What changed in this filing

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Item 9A. Controls and Procedures

2022-02-25 compared with 2021-02-26 · 49 added, 28 removed, 182 unchanged (30% of the section changed)

2 unchanged sentences

SPX management, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of disclosure controls and procedures, pursuant to Exchange Act Rule 13a-15(b), as of December 31, 2021.

Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective.

Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2021 due to the material weakness discussed below related to the accounting for asbestos-related insurance recovery assets.

Management’s Report on Internal Control Over Financial Reporting

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Further, because of changing conditions, effectiveness of internal control over financial reporting may vary over time.

Management assessed the effectiveness of our internal control over financial reporting and concluded that, as of December 31, 2020, such internal control was effective at the reasonable assurance level described above.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2021, at the reasonable assurance level described above.

In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control - Integrated Framework (2013).

Management excluded from its assessment of internal control over financial reporting as of December 31, 2020, the internal control over financial reporting of ULC and Sensors & Software, which were acquired on September 2, 2020, and November 11, 2020 respectively.

Based on this assessment, our Chief Executive Officer and Chief Financial Officer concluded, given the existence of a material weakness described below, that our internal control over financial reporting was not effective as of December 31, 2021.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the registrant’s annual or interim financial statements will not be prevented or detected on a timely basis.

As a result of its assessment, management, with the participation of our Chief Executive Officer and Chief Financial Officer, identified a deficiency in the design and operating effectiveness of our internal controls related to the insurance recovery assets associated with alleged exposure to asbestos-containing materials.

While the deficiency did not cause material misstatements to the financial statements, it presented a reasonable possibility that a material misstatement to the financial statements could have occurred.

Management excluded from its assessment of internal control over financial reporting as of December 31, 2021, the internal control over financial reporting of Sealite, ECS and Cincinnati Fan, which were acquired on April 19, 2021, August 2, 2021 and December 15, 2021, respectively.

This exclusion is consistent with guidance issued by the U.S.

Securities and Exchange Commission that an assessment of a recently acquired business may be omitted from the scope of management's report on internal control over financial reporting in the year of acquisition.

The total assets of these acquired entities represented approximately 6% of our consolidated total assets as of December 31, 2020 and their aggregate revenues represented approximately 1% of our consolidated revenues for the year ended December 31, 2020.

The total assets of these acquired entities (excluding goodwill and intangible assets, which are included within the scope of our assessment) represented approximately 2% of our

consolidated total assets as of December 31, 2021 and their aggregate revenues represented approximately 3% of our consolidated revenues for the year ended December 31, 2021.

See a discussion of these acquisitions in Note 1 of the Notes to the Consolidated Financial Statements contained in Item 8 of this Annual Report on Form 10-K.

The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report included in this Form 10-K.

Remediation Plan and Status

Our remediation efforts are in process as we have subsequently designed control procedures to address the material weakness.

Management will, among other procedures,

• Perform a reconciliation of data used in our accounting assessments to the records of external legal counsel and third-party administrators to verify the completeness of recorded insurance recovery assets associated with alleged exposure to asbestos-containing materials.

• On a quarterly basis, monitor changes in available insurance and, to the extent there are changes, confirm all changes with the external legal counsel and third-party administrators and verify all such changes are properly reflected in the insurance availability reports.

We will implement, document policies and procedures for, and test the implementation and operating effectiveness of, the newly-designed controls in future periods.

The material weakness in our internal control over financial reporting will not be considered remediated until the newly-designed controls operate for a sufficient period of time.

Changes in Internal Control Over Financial Reporting

In connection with the evaluation by SPX management, including the Chief Executive Officer and Chief Financial Officer, of our internal control over financial reporting, pursuant to Exchange Act Rule 13a-15(d), no changes during the quarter ended December 31, 2020 were identified that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other than those described above, there have been no changes in the our internal control over financial reporting (as defined in Rule 13a‐15(d)) during the quarter ended December 31, 2021 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of SPX Corporation

To the stockholders and the Board of Directors of SPX Corporation

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of SPX Corporation and subsidiaries (the “Company”) as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

In our opinion, because of the effect of the material weakness identified below on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2021, of the Company and our report dated February 25, 2022, expressed an unqualified opinion on those financial statements.

As described in Management’s Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting at ULC Robotics and Sensors & Software Inc., which were acquired on September 2, 2020 and November 11, 2020, respectively, and whose financial statements constitute approximately 6% of consolidated total assets and approximately 1% of consolidated revenues as of and for the year ended December 31, 2020.

Accordingly, our audit did not include the internal control over financial reporting at ULC Robotics and Sensors & Software Inc.

As described in Management’s Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Sealite Pty Ltd (“Sealite”), Enterprise Control Systems Ltd (“ECS”), and Cincinnati Fan & Ventilator Co., Inc.

(“Cincinnati Fan”), which were acquired on April 19, 2021, August 2, 2021, and December 15, 2021, respectively, and whose aggregate total assets (excluding goodwill and intangible assets, which were integrated into the Company's control environment) and aggregate revenues constitute approximately 2% and 3%, respectively, of the related amounts in the Company's consolidated financial statements as of and for the year ended December 31, 2021.

Accordingly, our audit did not include the internal control over financial reporting at Sealite, ECS, and Cincinnati Fan.

