What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-08-05 compared with 2022-05-05 · 368 added, 231 removed, 705 unchanged (46% of the section changed)

3 unchanged sentences

in millions, except per share amounts)

Three months ended

2022 April 3,

Three months ended Six months ended

Revenues $ 354.0 $ 296.6 $ 661.1 $ 583.8

4 unchanged sentences

Special charges, net 0.1 0.6 0.1 0.8

Other operating income ( 0.9 ) —

Other operating expense, net 1.9 2.7 1.0 2.7

Operating income 27.2 17.1 38.6 42.1

Other income, net 6.5 7.4

Other income (expense), net ( 1.7 ) 6.4 4.8 13.8

Interest expense ( 2.3 ) ( 3.4 ) ( 4.7 ) ( 7.6 )

4 unchanged sentences

Income from discontinued operations, net of tax — 40.1 — 44.7

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

Income (loss) on disposition of discontinued operations, net of tax ( 6.1 ) 4.1 ( 7.7 ) 3.3

Income (loss) from discontinued operations, net of tax ( 6.1 ) 44.2 ( 7.7 ) 48.0

33 unchanged sentences

Deferred income taxes 16.2 11.0

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)

Assets of DBT and Heat Transfer (includes cash and cash equivalents of $ 5.4 and $ 7.8 at July 2, 2022 and December 31, 2021, respectively)

TOTAL ASSETS $ 2,489.6 $ 2,628.6

15 unchanged sentences

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)

Common stock ( 53,247,919 and 45,185,089 issued and outstanding at July 2, 2022, respectively, and 53,011,255 and 45,467,768 issued and outstanding at December 31, 2021, respectively)

Paid-in capital 1,327.3 1,334.2

1 unchanged sentence

Accumulated other comprehensive income 254.0 263.9

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

Common stock in treasury ( 8,062,830 and 7,543,487 shares at July 2, 2022 and December 31, 2021, respectively)

( 465.8 ) ( 443.9 )

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Three months ended April 2, 2022

Stock Paid-In

Capital Retained

Deficit Accum.

Comprehensive

Income Common

Stockholders’

Three months ended July 2, 2022

Common Stock Paid-In Capital Retained Deficit Accum.

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

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

Net income — — 13.0 — — 13.0

Other comprehensive loss, net — — — ( 12.9 ) — ( 12.9 )

Incentive plan activity

— 4.0 — — — 4.0

Long-term incentive compensation expense

— 2.5 — — — 2.5

Restricted stock unit vesting — ( 0.4 ) — — 0.3 ( 0.1 )

Common stock repurchases — — — — ( 33.7 ) ( 33.7 )

Balance at July 2, 2022 $ 0.5 $ 1,327.3 $ ( 27.4 ) $ 254.0 $ ( 465.8 ) $ 1,088.6

Six months ended July 2, 2022

Common Stock Paid-In Capital Retained Deficit Accum.

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

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

Net income — — 24.4 — — 24.4

Other comprehensive income, net — — — 3.0 — 3.0

Other comprehensive loss, net — — — ( 9.9 ) — ( 9.9 )

Incentive plan activity

3 unchanged sentences

Restricted stock unit vesting — ( 19.0 ) — — 11.8 ( 7.2 )

Common stock repurchases — — — — ( 33.7 ) ( 33.7 )

Balance at July 2, 2022 $ 0.5 $ 1,327.3 $ ( 27.4 ) $ 254.0 $ ( 465.8 ) $ 1,088.6

Three months ended July 3, 2021

Common Stock Paid-In Capital Retained Deficit Accum.

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

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

Three months ended April 3, 2021

Net income — — 61.9 — — 61.9

Other comprehensive loss, net — — — ( 0.6 ) — ( 0.6 )

Incentive plan activity — 3.0 — — — 3.0

Long-term incentive compensation expense — 3.6 — — — 3.6

Restricted stock unit vesting — ( 1.2 ) — — 1.1 ( 0.1 )

Balance at July 3, 2021 $ 0.5 $ 1,321.2 $ ( 388.5 ) $ 250.6 $ ( 444.3 ) $ 739.5

Six months ended July 3, 2021

Common Stock Paid-In Capital Retained Deficit Accum.

6 unchanged sentences

Restricted stock unit vesting — ( 12.1 ) — — 7.3 ( 4.8 )

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

Balance at July 3, 2021 $ 0.5 $ 1,321.2 $ ( 388.5 ) $ 250.6 $ ( 444.3 ) $ 739.5

The accompanying notes are an integral part of these statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended

2022 April 3,

Six months ended

Cash flows from (used in) operating activities:

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Proceeds related to company-owned life insurance policies, net 1.6 3.9

Business acquisition, net of cash acquired ( 41.8 ) —

Business acquisitions, net of cash acquired ( 41.4 ) ( 81.9 )

Capital expenditures ( 6.0 ) ( 4.2 )

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

Net cash used in continuing operations ( 45.8 ) ( 82.2 )

Net cash used in discontinued operations ( 13.9 ) ( 1.2 )

