What changed in this filing

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Item 1. Financial Statements

2022-05-05 compared with 2021-11-04 · 371 added, 447 removed, 565 unchanged (59% of the section changed)

3 unchanged sentences

in millions, except per share amounts)

Three months ended Nine months ended

2021 September 26,

2020 October 2,

2021 September 26,

Three months ended

2022 April 3,

Revenues $ 307.1 $ 287.2

4 unchanged sentences

Special charges, net — 0.2

Other operating (income) expense — — 2.7 ( 0.4 )

Other operating income ( 0.9 ) —

Operating income 11.4 25.0

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Income from continuing operations 13.0 23.0

Income (loss) from discontinued operations, net of tax ( 31.0 ) 7.1 20.3 33.5

Gain (loss) on disposition of discontinued operations, net of tax 354.4 0.1 357.7 ( 1.2 )

Income from discontinued operations, net of tax — 4.6

Loss on disposition of discontinued operations, net of tax ( 1.6 ) ( 0.8 )

Income (loss) from discontinued operations, net of tax ( 1.6 ) 3.8

Net income $ 11.4 $ 26.8

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Income from continuing operations $ 0.29 $ 0.51

Income from discontinued operations 7.13 0.16 8.35 0.73

Income (loss) from discontinued operations ( 0.04 ) 0.08

Net income per share $ 0.25 $ 0.59

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Income from continuing operations $ 0.28 $ 0.50

Income from discontinued operations 6.93 0.16 8.14 0.71

Income (loss) from discontinued operations ( 0.03 ) 0.08

Net income per share $ 0.25 $ 0.58

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Inventories, net 220.7 189.8

Other current assets (includes income taxes receivable of $ 2.6 and $ 27.3 at October 2, 2021 and December 31, 2020, respectively)

Assets of discontinued operations — 121.6

Other current assets 78.6 73.1

Total current assets 815.5 903.4

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Deferred income taxes 12.5 11.0

Assets of discontinued operations — 219.1

Assets of DBT and Heat Transfer (includes cash and cash equivalents of $ 6.7 and $ 7.8 at April 2, 2022 and December 31, 2021, respectively)

TOTAL ASSETS $ 2,567.2 $ 2,628.6

LIABILITIES AND EQUITY

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

5 unchanged sentences

Current maturities of long-term debt 13.0 13.0

Liabilities of discontinued operations — 115.8

Total current liabilities 393.9 439.5

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Other long-term liabilities 761.2 788.5

Liabilities of discontinued operations — 30.7

Liabilities of DBT and Heat Transfer 38.0 35.6

Total long-term liabilities 1,057.5 1,086.2

Commitments and contingent liabilities (Note 15)

Common stock ( 52,921,832 and 45,372,991 is sued and outstanding at October 2, 2021, respectively, and 52,704,973 and 45,032,325 issued and outstanding at December 31, 2020, respectively)

Stockholders' Equity:

Common stock ( 53,065,643 and 45,716,583 is sued and outstanding at April 2, 2022, respectively, and 53,011,255 and 45,467,768 issued and outstanding at December 31, 2021, respectively)

Paid-in capital 1,321.2 1,334.2

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Accumulated other comprehensive income 266.9 263.9

Common stock in treasury ( 7,548,841 an d 7,672,648 shares at October 2, 2021 and December 31, 2020, respectively)

Common stock in treasury ( 7,349,060 and 7,543,487 shares at April 2, 2022 and December 31, 2021, respectively)

( 432.4 ) ( 443.9 )

Total equity 1,060.3 629.2

TOTAL LIABILITIES AND EQUITY $ 2,489.8 $ 2,319.0

Total stockholders' equity 1,115.8 1,102.9

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,567.2 $ 2,628.6

The accompanying notes are an integral part of these statements.

SPX CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Three months ended October 2, 2021

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Three months ended April 2, 2022

Stock Paid-In

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Income Common

Shareholders’

Balance at July 3, 2021 $ 0.5 $ 1,321.2 $ ( 399.8 ) $ 250.6 $ ( 444.3 ) $ 728.2

Stockholders’

Balance at December 31, 2021 $ 0.5 $ 1,334.2 $ ( 51.8 ) $ 263.9 $ ( 443.9 ) $ 1,102.9

Net income — — 11.4 — — 11.4

Other comprehensive loss, net — — — ( 6.1 ) — ( 6.1 )

Other comprehensive income, net — — — 3.0 — 3.0

Incentive plan activity

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Restricted stock unit vesting — ( 18.6 ) — — 11.5 ( 7.1 )

Balance at October 2, 2021 $ 0.5 $ 1,328.2 $ ( 68.7 ) $ 244.5 $ ( 444.2 ) $ 1,060.3

Nine months ended October 2, 2021

Balance at April 2, 2022 $ 0.5 $ 1,321.2 $ ( 40.4 ) $ 266.9 $ ( 432.4 ) $ 1,115.8

Three months ended April 3, 2021

Common Stock Paid-In Capital Retained Deficit Accum.

Other Comprehensive Income Common Stock In Treasury SPX Corporation Shareholders’ Equity

Other Comprehensive Income Common Stock In Treasury SPX Corporation Stockholders’ Equity

Balance at December 31, 2020 $ 0.5 $ 1,319.9 $ ( 477.2 ) $ 248.5 $ ( 451.6 ) $ 640.1

Net income — — 26.8 — — 26.8

Other comprehensive loss, net — — — ( 4.0 ) — ( 4.0 )

Incentive plan activity — 9.8 — — — 9.8

Long-term incentive compensation expense — 10.8 — — — 10.8

Restricted stock unit vesting — ( 12.3 ) — — 7.4 ( 4.9 )

Balance at October 2, 2021 $ 0.5 $ 1,328.2 $ ( 68.7 ) $ 244.5 $ ( 444.2 ) $ 1,060.3

Three months ended September 26, 2020

Common Stock Paid-In Capital Retained Deficit Accum.

Other Comprehensive Income Common Stock In Treasury SPX Corporation Shareholders’ Equity

Balance at June 27, 2020 $ 0.5 $ 1,303.4 $ ( 535.5 ) $ 235.3 $ ( 451.6 ) $ 552.1

Net income — — 22.8 — — 22.8

Other comprehensive income, net — — — 2.7 — 2.7

2 unchanged sentences

Restricted stock unit vesting — ( 10.9 ) — — 6.2 ( 4.7 )

Balance at September 26, 2020 $ 0.5 $ 1,309.7 $ ( 512.7 ) $ 237.2 $ ( 451.6 ) $ 583.1

Nine months ended September 26, 2020

Common Stock Paid-In Capital Retained Deficit Accum.

Other Comprehensive Income Common Stock In Treasury SPX Corporation Shareholders’ Equity

Balance at December 31, 2019 $ 0.5 $ 1,302.4 $ ( 584.8 ) $ 244.3 $ ( 460.0 ) $ 502.4

Impact of adoption of ASU 2016-13 - See Note 2 — — ( 0.5 ) — — ( 0.5 )

Net income — — 72.6 — — 72.6

Other comprehensive loss, net — — — ( 7.1 ) — ( 7.1 )

Incentive plan activity — 10.7 — — — 10.7

Long-term incentive compensation expense — 9.3 — — — 9.3

Restricted stock unit vesting — ( 12.7 ) — — 8.4 ( 4.3 )

Balance at September 26, 2020 $ 0.5 $ 1,309.7 $ ( 512.7 ) $ 237.2 $ ( 451.6 ) $ 583.1

Balance at April 3, 2021 $ 0.5 $ 1,315.8 $ ( 450.4 ) $ 251.2 $ ( 445.4 ) $ 671.7

The accompanying notes are an integral part of these statements.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine months ended

2021 September 26,

Three months ended

2022 April 3,

Cash flows from (used in) operating activities:

Net income $ 11.4 $ 26.8

Income from discontinued operations, net of tax 378.0 32.3

Income (loss) from discontinued operations, net of tax ( 1.6 ) 3.8

Income from continuing operations 13.0 23.0

Adjustments to reconcile income from continuing operations to net cash from operating activities:

Adjustments to reconcile income from continuing operations to net cash from (used in) operating activities:

Special charges, net — 0.2

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Cash spending on restructuring actions ( 0.1 ) ( 0.4 )

Net cash from continuing operations 94.0 11.0

Net cash from discontinued operations 59.8 45.4

Net cash from operating activities 153.8 56.4

Net cash from (used in) continuing operations ( 48.6 ) 23.1

Net cash from (used in) discontinued operations ( 8.6 ) 37.1

Net cash from (used in) operating activities ( 57.2 ) 60.2

Cash flows from (used in) investing activities:

Proceeds from company-owned life insurance policies, net 8.2 1.1

Business acquisitions, net of cash acquired ( 120.0 ) ( 87.9 )

Proceeds related to company-owned life insurance policies, net — 3.5

Business acquisition, net of cash acquired ( 41.8 ) —

Capital expenditures ( 2.1 ) ( 2.2 )

Net cash used in continuing operations ( 119.3 ) ( 99.3 )

Net cash from (used in) discontinued operations 617.9 ( 2.5 )

Net cash from (used in) continuing operations ( 43.9 ) 1.3

Net cash used in discontinued operations ( 13.9 ) ( 0.4 )

Net cash from (used in) investing activities ( 57.8 ) 0.9

2 unchanged sentences

Repayments under senior credit facilities ( 3.1 ) ( 81.6 )

Borrowings under trade receivables financing arrangement 179.0 65.0

Repayments under trade receivables financing arrangement ( 207.0 ) ( 60.4 )

Net repayments under other financing arrangements ( 0.3 ) ( 1.8 )

Borrowings under trade receivables arrangement — 54.0

Repayments under trade receivables arrangement — ( 48.0 )

Net borrowings (repayments) under other financing arrangements ( 0.2 ) 0.2

Payment of contingent consideration ( 1.3 ) —

Minimum withholdings paid on behalf of employees for net share settlements, net of proceeds from the exercise of employee stock options ( 6.4 ) ( 3.8 )

Net cash from (used in) continuing operations ( 166.8 ) 64.5

Net cash used in continuing operations ( 11.0 ) ( 25.2 )

Net cash used in discontinued operations ( 0.4 ) ( 0.4 )

Net cash from (used in) financing activities ( 166.8 ) 64.5

Net cash used in financing activities ( 11.4 ) ( 25.6 )

Change in cash and equivalents due to changes in foreign currency exchange rates ( 0.1 ) 3.1

2 unchanged sentences

Consolidated cash and equivalents, end of period $ 269.5 $ 106.9

Three months ended

2022 April 3,

Components of cash and equivalents:

Cash and cash equivalents $ 262.8 $ 90.7

Cash and cash equivalents included in assets of DBT and Heat Transfer 6.7 16.2

Total cash and equivalents $ 269.5 $ 106.9

The accompanying notes are an integral part of these statements.

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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.

Unless otherwise indicated, amounts provided in these Notes pertain to continuing operations only (see Note 3 for information on discontinued operations).

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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.

All of our VIEs are considered immaterial, individually and in aggregate, to our condensed consolidated financial statements.

Sale of Transformers Solutions Business

On October 1, 2021, we completed the previously announced sale of SPX Transformer Solutions, Inc.