Basis for Opinion

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Material Weakness

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weakness has been identified and included in management's assessment:

The Company identified a deficiency in the design and operating effectiveness of internal controls related to the insurance recovery assets associated with alleged exposure to asbestos-containing materials.

This material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the consolidated financial statements as of and for the year ended December 31, 2021, of the Company, and this report does not affect our report on such financial statements.

/s/ Deloitte & Touche LLP

3 unchanged sentences

Not applicable.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

P A R T I I I

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Data held numerous leadership positions in the global operations of the steam generating and environmental equipment businesses.

Mason , 55, President, Transformer Solutions since January 2015 and was appointed an officer of the company in January 2017.

Prior to joining SPX, Mr.

Mason spent over 14 years with Emerson Electric.

Most recently, he was President, Emerson Connectivity Solutions, from March 2004 to July 2014, and President, Cinch Connectivity Solutions, from July 2014 to December 2014, having led the divestiture of Emerson Connectivity Solutions and its integration with Cinch Connectors/Bel Fuse.

While at Emerson Electric, Mr.

Mason held leadership positions in various technology-oriented businesses.

He has also held leadership roles at General Cable, Winegard, and General Electric.

Nurkin , 52, Vice President, General Counsel and Secretary since September 2015.

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c) Section 16(a) Beneficial Ownership Reporting Compliance.

This information is included in our definitive proxy statement for the 2021 Annual Meeting of Stockholders under the heading “Section 16(a) Beneficial Ownership Reporting Compliance” and is incorporated herein by reference.

This information is included in our definitive proxy statement for the 2022 Annual Meeting of Stockholders under the heading “Delinquent Section 16(a) Reports” and is incorporated herein by reference.

d) Code of Ethics.

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/s/ ROBERT B.

TOTH /s/ TANA L.

TOTH /s/ ANGEL S.

/s/ MEENAL A.

SETHNA /s/ MICHAEL A.

Director Michael A.

SETHNA /s/ TANA L.

Director Tana L.

/s/ MICHAEL A.

Chief Accounting Officer, Vice President,

3 unchanged sentences

and SPX Corporation, incorporated by reference from our Current Report on Form 8-K filed on September 28, 2015 (File no.

2.2 — Stock Purchase Agreement among SPX Corporation, SPX Transformer Solutions, Inc., GE Prolec Transformers, Inc.

and Prolec GE Internacional, S.

dated as of June 8, 2021, incorporated by reference from our Current Report on Form 8-K filed on June 9, 2021 (File no.

3.1 — Restated Certificate of Incorporation, as amended, incorporated herein by reference from our Quarterly Report on Form 10-Q for the quarter ended June 30, 2002 (File no.

17 unchanged sentences

10.10 — Third Amendment to Credit Agreement, dated as of December 17, 2019, among SPX Corporation, the Foreign Subsidiary Borrowers, the Subsidiary Guarantors, the Lenders party thereto, Deutsche Bank AG Deutschlandgeschäft Branch, as Foreign Trade Facility Agent, and Bank of America, N.A., as Administrative Agent, incorporated by reference from our Current Report on Form 8-K filed on December 18, 2019 (File no.

10.11 — LIBOR Transition Amendment dated as of December 9, 2021 among SPX CORPORATION, the Subsidiary Guarantors party thereto, and Bank of America, N.A., as the Administrative Agent

10.12 — SPX Corporation 1997 Non-Employee Directors’ Compensation Plan, as amended and restated December 17, 2008, incorporated herein by reference from our Annual Report on Form 10-K for the year ended December 31, 2008 (File no.

33 unchanged sentences

*10.46 — Change of Control Agreement between Eugene Joseph Lowe, III and SPX Corporation, incorporated by reference from our Current Report on Form 8-K filed on October 1, 2015 (File no.

*10.47 — Letter agreement dated June 7, 2021 between SPX Corporation and Brian G.

Mason, incorporated by reference from our Quarterly Report on Form 10-Q for the period ended July 3, 2021 (File no.

*10.48 — Enhanced Severance Agreement dated as of June 7, 2021 between SPX Transformer Solutions, Inc.

Mason, incorporated by reference from our Quarterly Report on Form 10-Q for the period ended July 3, 2021 (File no.

18.1 — Preferability Letter re Change in Accounting Principle

21.1 — Subsidiaries.

23.1 — Consent of Independent Registered Public Accounting Firm — Deloitte & Touche LLP.

Registered Public Accounting Firm — Deloitte & Touche LLP.

31.1 — Rule 13a-14(a) Certification.

1 unchanged sentence

32.1 — Section 1350 Certifications.

101.1 — SPX Corporation financial information from its Form 10-K for the fiscal year ended December 31, 2020, formatted in Inline XBRL, including:

(i) Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018;

(ii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2020, 2019 and 2018;

(iii) Consolidated Balance Sheets as of December 31, 2020 and 2019;

(iv) Consolidated Statements of Equity for the years ended December 31, 2020, 2019 and 2018;

(v) Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018;

and (vi) Notes to Consolidated Financial Statements.

101.INS — Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

101.SCH — Inline XBRL Taxonomy Extension Schema Document

101.CAL — Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF — Inline XBRL Taxonomy Extension Definitions Linkbase Document

101.LAB — Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE — Inline XBRL Taxonomy Extension Presentation Linkbase Document

104.1 — Cover Page Interactive Data File (formatted as Inline XBRL and contained in the Interactive Data File submitted as (Exhibit 101.1)

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures