What changed in this filing

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Item 1. Financial Statements

2023-11-03 compared with 2023-08-03 · 288 added, 281 removed, 731 unchanged (44% of the section changed)

2 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

in millions, except per share amounts)

Three months ended Six months ended

Three months ended Nine months ended

September 30,

2023 October 1,

2022 September 30,

2023 October 1,

Revenues $ 448.7 $ 370.5 $ 1,271.8 $ 1,031.6

9 unchanged sentences

Interest income 0.8 1.0 1.5 1.4

Loss on amendment/refinancing of senior credit agreement — ( 1.1 ) — ( 1.1 )

Income from continuing operations before income taxes 48.1 10.0 144.6 49.1

Income tax provision ( 7.8 ) ( 4.4 ) ( 19.1 ) ( 7.0 )

Income tax (provision) benefit ( 12.4 ) 2.5 ( 31.5 ) ( 4.5 )

Income from continuing operations 35.7 12.5 113.1 44.6

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

Gain (loss) on disposition of discontinued operations, net of tax ( 2.3 ) ( 6.1 ) 1.4 ( 7.7 )

Income (loss) from discontinued operations, net of tax ( 2.3 ) ( 6.1 ) 1.4 ( 7.7 )

Net income $ 36.0 $ 13.0 $ 78.8 $ 24.4

Basic income per share of common stock:

Loss on disposition of discontinued operations, net of tax ( 56.1 ) ( 9.4 ) ( 54.7 ) ( 17.1 )

Loss from discontinued operations, net of tax ( 56.1 ) ( 9.4 ) ( 54.7 ) ( 17.1 )

Net income (loss) $ ( 20.4 ) $ 3.1 $ 58.4 $ 27.5

Basic income (loss) per share of common stock:

Income from continuing operations $ 0.78 $ 0.28 $ 2.49 $ 0.98

Income (loss) from discontinued operations, net of tax ( 0.05 ) ( 0.13 ) 0.03 ( 0.17 )

Net income per share $ 0.79 $ 0.29 $ 1.73 $ 0.54

Loss from discontinued operations, net of tax ( 1.23 ) ( 0.21 ) ( 1.21 ) ( 0.38 )

Net income (loss) per share $ ( 0.45 ) $ 0.07 $ 1.28 $ 0.60

Weighted-average number of common shares outstanding — basic 45.608 45.144 45.507 45.382

Diluted income per share of common stock:

Diluted income (loss) per share of common stock:

Income from continuing operations $ 0.76 $ 0.27 $ 2.43 $ 0.96

Income (loss) from discontinued operations, net of tax ( 0.05 ) ( 0.13 ) 0.03 ( 0.16 )

Net income per share $ 0.77 $ 0.28 $ 1.69 $ 0.53

Loss from discontinued operations, net of tax ( 1.20 ) ( 0.20 ) ( 1.18 ) ( 0.37 )

Net income (loss) per share $ ( 0.44 ) $ 0.07 $ 1.25 $ 0.59

Weighted-average number of common shares outstanding — diluted 46.751 46.132 46.560 46.253

Comprehensive income $ 39.2 $ 0.1 $ 83.8 $ 14.5

Comprehensive income (loss) $ ( 32.2 ) $ ( 13.7 ) $ 51.6 $ 0.8

The accompanying notes are an integral part of these statements.

3 unchanged sentences

in millions, except share data)

September 30,

2023 December 31,

16 unchanged sentences

Deferred income taxes 3.2 2.7

Assets of DBT and Heat Transfer (includes cash and equivalents of $ 8.5 and $ 9.3 at July 1, 2023 and December 31, 2022, respectively) (Note 3)

Assets of DBT and Heat Transfer (includes cash and equivalents of $ 1.1 and $ 9.3 at September 30, 2023 and December 31, 2022, respectively) (Note 3)

TOTAL ASSETS $ 2,473.0 $ 1,930.9

15 unchanged sentences

Stockholders' Equity:

Common stock ( 53,529,856 and 45,581,485 issued and outstanding at July 1, 2023, respectively, and 53,350,918 and 45,291,989 issued and outstanding at December 31, 2022, respectively)

Common stock ( 53,581,770 and 45,634,180 issued and outstanding at September 30, 2023, respectively, and 53,350,918 and 45,291,989 issued and outstanding at December 31, 2022, respectively)

Paid-in capital 1,348.0 1,338.3

1 unchanged sentence

Accumulated other comprehensive income 250.7 257.5

Common stock in treasury ( 7,948,371 and 8,058,929 shares at July 1, 2023 and December 31, 2022, respectively)

Common stock in treasury ( 7,947,590 and 8,058,929 shares at September 30, 2023 and December 31, 2022, respectively)

( 459.1 ) ( 465.5 )

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Three months ended July 1, 2023

Common Stock Paid-In Capital Retained Earnings (Deficit) Accum.

Three months ended September 30, 2023

Common Stock Paid-In Capital Retained Earnings Accum.

Other Comprehensive Income Common Stock In Treasury Total Stockholders’ Equity

Balance at April 1, 2023 $ 0.5 $ 1,335.3 $ ( 8.8 ) $ 259.3 $ ( 460.2 ) $ 1,126.1

Net income — — 36.0 — — 36.0

Other comprehensive income, net — — — 3.2 — 3.2

Balance at July 1, 2023 $ 0.5 $ 1,341.5 $ 27.2 $ 262.5 $ ( 459.1 ) $ 1,172.6

Net loss — — ( 20.4 ) — — ( 20.4 )

Other comprehensive loss, net — — — ( 11.8 ) — ( 11.8 )

Incentive plan activity

2 unchanged sentences

— 3.4 — — — 3.4

Restricted stock unit vesting — ( 0.3 ) — — 1.1 0.8

Balance at July 1, 2023 $ 0.5 $ 1,341.5 $ 27.2 $ 262.5 $ ( 459.1 ) $ 1,172.6

Six months ended July 1, 2023

Balance at September 30, 2023 $ 0.5 $ 1,348.0 $ 6.8 $ 250.7 $ ( 459.1 ) $ 1,146.9

Nine months ended September 30, 2023

Common Stock Paid-In Capital Retained Earnings (Deficit) Accum.

