collateralized by eligible trade receivables of certain of our businesses. (4) Includes balances under a purchase card program of $1.8 and $2.6 and capital lease obligations of $2.7 , a t June 27, 2020 and December 31, 2019, respectively. The purchase card program allows for payment beyond the normal payment terms for goods and services acquired under the program. As this arrangement extends the payment of these purchases beyond their normal payment terms through third-party lending institutions, we have classified these amounts as short-term debt. (5) “Other” primarily includes debt assumed, foreign currency translation on any debt instruments denominated in currencies other than the U.S. dollar, and the impact of amortization of debt issuance costs associated with the term loan. Senior Credit Facilities A detailed description of our senior credit facilities is included in our 2019 Annual Report on Form 10-K. At June 27, 2020, we had $202.7 of available borrowing capacity under our revolving credit facilities after giving effect to borrowings under the domestic revolving loan facility of $230.0 and $17.3 reserved for domestic letters of credit. In addition, at June 27, 2020, we had $19.3 of available issuance capacity under our foreign credit instrument facilities after giving effect to $80.7 reserved for outstanding letters of credit. The weighted-average interest rate of outstanding borrowings under our senior credit agreement was approximately 1.6% at June 27, 2020. At June 27, 2020, we were in compliance with all covenants of our senior credit agreement. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 27, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS Interest Rate Swaps In March 2018, we entered into interest rate s wap agreements (“Initial Swaps”) that had an initial notional amount of $260.0 and maturities through March 2021 and effectively convert a portion of the borrowings under our senior credit facilities to a fixed rate of 2.535%, plus the applicable margin. The aggregate notional amount of the Initial Swaps was $243.8 as of June 27, 2020. In February 2020, and as a result of a December 2019 amendment that extended the maturity date of our senior credit facilities to December 17, 2024, we entered into additional interest swap agreements (“Additional Swaps”). The Additional Swaps have a notional amount of $248.4, cover the period from March 2021 to November 2024, and will effectively convert borrowings under our senior credit facilities to a fixed rate of 1.061%, plus the applicable margin. We have designated and are accounting for our interest rate swap agreements as cash flow hedges. As of June 27, 2020 and December 31, 2019, the unrealized loss, net of tax, recorded in Accumulated Other Comprehensive Income (“AOCI”) for our interest rate swap agreements was $8.4 and $1.9, respectively. In addition, the fair value of our interest rate swap agreements totaled $11.1 at June 27, 2020, with $5.0 recorded as a current liability and the remainder in long-term liabilities, and $2.5 at December 31, 2019 (all of which is recorded in long-term liabilities). Changes in the fair value of our interest rate swap agreements are reclassified into earnings as a component of interest expense, when the forecasted transaction impacts earnings. Currency Forward Contracts We manufacture and sell our products in a number of countries and, as a result, are exposed to movements in foreign currency exchange rates. Our objective is to preserve the economic value of non-functional currency-denominated cash flows and to minimize the impact of changes as a result of currency fluctuations. Our principal currency exposures relate to the South African Rand, British Pound Sterling, and Euro. 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”). None of our FX forward contracts are designated as cash flow hedges. We had FX forward contracts with an aggregate notional amount of $10.1 and $26.0 outstanding as of June 27, 2020 and December 31, 2019, respectively, with all of the $10.1 scheduled to matur e within one year. Commodity Contracts From time to time, we enter into commodity contracts to manage the exposure on forecasted purchases of commodity raw materials. At June 27, 2020 and December 31, 2019, the outstanding notional amount of commodity contracts w ere 3.9 and 3.4 pounds of copper, respectively. We designate and account for these contracts as cash flow hedges and, to the extent the 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 June 27, 2020 and December 31, 2019, the fair value of these contracts were current assets of $0.5 and $0.4, respectively. The unrealized gain (loss), net of taxes, recorded in AOCI were $0.4 an d $0.3 as of June 27, 2020 and December 31, 2019, respectively. We anticipate reclassifying the unrealized gain as of June 27, 2020 to earnings over the next 12 months. |
EQUITY AND LONG-TERM INCENTIVE
EQUITY AND LONG-TERM INCENTIVE COMPENSATION | 6 Months Ended |
Jun. 27, 2020 | |
SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION | |
EQUITY AND LONG-TERM INCENTIVE COMPENSATION | EQUITY AND LONG-TERM INCENTIVE COMPENSATION Income Per Share The following table sets forth the number of weighted-average shares outstanding used in the computation of basic and diluted income per share: Three months ended Six months ended June 27, June 29, June 27, June 29, Weighted-average number of common shares used in basic income per share 44.590 43.914 44.452 43.767 Dilutive securities — Employee stock options and restricted stock units 1.058 0.978 1.168 0.983 Weighted-average number of common shares and dilutive securities used in diluted income per share 45.648 44.892 45.620 44.750 The weighted-average number of restricted stock 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 were 0.409 and 0.944 , respectively, for the three months ended June 27, 2020, and 0.345 and 0.803 , respectively, for the six months ended June 27, 2020. The weighted-average number of restricted stock 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 were 0.461 and 0.996, respectively, for the three months ended June 29, 2019, and 0.379 and 0.962, respectively, for the six months ended June 29, 2019. 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 2020 is included in our 2019 Annual Report on Form 10-K. Awards granted on February 20, 2020 to executive officers and other members of senior management were comprised of performance stock units (“PSU’s”), stock options, and time-based restricted stock units (“RSU’s”), while other eligible employees were granted PSU’s and RSU’s. The PSU’s are eligible to vest at the end of a three three three Effective May 14, 2020, we granted 0.028 RSU's to our non-employee directors, which vest in their entirety immediately prior to the annual meeting of stockholders in May 2021. Compensation expense within income from continuing operations related to long-term ince ntive awards totaled $3.3 for the three months ended June 27, 2020 and June 29, 2019 and $6.8 for the six months ended June 27, 2020 and June 29, 2019. The related tax benefit was $0.8 for the three months ended June 27, 2020 and June 29, 2019 and $1.7 for the six months ended June 27, 2020 and June 29, 2019. Accumulated Other Comprehensive Income The changes in the components of accumulated other comprehensive income, net of tax, for the three months ended June 27, 2020 were as follows: Foreign Net Unrealized Losses on Qualifying Cash Flow Hedges (1) Pension and Postretirement Liability Adjustment (2) Total Balance at beginning of period $ 222.3 $ (8.0) $ 17.1 $ 231.4 Other comprehensive income (loss) before reclassifications 4.9 (1.4) (0.1) 3.4 Amounts reclassified from accumulated other comprehensive income (loss) — 1.4 (0.9) 0.5 Current-period other comprehensive income (loss) 4.9 — (1.0) 3.9 Balance at end of period $ 227.2 $ (8.0) $ 16.1 $ 235.3 __________________________ (1) Net of tax benefit of $2.6 and $2.7 as of June 27, 2020 and March 28, 2020, respectively. (2) Net of tax provision of $5.5 and $5.8 as of June 27, 2020 and March 28, 2020, respectively. The balances as of June 27, 2020 and March 28, 2020 include unamortized prior service credits. The changes in the components of accumulated other comprehensive income, net of tax, for the six months ended June 27, 2020 were as follows: Foreign Net Unrealized Losses on Qualifying Cash Flow Hedges (1) Pension and Postretirement Liability Adjustment (2) Total Balance at beginning of period $ 228.0 $ (1.6) $ 17.9 $ 244.3 Other comprehensive loss before reclassifications (0.8) (8.2) — (9.0) Amounts reclassified from accumulated other comprehensive income (loss) — 1.8 (1.8) — Current-period other comprehensive loss (0.8) (6.4) (1.8) (9.0) Balance at end of period $ 227.2 $ (8.0) $ 16.1 $ 235.3 __________________________ (1) Net of tax benefit of $2.6 and $0.5 as of June 27, 2020 and December 31, 2019, respectively. (2) Net of tax provision of $5.5 and $6.1 as of June 27, 2020 and December 31, 2019. The balances as of June 27, 2020 and December 31, 2019 include unamortized prior service credits. The changes in the components of accumulated other comprehensive income, net of tax, for the three months ended June 29, 2019 were as follows: Foreign Net Unrealized Losses on Qualifying Cash Flow Hedges (1) Pension and Postretirement Liability Adjustment (2) Total Balance at beginning of period $ 228.2 $ (0.5) $ 18.9 $ 246.6 Other comprehensive loss before reclassifications — (2.2) — (2.2) Amounts reclassified from accumulated other comprehensive income (loss) (1.0) — (0.7) (1.7) Current-period other comprehensive loss (1.0) (2.2) (0.7) (3.9) Balance at end of period $ 227.2 $ (2.7) $ 18.2 $ 242.7 __________________________ (1) Net of tax benefit of $0.9 and $0.1 as of June 29, 2019 and March 30, 2019, respectively. (2) Net of tax provision of $6.1 and $6.4 as of June 29, 2019 and March 30, 2019, respectively. The balances as of June 29, 2019 and March 30, 2019 include unamortized prior service credits. The changes in the components of accumulated other comprehensive income, net of tax, for the six months ended June 29, 2019 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 $ 225.8 $ (0.6) $ 19.7 $ 244.9 Other comprehensive loss before reclassifications — (2.3) — (2.3) Amounts reclassified from accumulated other comprehensive income (loss) 1.4 0.2 (1.5) 0.1 Current-period other comprehensive income (loss) 1.4 (2.1) (1.5) (2.2) Balance at end of period $ 227.2 $ (2.7) $ 18.2 $ 242.7 __________________________ (1) Net of tax benefit of $0.9 and $0.2 as of June 29, 2019 and December 31, 2018. (2) Net of tax provision of $6.1 and $6.6 as of June 29, 2019 and December 31, 2018. The balances as of June 29, 2019 and December 31, 2018 include unamortized prior service credits. The following summarizes amounts reclassified from each component of accumulated comprehensive income for the three months ended June 27, 2020 and June 29, 2019: Amount Reclassified from AOCI Three months ended June 27, 2020 June 29, 2019 Affected Line Item in the Condensed Losses on qualifying cash flow hedges: Commodity contracts $ 0.6 $ — Cost of products sold Swaps 1.3 — Interest expense Pre-tax 1.9 — Income taxes (0.5) — $ 1.4 $ — Gains on pension and postretirement items: Amortization of unrecognized prior service credits - Pre-tax $ (1.2) $ (1.0) Other income, net Income taxes 0.3 0.3 $ (0.9) $ (0.7) The following summarizes amounts reclassified from each component of accumulated comprehensive income for the six months ended June 27, 2020 and June 29, 2019: Amount Reclassified from AOCI Six months ended June 27, 2020 June 29, 2019 Affected Line Item in the Condensed Losses on qualifying cash flow hedges: Commodity contracts $ 0.6 $ 0.3 Cost of products sold Swaps 1.8 — Interest expense Pre-tax 2.4 0.3 Income taxes (0.6) (0.1) $ 1.8 $ 0.2 Gains on pension and postretirement items: Amortization of unrecognized prior service credits - Pre-tax $ (2.4) (2.0) Other income, net Income taxes 0.6 0.5 $ (1.8) $ (1.5) |
CONTINGENT LIABILITIES AND OTHE
CONTINGENT LIABILITIES AND OTHER MATTERS | 6 Months Ended |
Jun. 27, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENT LIABILITIES AND OTHER MATTERS | CONTINGENT LIABILITIES AND OTHER MATTERS General Numerous claims, complaints and proceedings arising in the ordinary course of business have been asserted or are pending against us or certain of our subsidiaries (collectively, “claims”). These claims relate to litigation matters (e.g., class actions and contracts, intellectual property, and competitive claims), environmental matters, product liability matters (predominately associated with alleged exposure to asbestos-containing materials), and other risk management matters (e.g., general liability, automobile, and workers’ compensation claims). Additionally, we may become subject to other claims of which we are currently unaware, which may be significant, or the claims of which we are aware may result in our incurring significantly greater loss than we anticipate. While we (and our subsidiaries) maintain property, cargo, auto, product, general liability, environmental, and directors’ and officers’ liability insurance and have acquired rights under similar policies in connection with acquisitions that we believe cover a significant portion of these claims, this insurance may be insufficient or unavailable (e.g., in the case of insurer insolvency) to protect us against potential loss exposures. Also, while we believe we are entitled to indemnification from third parties for some of these claims, these rights may be insufficient or unavailable to protect us against potential loss exposures. Our recorded liabilities related to these matters t otaled $565.0 (including $525.0 for asbestos product liability matters) and $592.4 (including $552.2 for asbestos product liability matters) at June 27, 2020 and December 31, 2019, respectively. Of these amounts, $491.6 and $517.6 are included in “Other long-term liabilities” within our condensed consolidated balance sheets at June 27, 2020 and December 31, 2019, 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 six months ended June 27, 2020, our payments for asbestos-related matters, net of insurance recoveries of $ 16.3 , were $ 11.8 . During the six months ended June 29, 2019, our payments for asbestos-related matters, net of insurance recoveries of $26.6, were $6.3. 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 $496.4 and $509.6 at June 27, 2020 and December 31, 2019, respectively. Of these amounts, $446.4 and $459.6 are included in “Other assets” within our condensed consolidated balance sheets as of June 27, 2020 and December 31, 2019, respectively, with the remainder included in “Other current assets.” 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 June 27, 2020 and June 29, 2019, there were no changes in estimates associated with the liabilities and assets related to our asbestos product liability matters. Large Power Projects in South Africa Overview - Since 2008, DBT has been executing contracts on two large power projects in South Africa (Kusile and Medupi). Over such time, the business environment surrounding these projects has been difficult, as DBT, along with many other contractors on the projects, 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 DBT and its subcontractors), and various suppliers. DBT has substantially completed its scope of work, with its remaining responsibilities related largely to resolution of various claims, primarily between itself and one of its prime contractors, Mitsubishi-Hitachi Power Systems Africa (PTY) LTD (“MHPSA”). The challenges related to the projects have resulted in (i) significant adjustments to our revenue and cost estimates for the projects, (ii) DBT’s submission of numerous change orders to the prime contractors, (iii) various claims and disputes between DBT and other parties involved with the projects (e.g., prime contractors, subcontractors, suppliers, etc.), and (iv) the possibility that DBT may become subject to additional claims, which could be significant. It is possible that some outstanding claims may not be resolved until after the prime contractors complete their scopes of work. Our future financial position, operating results, and cash flows could be materially impacted by the resolution of current and any future claims. Claims by DBT - DBT has made numerous claims against MHPSA, including claims totaling South African Rand 1,133.3 (or $ 65.1 ) that have been submitted to dispute adjudication processes as required under the relevant contracts, with such amount subject to change as DBT progresses through these processes. Certain of these processes are expected to occur in 2020. In addition to existing asserted claims, DBT may have additional claims and rights to recovery based on its performance under the contracts with, and actions taken by, MHPSA. The amounts DBT may recover for current and potential future claims against MHPSA are not currently known given (i) the extent of current and potential future claims by MHPSA against DBT (see below for further discussion) and (ii) the unpredictable nature of any dispute resolution processes that may occur in connection with these current and potential future claims. No revenue has been recorded in the accompanying condensed consolidated financial statements with respect to current or potential future claims against MHPSA. Claims by MHPSA - On February 26, 2019, DBT received notification of an interim claim consisting of both direct and consequential damages from MHPSA alleging, among other things, that DBT (i) provided defective product and (ii) failed to meet certain project milestones. We believe the notification is unsubstantiated and the vast majority of the claimed damages are prohibited under the relevant contracts. Therefore, we believe any loss for the majority of these claimed damages is remote. For the remainder of the claims, which largely appear to be direct in nature (approximately South African Rand 948.0 or $ 54.4 ), DBT has numerous defenses and, thus, we do not believe that DBT has a probable loss associated with these claims. As such, no loss has been recorded in the condensed consolidated financial statements with respect to these claims. Although it is reasonably possible that some loss may be incurred in connection with these claims, we currently are unable to estimate the potential loss or range of potential loss associated with these claims due to the (i) lack of support provided by MHPSA for these claims; (ii) complexity of contractual relationships between the end customer, MHPSA, and DBT; (iii) legal interpretation of the contract provisions and application of South African common law to the contracts; and (iv) unpredictable nature of any dispute resolution processes that may occur in connection with these claims. In April and July 2019, DBT received notifications of intent to claim liquidated damages totaling South African Rand 407.2 (or $ 23.4 ) from MHPSA alleging that DBT failed to meet certain project milestones related to the construction of the filters for both the Kusile and Medupi projects. DBT has numerous defenses against these claims and, thus, we do not believe that DBT has a probable loss associated with these claims. As such, no loss has been recorded in the condensed consolidated financial statements with respect to these claims. Although it is reasonably possible that some loss may be incurred in connection with these claims, we currently are unable to estimate the potential loss or range of potential loss. MHPSA has made other claims against DBT totaling South African Rand 176.2 (or $10.1 ). DBT has numerous defenses against these claims and, thus, we do not believe that DBT has a probable loss associated with these claims. As such, no loss has been recorded in the condensed consolidated financial statements with respect to these claims. In favor of MHPSA, we are obligated with respect to bonds issued by banks tota ling $52.4 (including $18.8 with more stringent payment terms). We believe a portion of these bonds should be reduced based on project milestones achieved by DBT. In the event that MHPSA were to receive payment on a portion, or all, of these bonds, we would be required to reimburse the respective issuing bank. In addition to these bonds, SPX Corporation has guaranteed DBT’s performance on these projects to the prime contractors. On July 23, 2020, a dispute adjudication panel issued a ruling in favor of DBT on certain matters related to the Kusile and Medupi projects. The panel (i) ruled that DBT had achieved takeover on 9 of the units; (ii) ordered MHPSA to return $2.3 of bonds; (iii) ruled that DBT is entitled to the return of an additional $3.9 of bonds upon the completion of certain administrative milestones; and (iv) ordered MHPSA to pay South African Rand 18.4 (or $1.1) in incentive payments for work performed by DBT, and ruled that MHPSA waived its rights to assert delay damages against DBT, on one of the units of the Kusile project. The ruling is subject to MHPSA’s rights to seek further arbitration in the matter, as provided in the contracts. As such, the incentive payments noted above have not been recorded in our condensed consolidated financial statements. 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 June 27, 2020, we had liabilities for site investigation and/or remediation at 26 sites (29 sites at December 31, 2019) that we own or control, or formerly owned and controlled. 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 maintenance of clean-up sites. Our estimates are based primarily on investigations and remediation plans established by independent consultants, regulatory agencies and potentially responsible third parties. Accordingly, our estimates may change based on future developments, including new or changes in existing environmental laws or policies, differences in costs required to complete anticipated actions from estimates provided, future findings of investigation or remediation actions, or alteration to the expected remediation plans. It is our policy to revise an estimate once the revision becomes probable and the amount of change can be reasonably estimated. We generally do not discount our environmental accruals and do not reduce them by anticipated insurance recoveries. We take into account third-party indemnification from financially viable parties in determining our accruals where there is no dispute regarding the right to indemnification. In the case of contamination at offsite, third-party disposal sites, as of June 27, 2020, we have been notified th at we are potentially responsible and have received other notices of potential liability pursuant to various environmental laws at 14 sites at which the liability has not been settled, of which 9 sites have been active in the past few years. These laws may impose liability on certain persons that are considered jointly and severally liable for the costs of investigation and remediation of hazardous substances present at these sites, regardless of fault or legality of the original disposal. These persons include the present or former owners or operators of the site and companies that generated, disposed of or arranged for the disposal of hazardous substances at the site. We are considered a “de minimis” potentially responsible party at most of the sites, and we estimate that our aggregate liability, if any, related to these sites is not material to our condensed consolidated financial statements. We conduct extensive environmental due diligence with respect to potential acquisitions, including environmental site assessments and such further testing as we may deem warranted. If an environmental matter is identified, we estimate the cost and either establish a liability, purchase insurance or obtain an indemnity from a financially sound seller; however, in connection with our acquisitions or dispositions, we may assume or retain significant environmental liabilities, some of which we may be unaware. The potential costs related to these environmental matters and the possible impact on future operations are uncertain due in part to the complexity of government laws and regulations and their interpretations, the varying costs and effectiveness of various clean-up technologies, the uncertain level of insurance or other types of recovery, and the questionable level of our responsibility. We record a liability when it is both probable and the amount can be reasonably estimated. In our opinion, after considering accruals established for such purposes, the cost of remedial actions for compliance with the present laws and regulations governing the protection of the environment are not expected to have a material impact, individually or in the aggregate, on our financial position, results of operations or cash flows. Self-insured Risk Management Matters We are self-insured for certain of our workers’ compensation, automobile, product and general liability, disability and health costs, and we believe that we maintain adequate accruals to cover our retained liability. Our accruals for risk management matters are determined by us, are based on claims filed and estimates of claims incurred but not yet reported, and generally are not discounted. We consider a number of factors, including third-party actuarial valuations, when making these determinations. We maintain third-party stop-loss insurance policies to cover certain liability costs in excess of predetermined retained amounts. The insurance may be insufficient or unavailable (e.g., because of insurer insolvency) to protect us against loss exposure. |
INCOME AND OTHER TAXES
INCOME AND OTHER TAXES | 6 Months Ended |