All of our VIEs are immaterial, individually and in aggregate, to our condensed consolidated financial statements.

Sale of Transformer Solutions Business

On October 1, 2021, we completed the sale of SPX Transformer Solutions, Inc.

(“Transformer Solutions”) pursuant to the terms of the Stock Purchase Agreement dated June 8, 2021 with GE-Prolec Transformers, Inc.

(the “Purchaser”) and Prolec GE Internacional, S.

We transferred all of the outstanding common stock of Transformer Solutions to the Purchaser for an aggregate cash purchase price of $ 645.0 (the “Transaction”).

The purchase price is subject to potential adjustment based on Transformer Solutions’ cash, debt and working capital on the date the Transaction was consummated, as well as for specified transaction expenses and other specified items, with the net cash proceeds received totaling $ 620.6 .

After the sale of Transformer Solutions, we have only a limited presence in the power generation markets and are now focusing our efforts and investments on the HVAC and detection and measurement markets.

During the quarter ended April 2, 2022, we agreed to the final adjustment of the purchase price which resulted in a payment to the Purchaser of $ 13.9 with no resulting adjustment to the gain on sale.

Historically, Transformer Solutions’ operations have had a significant impact on our consolidated financial results, with revenues totaling approximately 25 % of our total consolidated revenues.

As we no longer have a consequential presence in the power generation markets, and given Transformer Solutions' significance to our historical consolidated financial results, we have concluded that the sale of Transformer Solutions represents a strategic shift.

Accordingly, we have classified the business as a discontinued operation in the accompanying condensed consolidated financial statements for all periods presented.

See Note 3 for additional details.

Change in Segment Reporting Structure

As noted above, Transformer Solutions is now being reported as a discontinued operation within the accompanying condensed consolidated financial statements.

In addition, the remaining operations of our former Engineered Solutions reportable segment, with annual income representing less than 5 % of the total annual income of our reportable segments, are being reported within our HVAC reportable segment, as these operations are now being managed, and evaluated by our Chief Operating Decision Maker, as part of our HVAC cooling business.

Wind-Down of the SPX Heat Transfer Business

As a continuation of our strategic shift away from power-generation markets, during the fourth quarter of 2020, we completed the wind-down of the SPX Heat Transfer business (“Heat Transfer”), which included providing all products and services on the business’s remaining contracts with customers.

As a result, we are reporting Heat Transfer as a discontinued operation in the accompanying condensed consolidated financial statements for all periods presented.

As we no longer have a consequential presence in the power transmission and distribution markets, and given Transformer Solutions' significance to our historical consolidated financial results, we concluded that the sale of Transformer Solutions represented a strategic shift.

Accordingly, we have classified the business as a discontinued operation in the accompanying condensed consolidated financial statements.

See Note 3 for additional details.

Acquisition of ULC

On September 2, 2020, we completed the acquisition of ULC Robotics (“ULC”), a leading developer of robotic systems, machine learning applications, and inspection technology for the energy, utility, and industrial markets, for cash proceeds of $ 89.2 , net of cash acquired of $ 4.0 .

Under the terms of the purchase and sales agreement, the seller was eligible for additional cash consideration of up to $ 45.0 , with payments scheduled to be made upon successful achievement of certain operational and financial performance milestones.

At the time of the acquisition, we recorded a liability of $ 24.3 , which

represented the estimated fair value of the contingent consideration.

During the third quarter of 2021, we concluded that the operational and financial milestones noted above would not be achieved.

As a result, we reversed the liability of $ 24.3 during the quarter, with the offset recorded to “Other operating (income) expense” (See Note 9 for further discussion of this matter).

The post-acquisition operating results of ULC are reflected within our Detection and Measurement reportable segment.

Acquisition of Sensors & Software

On November 11, 2020, we completed the acquisition of Sensors & Software Inc.

(“Sensors & Software”), a leading manufacturer and distributor of ground penetrating radar products used for locating underground utilities, detecting unexploded ordinances, and geotechnical and geological investigations, for cash proceeds of $ 15.5 , net of cash acquired of $ 0.3 .

Under the terms of the purchase and sales agreement, the seller is eligible for additional cash consideration of up to $ 3.9 , with payment scheduled to be made upon successful achievement of a financial performance milestone during the twelve months following the date of acquisition.

The estimated fair value of such contingent consider ation is $ 0.7 , whic h is reflected as a liability in our condensed consolidated balance sheets as of October 2, 2021 and December 31, 2020.

The post-acquisition operating results of Sensors & Software are reflected within our Detection and Measurement reportable segment.

Wind-Down of DBT Technologies Business

During the fourth quarter of 2021, we substantially ceased all operations of DBT Technologies (PTY) LTD (“DBT”).

As a result, we are reporting DBT as a discontinued operation in the accompanying condensed consolidated financial statements.

DBT continues to be involved in various dispute resolution matters related to two large power projects.

See Note 3 for additional details regarding DBT's presentation as a discontinued operation and Note 15 regarding the dispute resolution matters.

Acquisition of Sealite

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Sealite is a leader in the design and manufacture of marine and aviation Aids to Navigation products.

We purchased Sealite for cash proceeds of $ 80.3 , net of cash acquired of $ 2.3 .

We purchased Sealite for cash consideration of $ 80.3 , net of cash acquired of $ 2.3 .

The post acquisition operating results of Sealite are reflected within our Detection and Measurement reportable segment.

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On August 2, 2021, we completed the acquisition of Enterprise Control Systems Ltd (“ECS”), a leader in the design and manufacture of highly-engineered tactical datalinks and radio frequency (“RF”) countermeasures, including counter-drone and counter-IED RF jammers.

We purchased ECS for cash proceeds of $ 39.4 , net of cash acquired of $ 5.1 .

Under the terms of the purchase and sales agreement, the seller is eligible for additional cash consideration of up to $ 16.8 , with payment to be made in 2022 upon successful achievement of certain financial performance milestones.

The estimated fair value of such contingent consideration is $ 8.2 , which is reflected as a liability in our condensed consolidated balance sheet as of October 2, 2021.

We purchased ECS for cash consideration of $ 39.4 , net of cash acquired of $ 5.1 .

Under the terms of the purchase and sales agreement, the seller is eligible for additional cash consideration of up to $ 16.4 , with payment to be made in the fourth quarter of 2022 upon successful achievement of certain financial performance milestones.

During the fourth quarter of 2021, we concluded that the probability of achieving the above financial performance milestones had lessened due to a delay in the execution of certain large orders, resulting in a reduction of the estimated liability of $ 6.7 .

During the first quarter of 2022, we further reduced the estimated liability by $ 0.9 , with such amount recorded within “Other operating income.” The estimated fair value of such contingent consideration, w hich we have reflected as a liability in our condensed consolidated balance sheets, was $ 0.6 and $ 1.5 at April 2, 2022 and December 31, 2021, respectively .

The post acquisition operating results of ECS are reflected within our Detection and Measurement reportable segment.

The assets acquired and liabilities assumed in the Sensors & Software, Sealite and ECS transactions have been recorded at estimates of fair value as determined by management, based on information available and assumptions as to future operations and are subject to change, primarily for the final assessment and valuation of certain income tax amounts.

Acquisition of Cincinnati Fan

On December 15, 2021, we completed the acquisition of Cincinnati Fan & Ventilator Co., Inc.

(“Cincinnati Fan”), a leader in engineered air movement solutions, including blowers and critical exhaust systems.

W e purchased Cincinnati Fan for cash consideration of $ 145.2 , net of cash acquired of $ 2.5 .

The purchase price is subject to adjustment based on the final calculation of working capital, cash, and debt as of the date of the acquisition.

The post acquisition operating results of Cincinnati Fan are reflected within our HVAC reportable segment.

Acquisition of ITL

On March 31, 2022, we completed the acquisition of International Tower Lighting, LLC ( “ ITL ” ), a leader in the design and manufacture of highly-engineered Aids-to-Navigation systems, including obstruction lighting for telecommunications towers, wind turbines and numerous other terrestrial obstructions.

We purchased ITL for cash consideration of $ 41.8 , net of cash acquired of $ 1.1 .

The purchase price is subject to adjustment based on the final calculation of working capital, cash, and debt as of the date of the acquisition.

The post acquisition operating results of ITL are reflected withi n our Detection and Measurement reportable segment.

The assets acquired and liabilities assumed in the Sealite, ECS, Cincinnati Fan, and ITL transactions have been recorded at estimates of fair value as determined by management, based on information available and assumptions as to future operations and are subject to change, primarily for the final assessment and valuation of certain income tax amounts, and the valuation of ITL's acquired intangible assets.

Change in Segment Reporting Structure

As Transformer Solutions is now being reported as a discontinued operation, the remaining operations of our former Engineered Solutions reportable segment are being reported within our HVAC reportable segment, as these operations are now being managed, and evaluated by our Chief Operating Decision Maker, as part of our HVAC cooling business.

Change in Accounting Method

During the fourth quarter of 2021, as a means of harmonizing our accounting method for inventory across all of our businesses, we converted the inventory accounting for certain businesses within our HVAC reportable segment from the last-in, first-out (“LIFO”) method to the first-in, first-out (“FIFO”) method.

This change in accounting has been retrospectively applied, with the change having no impact on our results herein for the three months ended April 3, 2021.

Preparing financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.

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Our fourth quarter ends on December 31.

The interim closing dates for the first, second and third quarters of 2021 are April 3, July 3 and October 2, compared to the respective March 28, June 27 and September 26, 2020 dates.

We had five more days in the first quarter of 2021 and will have six fewer days in the fourth quarter of 2021 than in the respective 2020 periods.

It is not practicable to estimate the impact of the five additional days on our consolidated operating results for the nine months ended October 2, 2021, when compared to the consolidated operating results for the 2020 respective period.

The interim closing dates for the first, second and third quarters of 2022 are April 2, July 2, and October 1, compared to the respective April 3, July 3 and October 2, 2021 dates.

We had one less day in the first quarter of 2022 and will have one more day in the fourth quarter of 2022 than in the respective 2021 periods.

It is not practicable to

estimate the impact of the one less day on our consolidated operating results for the three months ended April 2, 2022, when compared to the consolidated operating results for the 2021 respective period.

Reclassification of Prior Year Amounts

Certain prior year amounts have been reclassified to conform to the current year presentation, including amounts related to the inclusion of DBT and Transformer Solutions within discontinued operations and the resulting change in our segment reporting structure noted above.

(2) NEW ACCOUNTING PRONOUNCEMENTS

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

In June 2016, the Financial Accounting Standards Board (“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 are to be applied on a modified retrospective basis, which entails

recognizing the initial effect of adoption in retained earnings.

We adopted ASU 2016-13 on January 1, 2020, which resulted in an increase of our retained deficit of $ 0.5 .

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 adopted this guidance on January 1, 2021, with no material impact on our condensed consolidated financial statements.

The London Interbank Offered Rate (“LIBOR”) is scheduled to be discontinued on June 30, 2023, with some tenors ceasing on December 31, 2021.

In an effort to address the various challenges created by such discontinuance, the FASB issued two amendments to existing guidance, ASU No.