2 unchanged sentences

Net income — — 58.4 — — 58.4

Other comprehensive income, net — — — 5.0 — 5.0

Other comprehensive loss, net — — — ( 6.8 ) — ( 6.8 )

Incentive plan activity

3 unchanged sentences

Restricted stock unit vesting — ( 11.6 ) — — 6.4 ( 5.2 )

Balance at July 1, 2023 $ 0.5 $ 1,341.5 $ 27.2 $ 262.5 $ ( 459.1 ) $ 1,172.6

Three months ended July 2, 2022

Balance at September 30, 2023 $ 0.5 $ 1,348.0 $ 6.8 $ 250.7 $ ( 459.1 ) $ 1,146.9

Three months ended October 1, 2022

Common Stock Paid-In Capital Retained Deficit Accum.

Other Comprehensive Income Common Stock In Treasury Total Stockholders’ Equity

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

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

Net income — — 3.1 — — 3.1

1 unchanged sentence

Incentive plan activity — 2.7 — — — 2.7

— 4.0 — — — 4.0

Long-term incentive compensation expense — 2.1 — — — 2.1

— 2.5 — — — 2.5

Restricted stock unit vesting — ( 0.2 ) — — 0.2 —

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

Six months ended July 2, 2022

Balance at October 1, 2022 $ 0.5 $ 1,331.9 $ ( 24.3 ) $ 237.2 $ ( 465.6 ) $ 1,079.7

Nine months ended October 1, 2022

Common Stock Paid-In Capital Retained Deficit Accum.

4 unchanged sentences

Incentive plan activity — 9.2 — — — 9.2

— 6.5 — — — 6.5

Long-term incentive compensation expense — 7.7 — — — 7.7

— 5.6 — — — 5.6

Restricted stock unit vesting — ( 19.2 ) — — 12.0 ( 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

Balance at October 1, 2022 $ 0.5 $ 1,331.9 $ ( 24.3 ) $ 237.2 $ ( 465.6 ) $ 1,079.7

The accompanying notes are an integral part of these statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six months ended

Nine months ended

September 30,

2023 October 1,

Cash flows from (used in) operating activities:

Net income $ 58.4 $ 27.5

Gain (loss) from discontinued operations, net of tax 1.4 ( 7.7 )

Loss from discontinued operations, net of tax ( 54.7 ) ( 17.1 )

Income from continuing operations 113.1 44.6

1 unchanged sentence

Special charges, net — 0.1

Gain on change in fair value of equity security ( 3.6 ) ( 4.4 )

(Gain) loss on change in fair value of equity security ( 3.6 ) 3.0

Deferred and other income taxes ( 22.5 ) ( 16.9 )

26 unchanged sentences

Minimum withholdings paid on behalf of employees for net share settlements, net of proceeds from the exercise of employee stock options ( 1.5 ) ( 4.9 )

Financing Fees Paid ( 1.3 ) —

Repurchases of common stock — ( 33.7 )

Financing fees paid ( 1.3 ) ( 1.9 )

Net cash from (used in) continuing operations 425.1 ( 41.2 )

5 unchanged sentences

Consolidated cash and equivalents, end of period $ 102.0 $ 187.3

Six months ended

Nine months ended

September 30,

2023 October 1,

Components of cash and equivalents:

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We purchased ITL for cash consideration of $ 40.4 , net of (i) cash acquired of $ 1.1 and (ii) an adjustment to the purchase price received during the third quarter of 2022 related to acquired working capital of $ 1.4 .

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

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

Acquisition of TAMCO

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( “TAMCO” ), a market leader in motorized and non-motorized dampers that control airflow in large-scale specialty applications in commercial, industrial, and institutional markets .

We purchased TAMCO for cash consideration of $ 125.3 , net of cash acquired of $ 1.0 .

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

We purchased TAMCO for cash consideration of $ 125.5 , inclusive of an adjustment to the purchase price of $ 0.2 paid during the third quarter of 2023 related to acquired working capital and net of cash acquired of $ 1.0 .

The post-acquisition operating results of TAMCO are reflected within our HVAC reportable segment.

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The post-acquisition operating results of ASPEQ are reflected within our HVAC reportable segment.

The assets acquired and liabilities assumed in the TAMCO and ASPEQ 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 acquired intangible assets.

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 2023 and will have one more day in the fourth quarter of 2023 than in the respective 2022 periods.

It is not practicable to estimate the impact of the one less day on our consolidated operating results for the six months ended July 1, 2023, when compared to the consolidated operating results for the respective 2022 period.

It is not practicable to estimate the impact of the one less day on our consolidated operating results for the nine months ended September 30, 2023, when compared to the consolidated operating results for the respective 2022 period.

Correction of Prior-Year Classification and Disclosure

3 unchanged sentences

Accordingly, Segment Income, as presented in Note 6, now excludes all of the items noted above.

This change had no impact to the amounts previously presented in our condensed consolidated statements of operations for the three and six months ended July 2, 2022.

This change had no impact to the amounts previously presented in our condensed consolidated statements of operations for the three and nine months ended October 1, 2022.

Although the impact of this change to previously disclosed Segment Income is not material, we revised the prior-year presentation to be consistent with the current-year disclosure.

The impact of this change on the Segment Income previously presented for the three and six months ended July 2, 2022 is summarized below:

Three months ended July 2, 2022 Six months ended July 2, 2022

The impact of this change on the Segment Income previously presented for the three and nine months ended October 1, 2022 is summarized below:

Three months ended October 1, 2022 Nine months ended October 1, 2022

As Previously Presented Effect of Change Current Presentation As Previously Presented Effect of Change Current Presentation

1 unchanged sentence

Detection and Measurement reportable segment 25.7 4.6 30.3 63.2 13.9 77.1

Total income for segments 48.1 8.0 56.1 78.3 17.4 95.7

Total income for reportable segments 56.6 6.8 63.4 134.9 24.2 159.1

Corporate expense 17.2 — 17.2 50.2 — 50.2

7 unchanged sentences

___________________________

(1) Represents additional “Cost of products sold” related to the step-up of inventory (to fair value) acquired in connection with the ITL acquisition of $ 0.9 and $ 1.0 during the three and six months ended July 2, 2022, respectively.

(1) Represents additional “Cost of products sold” related to the step-up of inventory (to fair value) acquired in connection with the ITL acquisition of $ 0.1 and $ 1.1 during the three and nine months ended October 1, 2022, respectively.

(2) NEW ACCOUNTING PRONOUNCEMENTS

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The qualitative factors that comprise the recorded goodwill include expected market growth for ASPEQ’s existing operations, increased volumes achieved by selling ASPEQ’s products through existing SPX sales channels, procurement and operational savings and efficiencies, and various other factors.

We expect none of the goodwill described above to be deductible for tax purposes.

Between the acquisition date and July 1, 2023, we recognized revenues and a net loss for ASPEQ of $ 8.6 and $ 0.5 , respectively.

The net loss included charges of $ 1.1 associated with the excess fair value (over historical cost) of inventory acquired which was subsequently sold during the period June 2, 2023 through July 1, 2023.

During the three and six months ended July 1, 2023, we incurred acquisition-related costs for ASPEQ of $ 4.6 and $ 5.1 , respectively, which have been recorded to “Selling, general and administrative” within our condensed consolidated statements of operations and “Corporate expense” within consolidated operating income in Note 6.

The following unaudited pro forma information presents our results of operations for the three and six months ended July 1, 2023 and July 2, 2022, respectively, as if the acquisition of ASPEQ had taken place on January 1, 2022.

We expect no ne of the goodwill described above to be deductible for tax purposes.

We recognized revenues and net losses for ASPEQ of $ 26.0 and $ 0.8 , and $ 34.6 and $ 1.3 , respectively, for the three and nine months ended September 30, 2023 with the net loss impacted by charges during the three and nine months ended September 30, 2023 of (i) $ 6.7 and $ 9.4 , respectively, associated with amortization of the various intangible assets mentioned above and (ii) $ 2.5 and $ 3.6 , respectively, associated with the excess fair value (over historical cost) of inventory acquired which has been subsequently sold.

During the nine months ended September 30, 2023, we incurred acquisition-related costs for ASPEQ of $ 5.1 , which have been recorded to “Selling, general and administrative” within our condensed consolidated statements of operations and “Corporate expense” within consolidated operating income in Note 6.

The following unaudited pro forma information presents our results of operations for the three and nine months ended September 30, 2023 and October 1, 2022, respectively, as if the acquisition of ASPEQ had taken place on January 1, 2022.

The unaudited pro forma financial information is not intended to represent or be indicative of our consolidated results of operations that would have been reported had the acquisition been completed as of the date presented, and should not be taken as representative of our future consolidated results of operations.

2 unchanged sentences

These pro forma results of operations have been prepared for comparative purposes only and include additional interest expense on the borrowings required to finance the acquisition, additional depreciation and amortization expense associated with fair value adjustments to the acquired property, plant and equipment and intangible assets, adjustments to reflect charges associated with acquisition-related costs and charges associated with the excess fair value (over historical cost) of inventory acquired and subsequently sold as if they were incurred during the first quarter of 2022, and the related income tax effects.

Three months ended Six months ended

July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

Three months ended Nine months ended

September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022

Revenues $ 448.7 $ 397.0 $ 1,319.0 $ 1,108.8

Income from continuing operations 39.8 9.0 118.6 23.5

Net income 39.6 6.1 80.2 6.8

Net income (loss) ( 16.3 ) ( 0.4 ) 63.9 6.4

Income from continuing operations per share of common stock:

1 unchanged sentence

Diluted $ 0.85 $ 0.20 $ 2.55 $ 0.51

Net income per share of common stock:

Net income (loss) per share of common stock:

Basic $ ( 0.36 ) $ ( 0.01 ) $ 1.40 $ 0.14

5 unchanged sentences

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

which is reported as a discontinued operation for all periods presented.

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

Wind-Down of DBT Business

We completed the wind-down of our DBT Technologies (PTY) LTD (“DBT”) business in the fourth quarter of 2021.

We completed the wind-down of our DBT Technologies (PTY) LTD (“DBT”) business after ceasing all operations, including those related to two large power projects in South Africa — Kusile and Medupi, 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.

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 July 1, 2023 and December 31, 2022 .

The major line items constituting DBT ’ s assets and liabilities as of July 1, 2023 and December 31, 2022 are shown below:

July 1, 2023 December 31, 2022

As previously disclosed, DBT had asserted claims against the remaining prime contractor on the large projects, Mitsubishi Heavy Industries Power — ZAF (f.k.a.

Mitsubishi-Hitachi Power Systems Africa (PTY) LTD) (“MHI”), of approximately South African Rand 1,000.0 (or $ 52.1 ) and MHI had asserted, or issued letters of intent to claim for, alleged damages against DBT.

Although it was reasonably possible that some loss may have been incurred in connection with these claims (which totaled approximately South African Rand 2,815.2 or $ 146.5 ), we were unable to estimate the potential loss or range of potential loss associated with these claims due to the (i) lack of support provided by MHI for these claims;

(ii) complexity of contractual relationships between the end customer, MHI, and DBT;

(iii) legal interpretation of the contract provisions and application of South African law to the contracts;

and (iv) unpredictable nature of any dispute resolution processes that have occurred or may occur in connection with these claims.

Although we have experienced success in enforcing and defending our rights through the dispute resolution process over the past few years (including the matters mentioned below), we have invested, and would have continued to invest, significant management and financial resources to defend and pursue these matters.

On September 5, 2023, DBT and SPX entered into an agreement with MHI to resolve all claims between the parties with respect to the two large power projects in South Africa (the “Settlement Agreement”).

The Settlement Agreement provides for full and final settlement and mutual release of all claims between the parties with respect to the projects, including any claim

against SPX Technologies, Inc.

as guarantor of DBT's performance on the projects.

It also provides that the underlying subcontracts are terminated and all obligations of both parties under the subcontracts have been satisfied in full.

In connection with the Settlement Agreement, we incurred a charge, net of tax, of $ 54.2 during the three months ended September 30, 2023.

The charge included the write-off of $ 15.2 in net amounts due from MHI.

Such charge is included in “Loss from discontinued operations, net of tax” for the three and nine months ended September 30, 2023.

Prior to the Settlement Agreement, on February 22, 2021, a dispute adjudication panel issued a ruling in favor of DBT against MHI related to costs incurred in connection with delays on two units of the Kusile project.

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

This ruling was subject to final and binding arbitration in this matter.

In March 2023, an arbitration tribunal upheld the decision of the dispute adjudication panel.

As a result, the South African Rand 126.6 (or $ 6.8 ) was recorded as income during the quarter ended April 1, 2023, with such amount recorded within “Loss on disposition of discontinued operations, net of tax.” Additionally, in June 2023, the arbitration tribunal ruled DBT was entitled to recover $ 1.3 of legal costs incurred related to the arbitration.

Such amount was recorded to “Loss on disposition of discontinued operations, net of tax” during the second quarter of 2023 with the cash payment received during the nine months ended September 30, 2023.

Additionally, in May 2023, a separate arbitration tribunal ruled DBT was entitled to recover $ 5.5 of legal costs incurred related to a prior arbitration hearing.

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 September 30, 2023 and December 31, 2022.

The major line items constituting DBT ’ s assets and liabilities as of September 30, 2023 and December 31, 2022 :

September 30, 2023 December 31, 2022

Cash and equivalents $ 1.1 $ 9.3

13 unchanged sentences

Total liabilities of DBT $ 39.3 $ 31.6

___________________________

(1) Includes DBT's remaining obligation under the Settlement Agreement to make a payment to MHI of South African Rand 480.9 (or $ 25.0 at September 30, 2023), due in September 2024.

In connection with this remaining obligation, we entered into a foreign currency forward contract which we are accounting for as a fair value hedge.

Refer to Note 13 for additional details.

Wind-Down of the Heat Transfer Business

1 unchanged sentence

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 July 1, 2023 and December 31, 2022.

The major line items constituting Heat Transfer’s assets and liabilities as of July 1, 2023 and December 31, 2022 are shown below:

July 1, 2023 December 31, 2022

Cash and equivalents $ 0.1 $ —

The major line items constituting Heat Transfer’s assets and liabilities as of September 30, 2023 and December 31, 2022 are shown below:

September 30, 2023 December 31, 2022

Other current assets $ 0.3 $ 0.2

4 unchanged sentences

Total liabilities of Heat Transfer $ 0.2 $ 0.2

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

income taxes) may occur.

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 and six months ended July 1, 2023 and July 2, 2022, results of operations from our businesses reported as discontinued operations were as follows:

Three months ended Six months ended

July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

Income (loss) from discontinued operations (1)

$ ( 2.4 ) $ ( 6.9 ) $ 0.6 $ ( 8.5 )

For the three and nine months ended September 30, 2023 and October 1, 2022, results of operations from our businesses reported as discontinued operations were as follows:

Three months ended Nine months ended

September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022

Loss from discontinued operations $ ( 69.2 ) $ ( 5.7 ) $ ( 68.6 ) $ ( 14.2 )

Income tax benefit 13.2 0.8 14.1 2.3

Income (loss) from discontinued operations, net ( 2.2 ) ( 5.8 ) 1.5 ( 7.0 )

Loss from discontinued operations, net ( 56.0 ) ( 4.9 ) ( 54.5 ) ( 11.9 )

All other (2)

Loss from discontinued operations ( 0.1 ) ( 6.0 ) ( 0.2 ) ( 6.9 )

( 0.1 ) ( 0.4 ) ( 0.1 ) ( 0.9 )

Income tax benefit — 1.5 — 1.7

Loss from discontinued operations, net ( 0.1 ) ( 4.5 ) ( 0.2 ) ( 5.2 )

Income (loss) from discontinued operations ( 2.5 ) ( 7.3 ) 0.5 ( 9.4 )

Loss from discontinued operations ( 69.3 ) ( 11.7 ) ( 68.8 ) ( 21.1 )

Income tax benefit 13.2 2.3 14.1 4.0

Income (loss) from discontinued operations, net $ ( 2.3 ) $ ( 6.1 ) $ 1.4 $ ( 7.7 )

Loss from discontinued operations, net $ ( 56.1 ) $ ( 9.4 ) $ ( 54.7 ) $ ( 17.1 )

___________________________

(1) Income for the six months ended July 1, 2023 resulted primarily from income recorded in connection with dispute resolutions, partially offset by legal costs incurred in connection with various dispute resolution matters related to two large power projects.

Loss for the three months ended July 1, 2023 and the three and six months ended July 2, 2022 resulted primarily from net legal costs incurred in connection with various dispute resolution matters related to two large power projects.

Refer to Note 15 for additional details on these dispute resolution matters.

(2) Loss for the three and six months ended July 1, 2023 and July 2, 2022 resulted primarily from revisions to liabilities, including income tax liabilities, retained in connection with prior dispositions.

(1) Loss for the three and nine months ended September 30, 2023 resulted primarily from the charge, and related income tax impacts, recorded in connection with the Settlement Agreement referred to above and legal costs incurred in connection with the various dispute resolution matters.

This loss for the nine months ended September 30, 2023 was partially offset by the arbitration awards received, which are discussed above.

Loss for the three and nine months ended October 1, 2022 resulted primarily from net legal costs, and related income tax impacts, incurred in connection with various dispute resolution matters related to the two large power projects.

(2) Loss for the three and nine months ended September 30, 2023 resulted primarily from revisions to liabilities retained in connection with prior dispositions.

Loss for the three and nine months ended October 1, 2022 resulted primarily from asbestos-related charges and revisions to liabilities, including income tax liabilities, retained in connection with prior dispositions.

Net cash used in discontinued operations for the nine months ended September 30, 2023 related primarily to (i) cash payments of $ 25.3 made by DBT to MHI during the three months ended September 30, 2023 in connection with the Settlement Agreement, (ii) disbursements of $ 14.5 for professional fees and support costs incurred principally in connection with the claims resolved by the Settlement Agreement, and (iii) local taxes of $ 3.8 paid in South Africa, which we subsequently recovered during the fourth quarter of 2023, partially offset by recovery of legal costs we were awarded in arbitration

proceedings between DBT and MHI of $ 6.8 mentioned above.

Net cash used in discontinued operations for the nine months ended October 1, 2022 related primarily to (i) disbursements for professional fees incurred in connection with the South Africa claims matters, (ii) disbursements related to asbestos product liability matters, (iii) a payment of $ 13.9 to the buyer of Transformer Solutions related to the settlement of the final working capital balances for the business, and (iv) disbursements for liabilities retained in connection with dispositions, including fees associated with the sale of Transformer Solutions.

(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 and six months ended July 1, 2023 and July 2, 2022:

Three months ended July 1, 2023

Three months ended September 30, 2023

Reportable Segments HVAC Detection and Measurement Total

9 unchanged sentences

$ 289.2 $ 159.5 $ 448.7

Six months ended July 1, 2023

Nine months ended September 30, 2023

Reportable Segments HVAC Detection and Measurement Total

9 unchanged sentences

$ 809.8 $ 462.0 $ 1,271.8

Three months ended July 2, 2022

Three months ended October 1, 2022

Reportable Segments HVAC Detection and Measurement Total

9 unchanged sentences

$ 227.8 $ 142.7 $ 370.5

Six months ended July 2, 2022

Nine months ended October 1, 2022

Reportable Segments HVAC Detection and Measurement Total

14 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 July 1, 2023 and December 31, 2022:

Contract Balances July 1, 2023 December 31, 2022 Change

Our contract balances consisted of the following as of September 30, 2023 and December 31, 2022:

Contract Balances September 30, 2023 December 31, 2022 Change

Contract Accounts Receivable (1)

8 unchanged sentences

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

T he $ 14.2 increase in our net contract asset balance from December 31, 2022 to July 1, 2023 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 1, 2023, we recognized revenues of $ 4.8 and $ 30.6 , respectively, related to our contract liabilities at December 31, 2022.

T he $ 38.0 in crease in our net contract balance from December 31, 2022 to September 30, 2023 was due primarily to revenue recognized during the period, partially offset by cash payments received from customers during the period as well as the inclusion of net contract assets acquired with the ASPEQ and TAMCO acquisitions.

During the three and nine months ended September 30, 2023, we recognized revenues of $ 4.9 and $ 35.5 , respectively, related to our contract liabilities at December 31, 2022.

Performance Obligations

As of July 1, 2023, the aggre gate amount all ocated to remaining performance obligations was $ 211.2 .

We expect to recognize revenue on approximately 82 % and 89 % of remaining performance obligations o ver 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 and six months ended July 1, 2023.

As of September 30, 2023, the aggregate amount allocated to remaining performance obligations was $ 210.8 .

We expect to recognize revenue on approximately 76 % and 89 % 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 three and nine months ended September 30, 2023.

(6) INFORMATION ON REPORTABLE SEGMENTS

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

Financial data for our reportable segments for the three and six months ended July 1, 2023 and July 2, 2022 are presented below:

Three months ended Six months ended

Financial data for our reportable segments for the three and nine months ended September 30, 2023 and October 1, 2022 are presented below:

Three months ended Nine months ended

September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022

HVAC reportable segment $ 289.2 $ 227.8 $ 809.8 $ 639.6

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Detection and Measurement reportable segment 33.3 30.3 89.2 77.1

Total income for segments 84.4 56.1 158.8 95.7

Total income for reportable segments 91.6 63.4 250.4 159.1

Corporate expense 13.0 17.2 44.2 50.2

4 unchanged sentences

Special charges, net — — — 0.1

Other operating expense — 1.9 — 1.0

Other operating expense, net — — — 1.0

Consolidated operating income $ 57.7 $ 37.3 $ 158.8 $ 75.9

___________________________

(1) Represents certain acquisition-related costs incurred of $ 1.5 and $ 2.1 during the three and six months ended July 1, 2023, respectively, and $ 0.9 and $ 1.0 during the three and six months ended July 2, 2022, respectively, including additional “Cost of products sold” related to the step-up of inventory (to fair value) acquired in connection with the ASPEQ acquisition of $ 1.1 during the three and six months ended July 1, 2023 and the ITL acquisition of $ 0.9 and $ 1.0 during the three and six months ended July 2, 2022, respectively.

(1) Represents certain acquisition-related costs incurred of $ 2.9 and $ 5.0 during the three and nine months ended September 30, 2023, respectively, and $ 0.1 and $ 1.1 during the three and nine months ended October 1, 2022, respectively, including additional “Cost of products sold” related to the step-up of inventory (to fair value) acquired in connection with the ASPEQ acquisition of $ 2.5 and $ 3.6 during the three and nine months ended September 30, 2023, respectively, and the ITL acquisition of $ 0.1 and $ 1.1 during the three and nine months ended October 1, 2022, respectively.

(7) SPECIAL CHARGES, NET

There were no special charges for the three and six months ended July 1, 2023.

No significant future charges are expected to be incurred under actions approved as of July 1, 2023.

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

Three months ended Six months ended

There were no special charges for the three and nine months ended September 30, 2023.

No significant future charges are expected to be incurred under actions approved as of September 30, 2023.

Special charges, net, for the three and nine months ended October 1, 2022 are described in more detail below:

Three months ended Nine months ended

October 1, 2022 October 1, 2022

HVAC reportable segment $ — $ 0.1

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Total $ — $ 0.1

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.

The following is an analysis of our restructuring liabilities for the six months ended July 1, 2023 and July 2, 2022:

Six months ended

HVAC — Charges for the nine months ended October 1, 2022 related to severance costs associated with a restructuring action at one of the segment’s cooling businesses.

The following is an analysis of our restructuring liabilities for the nine months ended September 30, 2023 and October 1, 2022:

Nine months ended

September 30,

2023 October 1,

Balance at beginning of year $ — $ 0.3

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(8) INVENTORIES, NET

Inventories are accounted for under the first-in, first-out method and are comprised of the following at July 1, 2023 and December 31, 2022:

Inventories are accounted for under the first-in, first-out method and are comprised of the following at September 30, 2023 and December 31, 2022:

September 30,

2023 December 31,

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(9) GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the six months ended July 1, 2023 were as follows:

The changes in the carrying amount of goodwill for the nine months ended September 30, 2023 were as follows:

2022 Goodwill

1 unchanged sentence

Combinations (1)

Translation July 1,

Translation September 30,

HVAC reportable segment

10 unchanged sentences

___________________________

(1) Reflects (i) goodwill acquired with the TAMCO and ASPEQ acquisitions o f $ 50.6 and $ 169.3 , respectively and (i i) an incre ase in ITL ’ s goodwill of $ 0.8 resulting from revisions to the valuation of certain assets and liabilities.

(1) Reflects (i) goodwill acquired with the TAMCO and ASPEQ acquisitions of $ 51.1 and $ 168.9 , respectively, and (ii) an increase in ITL ’s goodwill of $ 0.8 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 TAMCO and ASPEQ 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 July 1, 2023 and December 31, 2022 comprised the following:

July 1, 2023 December 31, 2022

Identifiable intangible assets at September 30, 2023 and December 31, 2022 comprised the following:

September 30, 2023 December 31, 2022

Value Accumulated

12 unchanged sentences

___________________________

(1) The identifiable intangible assets associated with the TAMCO acquisition consists of customer relationships of $ 59.7 , technology of $ 9.3 , definite-lived trademarks of $ 3.2 , and backlog of $ 1.0 .

The identifiable intangible assets associated with the ASPEQ acquisition consists of customer relationships of $ 142.3 , technology of $ 47.8 , and backlog of $ 4.5 .

(1) The identifiable intangible assets associated with the TAMCO acquisition consist of customer relationships of $ 59.7 , technology of $ 9.3 , definite-lived trademarks of $ 3.2 , and backlog of $ 1.0 .

The identifiable intangible assets associated with the ASPEQ acquisition consist of customer relationships of $ 142.3 , technology of $ 47.8 , and backlog of $ 4.5 .

(2) Includes $ 51.5 of indefinite-lived trademarks associated with the ASPEQ acquisition.

In connection with the acquisitions of TAMCO and ASPEQ, which have definite-lived intangible assets as noted above, we updated our estimated annual amortization expense related to intangible assets to approximately $ 44.0 for the full year 2023 and $ 46.0 for 2024 and each of the four years thereafter.

At July 1, 2023, the net carrying va lue of intangible assets with determinable lives consisted of $ 354.1 in the HVAC reportable segment and $ 130.8 in the Detection and Measurement reportable segment.

At July 1, 2023, trademarks with indefinite lives consisted of $ 156.7 in the HVAC reportable segment and $ 64.0 in the Detection and Measurement reportable segment.

At September 30, 2023 , the net carrying value of intangible assets with determinable lives consisted of $ 343.0 in the HVAC reportable segment and $ 125.1 in the Detection and Measurement reportable segment.

At September 30, 2023, trademarks with indefinite lives consisted of $ 156.5 in the HVAC reportable segment and $ 63.3 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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If Cincinnati Fan 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.

As of July 1, 2023 , Cincinnati Fan’s goodwill totaled $ 54.8 .

As of September 30, 2023, Cincinnati Fan’s goodwill totale d $ 54.8 .

We perform our annual trademarks impairment testing during the fourth quarter, or on a more frequent basis, if there are indications of potential impairment.

3 unchanged sentences

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

10 Six months ended

10 Nine months ended

September 30,

2023 October 1,

Balance at beginning of year $ 34.7 $ 34.8

7 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 first quarter ended April 2, 2022, with the remainder paid in the second quarter of 2022.

Of this consideration, $ 9.0 was paid during the first quarter of 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.

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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.

This triggered a plan settlement which resulted in a charge to “Other income (expense), net” of $ 2.3 during the second quarter of 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 recorded to “Other income (expense), net” during the quarter.

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

Plan at the settlement date, which resulted in an actuarial loss of $ 1.5 recorded to “Other income (expense), net” for the three months ended July 2, 2022.

Additional settlements by the U.S.

Plan during the quarter ended October 1, 2022 resulted in a charge to “Other income (expense), net” of $ 2.0 .

We also remeasured the assets and liabilities of the U.S.

Plan as of October 1, 2022, which resulted in an actuarial loss of $ 0.4 recorded to “Other income (expense), net” during the three months ended October 1, 2022.

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

Domestic Pension Plans

Three months ended Six months ended

Three months ended Nine months ended

September 30,

2023 October 1,

2022 September 30,

2023 October 1,

Interest cost $ 3.3 $ 2.9 $ 9.9 $ 7.5

3 unchanged sentences

___________________________

(1) C onsists of an actuarial loss of $ 1.5 and a settlement loss of $ 2.3 for the three and six months ended July 2, 2022.

(1) For the three months ended October 1, 2022, consists of a settlement loss of $ 2.0 and an actuarial loss of $ 0.4 .

For the nine months ended October 1, 2022, consists of settlement losses of $ 4.3 and actuarial losses of $ 1.9 .