Jun. 27, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME AND OTHER TAXES | INCOME AND OTHER TAXES Uncertain Tax Benefits As of June 27, 2020, we had gross unrecognized tax benefits of $16.7 (net unrecognized tax benefits of $13.4). Of these net unrecognized tax benefits, $9.4 would impact our effective tax rate from continuing operations if recognized. We classify interest and penalties related to unrecognized tax benefits as a component of our income tax provision. As of June 27, 2020, gross accrued interest totaled $4.5 (net accrued interest of $3.5). As of June 27, 2020, 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 belie ve that within the next 12 months it is reasonably possible that our previously unrecognized tax benefits could decrease by up to $10.0. The previously unrecognized tax benefits relate to a variety of tax matters including transfer pricing and various state matters. Other Tax Matters For the three months ended June 27, 2020, we recorded an income tax provision of $7.1 on $35.5 of pre-tax income from continuing operations, resulting in an effective rate of 20.0%. This compares to an income tax provision for the three months ended June 29, 2019 of $4.1 on $23.5 of pre-tax income from continuing operations, resulting in an effective rate of 17.4%. The most significant items impacting the income tax provision for the second quarter of 2020 were (i) $0.5 of tax benefits associated with statute expirations in certain jurisdictions and (ii) $0.3 of excess tax benefits resulting from stock option awards that were exercised during the quart er. T he most significant items impacting the income tax provision for the second quarter of 2019 were (i) $1.3 of tax benefits related to our U.S. tax credits and incentives and (ii) $0.4 of excess tax benefits resulting from stock option awards that were exercised during the quarter. For the six months ended June 27, 2020, we recorded an income tax provision of $13.1 on $64.2 of pre-tax income from continuing operations, resulting in an effective rate of 20.4%. This compares to an income tax provision for the six months ended June 29, 2019 of $8.7 on $28.7 of pre-tax income from continuing operations, resulting in an effective rate of 30.3%. The most significant items impacting the income tax provision for the first six months of 2020 were (i) $1.5 of excess tax benefits resulting from stock option awards that were exercised during the period and (ii) the $0.5 of tax benefits associated with the statute expirations noted above. The most significant items impacting the income tax provision for the first six months of 2019 were foreign losses for which no tax benefit was recognized as future realization of any such foreign tax benefit is considered unlikely, partially offset by $1.6 of excess tax benefits resulting from stock-based compensation awards that vested and/or were exercised during the period and the $1.3 of tax benefits noted above related to our U.S. tax credits and incentives. 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 ASC. 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. The Internal Revenue Service (“IRS”) currently is performing an audit of our 2007, 2013, 2014, 2015, 2016 and 2017 federal income tax returns. With regard to all open tax years, we believe any contingencies are adequately provided for. State income tax returns generally are subject to examination for a period of three to five years after filing the respective tax returns. The impact on such tax returns of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. We have various state income tax returns in the process of examination. We believe any uncertain tax positions related to these examinations have been adequately provided for. We have various foreign income tax returns under examination. The most significant of these is in Germany for the 2010 through 2014 tax years. We believe that any uncertain tax positions related to these examinations have been adequately provided for. An unfavorable resolution of one or more of the above matters could have a material impact on our results of operations or cash flows in the quarter and year in which an adjustment is recorded or the tax is due or paid. As audits and examinations are still in process, the timing of the ultimate resolution and any payments that may be required for the above matters cannot be determined at this time. Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) On March 27, 2020, the CARES Act was enacted into law and provides for changes to various tax laws that impact businesses. We do not believe these changes materially impact our current and deferred income tax balances; therefore, no resulting adjustments have been recorded to such balances as of June 27, 2020. As further guidance is released regarding the CARES Act, we will record adjustments to our current and deferred income tax balances, as necessary. As provided within the CARES Act, we are deferring payment of our social security payroll taxes, for the period March 27, 2020 to December 31, 2020, to 2021, with the amount deferred as of June 27, 2020 totaling $3.4. |
FAIR VALUE
FAIR VALUE | 6 Months Ended |
Jun. 27, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Preference is given to observable inputs. These two types of inputs create the following fair value hierarchy: • Level 1 — Quoted prices for identical instruments in active markets. • Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level 3 — Significant inputs to the valuation model are unobservable. There were no changes during the periods presented to the valuation techniques we use to measure asset and liability fair values on a recurring or nonrecurring basis. There were no transfers between the three levels of the fair value hierarchy for the periods presented. Valuation Methodologies Used to Measure Fair Value on a Non-Recurring Basis Parent Guarantees and Bonds Associated with Balcke Dürr — In connection with the 2016 sale of Balcke Dürr, existing parent company guarantees and bank surety bonds, which totaled approximately Euro 79.0 and Euro 79.0, respectively, at the time of sale (and Euro 0.0 and Euro 7.3 , respectively, at June 27, 2020) will remain in place through each instrument’s expiration date, with such expiration dates occurring through 2022. These guarantees and bonds provide protections for Balcke Dürr customers in regard to advance payments, performance, and warranties on projects in existence at the time of sale. In addition, certain bonds relate to lease obligations and foreign tax matters in existence at the time of sale. Balcke Dürr and the acquirer of Balcke Dürr have provided us an indemnity in the event that any bank guarantees or bonds are called. Also, at the time of sale, Balcke Dürr provided cash collateral of Euro 4.0 and mutares AG, an affiliate of the acquirer of Balcke Dürr, provided a guarantee of Euro 5.0 as a security for the above indemnifications (Euro 1.0 and Euro 2.5 , respectively, at June 27, 2020). 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 cash collateral and indemnities provided. Summarized below are changes in the liability and asset during the six months ended June 27, 2020, and June 29, 2019. Six months ended June 27, 2020 June 29, 2019 Guarantees and Bonds Liability (1) Indemnification Assets (1) Guarantees and Bonds Liability (1) Indemnification Assets (1) Balance at beginning of year $ 2.0 $ 0.3 $ 4.4 $ 1.2 Reduction/Amortization for the period (2) (0.3) (0.1) (2.2) (0.4) Impact of changes in foreign currency rates 0.1 — — — Balance at end of period (3) $ 1.8 $ 0.2 $ 2.2 $ 0.8 ___________________________ (1) In connection with the sale, we estimated the fair value of the existing parent company guarantees and bank and surety bonds considering the probability of default by Balcke Dürr and an estimate of the amount we would be obligated to pay in the event of a default. Additionally, we estimated the fair value of the cash collateral provided by Balcke Dürr and 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) 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, net.” (3) The 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.” 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, 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 June 27, 2020, 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. Equity Security — We estimate the fair value of an equity security that we hold utilizing a practical expedient under existing guidance, with such estimated fair value based on our ownership percentage applied to the net asset value of the investee as presented in the investee’s most recent audited financial statements. During the three and six months ended June 27, 2020, we recorded a gain of $5.3 to “ Other income, net ” to reflect an increase in the estimated fair value of the equity security. As of June 27, 2020 and December 31, 2019, the equity security had an estimated fair value of $27.2 and $21.9, respectively. During the three and six months ended June 29, 2019, we recorded gains of $1.6 and $7.9, respectively, to “Other income, net.” In addition, we received a distribution during the first quarter of 2019 of $2.6 included within “Cash flows from operating activities” in our condensed consolidated cash flows. Indebtedness and Other — The estimated fair value of our debt instruments as of June 27, 2020 and December 31, 2019 approximated the related carrying values due primarily to the variable market-based interest rates for such instruments. Se e Note 12 f or further details. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 27, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | We prepared the condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information normally required by accounting principles generally accepted in the United States (“GAAP”) can be condensed or omitted. The financial statements represent our accounts after the elimination of intercompany transactions and, in our opinion, include the adjustments (consisting only of normal and recurring items) necessary for their fair presentation. |
Variable Interest Entity | We account for investments in unconsolidated companies where we exercise significant influence but do not have control using the equity method. In determining whether we are the primary beneficiary of a variable interest entity (“VIE”), we perform a qualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties to determine which party has the power to direct the activities of the VIE that most significantly impact the entity’s economic performance, and which party has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. We have an interest in a VIE, in which we are not the primary beneficiary, as a result of the 2016 sale of Balcke Dürr. All other VIEs are considered immaterial, individually and in aggregate, to our condensed consolidated financial statements. |
Use of Estimates | Preparing financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ from these estimates. The unaudited information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2019. Interim results are not necessarily indicative of full year results. Unless otherwise indicated, amounts provided in these Notes pertain to continuing operations only. See Note 3 for information on discontinued operations. |
Fiscal Period | We establish actual interim closing dates using a fiscal calendar, which requires our businesses to close their books on the Saturday closest to the end of the first calendar quarter, with the second and third quarters being 91 days in length. Our fourth quarter ends on December 31. The interim closing dates for the first, second and third quarters of 2020 are March 28, June 27 and September 26, compared to the respective March 30, June 29 and September 28, 2019 dates. We had one less day in the first quarter of 2020 and will have two more days in the fourth quarter of 2020 than in the respective 2019 periods. We do not believe the one less day during the first quarter of 2020 had a material impact on our consolidated operating results for the six months ended June 27, 2020, when compared to the consolidated operating results for the six months ended June 29, 2019. |
New Accounting Pronouncements | NEW ACCOUNTING PRONOUNCEMENTS The following is a summary of new accounting pronouncements that apply or may apply to our business. In February 2016, the Financial Accounting Standards Board (“FASB”) issued an amendment to existing guidance, Accounting Standards Codification (“ASC”) 842, that requires lessees to recognize assets and liabilities for the rights and obligations created by leases. Under the amendment, additional qualitative and quantitative disclosures are required to allow users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. Effective January 1, 2019, we adopted ASC 842 using the modified retrospective transition approach, which entails recognizing the initial effect of adoption in retained earnings. The adoption of ASC 842 had no impact on our retained deficit. In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13. ASU 2016-13 changes how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income, based on historical experience, current conditions and reasonable and supportable forecasts. The requirements of ASU 2016-13 We adopted ASU 2016-13 $0.5. 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. The impact of this amendment on our consolidated financial statements will depend on the results of future goodwill impairment tests. In August 2017, the FASB issued significant amendments to hedge accounting. The FASB’s new guidance will make more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. We adopted this guidance during the first quarter of 2019, with such adoption having no material impact to our condensed consolidated financial statements. In August 2018, the FASB issued amended guidance to simplify fair value measurement disclosure requirements. The new provisions eliminate the requirements to disclose (i) transfers between Level 1 and Level 2 of the fair value hierarchy, (ii) policies related to valuation processes and the timing of transfers between levels of the fair value hierarchy, and (iii) net asset value disclosure of estimates of timing of future liquidity events. The FASB also modified disclosure requirements of Level 3 fair value measurements. This guidance is effective for annual periods beginning after December 15, 2019. We adopted this guidance on January 1, 2020 with no impact on our condensed consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). This ASU simplifies the accounting for income taxes by, among other things, eliminating certain existing exceptions related to the general approach in ASC 740 relating to franchise taxes, reducing complexity in the interim-period accounting for year-to-date loss limitations and changes in tax laws, and clarifying the accounting for the step-up in the tax basis of goodwill. The transition requirements are primarily prospective and the effective date is for interim and annual reporting periods beginning after December 15, 2020, with early adoption permitted. We are currently evaluating the impact of the new guidance on our condensed consolidated financial statements. The London Interbank Offered Rate (“LIBOR”) is scheduled to be discontinued on December 31, 2021. In an effort to address the various challenges created by such discontinuance, the FASB issued an amendment to existing guidance, ASU No. 2020-04, Reference Rate Reform. The amended guidance is designed to provide relief from the accounting analysis and impacts that may otherwise be required for modifications to agreements (e.g., loans, debt securities, derivatives, borrowings) necessitated by the reference rate reform. It also provides optional expedients to enable companies to continue to apply hedge accounting to certain hedging relationships impacted by the reference rate reform. Application of the guidance in the |
Inventories, net | Inventories include material, labor and factory overhead costs and are reduced, when necessary, to estimated net realizable values. Certain inventories are valued using the last-in, first-out (“LIFO”) method. |
Goodwill and Other Intangible Assets | We perform our annual goodwill impairment testing during the fourth quarter in conjunction with our annual financial planning process, with such testing based primarily on events and circumstances existing as of the end of the third quarter. In addition, we test goodwill for impairment on a more frequent basis if there are indications of potential impairment. A significant amount of judgment is involved in determining if an indication of impairment has occurred between annual testing dates. Such indication may include: a significant decline in expected future cash flows; a significant adverse change in legal factors or the business climate; unanticipated competition; and a more likely than not expectation of selling or disposing all, or a portion, of a reporting unit. Based on our annual goodwill impairment testing in the fourth quarter of 2019, we concluded that the estimated fair value of our Cues reporting unit exceeded the carrying value of its net assets by approximately 10%. An adverse change in any of the assumptions used in testing Cues’ goodwill for impairment (e.g., projected revenue and profit, discount rates, industry price multiples, etc.) could result in Cues’ estimated fair value being less than the carrying value of its net assets. If Cues is unable to achieve the financial forecasts included in its 2019 annual goodwill impairment analysis, we may be required to record an impairment charge related to Cues’ goodwill. Cues’ goodwill was $47.9 at June 27, 2020. 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 17) |
Currency Forward Contracts | Currency Forward Contracts We manufacture and sell our products in a number of countries and, as a result, are exposed to movements in foreign currency exchange rates. Our objective is to preserve the economic value of non-functional currency-denominated cash flows and to minimize the impact of changes as a result of currency fluctuations. Our principal currency exposures relate to the South African Rand, British Pound Sterling, and Euro. |
Potential Uncertain Positions | We perform reviews of our income tax positions on a continuous basis and accrue for potential uncertain positions when we determine that an uncertain position meets the criteria of the Income Taxes Topic of the ASC. 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. The Internal Revenue Service (“IRS”) currently is performing an audit of our 2007, 2013, 2014, 2015, 2016 and 2017 federal income tax returns. With regard to all open tax years, we believe any contingencies are adequately provided for. State income tax returns generally are subject to examination for a period of three to five years after filing the respective tax returns. The impact on such tax returns of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. We have various state income tax returns in the process of examination. We believe any uncertain tax positions related to these examinations have been adequately provided for. We have various foreign income tax returns under examination. The most significant of these is in Germany for the 2010 through 2014 tax years. We believe that any uncertain tax positions related to these examinations have been adequately provided for. An unfavorable resolution of one or more of the above matters could have a material impact on our results of operations or cash flows in the quarter and year in which an adjustment is recorded or the tax is due or paid. As audits and examinations are still in process, the timing of the ultimate resolution and any payments that may be required for the above matters cannot be determined at this time. |
Fair Value | Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Preference is given to observable inputs. These two types of inputs create the following fair value hierarchy: • Level 1 — Quoted prices for identical instruments in active markets. • Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level 3 — Significant inputs to the valuation model are unobservable. 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, 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 June 27, 2020, 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. |
REVENUES FROM CONTRACTS (Tables
REVENUES FROM CONTRACTS (Tables) | 6 Months Ended |
Jun. 27, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | We disaggregate revenue from contracts with customers by major product line and based on the timing of recognition for each of our reportable segments and other operating segments, as we believe such disaggregation best depicts how the nature, amount, timing, and uncertainty of our revenues and cash flows are affected by economic factors, with such disaggregation presented below for the three and six months ended June 27, 2020 and June 29, 2019: Three months ended June 27, 2020 Reportable Segments and All Other HVAC Detection and Measurement Engineered Solutions All Other Total Major product lines Cooling $ 76.6 $ — $ — $ — $ 76.6 Boilers, comfort heating, and ventilation 55.7 — — — 55.7 Underground locators and inspection and rehabilitation — 47.3 — — 47.3 Signal monitoring, obstruction lighting, and bus fare collection systems — 44.8 — — 44.8 Power transformers — — 113.9 — 113.9 Process cooling equipment and services, and heat exchangers — — 32.9 1.7 34.6 South African projects — — — 0.3 0.3 $ 132.3 $ 92.1 $ 146.8 $ 2.0 $ 373.2 Timing of Revenue Recognition Revenues recognized at a point in time $ 132.3 $ 85.7 $ 11.6 $ 0.7 $ 230.3 Revenues recognized over time — 6.4 135.2 1.3 142.9 $ 132.3 $ 92.1 $ 146.8 $ 2.0 $ 373.2 Six months ended June 27, 2020 Reportable Segments and All Other HVAC Detection and Measurement Engineered Solutions All Other Total Major product lines Cooling $ 134.5 $ — $ — $ — $ 134.5 Boilers, comfort heating, and ventilation 116.3 — — — 116.3 Underground locators and inspection and rehabilitation equipment — 96.0 — — 96.0 Signal monitoring, obstruction lighting, and bus fare collection systems — 88.0 — — 88.0 Power transformers — — 224.5 — 224.5 Process cooling equipment and services, and heat exchangers — — 77.2 3.6 80.8 South African projects — — — 2.4 2.4 $ 250.8 $ 184.0 $ 301.7 $ 6.0 $ 742.5 Timing of Revenue Recognition Revenues recognized at a point in time $ 250.8 $ 169.2 $ 23.2 $ 2.0 $ 445.2 Revenues recognized over time — 14.8 278.5 4.0 297.3 $ 250.8 $ 184.0 $ 301.7 $ 6.0 $ 742.5 Three months ended June 29, 2019 Reportable Segments and All Other HVAC Detection and Measurement Engineered Solutions All Other Total Major product lines Cooling $ 67.0 $ — $ — $ — $ 67.0 Boilers, comfort heating, and ventilation 63.9 — — — 63.9 Underground locators and inspection and rehabilitation — 52.6 — — 52.6 Signal monitoring, obstruction lighting, and bus fare collection systems — 49.1 — — 49.1 Power transformers — — 104.6 — 104.6 Process cooling equipment and services, and heat exchangers — — 34.4 3.1 37.5 South African projects (1) — — — (2.3) (2.3) $ 130.9 $ 101.7 $ 139.0 $ 0.8 $ 372.4 Timing of Revenue Recognition Revenues recognized at a point in time $ 130.9 $ 96.1 $ 12.9 $ 0.5 $ 240.4 Revenues recognized over time (1) — 5.6 126.1 0.3 132.0 $ 130.9 $ 101.7 $ 139.0 $ 0.8 $ 372.4 Six months ended June 29, 2019 Reportable Segments and All Other HVAC Detection and Measurement Engineered Solutions All Other Total Major product lines Cooling $ 125.9 $ — $ — $ — $ 125.9 Boilers, comfort heating, and ventilation 133.4 — — — 133.4 Underground locators and inspection and rehabilitation equipment — 99.7 — — 99.7 Signal monitoring, obstruction lighting, and bus fare collection systems — 87.1 — — 87.1 Power transformers — — 203.4 — 203.4 Process cooling equipment and services, and heat exchangers — — 73.6 6.8 80.4 South African projects (1) — — — (13.9) (13.9) $ 259.3 $ 186.8 $ 277.0 $ (7.1) $ 716.0 Timing of Revenue Recognition Revenues recognized at a point in time $ 259.3 $ 175.7 $ 25.4 $ 1.6 $ 462.0 Revenues recognized over time (1) — 11.1 251.6 (8.7) 254.0 $ 259.3 $ 186.8 $ 277.0 $ (7.1) $ 716.0 __________________________ |
Contract with Customer, Asset and Liability | Our contract balances consisted of the following as of June 27, 2020 and December 31, 2019: Contract Balances June 27, 2020 December 31, 2019 Change Contract Accounts Receivable (1) $ 231.4 $ 260.8 $ (29.4) Contract Assets 65.5 63.4 2.1 Contract Liabilities - current (91.1) (100.8) 9.7 Contract Liabilities - non-current (2) (3.0) (3.3) 0.3 Net contract balance $ 202.8 $ 220.1 $ (17.3) ___________________________ (1) Included in “Accounts receivable, net” within the accompanying condensed consolidated balance sheets. (2) Included in “Other long-term liabilities” within the accompanying condensed consolidated balance sheets. |
INFORMATION ON REPORTABLE AND_2
INFORMATION ON REPORTABLE AND OTHER OPERATING SEGMENTS (Tables) | 6 Months Ended |
Jun. 27, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Financial Data for Reportable Segments and Other Operating Segments | Financial data for our reportable segments and other operating segments for the three and six months ended June 27, 2020 and June 29, 2019 are presented below: Three months ended Six months ended June 27, June 29, June 27, June 29, Revenues: HVAC reportable segment $ 132.3 $ 130.9 $ 250.8 $ 259.3 Detection and Measurement reportable segment 92.1 101.7 184.0 186.8 Engineered Solutions reportable segment 146.8 139.0 301.7 277.0 All Other (1) 2.0 0.8 6.0 (7.1) Consolidated revenues $ 373.2 $ 372.4 $ 742.5 $ 716.0 Income (loss): HVAC reportable segment $ 18.2 $ 16.7 $ 33.2 $ 35.1 Detection and Measurement reportable segment 16.0 21.7 34.2 38.7 Engineered Solutions reportable segment 17.6 13.0 35.5 21.0 All Other (1) (4.2) (10.0) (8.1) (32.6) Total income for segments 47.6 41.4 94.8 62.2 Corporate expense (8.5) (10.5) (19.6) (22.9) Long-term incentive compensation expense (3.3) (3.3) (6.8) (6.8) Special charges, net (1.4) (1.3) (1.7) (1.4) Other operating income (expense) — — 0.4 (1.8) Consolidated operating income $ 34.4 $ 26.3 $ 67.1 $ 29.3 _____________________ (1) As indicated in Note 4, during the three and six months ended June 29, 2019, we reduced the amount of cumulative revenue associated with the variable consideration on the large power projects in South Africa by $6.0 and $23.5, respectively. |
SPECIAL CHARGES, NET (Tables)
SPECIAL CHARGES, NET (Tables) | 6 Months Ended |
Jun. 27, 2020 | |
Restructuring and Related Activities [Abstract] | |
Special Charges | Special charges, net, for the three and six months ended June 27, 2020 and June 29, 2019 are described in more detail below: Three months ended Six months ended June 27, June 29, June 27, June 29, HVAC reportable segment $ 0.4 $ 0.6 $ 0.5 $ 0.7 Detection and Measurement reportable segment 0.1 — 0.1 — Engineered Solutions reportable segment — 0.4 — 0.4 All Other 0.4 0.3 0.6 0.3 Corporate 0.5 — 0.5 — Total $ 1.4 $ 1.3 $ 1.7 $ 1.4 |
Analysis of Restructuring Liabilities | The following is an analysis of our restructuring liabilities for the six months ended June 27, 2020 and June 29, 2019: Six months ended June 27, June 29, Balance at beginning of year $ 1.7 $ 2.7 Special charges (1) 1.5 0.6 Utilization — cash (1.8) (2.2) Currency translation adjustment and other (0.2) — Balance at end of period $ 1.2 $ 1.1 _____________________ (1) For the six months ended June 27, 2020 and June 29, 2019, excludes $0.2 and $0.8, respectively, of non-cash charges that impacted “Special charges” but not the restructuring liabilities. |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 6 Months Ended |
Jun. 27, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories at June 27, 2020 and December 31, 2019 comprised the following: June 27, December 31, Finished goods $ 67.4 $ 57.6 Work in process 22.1 19.3 Raw materials and purchased parts 105.4 90.3 Total FIFO cost 194.9 167.2 Excess of FIFO cost over LIFO inventory value (13.3) (12.3) Total inventories, net $ 181.6 $ 154.9 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 27, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Goodwill | The changes in the carrying amount of goodwill for the six months ended June 27, 2020 were as follows: December 31, Goodwill Resulting from Business Combinations (1) Impairments Foreign June 27, HVAC reportable segment Gross goodwill $ 277.1 $ 1.3 $ — $ (0.1) $ 278.3 Accumulated impairments (144.6) — — 0.3 (144.3) Goodwill 132.5 1.3 — 0.2 134.0 Detection and Measurement reportable segment Gross goodwill 304.1 — — (1.2) 302.9 Accumulated impairments (133.6) — — 1.4 (132.2) Goodwill 170.5 — — 0.2 170.7 Engineered Solutions reportable segment Gross goodwill 334.2 — — 0.7 334.9 Accumulated impairments (187.9) — — (0.7) (188.6) Goodwill 146.3 — — — 146.3 All Other Gross goodwill 20.8 — — — 20.8 Accumulated impairments (20.8) — — — (20.8) Goodwill — — — — — Total Gross goodwill 936.2 1.3 — (0.6) 936.9 Accumulated impairments (486.9) — — 1.0 (485.9) Goodwill $ 449.3 $ 1.3 $ — $ 0.4 $ 451.0 ___________________________ |
Schedule of Identifiable Intangible Assets | Identifiable intangible assets at June 27, 2020 and December 31, 2019 comprised the following: June 27, 2020 December 31, 2019 Gross Accumulated Net Gross Accumulated Net Intangible assets with determinable lives: Customer relationships $ 77.5 $ (12.0) $ 65.5 $ 77.4 $ (8.7) $ 68.7 Technology 29.6 (4.7) 24.9 29.5 (3.3) 26.2 Patents 4.5 (4.5) — 4.5 (4.5) — Other 12.3 (9.6) 2.7 12.6 (9.2) 3.4 123.9 (30.8) 93.1 124.0 (25.7) 98.3 Trademarks with indefinite lives 153.4 — 153.4 153.4 — 153.4 Total $ 277.3 $ (30.8) $ 246.5 $ 277.4 $ (25.7) $ 251.7 |
WARRANTY (Tables)
WARRANTY (Tables) | 6 Months Ended |
Jun. 27, 2020 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Warranty Accrual | The following is an analysis of our product warranty accrual for the periods presented: Six months ended June 27, June 29, Balance at beginning of year $ 35.1 $ 34.0 Acquisitions 1.4 0.1 Provisions 5.7 6.0 Usage (6.7) (6.7) Currency translation adjustment 0.1 — Balance at end of period 35.6 33.4 Less: Current portion of warranty 13.5 11.8 Non-current portion of warranty $ 22.1 $ 21.6 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 6 Months Ended |
Jun. 27, 2020 | |
Postretirement Plans | |
Employee Benefit Plans | |
Schedule of Net Periodic Benefit (Income) Expense | Postretirement Plans Three months ended Six months ended June 27, June 29, June 27, June 29, Service cost $ — $ — $ — $ — Interest cost 0.4 0.6 0.8 1.2 Amortization of unrecognized prior service credits (1.2) (1.0) (2.4) (2.0) Net periodic postretirement benefit income $ (0.8) $ (0.4) $ (1.6) $ (0.8) |
UNITED STATES | |
Employee Benefit Plans | |
Schedule of Net Periodic Benefit (Income) Expense | Net periodic benefit expense (income) for our pension and postretirement plans include the following components: Domestic Pension Plans Three months ended Six months ended June 27, June 29, June 27, June 29, Service cost $ — $ — $ — $ — Interest cost 2.7 3.3 5.4 6.6 Expected return on plan assets (2.4) (2.4) (4.8) (4.9) Net periodic pension benefit expense $ 0.3 $ 0.9 $ 0.6 $ 1.7 |
Foreign Plan | |
Employee Benefit Plans | |
Schedule of Net Periodic Benefit (Income) Expense | Foreign Pension Plans Three months ended Six months ended June 27, June 29, June 27, June 29, Service cost $ — $ — $ — $ — Interest cost 1.0 1.1 2.0 2.3 Expected return on plan assets (1.5) (1.6) (3.0) (3.2) Net periodic pension benefit income $ (0.5) $ (0.5) $ (1.0) $ (0.9) |
INDEBTEDNESS (Tables)
INDEBTEDNESS (Tables) | 6 Months Ended |
Jun. 27, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Activity, Current and Noncurrent | The following summarizes our debt activity (both current and non-current) for the six months ended June 27, 2020: December 31, Borrowings Repayments Other (5) June 27, Revolving loans (1) $ 140.0 $ 178.7 $ (88.7) $ — $ 230.0 Term loan (2) 248.2 — — 0.2 248.4 Trade receivables financing arrangement (3) — 65.0 (30.0) — 35.0 Other indebtedness (4) 5.3 — (1.4) 0.6 4.5 Total debt 393.5 $ 243.7 $ (120.1) $ 0.8 517.9 Less: short-term debt 142.6 266.8 Less: current maturities of long-term debt 1.0 4.1 Total long-term debt $ 249.9 $ 247.0 ___________________________ (1) In March 2020, we borrowed $100.0 against our domestic revolving loan facility to preempt any potential concerns about cash availability in the bank markets as a result of the COVID-19 pandemic. In addition, while not due for repayment until December 2024 under the terms of our senior credit agreement, we have classified the outstanding balances for the revolving loans as a current liability in our condensed consolidated balance sheets, as it is reasonably expected that such balances will be repaid within one year with available cash and cash that is expected to be generated from operations. (2) The term loan is repayable in quarterly installments beginning in the first quarter of 2021, with the quarterly installments equal to 0.625% of the initial term loan balance of $250.0 during 2021, 1.25% in each of the four quarters of 2022 and 2023, and 1.25% during the first three quarters of 2024. The remaining balance is payable in full on December 17, 2024. Balances are net of unamortized debt issuance costs of $1.6 and $1.8 at June 27, 2020 and December 31, 2019, respectively. (3) Under this arrangement, we can borrow, on a continuous basis, up to $50.0, as available. At June 27, 2020, we had $9.3 of available borrowing capacity under this facility after giving effect to outstanding borrowings of $35.0. Borrowings under this arrangement are collateralized by eligible trade receivables of certain of our businesses. (4) Includes balances under a purchase card program of $1.8 and $2.6 and capital lease obligations of $2.7 , a t June 27, 2020 and December 31, 2019, respectively. The purchase card program allows for payment beyond the normal payment terms for goods and services acquired under the program. As this arrangement extends the payment of these purchases beyond their normal payment terms through third-party lending institutions, we have classified these amounts as short-term debt. (5) “Other” primarily includes debt assumed, foreign currency translation on any debt instruments denominated in currencies other than the U.S. dollar, and the impact of amortization of debt issuance costs associated with the term loan. |
EQUITY AND LONG-TERM INCENTIV_2
EQUITY AND LONG-TERM INCENTIVE COMPENSATION (Tables) | 6 Months Ended |
Jun. 27, 2020 | |
SHAREHOLDERS' EQUITY AND STOCK-BASED COMPENSATION | |
Weighted-Average Shares Outstanding Used in Computation of Basic and Diluted Income per Share | The following table sets forth the number of weighted-average shares outstanding used in the computation of basic and diluted income per share: Three months ended Six months ended June 27, June 29, June 27, June 29, Weighted-average number of common shares used in basic income per share 44.590 43.914 44.452 43.767 Dilutive securities — Employee stock options and restricted stock units 1.058 0.978 1.168 0.983 Weighted-average number of common shares and dilutive securities used in diluted income per share 45.648 44.892 45.620 44.750 |
Schedule of Changes in Components of Accumulated Other Comprehensive Income (Loss) | The changes in the components of accumulated other comprehensive income, net of tax, for the three months ended June 27, 2020 were as follows: Foreign Net Unrealized Losses on Qualifying Cash Flow Hedges (1) Pension and Postretirement Liability Adjustment (2) Total Balance at beginning of period $ 222.3 $ (8.0) $ 17.1 $ 231.4 Other comprehensive income (loss) before reclassifications 4.9 (1.4) (0.1) 3.4 Amounts reclassified from accumulated other comprehensive income (loss) — 1.4 (0.9) 0.5 Current-period other comprehensive income (loss) 4.9 — (1.0) 3.9 Balance at end of period $ 227.2 $ (8.0) $ 16.1 $ 235.3 __________________________ (1) Net of tax benefit of $2.6 and $2.7 as of June 27, 2020 and March 28, 2020, respectively. (2) Net of tax provision of $5.5 and $5.8 as of June 27, 2020 and March 28, 2020, respectively. The balances as of June 27, 2020 and March 28, 2020 include unamortized prior service credits. The changes in the components of accumulated other comprehensive income, net of tax, for the six months ended June 27, 2020 were as follows: Foreign Net Unrealized Losses on Qualifying Cash Flow Hedges (1) Pension and Postretirement Liability Adjustment (2) Total Balance at beginning of period $ 228.0 $ (1.6) $ 17.9 $ 244.3 Other comprehensive loss before reclassifications (0.8) (8.2) — (9.0) Amounts reclassified from accumulated other comprehensive income (loss) — 1.8 (1.8) — Current-period other comprehensive loss (0.8) (6.4) (1.8) (9.0) Balance at end of period $ 227.2 $ (8.0) $ 16.1 $ 235.3 __________________________ (1) Net of tax benefit of $2.6 and $0.5 as of June 27, 2020 and December 31, 2019, respectively. (2) Net of tax provision of $5.5 and $6.1 as of June 27, 2020 and December 31, 2019. The balances as of June 27, 2020 and December 31, 2019 include unamortized prior service credits. The changes in the components of accumulated other comprehensive income, net of tax, for the three months ended June 29, 2019 were as follows: Foreign Net Unrealized Losses on Qualifying Cash Flow Hedges (1) Pension and Postretirement Liability Adjustment (2) Total Balance at beginning of period $ 228.2 $ (0.5) $ 18.9 $ 246.6 Other comprehensive loss before reclassifications — (2.2) — (2.2) Amounts reclassified from accumulated other comprehensive income (loss) (1.0) — (0.7) (1.7) Current-period other comprehensive loss (1.0) (2.2) (0.7) (3.9) Balance at end of period $ 227.2 $ (2.7) $ 18.2 $ 242.7 __________________________ (1) Net of tax benefit of $0.9 and $0.1 as of June 29, 2019 and March 30, 2019, respectively. (2) Net of tax provision of $6.1 and $6.4 as of June 29, 2019 and March 30, 2019, respectively. The balances as of June 29, 2019 and March 30, 2019 include unamortized prior service credits. The changes in the components of accumulated other comprehensive income, net of tax, for the six months ended June 29, 2019 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 $ 225.8 $ (0.6) $ 19.7 $ 244.9 Other comprehensive loss before reclassifications — (2.3) — (2.3) Amounts reclassified from accumulated other comprehensive income (loss) 1.4 0.2 (1.5) 0.1 Current-period other comprehensive income (loss) 1.4 (2.1) (1.5) (2.2) Balance at end of period $ 227.2 $ (2.7) $ 18.2 $ 242.7 __________________________ (1) Net of tax benefit of $0.9 and $0.2 as of June 29, 2019 and December 31, 2018. |
Schedule of Amounts Reclassified from Each Component of Other Comprehensive Income (Loss) | The following summarizes amounts reclassified from each component of accumulated comprehensive income for the three months ended June 27, 2020 and June 29, 2019: Amount Reclassified from AOCI Three months ended June 27, 2020 June 29, 2019 Affected Line Item in the Condensed Losses on qualifying cash flow hedges: Commodity contracts $ 0.6 $ — Cost of products sold Swaps 1.3 — Interest expense Pre-tax 1.9 — Income taxes (0.5) — $ 1.4 $ — Gains on pension and postretirement items: Amortization of unrecognized prior service credits - Pre-tax $ (1.2) $ (1.0) Other income, net Income taxes 0.3 0.3 $ (0.9) $ (0.7) The following summarizes amounts reclassified from each component of accumulated comprehensive income for the six months ended June 27, 2020 and June 29, 2019: Amount Reclassified from AOCI Six months ended June 27, 2020 June 29, 2019 Affected Line Item in the Condensed Losses on qualifying cash flow hedges: Commodity contracts $ 0.6 $ 0.3 Cost of products sold Swaps 1.8 — Interest expense Pre-tax 2.4 0.3 Income taxes (0.6) (0.1) $ 1.8 $ 0.2 Gains on pension and postretirement items: Amortization of unrecognized prior service credits - Pre-tax $ (2.4) (2.0) Other income, net Income taxes 0.6 0.5 $ (1.8) $ (1.5) |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 6 Months Ended |
Jun. 27, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Nonrecurring | Summarized below are changes in the liability and asset during the six months ended June 27, 2020, and June 29, 2019. Six months ended June 27, 2020 June 29, 2019 Guarantees and Bonds Liability (1) Indemnification Assets (1) Guarantees and Bonds Liability (1) Indemnification Assets (1) Balance at beginning of year $ 2.0 $ 0.3 $ 4.4 $ 1.2 Reduction/Amortization for the period (2) (0.3) (0.1) (2.2) (0.4) Impact of changes in foreign currency rates 0.1 — — — Balance at end of period (3) $ 1.8 $ 0.2 $ 2.2 $ 0.8 ___________________________ (1) In connection with the sale, we estimated the fair value of the existing parent company guarantees and bank and surety bonds considering the probability of default by Balcke Dürr and an estimate of the amount we would be obligated to pay in the event of a default. Additionally, we estimated the fair value of the cash collateral provided by Balcke Dürr and 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) 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, net.” |
BASIS OF PRESENTATION - Narrati
BASIS OF PRESENTATION - Narrative (Details) - USD ($) $ in Millions | Nov. 12, 2019 | Jul. 03, 2019 | Feb. 01, 2019 | Jun. 27, 2020 | Jun. 29, 2019 |
Discontinued Operations | |||||
Business acquisition, net of cash acquired | $ 0 | $ 77.2 | |||
Length of second and third quarter (days) | 91 days | ||||
Patterson-Kelley, LLC | |||||
Discontinued Operations | |||||
Cash to acquire business | $ 59.9 | ||||
Sabik Marine | |||||
Discontinued Operations | |||||
Business acquisition, net of cash acquired | $ 77.2 | ||||
Cash acquired | $ 0.6 | ||||
SGS Refrigeration Inc. | |||||
Discontinued Operations | |||||
Cash to acquire business | $ 11.5 | ||||
Deferred payment | $ 1.5 |
NEW ACCOUNTING PRONOUNCEMENTS (
NEW ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 27, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained deficit | $ 535.5 | $ 584.8 | |
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | ||
Accounting Standards Update 2016-13 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained deficit | $ 0.5 |
AQUISITIONS AND DISCONTINUED _2
AQUISITIONS AND DISCONTINUED OPERATIONS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2020 | Jun. 29, 2019 | Jun. 27, 2020 | Jun. 29, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Loss on disposition of discontinued operations, net | $ 1.3 | $ 0.2 | $ 1.3 | $ 1.6 |
REVENUES FROM CONTRACTS - Disag
REVENUES FROM CONTRACTS - Disaggregated Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2020 | Jun. 29, 2019 | Jun. 27, 2020 | Jun. 29, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 373.2 | $ 372.4 | $ 742.5 | $ 716 |
Transferred at Point in Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 230.3 | 240.4 | 445.2 | 462 |
Transferred over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 142.9 | 132 | 297.3 | 254 |
Cooling | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 76.6 | 67 | 134.5 | 125.9 |
Boilers, comfort heating, and ventilation | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 55.7 | 63.9 | 116.3 | 133.4 |
Underground locators and inspection and rehabilitation equipment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 47.3 | 52.6 | 96 | 99.7 |
Signal monitoring, obstruction lighting, and bus fare collection systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 44.8 | 49.1 | 88 | 87.1 |
Power transformers | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 113.9 | 104.6 | 224.5 | 203.4 |
Process cooling equipment and services, and heat exchangers | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 34.6 | 37.5 | 80.8 | 80.4 |
South African projects | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0.3 | (2.3) | 2.4 | (13.9) |
HVAC | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 132.3 | 130.9 | 250.8 | 259.3 |
HVAC | Transferred at Point in Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 132.3 | 130.9 | 250.8 | 259.3 |
HVAC | Transferred over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
HVAC | Cooling | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 76.6 | 67 | 134.5 | 125.9 |
HVAC | Boilers, comfort heating, and ventilation | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 55.7 | 63.9 | 116.3 | 133.4 |
HVAC | Underground locators and inspection and rehabilitation equipment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
HVAC | Signal monitoring, obstruction lighting, and bus fare collection systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
HVAC | Power transformers | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
HVAC | Process cooling equipment and services, and heat exchangers | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
HVAC | South African projects | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Detection and Measurement | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 92.1 | 101.7 | 184 | 186.8 |
Detection and Measurement | Transferred at Point in Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 85.7 | 96.1 | 169.2 | 175.7 |
Detection and Measurement | Transferred over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 6.4 | 5.6 | 14.8 | 11.1 |
Detection and Measurement | Cooling | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Detection and Measurement | Boilers, comfort heating, and ventilation | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Detection and Measurement | Underground locators and inspection and rehabilitation equipment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 47.3 | 52.6 | 96 | 99.7 |
Detection and Measurement | Signal monitoring, obstruction lighting, and bus fare collection systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 44.8 | 49.1 | 88 | 87.1 |
Detection and Measurement | Power transformers | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Detection and Measurement | Process cooling equipment and services, and heat exchangers | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Detection and Measurement | South African projects | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Engineered Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 146.8 | 139 | 301.7 | 277 |
Engineered Solutions | Transferred at Point in Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 11.6 | 12.9 | 23.2 | 25.4 |
Engineered Solutions | Transferred over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 135.2 | 126.1 | 278.5 | 251.6 |
Engineered Solutions | Cooling | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Engineered Solutions | Boilers, comfort heating, and ventilation | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Engineered Solutions | Underground locators and inspection and rehabilitation equipment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Engineered Solutions | Signal monitoring, obstruction lighting, and bus fare collection systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Engineered Solutions | Power transformers | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 113.9 | 104.6 | 224.5 | 203.4 |
Engineered Solutions | Process cooling equipment and services, and heat exchangers | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 32.9 | 34.4 | 77.2 | 73.6 |
Engineered Solutions | South African projects | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
All Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 2 | 0.8 | 6 | (7.1) |
All Other | Transferred at Point in Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0.7 | 0.5 | 2 | 1.6 |
All Other | Transferred over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1.3 | 0.3 | 4 | (8.7) |
All Other | Cooling | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
All Other | Boilers, comfort heating, and ventilation | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
All Other | Underground locators and inspection and rehabilitation equipment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
All Other | Signal monitoring, obstruction lighting, and bus fare collection systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
All Other | Power transformers | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
All Other | Process cooling equipment and services, and heat exchangers | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1.7 | 3.1 | 3.6 | 6.8 |
All Other | South African projects | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 0.3 | $ (2.3) | $ 2.4 | $ (13.9) |
REVENUES FROM CONTRACTS - Narra
REVENUES FROM CONTRACTS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 27, 2020 | Jun. 29, 2019 | Mar. 30, 2019 | Jun. 27, 2020 | Jun. 29, 2019 | |
Revenue from External Customer [Line Items] | |||||
Increase (decrease) in contract with customers, net | $ (17.3) | ||||
Contract with customer, revenue recognized | $ 19.6 | 64.2 | |||
Revenues | 373.2 | $ 372.4 | 742.5 | $ 716 | |
All Other | |||||
Revenue from External Customer [Line Items] | |||||
Revenues | $ 2 | 0.8 | 6 | (7.1) | |
Contracts Accounted for under Percentage of Completion | Large Power Projects | South Africa | All Other | Operating Segments | |||||
Revenue from External Customer [Line Items] | |||||
Revenues | (6) | $ (17.5) | $ 0.3 | $ (23.5) | |
Contracts Accounted for under Percentage of Completion | Large Power Projects | South Africa | All Other | Operating Segments | Alstom S&E Africa (PTY) LTD | |||||
Revenue from External Customer [Line Items] | |||||
Revenues | $ (5.8) |
REVENUES FROM CONTRACTS - Contr
REVENUES FROM CONTRACTS - Contract Balances (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 27, 2020 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Contract Accounts Receivable | $ 231.4 | $ 260.8 |
Increase (decrease) in accounts receivable | (29.4) | |
Contract assets | 65.5 | 63.4 |
Increase (decrease) in contract with customer, asset, net, current | 2.1 | |
Contract Liabilities - current | (91.1) | (100.8) |
Increase (decrease) in contract with customer, liability, current | 9.7 | |
Contract Liabilities - non-current | (3) | (3.3) |
Increase (decrease) in contract with customer, liability, noncurrent | 0.3 | |
Net contract balance | 202.8 | $ 220.1 |
Increase (decrease) in contract with customers, net | $ (17.3) |
REVENUES FROM CONTRACTS - Perfo
REVENUES FROM CONTRACTS - Performance Obligation Narrative (Details) $ in Millions | Jun. 27, 2020USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 79.7 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-06-28 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation (as a percent) | 47.00% |
Remaining performance obligation, timing of satisfaction (years) | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-06-28 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation (as a percent) | 64.00% |
Remaining performance obligation, timing of satisfaction (years) | 12 months |
LEASES (Details)
LEASES (Details) - USD ($) $ in Millions | Jun. 27, 2020 | Jun. 01, 2020 |
Leases [Abstract] | ||
Term of lease (years) | 10 years | |
Scheduled payments | $ 17.6 | |
Weighted average remaining lease term (years) | 7 years | |
Weighted-average discount rate (percent) | 3.10% |
INFORMATION ON REPORTABLE AND_3
INFORMATION ON REPORTABLE AND OTHER OPERATING SEGMENTS (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 27, 2020USD ($)country | Jun. 29, 2019USD ($) | Mar. 30, 2019USD ($) | Jun. 27, 2020USD ($)country | Jun. 29, 2019USD ($) | |
Information on reportable segments and other operating segments | |||||
Number of countries in which entity operates (over 15 countries) | country | 17 | 17 | |||
Revenues: | |||||
Revenues | $ 373.2 | $ 372.4 | $ 742.5 | $ 716 | |
Income (loss): | |||||
Consolidated operating income | 34.4 | 26.3 | 67.1 | 29.3 | |
Special charges, net | (1.4) | (1.3) | (1.7) | (1.4) | |
Other operating income (expense) | 0 | 0 | 0.4 | (1.8) | |
Operating Segments | |||||
Income (loss): | |||||
Consolidated operating income | 47.6 | 41.4 | 94.8 | 62.2 | |
Corporate | |||||
Income (loss): | |||||
Corporate expense | (8.5) | (10.5) | (19.6) | (22.9) | |
Special charges, net | (0.5) | 0 | (0.5) | 0 | |
Segment Reconciling Items | |||||
Income (loss): | |||||
Long-term incentive compensation expense | (3.3) | (3.3) | (6.8) | (6.8) | |
Special charges, net | (1.4) | (1.3) | (1.7) | (1.4) | |
Other operating income (expense) | 0 | 0 | 0.4 | (1.8) | |
HVAC reportable segment | |||||
Revenues: | |||||
Revenues | 132.3 | 130.9 | 250.8 | 259.3 | |
Income (loss): | |||||
Special charges, net | (0.4) | (0.6) | (0.5) | (0.7) | |
HVAC reportable segment | Operating Segments | |||||
Income (loss): | |||||
Consolidated operating income | 18.2 | 16.7 | 33.2 | 35.1 | |
Detection and Measurement reportable segment | |||||
Revenues: | |||||
Revenues | 92.1 | 101.7 | 184 | 186.8 | |
Income (loss): | |||||
Special charges, net | (0.1) | 0 | (0.1) | 0 | |
Detection and Measurement reportable segment | Operating Segments | |||||
Income (loss): | |||||
Consolidated operating income | 16 | 21.7 | 34.2 | 38.7 | |
Engineered Solutions reportable segment | |||||
Revenues: | |||||
Revenues | 146.8 | 139 | 301.7 | 277 | |
Income (loss): | |||||
Special charges, net | 0 | (0.4) | 0 | (0.4) | |
Engineered Solutions reportable segment | Operating Segments | |||||
Income (loss): | |||||
Consolidated operating income | 17.6 | 13 | 35.5 | 21 | |
All Other | |||||
Revenues: | |||||
Revenues | 2 | 0.8 | 6 | (7.1) | |
Income (loss): | |||||
Consolidated operating income | (4.2) | (10) | (8.1) | (32.6) | |
Special charges, net | $ (0.4) | (0.3) | $ (0.6) | (0.3) | |
Minimum | |||||
Information on reportable segments and other operating segments | |||||
Number of countries in which entity sells its products and services (over 100 countries) | country | 100 | 100 | |||
Contracts Accounted for under Percentage of Completion | South Africa | Large Power Projects | All Other | Operating Segments | |||||
Revenues: | |||||
Revenues | $ (6) | $ (17.5) | $ 0.3 | $ (23.5) |
SPECIAL CHARGES, NET (Details)
SPECIAL CHARGES, NET (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2020 | Jun. 29, 2019 | Jun. 27, 2020 | Jun. 29, 2019 | |
Special Charges, Net | ||||
Special charges, net | $ 1.4 | $ 1.3 | $ 1.7 | $ 1.4 |
Restructuring liabilities | ||||
Balance at beginning of year | 1.7 | 2.7 | ||
Special charges | 1.5 | 0.6 | ||
Utilization — cash | (1.8) | (2.2) | ||
Currency translation adjustment and other | (0.2) | 0 | ||
Balance at end of period | 1.2 | 1.1 | 1.2 | 1.1 |
Non-cash charges | 0.2 | 0.8 | ||
Corporate | ||||
Special Charges, Net | ||||
Special charges, net | 0.5 | 0 | 0.5 | 0 |
HVAC reportable segment | ||||
Special Charges, Net | ||||
Special charges, net | 0.4 | 0.6 | 0.5 | 0.7 |
Detection and Measurement reportable segment | ||||
Special Charges, Net | ||||
Special charges, net | 0.1 | 0 | 0.1 | 0 |
Engineered Solutions reportable segment | ||||
Special Charges, Net | ||||
Special charges, net | 0 | 0.4 | 0 | 0.4 |
All Other | ||||
Special Charges, Net | ||||
Special charges, net | $ 0.4 | $ 0.3 | $ 0.6 | $ 0.3 |
INVENTORIES, NET (Details)
INVENTORIES, NET (Details) - USD ($) $ in Millions | Jun. 27, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 67.4 | $ 57.6 |
Work in process | 22.1 | 19.3 |
Raw materials and purchased parts | 105.4 | 90.3 |
Total FIFO cost | 194.9 | 167.2 |
Excess of FIFO cost over LIFO inventory value | (13.3) | (12.3) |
Total inventories, net | $ 181.6 | $ 154.9 |
Inventories, valued using the last-in, first-out (LIFO) method, as a percentage of total inventory | 42.00% | 36.00% |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill (Details) $ in Millions | 6 Months Ended |
Jun. 27, 2020USD ($) | |
Changes in the carrying amount of goodwill | |
Gross goodwill, beginning of the period | $ 936.2 |
Accumulated impairment, balance at the beginning of the period | (486.9) |
Goodwill, balance at the beginning of the period | 449.3 |
Goodwill resulting from business combinations | (1.3) |
Impairments | 0 |
Gross goodwill related to foreign currency translation | (0.6) |
Accumulated impairments related to foreign currency translation | 1 |
Goodwill related to foreign currency translation | 0.4 |
Gross goodwill, end of the period | 936.9 |
Accumulated impairment, balance at the end of the period | (485.9) |
Goodwill, balance at the end of the period | 451 |
HVAC reportable segment | |
Changes in the carrying amount of goodwill | |
Gross goodwill, beginning of the period | 277.1 |
Accumulated impairment, balance at the beginning of the period | (144.6) |
Goodwill, balance at the beginning of the period | 132.5 |
Goodwill resulting from business combinations | (1.3) |
Impairments | 0 |
Gross goodwill related to foreign currency translation | (0.1) |
Accumulated impairments related to foreign currency translation | 0.3 |
Goodwill related to foreign currency translation | 0.2 |
Gross goodwill, end of the period | 278.3 |
Accumulated impairment, balance at the end of the period | (144.3) |
Goodwill, balance at the end of the period | 134 |
Detection and Measurement reportable segment | |
Changes in the carrying amount of goodwill | |
Gross goodwill, beginning of the period | 304.1 |
Accumulated impairment, balance at the beginning of the period | (133.6) |
Goodwill, balance at the beginning of the period | 170.5 |
Goodwill resulting from business combinations | 0 |
Impairments | 0 |
Gross goodwill related to foreign currency translation | (1.2) |
Accumulated impairments related to foreign currency translation | 1.4 |
Goodwill related to foreign currency translation | 0.2 |
Gross goodwill, end of the period | 302.9 |
Accumulated impairment, balance at the end of the period | (132.2) |
Goodwill, balance at the end of the period | 170.7 |
Engineered Solutions reportable segment | |
Changes in the carrying amount of goodwill | |
Gross goodwill, beginning of the period | 334.2 |
Accumulated impairment, balance at the beginning of the period | (187.9) |
Goodwill, balance at the beginning of the period | 146.3 |
Goodwill resulting from business combinations | 0 |
Impairments | 0 |
Gross goodwill related to foreign currency translation | 0.7 |
Accumulated impairments related to foreign currency translation | (0.7) |
Goodwill related to foreign currency translation | 0 |
Gross goodwill, end of the period | 334.9 |
Accumulated impairment, balance at the end of the period | (188.6) |
Goodwill, balance at the end of the period | 146.3 |
All Other | |
Changes in the carrying amount of goodwill | |
Gross goodwill, beginning of the period | 20.8 |
Accumulated impairment, balance at the beginning of the period | (20.8) |
Goodwill, balance at the beginning of the period | 0 |
Goodwill resulting from business combinations | 0 |
Impairments | 0 |
Gross goodwill related to foreign currency translation | 0 |
Accumulated impairments related to foreign currency translation | 0 |
Goodwill related to foreign currency translation | 0 |
Gross goodwill, end of the period | 20.8 |
Accumulated impairment, balance at the end of the period | (20.8) |
Goodwill, balance at the end of the period | 0 |
Patterson-Kelley, LLC | |
Changes in the carrying amount of goodwill | |
Goodwill resulting from business combinations | (1.4) |
Goodwill decrease | 0.5 |
SGS Refrigeration Inc. | |
Changes in the carrying amount of goodwill | |
Goodwill resulting from business combinations | $ (0.4) |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangibles, Net (Details) - USD ($) $ in Millions | Jun. 27, 2020 | Dec. 31, 2019 |
Intangible assets with determinable lives | ||
Gross Carrying Value | $ 123.9 | $ 124 |
Accumulated Amortization | (30.8) | (25.7) |
Net Carrying Value | 93.1 | 98.3 |
Intangible assets with indefinite lives | ||
Gross carrying value, Total | 277.3 | 277.4 |
Net Carrying Value, Total | 246.5 | 251.7 |
Trademarks | ||
Intangible assets with indefinite lives | ||
Trademarks | 153.4 | 153.4 |
Customer relationships | ||
Intangible assets with determinable lives | ||
Gross Carrying Value | 77.5 | 77.4 |
Accumulated Amortization | (12) | (8.7) |
Net Carrying Value | 65.5 | 68.7 |
Technology | ||
Intangible assets with determinable lives | ||
Gross Carrying Value | 29.6 | 29.5 |
Accumulated Amortization | (4.7) | (3.3) |
Net Carrying Value | 24.9 | 26.2 |
Patents | ||
Intangible assets with determinable lives | ||
Gross Carrying Value | 4.5 | 4.5 |
Accumulated Amortization | (4.5) | (4.5) |
Net Carrying Value | 0 | 0 |
Other | ||
Intangible assets with determinable lives | ||
Gross Carrying Value | 12.3 | 12.6 |
Accumulated Amortization | (9.6) | (9.2) |
Net Carrying Value | $ 2.7 | $ 3.4 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions | Jun. 27, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, net | $ 93.1 | $ 98.3 |
Goodwill | 451 | $ 449.3 |
Cues, Inc. | ||
Finite-Lived Intangible Assets [Line Items] | ||
Percentage of fair value in excess of carrying amount | 10.00% | |
Goodwill | 47.9 | |
HVAC reportable segment | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, net | 25.9 | |
Goodwill | 134 | $ 132.5 |
Detection and Measurement reportable segment | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, net | 67.2 | |
Goodwill | 170.7 | 170.5 |
Engineered Solutions reportable segment | ||
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | 146.3 | 146.3 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Trademarks | 153.4 | $ 153.4 |
Trademarks | HVAC reportable segment | ||
Finite-Lived Intangible Assets [Line Items] | ||
Trademarks | 96.3 | |
Trademarks | Detection and Measurement reportable segment | ||
Finite-Lived Intangible Assets [Line Items] | ||
Trademarks | 48 | |
Trademarks | Engineered Solutions reportable segment | ||
Finite-Lived Intangible Assets [Line Items] | ||
Trademarks | $ 9.1 |
WARRANTY (Details)
WARRANTY (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 27, 2020 | Jun. 29, 2019 | |
Analysis of product warranty accrual | ||
Balance at beginning of year | $ 35.1 | $ 34 |
Acquisitions | 1.4 | 0.1 |
Provisions | 5.7 | 6 |
Usage | (6.7) | (6.7) |
Currency translation adjustment | 0.1 | 0 |
Balance at end of period | 35.6 | 33.4 |
Less: Current portion of warranty | 13.5 | 11.8 |
Non-current portion of warranty | $ 22.1 | $ 21.6 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2020 | Jun. 29, 2019 | Jun. 27, 2020 | Jun. 29, 2019 | |
Postretirement Plans | ||||
Net periodic pension/postretirement benefit expense | ||||
Service cost | $ 0 | $ 0 | $ 0 | $ 0 |
Interest cost | 0.4 | 0.6 | 0.8 | 1.2 |
Amortization of unrecognized prior service credits | (1.2) | (1) | (2.4) | (2) |
Total net periodic pension benefit (income) expense | (0.8) | (0.4) | (1.6) | (0.8) |
UNITED STATES | ||||
Net periodic pension/postretirement benefit expense | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 2.7 | 3.3 | 5.4 | 6.6 |
Expected return on plan assets | (2.4) | (2.4) | (4.8) | (4.9) |
Total net periodic pension benefit (income) expense | 0.3 | 0.9 | 0.6 | 1.7 |
Foreign Plan | ||||
Net periodic pension/postretirement benefit expense | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 1 | 1.1 | 2 | 2.3 |
Expected return on plan assets | (1.5) | (1.6) | (3) | (3.2) |
Total net periodic pension benefit (income) expense | $ (0.5) | $ (0.5) | $ (1) | $ (0.9) |
INDEBTEDNESS (Details)
INDEBTEDNESS (Details) - USD ($) | 1 Months Ended | 6 Months Ended | ||
Mar. 28, 2020 | Jun. 27, 2020 | Jun. 27, 2020 | Dec. 31, 2019 | |
Debt | ||||
Balance at the beginning of the period | $ 393,500,000 | |||
Borrowings | 243,700,000 | |||
Repayments | (120,100,000) | |||
Other | 800,000 | |||
Balance at the end of the period | 517,900,000 | |||
Less: short-term debt | $ 266,800,000 | $ 142,600,000 | ||
Less: current maturities of long-term debt | 4,100,000 | 1,000,000 | ||
Total long-term debt | 247,000,000 | 249,900,000 | ||
Outstanding borrowings | 517,900,000 | 517,900,000 | 393,500,000 | |
Trade receivables financing arrangement | ||||
Debt | ||||
Balance at the beginning of the period | 0 | |||
Borrowings | 65,000,000 | |||
Repayments | (30,000,000) | |||
Other | 0 | |||
Balance at the end of the period | 35,000,000 | |||
Maximum borrowing capacity | 50,000,000 | |||
Amount of available borrowing capacity | 9,300,000 | |||
Outstanding borrowings | 35,000,000 | 35,000,000 | 0 | |
Other indebtedness | ||||
Debt | ||||
Balance at the beginning of the period | 5,300,000 | |||
Borrowings | 0 | |||
Repayments | (1,400,000) | |||
Other | 600,000 | |||
Balance at the end of the period | 4,500,000 | |||
Outstanding borrowings | 4,500,000 | 4,500,000 | 5,300,000 | |
Purchase card programs | 1,800,000 | 2,600,000 | ||
Capital lease obligations | 2,700,000 | 2,700,000 | ||
Revolving loans | Current Revolving SPX Facilities | ||||
Debt | ||||
Balance at the beginning of the period | 140,000,000 | |||
Borrowings | 178,700,000 | |||
Repayments | (88,700,000) | |||
Other | 0 | |||
Balance at the end of the period | 230,000,000 | |||
Proceeds from line of credit | $ 100,000,000 | |||
Outstanding borrowings | 230,000,000 | 230,000,000 | 140,000,000 | |
Term loans | Current SPX Term Loan Facilities | ||||
Debt | ||||
Balance at the beginning of the period | 248,200,000 | |||
Borrowings | 0 | |||
Repayments | 0 | |||
Other | 200,000 | |||
Balance at the end of the period | 248,400,000 | |||
Original loan balance | 250,000,000 | |||
Debt issuance costs | 1,600,000 | 1,800,000 | ||
Outstanding borrowings | $ 248,400,000 | $ 248,400,000 | $ 248,200,000 | |
Term loans | Current SPX Term Loan Facilities | 2021 | ||||
Debt | ||||
Periodic payment (as a percent of principal) | 0.625% | |||
Term loans | Current SPX Term Loan Facilities | 2022 and 2023 | ||||
Debt | ||||
Periodic payment (as a percent of principal) | 1.25% | |||
Term loans | Current SPX Term Loan Facilities | 2024 | ||||
Debt | ||||
Periodic payment (as a percent of principal) | 1.25% |
INDEBTEDNESS - Senior Credit Fa
INDEBTEDNESS - Senior Credit Facilities (Details) $ in Millions | Jun. 27, 2020USD ($) |
Domestic Line of Credit | |
Line of Credit Facility [Line Items] | |
Amount of available borrowing capacity | $ 202.7 |
Borrowings under line of credit | 230 |
Letters of credit issued, amount outstanding | 17.3 |
Foreign credit instrument facility | |
Line of Credit Facility [Line Items] | |
Amount of available borrowing capacity | 19.3 |
Letters of credit issued, amount outstanding | $ 80.7 |
Line of Credit | |
Line of Credit Facility [Line Items] | |
Weighted-average interest rate of senior credit facilities (as a percent) | 1.60% |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Details) lb in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 27, 2020USD ($)lb | Dec. 31, 2019USD ($)lb | Mar. 31, 2018USD ($) | |
Initial Swaps | Derivative contracts designated as hedging instruments | |||
Derivative Financial Instruments | |||
Aggregate notional amount | $ 243,800,000 | $ 260,000,000 | |
Fixed rate (percentage) | 2.535% | ||
Additional Swaps | Derivative contracts designated as hedging instruments | |||
Derivative Financial Instruments | |||
Aggregate notional amount | $ 248,400,000 | ||
Fixed rate (percentage) | 1.061% | ||
Swaps | |||
Derivative Financial Instruments | |||
Unrealized gain (loss) recorded in AOCI | $ (8,400,000) | $ (1,900,000) | |
Swaps | Derivative contracts designated as hedging instruments | |||
Derivative Financial Instruments | |||
Derivative fair value | (11,100,000) | ||
Swaps | Derivative contracts designated as hedging instruments | Short-term Liability | |||
Derivative Financial Instruments | |||
Derivative fair value | (5,000,000) | ||
Swaps | Derivative contracts designated as hedging instruments | Long-term Liability | |||
Derivative Financial Instruments | |||
Derivative fair value | (2,500,000) | ||
FX Forward Contracts | |||
Derivative Financial Instruments | |||
Aggregate notional amount | 10,100,000 | 26,000,000 | |
Commodity Contracts | |||
Derivative Financial Instruments | |||
Unrealized gain (loss) recorded in AOCI | 400,000 | 300,000 | |
Fair value of derivative contract - asset | $ 500,000 | $ 400,000 | |
Commodity Contracts | Derivative contracts designated as hedging instruments | |||
Derivative Financial Instruments | |||
Notional amount of commodity contracts (in pounds of copper) | lb | 3.9 | 3.4 |
EQUITY AND LONG-TERM INCENTIV_3
EQUITY AND LONG-TERM INCENTIVE COMPENSATION (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2020 | Jun. 29, 2019 | Jun. 27, 2020 | Jun. 29, 2019 | |
Income Per Share | ||||
Weighted-average number of common shares used in basic income per share (in shares) | 44,590 | 43,914 | 44,452 | 43,767 |
Dilutive securities — Employee stock options, restricted stock shares and restricted stock units (in shares) | 1,058 | 978 | 1,168 | 983 |
Weighted-average number of common shares and dilutive securities used in diluted income per share (in shares) | 45,648 | 44,892 | 45,620 | 44,750 |
Restricted stock shares/units | ||||
Stock-based Compensation | ||||
Number of options or units that were excluded from the computation of diluted income per share | 409 | 461 | 345 | 379 |
Employee stock option | ||||
Stock-based Compensation | ||||
Number of options or units that were excluded from the computation of diluted income per share | 944 | 996 | 803 | 962 |
EQUITY AND LONG-TERM INCENTIV_4
EQUITY AND LONG-TERM INCENTIVE COMPENSATION - Long Term Incentive Compensation (Details) - USD ($) shares in Thousands, $ in Millions | May 14, 2020 | Jun. 27, 2020 | Jun. 29, 2019 | Jun. 27, 2020 | Jun. 29, 2019 |
Stock-based Compensation | |||||
Related tax benefit | $ 0.8 | $ 0.8 | $ 1.7 | $ 1.7 | |
Performance Shares | |||||
Stock-based Compensation | |||||
Award vesting period (years) | 3 years | ||||
Restricted Stock Units (RSUs) | Non-Employee Director | |||||
Stock-based Compensation | |||||
Granted (in shares) | 28 | ||||
Performance Stock Units, Stock Options, and Restricted Stock Units | |||||
Stock-based Compensation | |||||
Compensation expense | $ 3.3 | $ 3.3 | $ 6.8 | $ 6.8 |
EQUITY AND LONG-TERM INCENTIV_5
EQUITY AND LONG-TERM INCENTIVE COMPENSATION - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Jun. 27, 2020 | Jun. 29, 2019 | Jun. 27, 2020 | Jun. 29, 2019 | Mar. 28, 2020 | Dec. 31, 2019 | Mar. 30, 2019 | Dec. 31, 2018 | |
Components of accumulated other comprehensive income, net of tax [Roll Forward] | ||||||||
Other comprehensive income (loss) before reclassifications | $ 3.4 | $ (2.2) | $ (9) | $ (2.3) | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | 0.5 | (1.7) | 0 | 0.1 | ||||
Current-period other comprehensive income (loss) | 3.9 | (3.9) | (9) | (2.2) | ||||
Accum. Other Comprehensive Income | ||||||||
Components of accumulated other comprehensive income, net of tax [Roll Forward] | ||||||||
Balance at beginning of period | 231.4 | 246.6 | 244.3 | 244.9 | ||||
Balance at end of period | 235.3 | 242.7 | 235.3 | 242.7 | ||||
Foreign Currency Translation Adjustment | ||||||||
Components of accumulated other comprehensive income, net of tax [Roll Forward] | ||||||||
Balance at beginning of period | 222.3 | 228.2 | 228 | 225.8 | ||||
Other comprehensive income (loss) before reclassifications | 4.9 | 0 | (0.8) | 0 | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | (1) | 0 | 1.4 | ||||
Current-period other comprehensive income (loss) | 4.9 | (1) | (0.8) | 1.4 | ||||
Balance at end of period | 227.2 | 227.2 | 227.2 | 227.2 | ||||
Net Unrealized Gains (Losses) on Qualifying Cash Flow Hedges | ||||||||
Components of accumulated other comprehensive income, net of tax [Roll Forward] | ||||||||
Balance at beginning of period | (8) | (0.5) | (1.6) | (0.6) | ||||
Other comprehensive income (loss) before reclassifications | (1.4) | (2.2) | (8.2) | (2.3) | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | 1.4 | 0 | 1.8 | 0.2 | ||||
Current-period other comprehensive income (loss) | 0 | (2.2) | (6.4) | (2.1) | ||||
Balance at end of period | (8) | (2.7) | (8) | (2.7) | ||||
Tax benefit (provision) | 2.6 | 0.9 | 2.6 | 0.9 | $ 2.7 | $ 0.5 | $ 0.1 | $ 0.2 |
Pension and Postretirement Liability Adjustment | ||||||||
Components of accumulated other comprehensive income, net of tax [Roll Forward] | ||||||||
Balance at beginning of period | 17.1 | 18.9 | 17.9 | 19.7 | ||||
Other comprehensive income (loss) before reclassifications | (0.1) | 0 | 0 | 0 | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | (0.9) | (0.7) | (1.8) | (1.5) | ||||
Current-period other comprehensive income (loss) | (1) | (0.7) | (1.8) | (1.5) | ||||
Balance at end of period | 16.1 | 18.2 | 16.1 | 18.2 | ||||
Tax benefit (provision) | $ (5.5) | $ (6.1) | $ (5.5) | $ (6.1) | $ (5.8) | $ (6.1) | $ (6.4) | $ (6.6) |
EQUITY AND LONG-TERM INCENTIV_6
EQUITY AND LONG-TERM INCENTIVE COMPENSATION - Components of AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2020 | Jun. 29, 2019 | Jun. 27, 2020 | Jun. 29, 2019 | |
Amounts reclassified from each component of accumulated comprehensive income | ||||
Cost of products sold | $ (259.2) | $ (264.2) | $ (514.4) | $ (524.6) |
Interest expense | (4.8) | (5.3) | (9.5) | (10.6) |
Income from continuing operations before income taxes | 35.5 | 23.5 | 64.2 | 28.7 |
Income taxes | (7.1) | (4.1) | (13.1) | (8.7) |
Other income, net | 5.8 | 1.9 | 6.5 | 9.1 |
Net income | 49.8 | 18.4 | ||
Net Unrealized Gains (Losses) on Qualifying Cash Flow Hedges | Amount Reclassified from AOCI | ||||
Amounts reclassified from each component of accumulated comprehensive income | ||||
Income from continuing operations before income taxes | (1.9) | 0 | (2.4) | (0.3) |
Income taxes | 0.5 | 0 | 0.6 | 0.1 |
Net income | (1.4) | 0 | (1.8) | (0.2) |
Net Unrealized Gains (Losses) on Qualifying Cash Flow Hedges | Commodity Contracts | Amount Reclassified from AOCI | ||||
Amounts reclassified from each component of accumulated comprehensive income | ||||
Cost of products sold | (0.6) | 0 | (0.6) | (0.3) |
Net Unrealized Gains (Losses) on Qualifying Cash Flow Hedges | Swaps | Amount Reclassified from AOCI | ||||
Amounts reclassified from each component of accumulated comprehensive income | ||||
Interest expense | (1.3) | 0 | (1.8) | 0 |
Accumulated Defined Benefit Plans Adjustment, Net Prior Service Attributable to Parent | Amount Reclassified from AOCI | ||||
Amounts reclassified from each component of accumulated comprehensive income | ||||
Income taxes | (0.3) | (0.3) | (0.6) | (0.5) |
Other income, net | 1.2 | 1 | 2.4 | 2 |
Net income | $ 0.9 | $ 0.7 | $ 1.8 | $ 1.5 |
CONTINGENT LIABILITIES AND OT_2
CONTINGENT LIABILITIES AND OTHER MATTERS (Details) R in Millions | Jul. 23, 2020USD ($)dispute | Jul. 23, 2020ZAR (R) | Jun. 27, 2020USD ($)corporate_entityproject | Jun. 29, 2019USD ($) | Jun. 27, 2020ZAR (R) | Dec. 31, 2019USD ($) | Jul. 31, 2019USD ($) | Jul. 31, 2019ZAR (R) | Feb. 26, 2019USD ($) | Feb. 26, 2019ZAR (R) |
Contingent Liabilities and Other Matters | ||||||||||
Carrying values of accruals | $ 565,000,000 | $ 592,400,000 | ||||||||
Liability for asbestos product liability matters | 525,000,000 | 552,200,000 | ||||||||
Insurance recoveries | 16,300,000 | $ 26,600,000 | ||||||||
Payments for asbestos-related matters, net of insurance recoveries | $ 11,800,000 | $ 6,300,000 | ||||||||
Number of large power projects | project | 2 | |||||||||
SOUTH AFRICA | Large Power Projects | ||||||||||
Contingent Liabilities and Other Matters | ||||||||||
Gain contingency | $ 65,100,000 | R 1,133.3 | ||||||||
Estimate of possible legal claim deemed unlikely | $ 54,400,000 | R 948 | ||||||||
SOUTH AFRICA | Large Power Projects | Subsequent Event | ||||||||||
Contingent Liabilities and Other Matters | ||||||||||
Number of disputes | dispute | 9 | |||||||||
SOUTH AFRICA | Large Power Projects | Demand Bonds | ||||||||||
Contingent Liabilities and Other Matters | ||||||||||
Bonds issued | 52,400,000 | |||||||||
SOUTH AFRICA | Large Power Projects | Demand Bonds | Subsequent Event | ||||||||||
Contingent Liabilities and Other Matters | ||||||||||
Bonds issued | $ 2,300,000 | |||||||||
SOUTH AFRICA | Large Power Projects | Demand Bonds | Subsequent Event | MHPSA | ||||||||||
Contingent Liabilities and Other Matters | ||||||||||
Litigation settlement | 1,100,000 | R 18.4 | ||||||||
SOUTH AFRICA | Large Power Projects | Demand Bonds | Subsequent Event | Bonds Upon Completion Of Certain Administrative Milestones | ||||||||||
Contingent Liabilities and Other Matters | ||||||||||
Bonds issued | $ 3,900,000 | |||||||||
SOUTH AFRICA | Large Power Projects | Demand Bonds, Stringent Payment Requirements | ||||||||||
Contingent Liabilities and Other Matters | ||||||||||
Bonds issued | 18,800,000 | |||||||||
SOUTH AFRICA | Large Power Projects | MHPSA April And July 2019 Claims | ||||||||||
Contingent Liabilities and Other Matters | ||||||||||
Estimate of possible legal claim deemed unlikely | $ 23,400,000 | R 407.2 | ||||||||
SOUTH AFRICA | Large Power Projects | MHPSA Additional Claims | ||||||||||
Contingent Liabilities and Other Matters | ||||||||||
Estimate of possible legal claim deemed unlikely | 10,100,000 | R 176.2 | ||||||||
Other Long Term Liabilities | ||||||||||
Contingent Liabilities and Other Matters | ||||||||||
Accruals included in other long-term liabilities | 491,600,000 | 517,600,000 | ||||||||
Asbestos Issue | ||||||||||
Contingent Liabilities and Other Matters | ||||||||||
Loss contingency receivable | 496,400,000 | 509,600,000 | ||||||||
Asbestos Issue | Other Assets | ||||||||||
Contingent Liabilities and Other Matters | ||||||||||
Insurance recovery assets | $ 446,400,000 | $ 459,600,000 | ||||||||
Minimum | Asbestos Issue | ||||||||||
Contingent Liabilities and Other Matters | ||||||||||
Number of corporate entities named as defendants | corporate_entity | 50 |
CONTINGENT LIABILITIES AND OT_3
CONTINGENT LIABILITIES AND OTHER MATTERS - Environmental Matters (Details) - Site investigation and remediation - site | Jun. 27, 2020 | Dec. 31, 2019 |
Environmental Matters | ||
Number of sites | 26 | 29 |
Number of third-party disposal sites for which entity is potentially responsible | 14 | |
Number of active sites | 9 |
INCOME AND OTHER TAXES (Details
INCOME AND OTHER TAXES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2020 | Jun. 29, 2019 | Jun. 27, 2020 | Jun. 29, 2019 | |
Uncertain Tax Benefits | ||||
Gross unrecognized tax benefits | $ 16,700,000 | $ 16,700,000 | ||
Net unrecognized tax benefits | 13,400,000 | 13,400,000 | ||
Net unrecognized tax benefits that would impact effective tax rate if recognized | 9,400,000 | 9,400,000 | ||
Gross accrued interest | 4,500,000 | 4,500,000 | ||
Net accrued interest | 3,500,000 | 3,500,000 | ||
Penalties accrued | 0 | 0 | ||
Other Tax Matters | ||||
Income tax provision | 7,100,000 | $ 4,100,000 | 13,100,000 | $ 8,700,000 |
Pre-tax income (loss) from continuing operations | $ 35,500,000 | $ 23,500,000 | $ 64,200,000 | $ 28,700,000 |
Effective income tax rate (as a percent) | 20.00% | 17.40% | 20.40% | 30.30% |
Tax benefits associated with statute expirations | $ 500,000 | $ 500,000 | ||
Tax benefits related to U.S. tax credits and incentives | $ 1,300,000 | $ 1,300,000 | ||
Excess tax benefits from stock-based compensation awards vested | 300,000 | $ 400,000 | 1,500,000 | $ 1,600,000 |
Deferred social security payroll taxes due to CARES act | 3,400,000 | 3,400,000 | ||
Maximum | ||||
Uncertain Tax Benefits | ||||
Reasonably possible amount that unrecognized tax benefits could decrease within next 12 months, high end of range | $ 10,000,000 | $ 10,000,000 |
FAIR VALUE (Details)
FAIR VALUE (Details) € in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||||||
Jun. 27, 2020USD ($) | Jun. 29, 2019USD ($) | Mar. 30, 2019USD ($) | Jun. 27, 2020USD ($) | Jun. 29, 2019USD ($) | Jun. 27, 2020EUR (€) | Jun. 27, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 30, 2016EUR (€) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Security at fair value | $ 27.2 | $ 21.9 | |||||||
Realized gain on fair value adjustment | $ 5.3 | $ 1.6 | $ 5.3 | $ 7.9 | |||||
Distribution | $ 2.6 | ||||||||
Discontinued Operations, Disposed of by Sale | Buyer | Balcke Durr Business | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Amount of guarantees | € | € 0 | € 79 | |||||||
Discontinued Operations, Disposed of by Sale | Buyer | Bank and Surety Bonds | Balcke Durr Business | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Amount of guarantees | € | € 7.3 | 79 | |||||||
Discontinued Operations, Disposed of by Sale | Buyer | Balcke-Durr | Balcke Durr Business | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Cash collateral | 1 | 4 | |||||||
Discontinued Operations, Disposed of by Sale | Buyer | mutares AG | Indemnification Agreement | Balcke Durr Business | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Amount of guarantees | $ 2.5 | € 5 |
FAIR VALUE - Changes in Liabili
FAIR VALUE - Changes in Liability and Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 27, 2020 | Jun. 29, 2019 | Jun. 27, 2020 | Jun. 29, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Non-Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Other income, net | $ 5.8 | $ 1.9 | $ 6.5 | $ 9.1 | ||
Balcke Durr Business | Discontinued Operations, Disposed of by Sale | Guarantees and Bonds | Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 3 | ||||||
Fair Value, Assets and Liabilities Measured on Non-Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Guarantees, Fair Value Disclosure | 1.8 | 2.2 | 1.8 | 2.2 | $ 2 | $ 4.4 |
Other income, net | 0.3 | 2.2 | ||||
Impact of changes in foreign currency rates | 0.1 | 0 | ||||
Balcke Durr Business | Discontinued Operations, Disposed of by Sale | Indemnification Agreement | Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 3 | ||||||
Fair Value, Assets and Liabilities Measured on Non-Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Assets, Fair Value Disclosure | $ 0.2 | $ 0.8 | 0.2 | 0.8 | $ 0.3 | $ 1.2 |
Other income, net | 0.1 | 0.4 | ||||
Impact of changes in foreign currency rates | $ 0 | $ 0 |