The London Interbank Offered Rate (“LIBOR”) is scheduled to be discontinued on June 30, 2023.

In an effort to address the various challenges created by such discontinuance, the Financial Accounting Standards Board (“FASB”) issued two amendments to existing guidance, Accounting Standards Update (“ASU”) No.

2020-04 and No.

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Application of the guidance in the amendments is optional, is only available in certain situations, and is only available for companies to apply until December 31, 2022.

We are currently evaluating the impacts of reference rate reform and the new guidance on our condensed consolidated financial statements.

In preparation of our adoption of these amendments, we entered into a LIBOR transition amendment related to our global revolving credit facility, as described in our 2021 Annual Report on Form 10-K.

Upon adoption, we do not believe these amendments will have a material impact to our condensed consolidated financial statements.

In October 2021, the FASB issued ASU No.

2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.

This ASU requires acquiring entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination.

This guidance is effective for public entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

The impact of adopting this guidance on our condensed consolidated financial statements will depend on business combinations occurring on or after the effective date.

In March 2022, the FASB issued ASU No.

2022-01, Derivatives and Hedging (Topic 815):

Fair Value Hedging - Portfolio Layer Method.

This ASU allows multiple hedged layers to be designated for a single closed portfolio of financial assets or one or more beneficial interests secured by a portfolio of financial instruments.

This guidance applies to all entities that elect to apply the portfolio layer method of hedge accounting in accordance with Topic 815 and is effective for public entities for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years.

We do not believe the adoption of this guidance will have a material impact on our condensed consolidated financial statements.

In March 2022, the FASB issued ASU No.

2022-02, Financial Instruments - Credit Losses (Topic 326) - Troubled Debt Restructurings and Vintage Disclosures, which requires enhanced disclosure of certain loan refinancing and restructuring by creditors when a borrower is experiencing financial difficulty while eliminating certain current recognition and measurement accounting guidance.

This guidance also requires the disclosure of current-period gross write-offs by year of origination for financing receivables and net investments in leases.

The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and allows for early adoption in any interim period after issuance.

We are currently assessing the impact of this amendment on our condensed consolidated financial statements.

(3) ACQUISITIONS AND DISCONTINUED OPERATIONS

As indicated in Note 1, on September 2, 2020, November 11, 2020, April 19, 2021 and August 2, 2021, we completed the acquisitions of ULC, Sensors & Software, Sealite and ECS, respectively.

The pro forma effects of these acquisitions, to the applicable periods, are not material to the accompanying condensed consolidated results of operations.

As indicated in Note 1, on April 19, 2021, August 2, 2021, December 15, 2021, and March 31, 2022, we completed the acquisitions of Sealite, ECS, Cincinnati Fan, and ITL, respectively.

The pro forma effects of these acquisitions are not material to our condensed consolidated results of operations.

Sale of Transformer Solutions Business

As discussed in Note 1, on October 1, 2021, we completed the sale of Transformer Solutions for net cash proceeds of $ 620.6 .

In connection with the sale, we recorded a gain of $ 357.7 to “ Gain (loss) on disposition of discontinued operations, net of tax ” within our condensed consolidated statements of operations for the three and nine months ended October 2, 2021.

The final sales price for Transformer Solutions is subject to adjustment based on cash, debt and working capital existing at the closing date, as well as for specified transaction expenses and other specified items, and is subject to agreement with the Purchaser, with final agreement of these items yet to occur.

Accordingly, it is possible that the sales price and resulting gain for this divestiture may be materially adjusted in subsequent periods.

As discussed in Note 1, on October 1, 2021, we completed the sale of Transformer Solutions.

During the first quarter of 2022, we reached agreement with the Purchaser on the amount of cash, debt and working capital on the date the Transaction was consummated, for a payment made to the Purchaser of $ 13.9 with no resulting adjustment to the gain on sale.

The results of Transformer Solutions are presented as a discontinued operation for all periods presented.

Major line items constituting pre-tax income and after-tax income (loss) of Transformer Solutions for the three and nine months ended October 2, 2021 and September 26, 2020 are shown below:

Three months ended Nine months ended

October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020

Major line items constituting pre-tax income and after-tax income of Transformer Solutions for the three months ended April 3, 2021 are shown below:

Three months ended

April 3, 2021

Revenues $ 110.6

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Selling, general and administrative 9.5

Other income, net — 0.2 — 0.9

Other expense, net 0.2

Income before income tax 11.5

Income tax provision ( 2.9 )

Income (loss) from discontinued operations, net of tax $ ( 31.0 ) $ 7.2 $ 20.3 $ 33.5

The assets and liabilities of Transformer Solutions have been classified as assets and liabilities of discontinued operations as of December 31, 2020.

The major line items constituting Transformer Solutions assets and liabilities as of December 31, 2020 are shown below:

Income from discontinued operations, net of tax $ 8.6

Wind-Down of DBT Business

As discussed in Note 1, we completed the wind-down of our DBT business in the fourth quarter of 2021.

As a result of completing the wind-down plan, we are reporting DBT as a discontinued operation for all periods presented.

Major line items constituting pre-tax loss and after-tax loss of DBT for the three months ended April 3, 2021 are shown below:

Three months ended

April 3, 2021

Revenues $ 0.7

Costs and expenses:

Cost of product sold 1.0

Selling, general and administrative 4.2

Special charges 0.5

Other expense, net 0.2

Loss before tax ( 5.2 )

Income tax benefit 1.2

Loss after tax $ ( 4.0 )

The assets and liabilities of DBT have been included within “ Assets of DBT and Heat Transfer ” and “ Liabilities of DBT and Heat Transfer, ” respectively, on the condensed consolidated balance sheets as of April 2, 2022 and December 31, 2021.

The major line items constituting DBT's assets and liabilities as of April 2, 2022 and December 31, 2021 are shown below:

April 2, 2022 December 31, 2021

Cash and equivalents $ 6.7 $ 7.8

Accounts receivable, net 10.0 9.1

Contract assets 48.6

Inventories, net 18.9

Other current assets 7.7 7.0

4 unchanged sentences

Property, plant and equipment, net 0.2 0.2

Goodwill 131.3

Other assets 30.4 27.6

Total assets - discontinued operations $ 340.7

Total assets of DBT $ 55.0 $ 51.7

Accounts payable $ 1.6 $ 2.3

1 unchanged sentence

Accrued expenses 25.1 22.4

Deferred and other income taxes 21.6

Other long-term liabilities 5.3 4.9

Total liabilities - discontinued operations $ 146.5

Total liabilities of DBT $ 37.8 $ 35.2

Wind-Down of the Heat Transfer Business

As discussed in Note 1, we completed the wind-down of Heat Transfer in the fourth quarter of 2020.

As a result of completing the wind-down plan, we are reporting Heat Transfer as a discontinued operation for all prior periods presented.

Major line items constituting pre-tax income (loss) and after-tax income (loss) of Heat Transfer for the three and nine months ended September 26, 2020 are shown below:

Three months ended Nine months ended

September 26, 2020 September 26, 2020

Revenues $ — $ 3.2

Cost of product sold 0.1 2.6

Selling, general and administrative ( 0.1 ) 0.1

Special charges, net 0.1 0.5

Income (loss) before income tax ( 0.1 ) —

Income tax provision — —

Income (loss) from discontinued operations, net of tax $ ( 0.1 ) $ —

We recognized net gain (loss) of $( 3.3 ) and $ 0.0 during the three and nine months ended October 2, 2021 and net gain (loss) of $ 0.1 and $( 1.2 ) during the three and nine months ended September 26, 2020 within “Gain (loss) on disposition of discontinued operations, net of tax” resulting primarily from revisions to liabilities, including income tax liabilities, retained in connection with prior businesses classified as discontinued operations.

We completed the wind-down of our SPX Heat Transfer (“Heat Transfer”) business in the fourth quarter of 2020.

As a result of completing the wind-down plan, we are reporting Heat Transfer as a discontinued operation for all periods presented.

The assets and liabilities of Heat Transfer have been included within “ Assets of DBT and Heat Transfer ” and “ Liabilities of DBT and Heat Transfer, ” respectively, on the condensed consolidated balance sheets as of April 2, 2022 and December 31, 2021.

The major line items constituting Heat Transfer's assets and liabilities as of April 2, 2022 and December 31, 2021 are shown below:

April 2, 2022 December 31, 2021

Accounts receivable, net $ 0.1 $ 0.1

Other current assets 0.2 0.2

Other assets 0.1 0.2

Total assets of Heat Transfer $ 0.4 $ 0.5

Accounts payable $ 0.1 $ 0.3

Accrued expenses 0.1 0.1

Total liabilities of Heat Transfer $ 0.2 $ 0.4

Changes in estimates associated with liabilities retained in connection with a business divestiture (e.g.

income taxes) may occur.

As a result, it is possible that the resulting gains/losses on these and other previous divestitures may be materially adjusted in subsequent periods.

For the three months ended April 2, 2022 and April 3, 2021, results of operations from our businesses reported as discontinued operations were as follows:

Three months ended

April 2, 2022 April 3, 2021

Transformer Solutions (1)

Income (loss) from discontinued operations $ ( 0.3 ) $ 11.5

Income tax (provision) benefit 0.1 ( 2.9 )

Income (loss) from discontinued operations, net ( 0.2 ) 8.6

Loss from discontinued operations ( 1.6 ) ( 5.2 )

Income tax benefit 0.4 1.2

Loss from discontinued operations, net ( 1.2 ) ( 4.0 )

Heat Transfer (3)

Loss from discontinued operations — ( 0.1 )

Income tax (provision) benefit — —

Loss from discontinued operations, net — ( 0.1 )

All other (3)

Loss from discontinued operations ( 0.2 ) ( 0.9 )

Income tax benefit — 0.2

Loss from discontinued operations, net ( 0.2 ) ( 0.7 )

Income (loss) from discontinued operations ( 2.1 ) 5.3

Income tax (provision) benefit 0.5 ( 1.5 )

Income (loss) from discontinued operations, net $ ( 1.6 ) $ 3.8

___________________________

(1) Loss for the three months ended April 2, 2022 resulted primarily from revisions to liabilities retained in connection with the disposition.

(2) Loss for the three months ended April 2, 2022 resulted primarily from legal costs incurred in connection with various dispute resolution matters related to two large power projects.

(3) Loss for the three months ended April 2, 2022 and April 3, 2021 resulted primarily from revisions to liabilities retained in connection with prior dispositions.

(4) 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 our other operating segment, 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 nine months ended October 2, 2021 and September 26, 2020:

Three months ended October 2, 2021

Reportable Segments and Other HVAC Detection and Measurement Other Total

Major product lines

Package and process cooling equipment and services $ 104.1 $ — $ — $ 104.1

Boilers, comfort heating, and ventilation 75.2 — — 75.2

Underground locators, inspection and rehabilitation

equipment, and robotic systems — 60.1 — 60.1

Communication technologies, obstruction lighting, and bus fare collection systems — 46.3 — 46.3

South African projects — — 0.1 0.1

$ 179.3 $ 106.4 $ 0.1 $ 285.8

Timing of Revenue Recognition

Revenues recognized at a point in time $ 154.1 $ 94.5 $ — $ 248.6

Revenues recognized over time 25.2 11.9 0.1 37.2

$ 179.3 $ 106.4 $ 0.1 $ 285.8

Nine months ended October 2, 2021

Reportable Segments and Other HVAC Detection and Measurement Other Total

Major product lines

Package and process cooling equipment and services $ 317.3 $ — $ 0.2 $ 317.5

Boilers, comfort heating, and ventilation 223.0 — — 223.0

Underground locators, inspection and rehabilitation

equipment, and robotic systems — 193.4 — 193.4

Communication technologies, obstruction lighting, and bus fare collection systems — 135.8 — 135.8

South African projects — — 0.7 0.7

$ 540.3 $ 329.2 $ 0.9 $ 870.4

Timing of Revenue Recognition

Revenues recognized at a point in time $ 474.8 $ 292.5 $ — $ 767.3

Revenues recognized over time 65.5 36.7 0.9 103.1

$ 540.3 $ 329.2 $ 0.9 $ 870.4

Three months ended September 26, 2020

Reportable Segments and Other HVAC Detection and Measurement Other Total

We disaggregate revenue from contracts with customers by major product line and based on the timing of recognition for each of our reportable 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 months ended April 2, 2022 and April 3, 2021:

Three months ended April 2, 2022

Reportable Segments HVAC Detection and Measurement Total

Major product lines

Package and process cooling equipment and services $ 107.7 $ — $ 0.2 $ 107.9

Package and process cooling equipment and services, and engineered air quality solutions $ 116.8 $ — $ 116.8

Boilers, comfort heating, and ventilation 76.3 — 76.3

2 unchanged sentences

Communication technologies, obstruction lighting, and bus fare collection systems — 46.8 46.8

South African Projects — — 0.3 0.3

$ 193.1 $ 114.0 $ 307.1

3 unchanged sentences

$ 193.1 $ 114.0 $ 307.1

Nine months ended September 26, 2020

Reportable Segments and Other HVAC Detection and Measurement Other Total

Three months ended April 3, 2021

Reportable Segments HVAC Detection and Measurement Total

Major product lines

4 unchanged sentences

Communication technologies, obstruction lighting, and bus fare collection systems — 44.2 44.2

South African projects — — 2.7 2.7

$ 175.6 $ 111.6 $ 287.2

8 unchanged sentences

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 October 2, 2021 and December 31, 2020:

Contract Balances October 2, 2021 December 31, 2020 Change

Our contract balances consisted of the following as of April 2, 2022 and December 31, 2021:

Contract Balances April 2, 2022 December 31, 2021 Change

Contract Accounts Receivable (1)

8 unchanged sentences

(2) Included in “Other long-term liabilities” within the accompanying condensed consolidated balance sheets.

T he $ 23.5 decrease in our net contract balance from December 31, 2020 to October 2, 2021 was due primarily to cash payments received from customers during the period, partially offset by revenue recognized during the period.

During the three and nine months ended October 2, 2021, we recognized revenues of $ 8.6 and $ 31.8 , r espectively, related to our contract liabilities at December 31, 2020.

T he $ 1.0 in crease in our net contract asset balance from December 31, 2021 to April 2, 2022 was due primarily to revenue recognized during the period, partially offset by cash payments received from customers during the period.

During the three months ended April 2, 2022, we recognized revenues of $ 23.6 related to our contract liabilities at December 31, 2021.

Performance Obligations

As of October 2, 2021, the aggre gate amount allocated to remaining performance obligations was $ 102.5 .

We expect to recognize revenue on approximately 63 % and 86 % of remaining performance obligations over the next 12 and 24 months, respectively, with the remaining recognized thereafter.

There have been no material changes to our operating and finance leases during the nine months ended October 2, 2021.

(6) INFORMATION ON REPORTABLE SEGMENTS AND “ OTHER ” OPERATING SEGMENT

We are a global supplier of highly specializ ed, engineered solutions with operations in over 15 countries and sales in over 100 countries around the world.

Our DBT Technologies (PTY) LTD (“DBT”) operating segment is reported within an “Other” category outside of our reportable segments.

We have aggregated our other operating segments into the following two reportable segments:

As of April 2, 2022, the aggre gate amount allocat ed to remaining performance obligations was $ 96.3 .

We expect to recognize revenue on approximately 75 % and 87 % of rem aining performance obligations over the next 12 and 24 months, respectively, with the remaining recognized thereafter.

There have been no material changes to our operating and finance leases during the three months ended April 2, 2022.

(6) INFORMATION ON REPORTABLE SEGMENTS

We are a global supplier of highly specializ ed, engineered solutions with operations in 15 countries and sales in over 100 countries around the world.

We have aggregated our operating segments into the following two reportable segments:

HVAC and Detection and Measurement.

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 Codification.

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/expense, and other indirect corporate expenses.

In determining our reportable segments, we apply the threshold criteria of the Segment Reporting Topic of the Accounting Standards Codification ( “ Codification ” ).

Operating income or loss for each of our reportable segments is determined before considering, if applicable, impairment and special charges, long-term incentive compensation, certain other operating income/expense, 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 package and process cooling equipment products for the HVAC industrial and power generation markets, as well as boilers and comfort heating and ventilation products for the residential and commercial markets.

Our HVAC reportable segment engineers, designs, manufactures, installs and services package and process cooling products and engineered air movement solutions for the HVAC industrial and power generation 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.

2 unchanged sentences

Our Detection and Measurement reportable segment engineers, designs, manufactures, services, and installs underground pipe and cable locators, inspection and rehabilitation equipment, robotic systems, 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 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.

As noted above, “Other” consists of our South African operating segment, DBT.

Our DBT operating segment engineers, designs, manufactures, installs, and services equipment for the industrial and power generation markets, with its efforts focused primarily on two large power projects in South Africa that are in the final stages of completion (see Note 15 for additional details).

Corporate Expense

Corporate expense generally relates to the cost of our Charlotte, North Carolina corporate headquarters.

Financial data for our reportable segments and our other operating segment for the three and nine months ended October 2, 2021 and September 26, 2020 are presented below:

Three months ended Nine months ended

2021 September 26,

2020 October 2,

2021 September 26,

Financial data for our reportable segments for the three months ended April 2, 2022 and April 3, 2021 are presented below:

Three months ended

2022 April 3,

HVAC reportable segment $ 193.1 $ 175.6

Detection and Measurement reportable segment 114.0 111.6

Other 0.1 0.5 0.9 3.3

Consolidated revenues $ 307.1 $ 287.2

Income (loss):

HVAC reportable segment $ 15.2 $ 22.3

Detection and Measurement reportable segment 15.0 20.0

Other ( 4.1 ) ( 5.3 ) ( 12.6 ) ( 13.9 )

Total income for segments 27.2 35.7 97.8 98.6

Total income for reportable segments 30.2 42.3

Corporate expense 16.6 14.4

1 unchanged sentence

Special charges, net — 0.2

Other operating income (expense) (1)

— — ( 2.7 ) 0.4

Other operating income ( 0.9 ) —

Consolidated operating income $ 11.4 $ 25.0

___________________________

(1) For the nine months ended October 2, 2021, includes a charge of $ 2.7 related to revisions of recorded assets for asbestos-related claims.

For the nine months ended September 26, 2020, includes a gain of $ 0.4 related to revisions to estimates of certain liabilities retained in connection with the 2016 sale of the dry cooling business.

(7) SPECIAL CHARGES, NET

Special charges, net, for the three and nine months ended October 2, 2021 and September 26, 2020 are described in more detail below:

Three months ended Nine months ended

2021 September 26,

2020 October 2,

2021 September 26,

Special charges, net, for the three months ended April 2, 2022 and April 3, 2021 are described in more detail below:

Three months ended

2022 April 3,

HVAC reportable segment $ — $ —

Detection and Measurement reportable segment — 0.2

Other 0.5 — 1.1 0.2

Corporate — —

Total $ — $ 0.2

HVAC — Charges for the nine months ended October 2, 2021 related to severance costs associated with a restructuring action at one of the segment's heating businesses.

Charges for the nine months ended September 26, 2020 related primarily to severance costs associated with restructuring actions at one of the segment's heating businesses and its Cooling Americas business.

Detection and Measurement — Charges for the nine months ended October 2, 2021 related to severance costs for restructuring actions at the segment's location and inspection businesses .

Charges for the nine months ended September 26, 2020 related to severance costs for a restructuring action at the segment's bus fare collection systems business.

Other — Charges for the three and nine months ended October 2, 2021 included an asset impairment charge and severance costs incurred in connection with the wind-down activities at DBT.

Charges for the nine months ended September 26, 2020 included severance costs at DBT.

Corporate — Charges for the three and nine months ended September 26, 2020 related to asset impairment and other charges associated with the move to a new corporate headquarters.

No significant future charges are expected to be incurred under actions approved as of October 2, 2021.

The following is an analysis of our restructuring liabilities for the nine months ended October 2, 2021 and September 26, 2020:

Nine months ended

2021 September 26,

Detection and Measurement — Charges for the three months ended April 3, 2021 related primarily to severance costs associated with a restructuring action at the segment's pipeline inspection and rehabilitation business.

No significant future charges are expected to be incurred under actions approved as of April 2, 2022.

The following is an analysis of our restructuring liabilities for the three months ended April 2, 2022 and April 3, 2021:

Three months ended

2022 April 3,

Balance at beginning of year $ 0.3 $ 0.8

3 unchanged sentences

Balance at end of period $ 0.2 $ 0.6

___________________________

(1) For the nine months ended October 2, 2021 and September 26, 2020, excludes $ 0.5 and $ 0.4 , respectively, of non-cash charges that impacted “Special charges” but not the restructuring liabilities.

(8) INVENTORIES, NET

Inventories at October 2, 2021 and December 31, 2020 comprised the following:

Inventories at April 2, 2022 and December 31, 2021 comprised the following:

2022 December 31,

2 unchanged sentences

Raw materials and purchased parts 136.7 113.6

Total FIFO cost 184.2 155.0

Excess of FIFO cost over LIFO inventory value ( 13.9 ) ( 11.9 )

Total inventories, net $ 170.3 $ 143.1

Total inventories $ 220.7 $ 189.8

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 31 % and 35 % of total inventory at October 2, 2021 and December 31, 2020, respectively.

Other inventories are valued using the first-in, first-out (“FIFO”) method.

(9) GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the nine months ended October 2, 2021 were as follows:

The changes in the carrying amount of goodwill for the three months ended April 2, 2022 were as follows:

2021 Goodwill

1 unchanged sentence

Combinations (1)

Impairments (2)

Translation October 2,

Impairments Foreign

Translation April 2,

HVAC reportable segment

9 unchanged sentences

Goodwill $ 457.3 $ 34.5 $ — $ ( 1.2 ) $ 490.6

Gross goodwill 843.7 64.2 — ( 10.1 ) 897.8

Accumulated impairments ( 475.1 ) — ( 23.3 ) 4.6 ( 493.8 )

Goodwill $ 368.6 $ 64.2 $ ( 23.3 ) $ ( 5.5 ) $ 404.0

___________________________

(1) Reflects (i) goodwill acquired with the Sealite and ECS acquisitions of $ 38.5 and $ 20.6 , re spectively, (ii) an increase in ULC's goodwill during 202 1 of $ 3.1 resulting from revisions to the valuation of certain assets and liabilities and income tax accounts, and (iii) an increase in Sensors & Software's goodwill of $ 2.0 resulting from revisions to the valuation of certain assets and liabilities and income tax accounts.

As indicated in Note 1, the acquired assets, in cluding goodwill, and liabilities assumed in the Sealite, ECS and Sensors & Software acquisitions have been recorded at estimates of fair value and are subject to change upon completion of acquisition accounting.

(2) As indicated in Note 1, we concluded during the third quarter of 2021 that the operating and financial milestones related to the ULC contingent consideration would not be achieved, resulting in the reversal of the related liability of $ 24.3 , with the offset to “Other operating (income) expense .

” We also concluded that the lack of achievement of these milestones, along with lower than anticipated future cash flows, are indicators of potential impairment related to ULC’s indefinite-lived intangible assets and goodwill.

As such, we tested ULC’s indefinite-lived intangible assets and goodwill for impairment during the quarter.

Based on such testing, we determined that the carrying value of ULC’s net assets exceeded the implied fair value of the business.

As a result, we recorded an impairment charge to “Other operating (income) expense” of $ 24.3 during the quarter, with $ 23.3 related to goodwill and the remainder to trademarks.

(1) Reflects (i) goodwill acquired with the ITL acquisition of $ 35.6 , (ii) a decrease in Cincinnati Fan's goodwill of $ 0.7 resulting from revisions to the valuation of certain assets and liabilities, and (iii) a decrease in Sealite's goodwill of $ 0.4 resulting from revisions to the valuation of certain assets and liabilities.

As indicated in Note 1, the acquired assets, including goodwill, and liabilities assumed in the Sealite, Cincinnati Fan, ECS, and ITL 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 October 2, 2021 and December 31, 2020 comprised the following:

October 2, 2021 December 31, 2020

Identifiable intangible assets at April 2, 2022 and December 31, 2021 comprised the following:

April 2, 2022 December 31, 2021

Value Accumulated

9 unchanged sentences

Trademarks with indefinite lives 172.1 — 172.1 172.2 — 172.2

173.2 — 173.2 163.9 — 163.9

Total $ 476.3 $ ( 70.4 ) $ 405.9 $ 476.6 $ ( 61.1 ) $ 415.5

___________________________

(1) The identifiable intangible assets as sociated with the Sealite and ECS acquisitions consist of customer backlog of $ 1.9 and $ 0.8 , respectively, customer relationships of $ 12.1 and $ 12.6 , respectively, technology of $ 6.6 and $ 5.8 , respectively, and definite-lived trademarks of $ 0.0 and $ 1.2 , respectively.

(2) Changes during the nine months ended October 2, 2021 related primarily to the acquisition of Sealite trademarks of $ 11.6 and, as previously discussed, the impairment charge of $ 1.0 related to ULC's trademarks.

In connection with the acquisitions of Sealite and ECS, which have definite-lived intangible assets as noted above, we increased our estimated annual amortization expense related to intangible assets to approximately $ 21.0 for the full year 2021, and $ 19.0 for 2022 and each of the four years thereafter.

At October 2, 2021, the net carrying value of intangible assets with determinable lives consisted of $ 22.4 in the HVAC reportable segment and $ 141.6 in the Detection and Measurement reportable segment.

At October 2, 2021, trademarks with indefinite lives consisted of $ 105.5 in the HVAC reportable segment and $ 67.7 in the Detection and Measurement reportable segment.

We perform our annual goodwill impairment testing during th e 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.

At April 2, 2022, the net carrying value of intangible assets with determinable lives consisted of $ 100.8 in the HVAC reportable segment and $ 133.0 in the Detection and Measurement reportable segment.

At April 2, 2022, trademarks with indefinite lives consisted of $ 105.3 in the HVAC reportable segment and $ 66.8 in the Detection and Measurement reportable segment.

We review goodwill and indefinite-lived intangible assets for impairment annually during th e 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.

In reviewing goodwill and indefinite-lived intangible assets for impairment, we initially perform a qualitative analysis.

If there is an indication of impairment, we then perform a quantitative analysis.

A significant amount of judgment is involved in determining if an indication of impairment has occurred between annual testing dates.

4 unchanged sentences

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 during the fourth quarter of 2020, we concluded that the estimated fair value of each of our reporting units, exclusive of Cues, Inc.

(“Cues”), Patterson-Kelley, LLC ( “Patterson-Kelley”) and ULC, exceeded the carrying value of their respective net assets by over 75 %.

The estimated fair values of Cues and Patterson-Kelley exceeded the carrying value of their respective net assets by approximately 12 % and 3 %, while ULC's fair value approximates the carrying value of its net assets.

The total goodwill for Cues, Patterson-Kelley and ULC was $ 47.9 , $ 14.2 and $ 17.1 , respectively, as of October 2, 2021.

A change in assumptions used in valuing Cues, Patterson-Kelley, or ULC (e.g., projected revenues and profit growth rates, discount rates, industry price multiples, etc.) could result in these reporting units estimated fair value being less than the respective carrying value of their net assets.

If any of these reporting units is unable to achieve its current financial forecast, we may be required to record an impairment charge in a future period related to its goodwill.

During the fourth quarter of 2021, based on a quantitative analyses of the goodwill and indefinite-lived intangible assets of our ULC reporting unit, we determined that the fair value of the reporting unit approximated the carrying value of its net assets.

The total goodwill of ULC wa s $ 12.0 as of April 2, 2022 .

A change in assumptions used in ULC's quantitative analysis (e.g., projected revenues and profit growth rates, discount rates, industry price multiples, etc.) could result in the reporting unit's estimated fair value being less than the carrying value of its net assets.

In addition to ULC, the fair value of Sealite, ECS, Cincinnati Fan and ITL, acquisitions over the past 12 months, approximate their carrying value.

If ULC, Sealite, ECS, Cincinnati Fan or ITL are unable to achieve their respective current financial forecast, we may be required to record an impairment charge in a future period related to their respective goodwill.

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 fair value of our trademarks is based on applying estimated royalty rates to projected revenues, with 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.

1 unchanged sentence

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

Nine months ended

2021 September 26,

Three months ended

2022 April 3,

Balance at beginning of year $ 34.8 $ 35.3

Acquisitions — 1.6

Provisions 2.6 2.8

Usage ( 3.0 ) ( 3.1 )

Currency translation adjustment — 0.1

Balance at end of period 34.4 35.0

2 unchanged sentences

(11) EMPLOYEE BENEFIT PLANS

On February 17, 2022, we transferred our existing liability under the SPX Postretirement Benefit Plans (the “Plans”) for a group of participants with retiree life insurance benefits to an insurance carrier for consideration payable to the insurance carrier of approximately $ 10.0 .

Of this consideration, $ 9.0 was paid during the quarter ended April 2, 2022, with the remainder expected to be paid in the second quarter of 2022.

This transaction resulted in a settlement charge of $ 0.7 recorded in net periodic pension benefit expense during the first quarter of 2022.

In addition, and in connection with this transfer, we remeasured the assets and liabilities of the Plans as of the transfer date, which resulted in a benefit of $ 0.4 recorded in net periodic pension benefit expense for the three months ended April 2, 2022.

Lastly, as a result of the transfer, we have eliminated the third-party cost and internal resource requirements associated with administering these benefits.

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

Domestic Pension Plans

Three months ended Nine months ended

2021 September 26,

2020 October 2,

2021 September 26,

Three months ended

2022 April 3,

Service cost $ — $ —

3 unchanged sentences

Foreign Pension Plans

Three months ended Nine months ended

2021 September 26,

2020 October 2,

2021 September 26,

Three months ended

2022 April 3,

Service cost $ — $ —

3 unchanged sentences

Postretirement Plans

Three months ended Nine months ended

2021 September 26,

2020 October 2,

2021 September 26,

Three months ended

2022 April 3,

Service cost $ — $ —

1 unchanged sentence

Amortization of unrecognized prior service credits ( 1.1 ) ( 1.2 )

Recognized net actuarial losses (1)

Net periodic postretirement benefit income $ ( 0.5 ) $ ( 0.9 )

_________________

(1) The three months ended April 2, 2022 includes the impact of the transfer of the retiree life insurance benefits obligation.

(12) INDEBTEDNESS

The following summarizes our debt activity (both current and non-current) for the nine months ended October 2, 2021:

2020 Borrowings Repayments Other (5)

The following summarizes our debt activity (both current and non-current) for the three months ended April 2, 2022:

2021 Borrowings Repayments Other April 2,

Revolving loans $ — $ — $ — $ — $ —

$ 129.8 $ 209.1 $ ( 338.9 ) $ — $ —

Term loan (1)

1 unchanged sentence

Trade receivables financing arrangement (2)

28.0 179.0 ( 207.0 ) — —

Other indebtedness (3)

5 unchanged sentences

___________________________

(1) While not due for repayment until December 2024 under the terms of our senior credit agreement, we classify within current liabilities the portion of the outstanding balance that we believe will be repaid over the next year, with such amount based on an estimate of cash that is expected to be generated over such period.

(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.

(1) The term loan is repayable in quarterly installments equal to 1.25 % of the initial term loan balance of $ 250.0 , 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 $ 1.1 and $ 1.4 at October 2, 2021 and December 31, 2020, respectively.

Balances are net of unamortized debt issuance costs of $ 1.0 at April 2, 2022 and December 31, 2021.

(2) Under this arrangement, we can borrow, on a continuous basis, up to $ 50.0 , as available.

Borrowings under this arrangement are collateralized by eligible trade receivables of certain of our businesses.

(4) Primarily includes balances under a purchase card program of $ 2.3 and $ 1.7 and finance lease obligations of $ 1.1 and $ 2.6 at October 2, 2021 and December 31, 2020, respectively.

(3) Primarily includes balances under a purchase card program of $ 2.0 and $ 2.2 and finance lease obligations of $ 1.1 and $ 1.1 at April 2, 2022 and December 31, 2021, 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 2021 Annual Report on Form 10-K.

On May 24, 2021 we elected to reduce our participating foreign credit instrument facility and bilateral foreign credit instrument facility, available for performance letters of credit and guarantees, by an aggregate amount of $ 20.0 and $ 25.0 , respectively.

The facility reduction resulted in a write-off of deferred finance costs of $ 0.2 , recorded to “Interest expense” in the condensed consolidated statement of operations for nine months ended October 2, 2021.

At October 2, 2021, we had $ 437.8 of available borrowing capacity under our revolving credit facilities, after giving effect to $ 12.2 reserved for domestic letters of credit.

In addition, at October 2, 2021, we had $ 31.2 of available issuance capacity under our foreign credit instrument facilities after giving effect to $ 23.8 reserved for outstanding letters of credit.

The weighted-average interest rate of outstanding borrowings under our senior credit agreement was approximately 1.6 % at October 2, 2021.

At October 2, 2021, we were in compliance with all covenants of our senior credit agreement.

Off Balance Sheet Arrangements

As of October 2, 2021, in connection with the sale of Transformer Solutions and pursuant to the terms of the Stock Purchase Agreement dated June 8, 2021, surety bonds totaling approximately $ 27.4 remained in place at the time of sale .

Transformer Solutions and the Purchaser provided us an indemnity in the event that any of the bonds are called.

Under the Stock Purchase Agreement, the Purchaser has 90 days to arrange for substitute surety bonds.

At April 2, 2022, we had $ 438.2 of available borrowing capacity under our revolving credit facilities, after giving effect to $ 11.8 reserved for outstanding letters of credit.

In addition, at April 2, 2022, we had $ 28.9 of available issuance capacity under our foreign credit instrument facilities after giving effect to $ 26.1 reserved for outstanding letters of credit.

The weighted-average interest rate of outstanding borrowings under our senior credit agreement was approximately 1.8 % at April 2, 2022.

At April 2, 2022, we were in compliance with all covenants of our senior credit agreement.

(13) DERIVATIVE FINANCIAL INSTRUMENTS

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We have designated and are accounting for our interest rate swap agreements as cash flow hedges.

As of October 2, 2021 and December 31, 2020, the unrealized loss, net of tax, recorded in accumulated other comprehensive income ( “ AOCI ”) was $ 2.2 and $ 5.9 , respectively.

In addition, as of October 2, 2021, the fair value of our interest rate swap agreements totaled $ 2.9 , with $ 2.4 recorded as a current liability and the remainder in long-term liabilities, and $ 7.8 at December 31, 2020 (with $ 1.4 recorded as a current liability and the remainder in long-term liabilities).

As of April 2, 2022 and December 31, 2021, the unrealized gain, net of tax, recorded in accumulated other comprehensive income ( “ AOCI ”) was $ 7.0 and $ 0.5 , respectively.

In addition, as of April 2, 2022, the fair value of our interest rate swap agreements totaled $ 9.3 (with $ 0.3 recorded as a current asset, $ 9.4 as a non-current asset, and $ 0.4 as a current liability), and $ 0.6 at December 31, 2021 (with $ 2.5 recorded as a non-current asset and $ 1.9 as a current liability).

Changes in fair value of our interest rate swap agree ments are reclassified into earnings as a component of interest expense, when the forecasted transaction impacts earnings.

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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 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 (“GBP”), and Euro.

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None of our FX forward contracts are designated as cash flow hedges.

We had FX forward contracts with an aggregate notional amount of $ 8.6 and $ 6.3 outstanding as of October 2, 2021 and December 31, 2020, respectively, with all of the $ 8.6 scheduled to mature within one year.

We had FX forward contracts with an aggregate notional amount of $ 4.6 and $ 8.7 outstanding as of April 2, 2022 and December 31, 2021, respectively, with all of the $ 4.6 scheduled to mature within one year.

The fair value of our FX forward contracts was less than $ 0.1 at April 2, 2022 and December 31, 2021.

Commodity Contracts

From time to time, we ent er into commodity contracts to manage the exposure on forecasted purchases of commodity raw materials.

The commodity contracts relate solely to Transformer Solutions.

As discussed in Note 1, on October 1, 2021, we completed the sale of Transformer Solutions.

Immediately prior to the sale, we extinguished the existing commodity contracts and reclassified from AOCI a net loss of $ 0.6 to “ Gain (loss) on disposition of discontinued operations, net of tax ” within our condensed consolidated statements of operations for the three and nine months ended October 2, 2021.

At December 31, 2020, the outstanding notional amount of commodity contracts was 3.2 pounds of copper.

In connection with our Transformer Solutions business, we historically entered into commodity contracts to manage the exposure on forecasted purchases of commodity raw materials.

As discussed in Note 1, on October 1, 2021, we completed the sale of Transformer Solutions, which has been presented within discontinued operations.

Immediately prior to the sale, we extinguished the existing commodity contracts and reclassified from AOCI a net loss of $ 0.6 to “Gain (loss) on disposition of discontinued operations, net of tax” within our condensed consolidated statements of operations for the three months ended October 2, 2021.

Prior to extinguishment, we designated and accounted for these contracts as cash flow hedges and, to the extent the commodity contracts were effective in offsetting the variability of the forecasted purchases, the change in fair value was included in AOCI.

We reclassified amounts associated with our commodity contracts out of AOCI when the forecasted transaction impacted earnings.

As of December 31, 2020, the fair value of these contracts was a current asset of $ 2.4 .

Since these commodity contracts related to our Transformer Solutions business, the amount has been recorded within assets of discontinued operations in the accompanying condensed consolidated balance sheet.

The unrealized gain, net of taxes, recorded in AOCI was $ 1.5 as of December 31, 2020.

(14) EQUITY AND LONG-TERM INCENTIVE COMPENSATION

(14) STOCKHOLDERS' 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 Nine months ended

2021 September 26,

2020 October 2,

2021 September 26,

Three months ended

2022 April 3,

Weighted-average number of common shares used in basic income per share 45.554 45.132

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Weighted-average number of common shares and dilutive securities used in diluted income per share 46.445 46.319

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 w ere 0.222 and 0.631 , respectively, for the three months ended October 2, 2021, and 0.261 and 0.631 , re spectively, for the nine months ended October 2, 2021.

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 0.352 and 0.858 , respectively, for the three months ended September 26, 2020, and 0.346 and 0.817 , respectively, for the nine months ended September 26, 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 0.243 and 0.737 , respectively, for the three months ended April 2, 2022, and 0.234 and 0.627 , respectively, for the three months ended April 3, 2021.

Long-Term Incentive Compensation

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Stock options and RSU’s vest ratably over the three-year period subsequent to the date of grant.

Effective May 11, 2021, we granted 0.017 RSU's to our non-employee directors, which vest in their entirety immediately prior to the annual meeting of stockholders in May 2022.

C ompensation expense within income from continuing operations related to long-term incentive awards totaled $ 3.4 and $ 3.2 for the three months ended October 2, 2021 and September 26, 2020 and $ 9.5 and $ 9.6 for the nine months ended October 2, 2021 and September 26, 2020, respectively.

The related tax benefit was $ 0.6 and $ 0.8 for the three months ended October 2, 2021 and September 26, 2020 and $ 1.6 and $ 2.4 for the nine months ended October 2, 2021 and September 26, 2020, respectively.

Non-employee directors receive annual long-term incentive awards at the time of our annual meeting of stockholders, with the 2022 meeting scheduled for May 10, 2022.

C ompensation expense within income from continuing operations related to long-term incentive awards totaled $ 3.1 and $ 2.7 for the three months ended April 2, 2022 and April 3, 2021, respectively.

The related tax benefit was $ 0.5 for the three months ended April 2, 2022 and April 3, 2021.

PSU’s and RSU’s

We use the Monte Carlo simulation model valuation technique to determine the fair value of our restricted stock units that contain a market condition (i.e., the PSU’s).

The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each PSU.

The following table summarizes the PSU and RSU activity from December 31, 2021 through April 2, 2022:

Unvested PSU's and RSU's Weighted-Average Grant-Date Fair Value Per Share

Outstanding at December 31, 2021 0.636 $ 49.14

Granted 0.265 48.39

Vested ( 0.320 ) 43.97

Forfeited ( 0.007 ) 50.57

Outstanding at April 2, 2022 0.574 $ 51.67

As of April 2, 2022, there was $ 18.0 of unrecognized compensation cost related to PSU’s and RSU’s.

We expect this cost to be recognized over a weighted-average period of 2.4 years.

Stock Options

On March 1, 2022, we granted 0.105 stock options, all of which were outstanding (but not exercisable) as of April 2, 2022.

The exercise price per share of these options is $ 48.97 and the maximum contractual term of these options is 10 years.

The fair value per share of the stock options granted on March 1, 2022 was $ 19.33 .

The fair value of each option grant was estimated using the Black-Scholes option-pricing model with the following assumptions:

Annual expected stock price volatility 38.62 %

Annual expected dividend yield — %

Risk-free interest rate 1.61 %

Expected life of stock option (in years) 6.0

Annual expected stock price volatility is based on a weighted average of SPX’s stock volatility of the most recent six -year historical volatility of a peer company group.

There is no annual expected dividend yield as we discontinued dividend payments in 2015 and do not expect to pay dividends for the foreseeable future.

The average risk-free interest rate is based on the five -year and seven -year treasury constant maturity rates.

The expected option life is based on a three -year pro-rata vesting schedule and represents the period of time that awards are expected to be outstanding.

As of April 2, 2022, there was $ 3.1 of unrecognized compensation cost related to stock options.

We expect this cost to be recognized over a weighted-average period of 2.5 years.

Accumulated Other Comprehensive Income

The changes in the components of accumulated other comprehensive income, net of tax, for the three months ended October 2, 2021 were as follows:

Adjustment Net Unrealized Losses

on Qualifying Cash

Flow Hedges (1)

Postretirement

Adjustment (2)

Balance at beginning of period $ 240.1 $ ( 2.0 ) $ 12.5 $ 250.6

Other comprehensive loss before reclassifications ( 5.0 ) ( 0.4 ) — ( 5.4 )

Amounts reclassified from accumulated other comprehensive income (loss) — 0.2 ( 0.9 ) ( 0.7 )

Current-period other comprehensive loss ( 5.0 ) ( 0.2 ) ( 0.9 ) ( 6.1 )

Balance at end of period $ 235.1 $ ( 2.2 ) $ 11.6 $ 244.5

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(1) Net of tax benefit of $ 0.7 as of October 2, 2021 and July 3, 2021.

(2) Net of tax provision of $ 4.0 and $ 4.3 as of October 2, 2021 and July 3, 2021, respectively.

The balances as of October 2, 2021 and July 3, 2021 include unamortized prior service credits.

The changes in the components of accumulated other comprehensive income, net of tax, for the nine months ended October 2, 2021 were as follows:

Adjustment Net Unrealized

The changes in the components of accumulated other comprehensive income, net of tax, for the three months ended April 2, 2022 were as follows:

Adjustment Net Unrealized Gains

on Qualifying Cash

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__________________________

(1) Net of tax benefit of $ 0.7 and $ 1.4 as of October 2, 2021 and December 31, 2020, respectively.

(2) Net of tax provision of $ 4.0 and $ 4.9 as of October 2, 2021 and December 31, 2020, respectively.

The balances as of October 2, 2021 and December 31, 2020 include unamortized prior service credits.

The changes in the components of accumulated other comprehensive income, net of tax, for the three months ended September 26, 2020 were as follows:

(1) Net of tax provision o f $ 2.3 and $ 0.1 as of April 2, 2022 and December 31, 2021, respectively.

(2) Net of tax provision of $ 3.5 and $ 3.7 as of April 2, 2022 and December 31, 2021, respectively.

The balances as of April 2, 2022 and December 31, 2021 include unamortized prior service credits.

The changes in the components of accumulated other comprehensive income, net of tax, for the three months ended April 3, 2021 were as follows:

Adjustment Net Unrealized

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__________________________

(1) Net of tax benefit of $ 2.2 and $ 2.6 as of September 26, 2020 and June 27, 2020, respectively.