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

Net cash used in investing activities ( 59.7 ) ( 83.4 )

Cash flows from (used in) financing activities:

3 unchanged sentences

Repayments under trade receivables arrangement — ( 134.0 )

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

Net repayments under other financing arrangements ( 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 ( 5.2 ) ( 3.8 )

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

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

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

Repurchases of common stock ( 33.7 ) —

Net cash from (used in) continuing operations ( 46.7 ) 1.3

Net cash from (used in) discontinued operations 0.3 ( 0.4 )

Net cash from (used in) financing activities ( 46.4 ) 0.9

Change in cash and equivalents due to changes in foreign currency exchange rates 1.8 4.4

2 unchanged sentences

Consolidated cash and equivalents, end of period $ 195.2 $ 69.1

Three months ended

2022 April 3,

Six months ended

Components of cash and equivalents:

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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 immaterial, individually and in aggregate, to our condensed consolidated financial statements.

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

Sale of Transformer Solutions Business

2 unchanged sentences

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

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.

During the first quarter of 2022, we agreed to the final adjustment of the purchase price which resulted in a payment to the Purchaser of $ 13.9 with an increase to the gain on sale of $ 0.2 .

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

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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 consideration 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 , which included a final settlement of working capital that resulted in a reduction of the purchase price of $ 1.3 in the third quarter of 2021.

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

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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 .

During the first and second quarters of 202 2, we further reduced the estimated liability by $ 0.9 and $ 0.4 , respectively, with such amounts recorded within “Other operating expense, net.” The estimated fair value of such contingent consideration, which we have reflected as a liability in our condensed consolidated balance sheets, was $ 0.0 and $ 1.5 at July 2, 2022 and December 31, 2021, respectively.

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

3 unchanged sentences

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.

During the second quarter of 2022, we agreed to a final adjustment to the purchase price, related to acquired working capital, resulting in our receiving $ 0.4 during the quarter.

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

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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.

The assets acquired and liabilities assumed in the 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.

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.

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 domestic 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 to our condensed consolidated financial statements.

See Note 8 for additional information.

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

6 unchanged sentences

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.

It is not practicable to estimate the impact of the one less day on our consolidated operating results for the six months ended July 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.

Certain prior-year amounts have been reclassified to conform to the current-year presentation, including amounts related to the inclusion of DBT within discontinued operations and the change from the LIFO method of inventory accounting.

(2) NEW ACCOUNTING PRONOUNCEMENTS

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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.

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

In June 2022, the FASB issued ASU No.

2022-03, Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.

This guidance also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction.

The guidance also requires the following disclosures for equity securities subject to contractual sale restrictions:

1) the fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet;

2) the nature and remaining duration of the restriction(s);

and 3) the circumstances that could cause a lapse in the restriction(s).

The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, and allows for early adoption in any interim period after issuance.

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

(3) ACQUISITIONS AND DISCONTINUED OPERATIONS

3 unchanged sentences

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 of Transformer Solutions for the three months ended April 3, 2021 are shown below:

Three months ended

April 3, 2021

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

Three months ended Six months ended

July 3, 2021 July 3, 2021

Revenues $ 108.5 $ 219.1

2 unchanged sentences

Selling, general and administrative 8.6 18.1

Other expense, net 0.2

Other income, net 0.2 —

Income before income tax 12.8 24.3

Income tax provision ( 2.9 )

Income tax benefit (1)

Income from discontinued operations, net of tax $ 42.7 $ 51.3

___________________________

(1) During the three and six months ended July 3, 2021, we recorded tax benefits of $ 33.0 in “Income from discontinued operations, net of tax” including (i) $ 28.6 for the excess tax basis in the stock of Transformer Solutions and (ii) $ 4.4 for previously unrecognized state net operating losses, each as a result of the definitive agreement to sell the business.

Wind-Down of DBT Business

1 unchanged sentence

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

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

Three months ended Six months ended

July 3, 2021 July 3, 2021

Revenues $ 0.1 $ 0.8

3 unchanged sentences

Special charges 0.1 0.6

Other expense, net 0.2

Loss before tax ( 5.2 )

Other income, net 0.7 0.5

Interest income 0.1 0.1

Loss before income tax ( 2.9 ) ( 8.1 )

Income tax benefit 0.3 1.5

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

Loss from discontinued operations, net of tax $ ( 2.6 ) $ ( 6.6 )

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

July 2, 2022 December 31, 2021

Cash and equivalents $ 5.4 $ 7.8

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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

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 July 2, 2022 and December 31, 2021.

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

July 2, 2022 December 31, 2021

Accounts receivable, net $ — $ 0.1

8 unchanged sentences

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

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

Three months ended Six months ended

July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Transformer Solutions (1)

Income (loss) from discontinued operations $ 0.1 $ 12.8 $ ( 0.2 ) $ 24.3

Income tax (provision) benefit 0.1 ( 2.9 )

Income tax benefit — 29.9 0.1 27.0

Income (loss) from discontinued operations, net 0.1 42.7 ( 0.1 ) 51.3

9 unchanged sentences

Income tax benefit 0.1 4.4 0.1 4.6

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

Income (loss) from discontinued operations, net ( 0.2 ) 4.2 ( 0.4 ) 3.5

Income (loss) from discontinued operations ( 7.3 ) 9.6 ( 9.4 ) 14.9

Income tax (provision) benefit 0.5 ( 1.5 )

Income tax benefit 1.2 34.6 1.7 33.1

Income (loss) from discontinued operations, net $ ( 6.1 ) $ 44.2 $ ( 7.7 ) $ 48.0

___________________________

(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.