Foreign Pension Plans

Three months ended Six months ended

Three months ended Nine months ended

September 30,

2023 October 1,

2022 September 30,

2023 October 1,

Interest cost $ 1.4 $ 1.0 $ 4.2 $ 3.0

2 unchanged sentences

Postretirement Plans

Three months ended Six months ended

Three months ended Nine months ended

September 30,

2023 October 1,

2022 September 30,

2023 October 1,

Interest cost $ 0.3 $ 0.3 $ 0.9 $ 0.9

Amortization of unrecognized prior service credits ( 1.0 ) ( 1.1 ) ( 3.0 ) ( 3.3 )

Recognized net actuarial losses (1)

Settlement loss, net (1)

Net periodic postretirement benefit income $ ( 0.7 ) $ ( 0.8 ) $ ( 2.1 ) $ ( 2.1 )

___________________________

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

(1) For t he nine months ended October 1, 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 six months ended July 1, 2023:

The following summarizes our debt activity (both current and non-current) for the nine months ended September 30, 2023:

2022 Borrowings Repayments Other (6)

September 30,

Revolving loans (1)

15 unchanged sentences

The proceeds from the Incremental Term Loan were primarily used to fund the acquisition of ASPEQ.

(3) The term loans are repayable in quarterly installments equal to 0.625 % of the balance of $ 545.0 , beginning in December 2023 and in each of the first three quarters of 2024, and 1.25 % during the fourth quarter of 2024, all quarters of 2025 and 2026, and the first

two quarters of 2027.

The remaining balances are payable in full on August 12, 2027.

Balances are net of unamortized debt issuance costs of $ 1.9 and $ 0.7 at July 1, 2023 and December 31, 2022, respectively.

Balances are net of unamortized debt issuance costs of $ 1.8 and $ 0.7 at September 30, 2023 and December 31, 2022, respectively.

(4) Under this arrangement, we can borrow, on a continuous basis, up to $ 60.0 , as available.

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

At July 1, 2023, we had $ 12.3 of available borrowing capacity under this facility after giving effect to outstanding borrowings of $ 30.0 .

(5) Primarily includes balances under a purchase card program of $ 2.0 and $ 1.8 and finance lease obligations of $ 0.5 and $ 0.7 at July 1, 2023 and December 31, 2022, respectively.

At September 30, 2023, we had $ 18.0 of available borrowing capacity under this facility after giving effect to outstanding borrowings of $ 32.0 .

(5) Primarily includes balances under a purchase card program of $ 1.8 and $ 1.8 and finance lease obligations of $ 0.6 and $ 0.7 at September 30, 2023 and December 31, 2022, respectively.

The purchase card program allows for payment beyond the normal payment terms for goods and services acquired under the program.

1 unchanged sentence

(6) “Other” includes the capitalization and amortization of debt issuance costs.

During the three months ended July 1, 2023, we capitalized $ 1.3 of debt issuance costs associated with the Incremental Term Loan.

During the second quarter of 2023 we capitalized $ 1.3 of debt issuance costs associated with the Incremental Term Loan.

Senior Credit Facilities

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SPX may elect interest periods of one , three or six months (and, if consented to by all relevant lenders, any other period not greater than twelve months) for Term SOFR borrowings.

SPX will also pay a commitment fee to the incremental lenders on the daily unused amount of the commitments for the Incremental Term Loan, payable quarterly at a per annum rate which also varies based on the Company’s Consolidated Leverage Ratio.

SPX will also pay a commitment fee to the incremental lenders on the daily unused amount of the

commitments for the Incremental Term Loan, payable quarterly at a per annum rate which also varies based on the Company’s Consolidated Leverage Ratio.

The commitment fee rate and interest rate margins for the Incremental Term Loan are as follows:

8 unchanged sentences

A detailed description of our remaining senior credit facilities under the Credit Agreement is included in our 2022 Annual Report on Form 10-K.

At July 1, 2023, we had $ 389.2 of available borrowing capacity under our revolving credit facilities, after giving effect to borrowings under the domestic revolving loan facility of $ 100.0 and $ 10.8 reserved for outstanding letters of credit.

In addition, at July 1, 2023, we had $ 9.6 of available issuance capacity under our foreign credit instrument facilities after giving effect to $ 15.4 reserved for outstanding letters of credit.

The weighted-average interest rate of outstanding borrowings under the Credit Agreement was approximately 6.8 % at July 1, 2023.

At July 1, 2023, we were in compliance with all covenants of the Credit Agreement.

At September 30, 2023, we had $ 392.9 of available borrowing capacity under our revolving credit facilities, after giving effect to borrowings under the domestic revolving loan facility of $ 96.3 and $ 10.8 reserved for outstanding letters of credit.

In addition, at September 30, 2023, we had $ 9.7 of available issuance capacity under our foreign credit instrument facilities after giving effect to $ 15.3 reserved for outstanding letters of credit.

The weighted-average interest rate of outstanding borrowings under the Credit Agreement was approximately 7.0 % at September 30, 2023.

At September 30, 2023, we were in compliance with all covenants of the Credit Agreement.

In connection with an August 2022 amendment of the Credit Agreement, we recorded charges of $ 1.1 to “Loss on amendment/refinancing of senior credit agreement” related to the write-off of unamortized deferred financing costs totaling $ 0.7 and transaction costs of $ 0.4 .

Additionally, $ 1.5 of fees paid in connection with the August 2022 amendment were capitalized, with $ 1.2 related to our revolving loans and $ 0.3 related to the term loan.

(13) DERIVATIVE FINANCIAL INSTRUMENTS

2 unchanged sentences

We have designated, and are accounting for, our Swaps as cash flow hedges.

As of July 1, 2023 and December 31, 2022 , the unrealized gain, net of tax, recorded in accumulated other comprehensive income ( “ AOCI ”) was $ 9.2 and $ 11.0 , respectively.

In addition, the fair value of our Swaps was $ 12.3 (with $ 9.0 recorded as a current asset and $ 3.3 as a non-current asset) as of July 1, 2023 , and $ 14.7 (with $ 8.7 recorded as a current asset and $ 6.0 as a non-current asset) as of December 31, 2022 .

As of September 30, 2023 and December 31, 2022 , the unrealized gain, net of tax, recorded in accumulated other comprehensive income ( “ AOCI ”) was $ 8.1 and $ 11.0 , respectively.

In addition, the fair value of our Swaps was $ 10.8 (with $ 9.6 recorded as a current asset and $ 1.2 as a non-current asset) as of September 30, 2023 , and $ 14.7 (with $ 8.7 recorded as a current asset and $ 6.0 as a non-current asset) as of December 31, 2022 .