(2) Net of tax provision of $ 5.2 and $ 5.5 as of September 26, 2020 and June 27, 2020, respectively.

The balances as of September 26, 2020 and June 27, 2020 include unamortized prior service credits.

The changes in the components of accumulated other comprehensive income, net of tax, for the nine months ended September 26, 2020 were as follows:

Adjustment Net Unrealized

on Qualifying Cash

Flow Hedges (1)

Postretirement

Adjustment (2)

Balance at beginning of period $ 228.0 $ ( 1.6 ) $ 17.9 $ 244.3

Other comprehensive income (loss) before reclassifications 0.9 ( 7.8 ) — ( 6.9 )

Amounts reclassified from accumulated other comprehensive income (loss) — 2.5 ( 2.7 ) ( 0.2 )

Current-period other comprehensive income (loss) 0.9 ( 5.3 ) ( 2.7 ) ( 7.1 )

Balance at end of period $ 228.9 $ ( 6.9 ) $ 15.2 $ 237.2

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(1) Net of tax benefit of $ 2.2 and $ 0.5 as of September 26, 2020 and December 31, 2019, respectively.

(2) Net of tax provision of $ 5.2 and $ 6.1 as of September 26, 2020 and December 31, 2019, respectively.

The balances as of September 26, 2020 and December 31, 2019 include unamortized prior service credits.

The following summarizes amounts reclassified from each component of accumulated other comprehensive income for the three months ended October 2, 2021 and September 26, 2020:

(1) Net of tax benefit of $ 0.4 and $ 1.4 as of April 3, 2021 and December 31, 2020, respectively.

(2) Net of tax provision of $ 4.6 and $ 4.9 as of April 3, 2021 and December 31, 2020, respectively.

The balances as of April 3, 2021 and December 31, 2020 include unamortized prior service credits.

The following summarizes amounts reclassified from each component of accumulated other comprehensive income for the three months ended April 2, 2022 and April 3, 2021:

Amount Reclassified from AOCI

Three months ended

October 2, 2021 September 26, 2020 Affected Line Item in the Condensed

Consolidated Statements of Operations

(Gains) losses on qualifying cash flow hedges:

Commodity contracts $ ( 0.3 ) $ ( 0.5 ) Income from discontinued operations, net of tax

Swaps 0.6 1.4 Interest expense

Pre-tax 0.3 0.9

Income taxes ( 0.1 ) ( 0.2 )

Gains on pension and postretirement items:

Amortization of unrecognized prior service credits - Pre-tax $ ( 1.2 ) $ ( 1.2 ) Other income, net

Income taxes 0.3 0.3

$ ( 0.9 ) $ ( 0.9 )

The following summarizes amounts reclassified from each component of accumulated other comprehensive income for the nine months ended October 2, 2021 and September 26, 2020:

Amount Reclassified from AOCI

Nine months ended

October 2, 2021 September 26, 2020 Affected Line Item in the Condensed

April 2, 2022 April 3, 2021 Affected Line Item in the Condensed

Consolidated Statements of Operations

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Also, while we believe we are entitled to indemnification from third parties for some of these claims, these rights may be insufficient or unavailable to protect us against potential loss exposures.

Our recorded liabilities related to these matters totaled $ 540.4 and $ 575.7 at October 2, 2021 and December 31, 2020, respectively.

Of these amounts, $ 469.5 and $ 499.8 are included in “Other long-term liabilities” within our condensed consolidated balance sheets at October 2, 2021 and December 31, 2020, respectively, with the remainder included in “Accrued expenses.” The liabilities we record for these matters are based on a number of assumptions, including historical claims and payment experience.

Our recorded liab ilities related to these matters totaled $ 645.6 and $ 658.8 at April 2, 2022 and December 31, 2021, respectively.

Of these amounts, $ 570.6 and $ 584.3 are included in “Other long-term liabilities” within our condensed consolidated balance sheets at April 2, 2022 and December 31, 2021, respectively, with the remainder included in “Accrued expenses.” The liabilities we record for these matters are based on a number of assumptions, including historical claims and payment experience.

While we base our assumptions on facts currently known to us, they entail inherently subjective judgments and uncertainties.

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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.

Our recorded assets and liabilities related to asbestos-related claims were as follows at October 2, 2021 and December 31, 2020:

October 2, 2021 December 31, 2020

Our recorded assets and liabilities related to asbestos-related claims were as follows at April 2, 2022 and December 31, 2021:

April 2, 2022 December 31, 2021

Insurance recovery assets (1)

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__________________________

(1) Of these amounts , $ 403.9 and $ 446.4 are included in “ Other assets ” at October 2, 2021 and December 31, 2020, respectively, while the remainder is included in “ Other current assets.

(2) Of these amounts, $ 444.8 a nd $ 479.9 are included in “ Other long-term liabilities ” at October 2, 2021 and December 31, 2020, respectively, while the remainder is included in “ Accrued expenses.

(1) Of these amounts, $ 466.2 and $ 473.6 are included in “ Other assets ” at April 2, 2022 and December 31, 2021, respectively, while the remainder is included in “ Other current assets.

(2) Of these amounts, $ 548.6 and $ 561.4 are included in “ Other long-term liabilities ” at April 2, 2022 and December 31, 2021, respectively, while the remainder is included in “ Accrued expenses.

The liabilities we record for asbestos-related claims are based on a number of assumptions.

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• The period over which we can reasonably project asbestos-related claims (currently projecting through 2057).

The following table presents information regarding activity for the asbestos-related claims for the nine months ended October 2, 2021 and September 26, 2020:

Nine months ended Nine months ended

October 2, 2021 September 26, 2020

The following table presents information regarding activity for the asbestos-related claims for the three months ended April 2, 2022 and April 3, 2021:

Three months ended

April 2, 2022 April 3, 2021

Pending claims, beginning of period 10,065 9,782

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These variances relative to current expectations could have a material impact on our financial position and results of operations.

During the nine months ended October 2, 2021 and September 26, 2020, our (receipts) payments for asbestos-related claims, net of respective insurance recoveries of $ 39.8 and $ 23.3 , were $( 2.2 ) and $ 15.8 , respectively.

The nine months ended October 2, 2021 includes insurance proceeds of $ 15.0 , associated with the settlement of an asbestos insurance coverage matter.

During the three months ended April 2, 2022 and April 3, 2021, our payments for asbestos-related claims, net of respective insurance recoveri es of $ 7.4 and $ 8.0 , were $ 7.2 and $ 3.8 , r espectively.

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 a result, have a material impact on our financial position, results of operations and cash flows.

During the nine months ended October 2, 2021, we recorded a charge of $ 2.7 related to revisions of recorded assets for asbestos-related claims.

There were no other changes in estimates associated with our assets and liabilities related to our asbestos product liability matters during the three and nine months ended October 2, 2021 and three and nine months ended September 26, 2020.

During the three months ended April 2, 2022 and April 3, 2021, there were no other changes in estimates associated with our assets and liabilities 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 Heavy Industries Power—ZAF, or “MHI.”

Overview - Since 2008, DBT had been executing on two large power projects in South Africa (Kusile and Medupi), on which it has now substantially completed its scope of work.

Over such time, the business environment surrounding these projects was difficult, as DBT, along with many other contractors on the projects, 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's remaining responsibilities relate largely to resolution of various claims, primarily between itself and one of its prime contractors, Mitsubishi Heavy Industries Power—ZAF (f.k.a.

Mitsubishi-Hitachi Power Systems Africa (PTY) LTD), or “MHI.”

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.

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As DBT prepares these claims for dispute resolution processes, the amounts, along with the characterization, of the claims could change.

Of these claims, South African Rand 566.5 (or $ 37.4 ), which is inclusive of the amounts awarded in the adjudications referred to below, are currently proceeding through contractual dispute resolution processes and DBT is likely to initiate additional dispute resolution processes.

Of these claims, South African Rand 566.5 (or $ 39.1 ), which is inclusive of the amounts awarded in the adjudications referred to below, are currently proceeding through contractual di spute resolution processes and DBT is likely to initiate additional dispute resolution processes.

DBT is also pursuing several claims to force MHI to abide by its contractual obligations and provide DBT with certain benefits that MHI may have received from its customer on the projects.

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(ii) ordered MHI to return $ 2.3 of bonds (which have been subsequently returned by MHI);

(iii) ruled that DBT is entitled to the return of an additional $ 4.5 of bonds upon the completion of certain administrative milestones;

(iii) ruled that DBT is entitled to the return of an additional $ 4.3 of

bonds upon the completion of certain administrative milestones;

(iv) ordered MHI to pay South African Rand 18.4 (or $ 1.1 at the time of the ruling) in incentive payments for work performed by DBT (which MHI has subsequently paid);

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In connection with the ruling, MHI paid DBT South African Rand 126.6 (or $ 8.6 at the time of payment).

This ruling is subject to MHI’s rights to seek further arbitration in the matter and, thus, the amount awarded has not been reflected in our condensed consolidated statement of operations for the nine months ended October 2, 2021.

This ruling is subject to MHI’s rights to seek further arbitration in the matter and, thus, the amount awarded has not been reflected in our condensed consolidated statement of operations.

On July 5, 2021, DBT received notice from MHI of its intent to seek final and binding arbitration in this matter.

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In connection with the ruling, MHI paid DBT South African Rand 82.0 (or $ 6.0 at the time of payment).

This ruling is subject to MHI’s rights to seek further arbitration in the matter and, thus, the amount awarded has not been reflected in our condensed consolidated statement of operations.

Claims by MHI - On February 26, 2019, DBT received notification of an interim claim consisting of both direct and consequential damages from MHI alleging, among other things, that DBT (i) provided defective product and (ii) failed to meet certain project milestones.

In September 2020, MHI made a demand on certain bonds issued in its favor by DBT, based solely on these alleged defects, but without further substantiation or other justification (see further discussion below).

On December 30, 2020, MHI notified DBT of its intent to take these claims to binding arbitration.

On December 30, 2020, MHI notified DBT of its intent to take these claims to binding arbitration even though the vast majority of these claims had not been brought appropriately before a dispute adjudication board as required under the relevant subcontracts.

On June 4, 2021, in connection with the arbitration, DBT received a revised version of the claim.

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For the remainder of the claims in both the interim notification and the revised version, which largely appear to be direct in nature (approximately South African Rand 790.0 or $ 54.5 ), DBT has numerous defenses and, thus, we do not believe that DBT has a probable loss associated with these claims.

In addition, we do not believe MHI has followed the appropriate dispute resolution processes under our agreement and therefore most, if not all, of its claims against DBT are not valid.

As such, no loss has been recorded in the condensed consolidated financial statements with respect to these claims.

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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 $ 26.9 ) from MHI alleging that DBT failed to meet certain project milestones related to the construction of the filters for both the Kusile and Medupi projects.

In April and J uly 2019, DBT received notifications of intent to claim liquidated damages totaling South African Rand 407.2 (or $ 28.1 ) from MHI 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.

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However, given the extent and complexities of the claims between DBT and MHI, reimbursement of the South African Rand 418.3 (or $ 28.9 ) is unlikely to occur over the next twelve months.

As such, we have reflected the South African Rand 418.3 (or $ 27.6 ) as a non-current asset within our condensed consolidated balance sheet as of October 2, 2021.

As such, we have reflected the South African Rand 418.3 (or $ 28.9 ) as a non-cur rent asset within our condensed consolidated balance sheets as of April 2, 2022 and December 31, 2021.

The remaining bond of $ 2.0 issued to MHI as a performance guarantee could be exercised by MHI for an alleged breach of DBT's obligation.

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Claim against Surety - On February 5, 2021, DBT received payment of $ 6.7 on bonds issued in support of performance by one of DBT's sub-contractors.

The sub-contractor maintains a right to seek recovery of such amount and, thus, the amount received by DBT has not been reflected in our condensed consolidated statement of operations for the nine months ended October 2, 2021.

The sub-contractor maintains a right to seek recovery of such amount and, thus, the amount received by DBT has not been reflected in our condensed consolidated statement of operations.

Litigation Matters

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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 October 2, 2021, we had liabilities for site investigation and/or remediation at 25 sites ( 25 sites at December 31, 2020) that we own or control, or formerly owned and controlled.

We had liabilities for site investigation and/or remediation at 18 sites that we own or control, or formerly owned and controlled, as of April 2, 2022 and December 31, 2021.

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.

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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 October 2, 2021, we have been notified th at we are potentially responsible and have received other notices of potential liability pursuant to various environme ntal la ws at 11 sites at which the liability has not been settled, of which 9 sites have been active in the past few years.

In the case of contamination at offsite, third-party disposal sites, as of April 2, 2022 and December 31, 2021, we have been notified that we are potentially responsible and have received other notices of potential liability pursuant to various environmental laws at 9 sites, at which the liability has not been settled and all of which 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.

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Uncertain Tax Benefits

As of October 2, 2021 , we had gross unrecognized tax benefits of $ 7.3 (net unrecognized tax benefits of $ 6.4 ).

As of April 2, 2022 , we had gross unrecognized tax benefi ts of $ 7.1 (net unrecognized tax benefits of $ 6.4 ).

All of these net unrecognized tax benefits 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 October 2, 2021, gross accrued interest totaled $ 3.1 (net accrued interest of $ 2.5 ).

As of October 2, 2021, we had no accrual for penalties included in our unrecognized tax benefits.

As of April 2, 2022, gross accrued interest totaled $ 2.7 (net accrued interest of $ 2.3 ).

As of April 2, 2022, we had no accrual for penalties included in our unrecognized tax benefits.

Based on the outcome of certain examinations or as a result of the expiration of statutes of limitations for certain jurisdictions, we believe that within the next 12 months it is reasonably possible that our previously unrecognized tax benefits could decrease by up to $ 5.0 .

Th e previously unrecognized tax benefits relate to a variety of tax matters including transfer pricing and various state matters.

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 October 2, 2021, we recorded an income tax pro vision of $ 3.7 on $ 11.4 of pre-tax income from continuing operations, resulting in an effective rate of 32.5 %.

This compares t o an income tax provision for the three months ended September 26, 2020 of $ 3.1 on $ 18.7 of pre-tax income from continuing operations, resulting in an effective rate of 16.6 % .

The most significant item impacting the income tax provision for the third quarter of 2021 was $ 0.7 of expense related to th e revaluation of certain deferred tax liabilities due to an enacted tax rate increase.

The most significant item impacting the income tax provision for the third quarter of 2020 was $ 1.2 of tax benefits related to our U.S.

tax credits and incentives.

For the nine months ended October 2, 2021, we recorded an income tax provision o f $ 9.8 on $ 51.2 of pre-tax income from continuing operations, resulting in an effective rate of 19.1 % .

This compares to an income tax provision for the nine months ended September 26, 2020 of $ 8.4 on $ 48.7 of pre-tax income from continuing operations, resulting in an effective rate of 17.2 % .

The most significant items impacting the income tax provision for the first nine months of 2021 were (i) a benefit of $ 2.2 related to the resolution of certain liabilities for uncertain tax positions and interest associated with various refund claims and (ii) $ 1.0 of excess tax benefits associated with stock-based compensation awards that vested and/or were exercised during the period, partially offset by (iii) $ 1.3 of expense related to the revaluation of deferred tax liabilities due to an enacted tax rate increase.

The most significant items impacting the income tax provision for the first nine months of 2020 were (i) $ 1.5 of excess tax benefits resulting from stock-based compensation awards that vested and/or were exercised during the period, (ii) the $ 1.2 of tax benefits associated with U.S.

tax credits and incentives noted above, and (iii) $ 0.5 of tax benefits associated with statute expirations in certain jurisdictions during the second quarter of 2020.

For the three months ended April 2, 2022, we recorded an income tax provision of $ 2.6 on $ 15.6 of pre-tax income from continuing operations, resulting in an effective rate of 16.7 %.

This compares to an income tax provision for the three months ended April 3, 2021 of $ 5.3 on $ 28.3 of pre-tax income from continuing operations, resulting in an effective rate of 18.7 %.

The most significant item impacting the income tax provision for the first quarter of 2022 and 2021 was $ 0.7 and $ 0.9 , respectively, of excess tax benefits resulting from stock-based compensation awards that vested and/or were exercised during the periods.

We perform reviews of our income tax positions on a continuous basis and accrue for potential uncertain positions when we determine that an uncertain position meets the criteria of the Income Taxes Topic of the Codification.

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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”) concluded its audit of our 2013, 2014, 2015, 2016 and 2017 federal income tax returns.

In connection with such, we recorded a tax benefit of $ 2.2 during the three months ended July 3, 2021 related to the resolution of certain liabilities for uncertain tax positions and interest associated with various refund claims.

During the second quarter of 2021, the Internal Revenue Service (“IRS”) concluded its audit of our 2013, 2014, 2015, 2016 and 2017 federal income tax returns.

We believe contingencies related to the subsequent returns 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.

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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.

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 changes to various tax laws that impact businesses.

We do not believe these changes impact our current and deferred income tax balances;

therefore, no resulting adjustments have been recorded to such balances as of April 2, 2022 and December 31, 2021.

As provided within the CARES Act, we are deferring payments of our social security payroll taxes, for the period March 27, 2020 to December 31, 2020, with such deferral totaling $ 3.5 as of April 2, 2022.

This amount is required to be paid by the end of 2022.

(17) FAIR VALUE

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There were no transfers between the three levels of the fair value hierarchy for the periods pres ented.

Valuation Methodologies Used to Measure Fair Value on a Non-Recurring Basis

Valuation Methods 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, remained in place at the time of sale.

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Balcke Dürr and the acquirer of Balcke Dürr provided us an indemnity in the event that any of the bonds were called or payments were made under the guarantees.

Also, at the time of sale, Balcke Dürr provided cash collateral of Euro 4.0 and the parent company of the buyer provided a guarantee of Euro 5.0 as a security for the above indemnifications (E uro 0.0 and Euro 1.0 , r espectively, at October 2, 2021).

In connection with the sale, we recorded a liability for the estimated fair value of the guarantees and bonds and an asset for the estimated fair value of the cash collateral and indemnities provided.

Since the sale of Balcke Dürr, the guarantees have expired and bonds have been periodically returned.

As of October 2, 2021, all remaining bonds have been returned.

Summarized below are changes in the liability and asset during the nine months ended October 2, 2021 and September 26, 2020.

Nine months ended

October 2, 2021 September 26, 2020

Guarantees and Bonds Liability (1)

Indemnification Assets (1)

Since the sale of Balcke Dürr, the guarantees have expired and bonds have been returned.

Summarized below are the liability (related to parent company guarantees and bank and surety bonds) and asset (related to cash collateral and guarantee provided by the parent company of the buyer) recorded at the time of sale, along with the change in the liability and asset during the three months ended April 3, 2021.

Three months ended

April 3, 2021

Guarantees and Bonds Liability (1)

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Balance at beginning of year

$ 1.8 $ — $ 2.0 $ 0.3

Reduction/Amortization for the period (2)

( 1.7 ) — ( 0.3 ) ( 0.2 )

Impact of changes in foreign currency rates ( 0.1 ) —

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We recorded the reduction of the liability and the amortization of the asset to “Other income, net.”

Contingent Consideration for Sensors & Software and ECS Acquisitions - In connection with the acquisitions of Sensors & Software and ECS, the respective sellers are eligible for additional cash consideration of up to $ 3.9 and $ 16.8 , respectively, with payment of such contingent consideration dependent upon the achievement of certain milestones.

The estimated fair value of such contingent consideration is $ 0.7 and $ 8.2 , re spectively, with such amounts reflected as liabilities within our condensed consolidated balance sheets.

We estimated the fair value of the contingent consideration for these acquisitions based on the probability of Sensors & Software and ECS achieving the applicable milestones.

Contingent Consideration for Sensors & Software and EC S Acquisitions — In connection with the acquisition of Sensors & Software, the sellers were eligible for additional cash consideration of up to $ 4.0 , with payment of such contingent consideration dependent upon the achievement of certain milestones.

The estimated fair value of such contingent consideration totaled $ 1.3 , and was paid during the quarter ended April 2, 2022.

In connection with the acquisition of ECS, the respective seller is eligible for additional cash consideration of up to $ 16.4 , with payment of such contingent consideration dependent upon the achievement of certain milestones.

The estimated fair value of such contingent consideration was $ 0.6 and $ 1.5 at April 2, 2022 and December 31, 2021, respectively, with such amounts reflected as a liability within the respective condensed consolidated balance sheets.

We estimated the fair value of the contingent consideration for this acquisition based on the probability of ECS achieving the applicable milestones.

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.

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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

Valuation Methods Used to Measure Fair Value on a Recurring Basis

Derivative Financial Instruments — Our financial derivative assets and liabilities include commodity contracts (until the sale of Transformer Solutions), interest rate swaps, and FX forward contracts, valued using valuation models based on observable market inputs such as forward rates, inte rest rates, our own credit risk and the credit risk of our counterparties, which comprise investment-grade financial institutions.

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We primarily use the income approach, which uses valuation techniques to convert future amounts to a single present amount.

As of October 2, 2021, 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.

As of April 2, 2022, 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 nine months ended

October 2, 2021 and September 26, 2020, we recorded a gain of $ 1.6 and $ 9.0 , respectively and $ 2.1 and $ 7.4 , respectively, to “ Other income, net ” to reflect an increase in the estimated fair value of the equity security.

As of October 2, 2021 and December 31, 2020, the equity security had an estimated fair value of $ 36.0 and $ 27.0 , respectively.

Indebtedness and Other — The estimated fair value of our debt instruments as of October 2, 2021 and December 31, 2020 approximated the related carrying values due primarily to the variable market-based interest rates for such instruments.

During the three months ended April 2, 2022 and April 3, 2021, we recorded gains of $ 4.4 and $ 5.2 , respectively, to “ Other income, net ” to reflect an increase in the estimated fair value of the equity security.

As of April 2, 2022 and December 31, 2021, the equity security had an estimated fair value of $ 43.2 and $ 38.8 , respectively.

Indebtedness and Other — The estimated fair value of our debt instruments as of April 2, 2022 and December 31, 2021 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.

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-Q

Item 1. Financial Statements