(1) Income (loss) for the three and six months ended July 2, 2022 resulted primarily from revisions to liabilities retained in connection with the disposition.

During the three and six months ended July 3, 2021, we recorded tax benefits of $ 33.0 in “Income from discontinued operations, net of tax” including (i) $ 28.6 for the excess tax basis in the stock of Transformer Solutions and (ii) $ 4.4 for previously unrecognized state net operating losses, each as a result of the definitive agreement to sell the business.

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

(3) Income (loss) for the three and six months ended July 2, 2022 and July 3, 2021 resulted primarily from revisions to liabilities, including income tax 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, 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

Three months ended July 2, 2022

Reportable Segments HVAC Detection and Measurement Total

10 unchanged sentences

$ 218.7 $ 135.3 $ 354.0

Three months ended April 3, 2021

Six months ended July 2, 2022

Reportable Segments HVAC Detection and Measurement Total

Major product lines

Package and process cooling equipment and services, and engineered air quality solutions $ 247.3 $ — $ 247.3

Boilers, comfort heating, and ventilation 164.5 — 164.5

Underground locators, inspection and rehabilitation

equipment, and robotic systems — 132.6 132.6

Communication technologies, obstruction lighting, and bus fare collection systems — 116.7 116.7

$ 411.8 $ 249.3 $ 661.1

Timing of Revenue Recognition

Revenues recognized at a point in time $ 375.9 $ 214.1 $ 590.0

Revenues recognized over time 35.9 35.2 71.1

$ 411.8 $ 249.3 $ 661.1

Three months ended July 3, 2021

Reportable Segments HVAC Detection and Measurement Total

Major product lines

Package and process cooling equipment and services $ 111.5 $ — $ 111.5

8 unchanged sentences

$ 185.4 $ 111.2 $ 296.6

Six months ended July 3, 2021

Reportable Segments HVAC Detection and Measurement Total

Major product lines

Package and process cooling equipment and services $ 213.2 $ — $ 213.2

Boilers, comfort heating, and ventilation 147.8 — 147.8

Underground locators, inspection and rehabilitation

equipment, and robotic systems — 133.3 133.3

Communication technologies, obstruction lighting, and bus fare collection systems — 89.5 89.5

$ 361.0 $ 222.8 $ 583.8

Timing of Revenue Recognition

Revenues recognized at a point in time $ 320.7 $ 198.0 $ 518.7

Revenues recognized over time 40.3 24.8 65.1

$ 361.0 $ 222.8 $ 583.8

Contract Balances

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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 April 2, 2022 and December 31, 2021:

Contract Balances April 2, 2022 December 31, 2021 Change

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

Contract Balances July 2, 2022 December 31, 2021 Change

Contract Accounts Receivable (1)

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

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.

T he $ 23.0 in crease in our net contract asset balance from December 31, 2021 to July 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 and six months ended July 2, 2022, we recognized revenues of $ 10.1 and $ 33.7 , respectively, related to our contract liabilities at December 31, 2021.

Performance Obligations

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

As of July 2, 2022, the aggre gate amount all ocated to remaining performance obligations was $ 92.4 .

We expect to recognize revenue on approximately 65 % 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.

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

(6) INFORMATION ON REPORTABLE SEGMENTS

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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.

1 unchanged sentence

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

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,

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

Three months ended Six months ended

HVAC reportable segment $ 218.7 $ 185.4 $ 411.8 $ 361.0

7 unchanged sentences

Special charges, net 0.1 0.6 0.1 0.8

Other operating income ( 0.9 ) —

Other operating expense 1.9 2.7 1.0 2.7

Consolidated operating income $ 27.2 $ 17.1 $ 38.6 $ 42.1

(7) SPECIAL CHARGES, NET

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,

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

Three months ended Six months ended

HVAC reportable segment $ 0.1 $ 0.2 $ 0.1 $ 0.2

Detection and Measurement reportable segment — 0.4 — 0.6

Corporate — —

Total $ 0.1 $ 0.6 $ 0.1 $ 0.8

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,

HVAC — Charges for the three and six months ended July 2, 2022 related to severance costs associated with a restructuring action at one of the segment's cooling businesses.

Charges for the three and six months ended July 3, 2021 related to severance costs associated with a restructuring action at one of the segment's heating businesses.

Detection and Measurement — Charges for the three and six months ended July 3, 2021 related to severance costs for restructuring actions at the segment's location and inspection businesses.

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

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

Six months ended

Balance at beginning of year $ 0.3 $ 0.8

4 unchanged sentences

(8) INVENTORIES, NET

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

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

2022 December 31,

4 unchanged sentences

Inventories include material, labor and factory overhead costs and are reduced, when necessary, to estimated net realizable values.

As mentioned in Note 1, during the fourth quarter of 2021, we converted the inventory accounting for certain of our domestic businesses within our HVAC reportable segment from the LIFO method to the FIFO method.

The effects of this accounting change have been retrospectively applied to all periods presented.

The impact of this change on our condensed consolidated statements of operations and condensed consolidated statements of comprehensive income for the three and six months ended July 3, 2021 was as follows:

As Computed under LIFO Effect of Change As Adjusted

Consolidated Statement of Operations for three months ended July 3, 2021:

Income from continuing operations before income taxes $ 19.6 $ 0.5 $ 20.1

Income tax provision ( 2.3 ) ( 0.1 ) ( 2.4 )

Income from continuing operations 17.3 0.4 17.7

Income from discontinued operations, net of tax 44.2 — 44.2

Net income $ 61.5 $ 0.4 $ 61.9

Basic income per share of common stock:

Income from continuing operations, net of tax $ 0.38 $ 0.01 $ 0.39

Income from discontinued operations, net of tax 0.98 — 0.98

Net income attributable to SPX common stockholders $ 1.36 $ 0.01 $ 1.37

Diluted income per share of common stock:

Income from continuing operations, net of tax $ 0.37 $ 0.01 $ 0.38

Income from discontinued operations, net of tax 0.95 — 0.95

Net income attributable to SPX common stockholders $ 1.32 $ 0.01 $ 1.33

Total comprehensive income $ 60.9 $ 0.4 $ 61.3

As Computed under LIFO Effect of Change As Adjusted

Consolidated Statement of Operations for six months ended July 3, 2021:

Income from continuing operations before income taxes $ 47.9 $ 0.5 $ 48.4

Income tax provision ( 7.6 ) ( 0.1 ) ( 7.7 )

Income from continuing operations 40.3 0.4 40.7

Income from discontinued operations, net of tax 48.0 — 48.0

Net income $ 88.3 $ 0.4 $ 88.7

Basic income per share of common stock:

Income from continuing operations, net of tax $ 0.89 $ 0.01 $ 0.90

Income from discontinued operations, net of tax 1.06 — 1.06

Net income attributable to SPX common stockholders $ 1.95 $ 0.01 $ 1.96

Diluted income per share of common stock:

Income from continuing operations, net of tax $ 0.87 $ 0.01 $ 0.88

Income from discontinued operations, net of tax 1.03 — 1.03

Net income attributable to SPX common stockholders $ 1.90 $ 0.01 $ 1.91

Total comprehensive income $ 90.4 $ 0.4 $ 90.8

(9) GOODWILL AND OTHER INTANGIBLE ASSETS

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

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

2021 Goodwill

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Impairments Foreign

Translation April 2,

Translation July 2,

HVAC reportable segment

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___________________________

(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.

(1) Reflects (i) goodwill acquired with the ITL acquisition o f $ 12.0 , (i i) an incre ase in Sealite's goodwill of $ 0.2 resulting from revisions to the valuation of certain assets and liabilities, and (iii) an increase in Cincinnati Fan's goodwill of $ 0.1 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 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 April 2, 2022 and December 31, 2021 comprised the following:

April 2, 2022 December 31, 2021

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

July 2, 2022 December 31, 2021

Value Accumulated

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Total $ 492.4 $ ( 76.3 ) $ 416.1 $ 476.6 $ ( 61.1 ) $ 415.5

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.

___________________________

(1) The identifiable intangible assets associated with the ITL acquisition consist of customer relationships of $ 14.0 , definite-lived trademarks of $ 3.0 , technology of $ 2.9 , and non-compete agreements of $ 2.6 .

In connection with the acquisition of ITL, which has definite-lived intangibles as noted above, we updated our estimated annual amortization expense related to intangible assets to approximately $ 29.0 for the full year 2022 and $ 25.0 for 2023 and each of the four years thereafter.

At July 2, 2022, the net carrying va lue of intangible assets with determinable lives consisted of $ 98.2 in the HVAC reportable segment and $ 147.8 in the Detection and Measurement reportable segment.

At July 2, 2022, trademarks with indefinite lives consisted of $ 105.0 in the HVAC reportable segment and $ 65.1 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.

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and a more likely than not expectation of selling or disposing all, or a portion, of a reporting unit.

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 .

During the fourth quarter of 2021, based on 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 July 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.

In addition to ULC, the fair value of the Sealite, ECS, Cincinnati Fan and ITL, acquisitions in 2021 and thus far in 2022, 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.

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

Three months ended

2022 April 3,

10 Six months ended

Balance at beginning of year $ 34.8 $ 35.3

Acquisitions 0.3 —

Provisions 5.5 5.5

Usage ( 5.5 ) ( 5.2 )

Currency translation adjustment ( 0.2 ) —

Balance at end of period 34.9 35.6

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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.

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

This transaction resulted in a settlement charge of $ 0.7 recorded to “Other income (expense), net” 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 an actuarial gain of $ 0.4 recorded to “Other income (expense), net” 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.

Participants in the SPX U.S.

Pension Plan (the “U.S.

Plan”) are eligible to elect a lump-sum payment option in lieu of a future pension benefit.

During the first half of 2022, $ 10.0 was paid to participants who elected lump-sum payments.

This triggered a plan settlement which resulted in a charge to "Other income (expense), net" of $ 2.3 during the quarter ended July 2, 2022.

In addition, we remeasured assets and liabilities of the U.S.

Plan at July 2, 2022, which resulted in an actuarial loss of $ 1.5 to "Other income (expense), net" during the quarter.

In connection with the remeasurement we updated our actuarial assumptions, the only change of significance being the discount rate, which increased from 2.83 % to 4.86 %.

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

Domestic Pension Plans

Three months ended

2022 April 3,

Three months ended Six months ended

Service cost $ — $ — $ — $ —

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Expected return on plan assets ( 2.1 ) ( 2.2 ) ( 4.2 ) ( 4.4 )

Settlement and actuarial losses (1)

Net periodic pension benefit (income) expense $ 4.0 $ ( 0.1 ) $ 4.2 $ ( 0.2 )

_________________

(1) C onsists of an actuarial loss of $ 1.5 and a settlement loss of $ 2.3 .

Foreign Pension Plans

Three months ended

2022 April 3,

Three months ended Six months ended

Service cost $ — $ — $ — $ —

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Postretirement Plans

Three months ended

2022 April 3,

Three months ended Six months ended

Service cost $ — $ — $ — $ —

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Amortization of unrecognized prior service credits ( 1.1 ) ( 1.2 ) ( 2.2 ) ( 2.4 )

Recognized net actuarial losses (1)

Settlement loss, net (1)

Net periodic postretirement benefit income $ ( 0.8 ) $ ( 0.9 ) $ ( 1.3 ) $ ( 1.8 )

_________________

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

(1) The six months ended July 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 three months ended April 2, 2022:

2021 Borrowings Repayments Other April 2,

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

2021 Borrowings Repayments Other July 2,

Revolving loans $ — $ — $ — $ — $ —

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The remaining balance is payable in full on December 17, 2024.

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

Balances are net of unamortized debt issuance costs of $ 0.9 and $ 1.0 at July 2, 2022 and December 31, 2021, respectively.

(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.

(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.

(3) Primarily includes balances under a purchase card program of $ 2.1 and $ 2.2 and finance lease obligations of $ 1.0 and $ 1.1 at July 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.

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A detailed description of our senior credit facilities is included in our 2021 Annual Report on Form 10-K.

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.

At July 2, 2022, we had $ 439.0 of available borrowing capacity under our revolving credit facilities, after giving effect to $ 11.0 reserved for outstanding letters of credit.

In addition, at July 2, 2022, we had $ 43.3 of available issuance capacity under our foreign credit instrument facilities after giving effect to $ 11.7 reserved for outstanding letters of credit.

The weighted-average interest rate of outstanding borrowings under our senior credit agreement was approximately 3.0 % at July 2, 2022.

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

(13) DERIVATIVE FINANCIAL INSTRUMENTS

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In February 2020, and as a result of a December 2019 amendment that extended the maturity date of our senior credit facilities to December 17, 2024, we entered into additional interest swap agreements (“Swaps”).

The Swaps have a notional amount of $ 240.6 , cover the period from March 2021 to November 202 4, and effectively convert borrowings under our senior credit facilities to a fixed rate of 1.061 %, plus the applicable margin.

The Swaps have a remaining notional amount of $ 237.5 , cover the period from March 2021 to November 202 4, and effectively convert borrowings under our senior credit facilities to a fixed rate of 1.061 %, plus the applicable margin.

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

As of 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).

As of July 2, 2022 and December 31, 2021, the unrealized gain, net of tax, recorded in accumulated other comprehensive income ( “ AOCI ”) was $ 8.6 and $ 0.5 , respectively.

In addition, as of July 2, 2022, the fair value of our interest rate swap agreements totaled $ 11.5 (with $ 1.5 recorded as a current asset and $ 10.0 as a non-current asset), 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.

From time to time, we enter into forward contracts to manage the exposure on contracts with forecasted transactions denominated in non-functional currencies and to manage the risk of transaction gains and losses associated with assets/liabilities denominated in currencies other than the functional currency of certain subsidiaries (“FX forward contracts”).

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

We had FX forward contracts with an aggregate notional amount of $ 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.

We had FX forward contracts with an aggregate notional amount of $ 27.8 and $ 8.7 outstanding as of July 2, 2022 and December 31, 2021, respectively, with all of the $ 27.8 scheduled to mature within one year.

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

Beginning in the second quarter of 2022, we have designated and accounted for certain of our FX forward contracts, with a notional amount of $ 3.5 , as cash flow hedges.

As of July 2, 2022, the unrealized gain/loss recorded in AOCI related to these cash flow hedges was less than $0.1.

Commodity Contracts

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

For 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.

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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

2022 April 3,

Three months ended Six months ended

Weighted-average number of common shares used in basic income per share 45.444 45.271 45.500 45.201

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Weighted-average number of common shares and dilutive securities used in diluted income per share 46.289 46.545 46.370 46.408

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.

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 0.350 and 0.791 , r espectively, for the three mon ths ended July 2, 2022, and 0.292 and 0.739 , respectively, for the six months ended July 2, 2022.

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 0.307 and 0.652 , respectively, for the three months ended July 3, 2021, and 0.269 and 0.632 , respectively, for the six months ende d July 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.

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.

Effective May 10, 2022, we granted 0.023 RSU's to our non-employee directors, which vest in their entirety immediately prior to the annual meeting of stockholders in May 2023.

A detailed description of the awards granted prior to 2022 is included in our 2021 Annual Report on Form 10-K.

C ompensation expense within income from continuing operations related to long-term incentive awards totaled $ 2.5 and $ 3.3 for the three months ended July 2, 2022 and July 3, 2021, respectively, and $ 5.6 an d $ 6.0 for the six months ended July 2, 2022 and July 3, 2021, respectively.

The related tax benefit was $ 0.4 and $ 0.5 for the three months ended July 2, 2022 and July 3, 2021, respectively, and $ 0.9 and $ 1.0 for the six months ended July 2, 2022 and July 3, 2021, respectively.

Repurchases of Common Stock

On May 10, 2022, our Board of Directors re-authorized management, in its sole discretion, to repurchase, in any fiscal year, up to $ 100.0 of our common stock, subject to maintaining compliance with all covenants of our Senior Credit Facilities.

Pursuant to this re-authorization, during the three months ended July 2, 2022, we repurchased approximately 0.7 shares of our common stock for aggregate cash payments of $ 33.7 .

As of July 2, 2022, the remaining maximum approximate amount of our common stock that may be purchased under this authorization is $ 66.3 .

Accumulated Other Comprehensive Income

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

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

Adjustment Net Unrealized Gains

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Other comprehensive income (loss) before reclassifications ( 13.8 ) 1.5 0.1 ( 12.2 )

Amounts reclassified from accumulated other comprehensive income — 0.1 ( 0.8 ) ( 0.7 )

Current-period other comprehensive income (loss) ( 13.8 ) 1.6 ( 0.7 ) ( 12.9 )

Balance at end of period $ 236.3 $ 8.6 $ 9.1 $ 254.0

__________________________

(1) Net of tax provision o f $ 2.9 and $ 2.3 as of July 2, 2022 and April 2, 2022, respectively.

(2) Net of tax provision of $ 3.2 and $ 3.5 as of July 2, 2022 and April 2, 2022, respectively.

The balances as of July 2, 2022 and April 2, 2022 include unamortized prior service credits.

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

Adjustment Net Unrealized Gains

on Qualifying Cash

Flow Hedges (1)

Postretirement

Adjustment (2)

Balance at beginning of period $ 252.7 $ 0.5 $ 10.7 $ 263.9

Other comprehensive income (loss) before reclassifications ( 16.4 ) 7.6 0.1 ( 8.7 )

Amounts reclassified from accumulated other comprehensive income — 0.5 ( 1.7 ) ( 1.2 )

Current-period other comprehensive income (loss) ( 16.4 ) 8.1 ( 1.6 ) ( 9.9 )

Balance at end of period $ 236.3 $ 8.6 $ 9.1 $ 254.0

__________________________

(1) Net of tax provision of $ 2.9 a nd $ 0.1 as of July 2, 2022 and December 31, 2021, respectively.

(2) Net of tax provision of $ 3.2 and $ 3.7 as of July 2, 2022 and December 31, 2021, respectively.

The balances as of July 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 July 3, 2021 were as follows:

Adjustment Net Unrealized

on Qualifying Cash

Flow Hedges (1)

Postretirement

Adjustment (2)

Balance at beginning of period $ 239.2 $ ( 1.4 ) $ 13.4 $ 251.2

Other comprehensive income before reclassifications 0.9 0.2 — 1.1

Amounts reclassified from accumulated other comprehensive income (loss) — ( 0.8 ) ( 0.9 ) ( 1.7 )

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__________________________

(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:

(1) Net of tax benefit of $ 0.7 and $ 0.4 as of July 3, 2021 and April 3, 2021, respectively.

(2) Net of tax provision of $ 4.3 and $ 4.6 as of July 3, 2021 and April 3, 2021, respectively.

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

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

Adjustment Net Unrealized

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__________________________

(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:

(1) Net of tax benefit of $ 0.7 and $ 1.4 as of July 3, 2021 and December 31, 2020, respectively.

(2) Net of tax provision of $ 4.3 and $ 4.9 as of July 3, 2021 and December 31, 2020, respectively.

The balances as of July 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 July 2, 2022 and July 3, 2021:

Amount Reclassified from AOCI

Three months ended

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

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

Consolidated Statements of Operations

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Gains on pension and postretirement items:

Amortization of unrecognized prior service credits - Pre-tax $ ( 1.1 ) $ ( 1.2 ) Other income, net

Amortization of unrecognized prior service credits - Pre-tax $ ( 1.1 ) $ ( 1.2 ) Other income (expense), net

Income taxes 0.3 0.3

$ ( 0.8 ) $ ( 0.9 )

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

Amount Reclassified from AOCI

Six months ended

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

Consolidated Statements of Operations

(Gains) losses on qualifying cash flow hedges:

Commodity contracts $ — $ ( 3.5 ) Income from discontinued operations, net of tax

Swaps 0.7 2.0 Interest expense

Pre-tax 0.7 ( 1.5 )

Income taxes ( 0.2 ) 0.4

$ 0.5 $ ( 1.1 )

Gains on pension and postretirement items:

Amortization of unrecognized prior service credits - Pre-tax $ ( 2.2 ) $ ( 2.4 ) Other income (expense), net

Income taxes 0.5 0.6

$ ( 1.7 ) $ ( 1.8 )

(15) CONTINGENT LIABILITIES AND OTHER MATTERS

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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 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.

Our recorded liab ilities related to these matters totaled $ 632.4 and $ 658.8 at July 2, 2022 and December 31, 2021, respectively.

Of these amounts, $ 556.7 and $ 584.3 are included in “Other long-term liabilities” within our condensed consolidated balance sheets at July 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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These variances relative to current expectations could have a material impact on our financial position and results of operations.

Our asbestos-related claims are typical in certain of the industries in which we operate or pertain to legacy businesses we no longer operate.

Our asbestos-related claims are with respect to products that we no longer manufacture or sell and are typical in certain of the industries in which we operate or pertain to legacy businesses we no longer operate.

It is not unusual in these cases for fifty or more corporate entities to be named as defendants.

We vigorously defend these claims, many of which are dismissed without payment, and the significant majority of costs related to these claims have historically been paid pursuant to our insurance arrangements.

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

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

July 2, 2022 December 31, 2021

Insurance recovery assets (1)

2 unchanged sentences

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(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.

(1) Of these amounts, $ 456.6 and $ 473.6 are included in “Other assets” at July 2, 2022 and December 31, 2021, respectively, while the remainder is included in “Other current assets.”

(2) Of these amounts, $ 536.9 and $ 561.4 are included in “Other long-term liabilities” at July 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 three months ended April 2, 2022 and April 3, 2021:

Three months ended

April 2, 2022 April 3, 2021

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

Six months ended

July 2, 2022 July 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 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.

During the six months ended July 2, 2022 and July 3, 2021, our payments for asbestos-related claims, net of respective insurance recoveri es of $ 17.0 and $ 15.3 , were $ 11.2 and $ 8.1 , 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 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.

During the three and six months ended July 2, 2022, we recorded charges of $ 2.3 to continuing operations and $ 0.2 to discontinued operations related to revisions of recorded liabilities for asbestos-related claims.

During the three and six months ended July 3, 2021, we recorded a charge of $ 2.7 to continuing operations related to revisions of recorded assets for asbestos-related claims.

There w ere no other changes in estimates associated with the assets and liabilities related to our asbestos product liability matters during the three and six months ended July 2, 2022 and July 3, 2021.

Large Power Projects in South Africa

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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 $ 4.3 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 (which have been completed);

(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.

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 statements 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.

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 statements 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).

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 even though the vast majority of these claims had not been brought appropriately before a dispute adjudication board as required under the relevant subcontracts.

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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 $ 48.6 ), 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.

In addition, we do not believe MHI has followed the appropriate dispute resolution processes under DBT's contracts 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 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.

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

Although it is reasonably possible that some loss may be incurred in connection with these claims, we currently are unable to estimate the potential loss or range of potential loss.

MHI has made other claims against DBT totaling South African Rand 176.2 (or $ 12.2 ).

In April and July 2019, DBT received notifications of intent to claim liquidated damages totaling South African Rand 407.2 (or $ 25.0 ) 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.

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

Although it is reasonably possible that some loss may be incurred in connection with these claims, we currently are unable to estimate the potenti al loss or range of potential loss.

MHI has made other claims against DBT totaling South African Rand 176.2 (or $ 10.8 ) and has also alleged that it has incurred additional remedial costs related to portions of DBT's scope of work.

DBT has numerous defenses against these claims, as well as claims, if any, that may result from the above unsubstantiated allegations, and, thus, we do not believe that DBT has a probable loss associated with these claims and allegations.

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

Bonds Issued in Favor of MHI - DBT is obligated with respect to bonds issued by banks in favor of MHI.

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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 $ 25.7 ) is unlikely to occur over the next twelve months.

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.

As such, we have reflected the South African Rand 418.3 (or $ 25.7 ) as a non-current asset within our condensed consolidated balance sheets as of July 2, 2022 and December 31, 2021.

The remaining bond of South Africa Rand 29.2 (or $ 1.8 ) issued to MHI as a performance guarantee could be exercised by MHI for an alleged breach of DBT's obligation.

In the event that MHI were to receive payment on a portion, or all, of the remaining bond, we would be required to reimburse the issuing bank.

In addition to this bond, SPX Corporation has guaranteed DBT’s performance on these projects to the prime contractors, including MHI.

In addition to the remaining bond, SPX Corporation has guaranteed DBT’s performance on these projects to the prime contractors, including MHI.

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.

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 statements 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.

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.

We had liabilities for site investigation and/or remediation at 18 sites that we own or control, or formerly owned and controlled, as of July 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 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.

In the case of contamination at offsite, third-party disposal sites, as of July 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 April 2, 2022 , we had gross unrecognized tax benefi ts of $ 7.1 (net unrecognized tax benefits of $ 6.4 ).

As of July 2, 2022 , we had gross unrecognized tax benefi ts of $ 6.3 (net unrecognized tax benefits of $ 5.6 ).

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 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.

As of July 2, 2022, gross accrued interest totaled $ 2.8 (net accrued interest of $ 2.3 ).

As of July 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 .

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Other Tax Matters

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.

For the three months ended July 2, 2022, we recorded an income tax provision of $ 4.4 on $ 23.5 of pre-tax income from continuing operations, resulting in an effective rate of 18.7 %.

This compares to an income tax provision for the three months ended July 3, 2021 of $ 2.4 on $ 20.1 of pre-tax income from continuing operations, resulting in an effective rate of 11.9 %.

The most significant item impacting the income tax provision for the second quarters of 2022 and 2021 was $ 0.7 and $ 2.2 of tax benefits, respectively, related to revisions to liabilities for uncertain tax positions.

In addition, the tax provision for the second quarter of 2021 included interest associated with various refund claims.

For the six months ended July 2, 2022, we recorded an income tax provision of $ 7.0 on $ 39.1 of pre-tax income from continuing operations, resulting in an effective rate of 17.9 %.

This compares to an income tax provision for the six months ended July 3, 2021 of $ 7.7 on $ 48.4 of pre-tax income from continuing operations, resulting in an effective rate of 15.9 %.

The most significant items impacting the income tax provision during the first half of 2022 and 2021 were (i) $ 0.7 and $ 1.0 , respectively, of excess tax benefits associated with stock-based compensation awards that vested and/or were exercised during the periods and (ii) the $ 0.7 and $ 2.2 , respectively, of the tax benefits noted above that were recorded in the second quarter of 2022 and 2021.

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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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”)

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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.

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

As provided within the CARES Act, we deferred payments of our social security payroll taxes for the period March 27, 2020 to December 31, 2020, with such deferral totaling $ 3.7 as of July 2, 2022.

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

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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 0.0 , respectively, at April 2, 2022).

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 u ro 0.0 and Euro 0.0 , respectively, at July 2, 2022).

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 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

Summarized below are the change in the liability and asset during the six months ended July 3, 2021.

Six months ended

Guarantees and Bonds Liability (1)

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We amortized the asset based on the expiration terms of each of the securities.

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

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.

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

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.

The estimated fair value of such contingent consideration was $ 8.2 as of the date of acquisition.

During the fourth quarter of 2021, we concluded that the probability of achieving the financial performance milestone had lessened due to a delay in the execution of certain large orders, resulting in a reduction of the contingent fair value/liability of $ 6.7 .

During the first and second quarters of 2022, we further reduced the fair value/liability by $ 0.9 and $ 0.4 , respectively, with such amounts recorded to "Other operating expense, net." The estimated fair value of such contingent consideration was $ 0.0 and $ 1.5 at July 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.

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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 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.

As of July 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 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.

During the three and six months ended July 2, 2022 and July 3, 2021, we re corded gains of $ 0.0 and $ 2.2 , respectively and $ 4.4 and $ 7.4 to “Other income (expense), net” to reflect an increase in the estimated fair value of the equity security.

As of July 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 July 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.

(18) SUBSEQUENT EVENT

On August 4, 2022, we announced the intent to implement a reorganization of our corporate legal structure by executing a tax-free merger of SPX Corporation with and into SPX Merger, LLC, a newly-formed Delaware limited liability company that is a subsidiary of a newly-formed Delaware corporation, SPX Technologies, Inc.

(“SPX Technologies”).

As a result of the transaction, SPX Technologies will become the holding company for the SPX group of companies, and will be the publicly traded entity.

Immediately after consummation of the transaction, SPX Technologies will have, on a consolidated basis, the same assets, businesses, operations, executive officers, officers and directors as SPX Corporation had immediately prior to the consummation of the transaction.

As a result of the new structure, the operating assets of SPX will be separated from certain legacy liabilities and associated insurance assets.

Upon completion of the new structure, which we are targeting to occur on or about August 15, 2022, the SPX Corporation common stock will continue trading on the New York Stock Exchange on an uninterrupted basis with no change to the ticker symbol “SPXC.” The stock will trade under a new CUSIP (78473E 103).

The transaction will be accomplished pursuant to Section 251(g) of the Delaware General Corporation Law and no action will be required by SPX Corporation stockholders.

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