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

4 unchanged sentences

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”).

We had FX forward contracts with an aggregate notional amount of $ 9.9 and $ 6.9 outstanding as of July 1, 2023 and December 31, 2022, respectively, with all of the $ 9.9 scheduled to mature within one year.

The fair value of our FX forward contracts was less than $ 0.1 at July 1, 2023 and December 31, 2022.

We had FX forward contracts related to continuing operations with an aggregate notional amount of $ 5.0 and $ 6.9 outstanding as of September 30, 2023 and December 31, 2022, respectively, with all of the $ 5.0 scheduled to mature within one year.

The fair value of these FX forward contracts was less than $ 0.1 at September 30, 2023 and December 31, 2022.

In addition, we entered FX forward contracts associated with the Settlement Agreement, to mitigate our exposure to fluctuations in the South African Rand, with a notional amount of $ 25.0 and a fair value of $ 0.2 , which is included within “Assets of DBT and Heat Transfer” on the condensed consolidated balance sheet as of September 30, 2023.

All of the $ 25.0 is scheduled to mature within one year.

Refer to Note 3 for additional details.

(14) STOCKHOLDERS' EQUITY AND LONG-TERM INCENTIVE COMPENSATION

1 unchanged sentence

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

Three months ended Six months ended

Three months ended Nine months ended

September 30,

2023 October 1,

2022 September 30,

2023 October 1,

Weighted-average number of common shares used in basic income per share 45.608 45.144 45.507 45.382

1 unchanged sentence

Weighted-average number of common shares and dilutive securities used in diluted income per share 46.751 46.132 46.560 46.253

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 0.228 and 0.535 , r espectively, for the three mon ths ended July 1, 2023, and 0.198 and 0.529 , respectively, for the six months ended July 1, 2023.

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 , respectively, for the three months ended July 2, 2022, and 0.292 and 0.739 , respectively, for the six months ende d 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 wer e 0.184 and 0.488 , respectively, for the three months ended September 30, 2023, and 0.191 and 0.521 , respectively, for the nine months ende d September 30, 2023 .

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 0.655 , r espectively, for the three mon ths ended October 1, 2022, and 0.270 and 0.720 , respectively, for the nine months ended October 1, 2022.

Long-Term Incentive Compensation

5 unchanged sentences

Effective May 9, 2023, we granted 0.014 RSU ’ s to our non-employee directors, which vest in their entirety immediately prior to the annual meeting of stockholders in May 2024.

C ompensation expense within income from continuing operations related to long-term incentive awards totaled $ 3.5 and $ 2.5 for the three months ended July 1, 2023 and July 2, 2022 , respectively, an d $ 6.6 an d $ 5.6 for the six months ended July 1, 2023 and July 2, 2022 , respectively.

The related tax benefit w as $ 0.6 and $ 0.4 for the three months ended July 1, 2023 and July 2, 2022, respectively, and $ 1.1 and $ 0.9 for the six months e nded July 1, 2023 and July 2, 2022 , respectively.

C ompensation expense within income from continuing operations related to long-term incentive awards totaled $ 3.4 and $ 2.1 for the three months ended September 30, 2023 and October 1, 2022 , respectively, and $ 10.0 an d $ 7.7 for the nine months ended September 30, 2023 and October 1, 2022 , respectively.

The related tax b enefit was $ 0.6 and $ 0.3 for the three months ended September 30, 2023 and October 1, 2022, respectively, and $ 1.7 a nd $ 1.2 for the nine months ended September 30, 2023 and October 1, 2022 , respectively.

Repurchases of Common Stock

On May 10, 2022 and May 9, 2023, our Board of Directors 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 the Credit Agreement.

On May 10, 2022, and May 9, 2023, our Board of Directors 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 Credit Agreement.

Pursuant to this 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 .

Accumulated Other Comprehensive Income

The changes in the components of AOCI, net of tax, for the three months ended July 1, 2023 were as follows:

The changes in the components of AOCI, net of tax, for the three months ended September 30, 2023 were as follows:

Adjustment Net Unrealized Gains

4 unchanged sentences

Balance at beginning of period $ 247.4 $ 9.2 $ 5.9 $ 262.5

Other comprehensive income before reclassifications 3.9 1.8 — 5.7

Other comprehensive income (loss) before reclassifications ( 10.0 ) 0.7 — ( 9.3 )

Amounts reclassified from accumulated other comprehensive income — ( 1.8 ) ( 0.7 ) ( 2.5 )

Current-period other comprehensive income (loss) 3.9 0.1 ( 0.8 ) 3.2

Current-period other comprehensive loss ( 10.0 ) ( 1.1 ) ( 0.7 ) ( 11.8 )

Balance at end of period $ 237.4 $ 8.1 $ 5.2 $ 250.7

___________________________

(1) Net of tax provision o f $ 3.1 as of July 1, 2023 and April 1, 2023.

(2) Net of tax provision of $ 2.2 and $ 2.4 as of July 1, 2023 and April 1, 2023, respectively.

The balances as of July 1, 2023 and April 1, 2023 include unamortized prior service credits.

The changes in the components of AOCI, net of tax, for the six months ended July 1, 2023 were as follows:

(1) Net of tax provision o f $ 2.7 and $ 3.1 as of September 30, 2023 and July 1, 2023, respectively.

(2) Net of tax provision of $ 1.9 and $ 2.2 as of September 30, 2023 and July 1, 2023, respectively.

The balances as of September 30, 2023 and July 1, 2023 include unamortized prior service credits.

The changes in the components of AOCI, net of tax, for the nine months ended September 30, 2023 were as follows:

Adjustment Net Unrealized Gains

4 unchanged sentences

Balance at beginning of period $ 239.1 $ 11.0 $ 7.4 $ 257.5

Other comprehensive income before reclassifications 8.3 1.5 — 9.8

Other comprehensive income (loss) before reclassifications ( 1.7 ) 2.2 — 0.5

Amounts reclassified from accumulated other comprehensive income — ( 5.1 ) ( 2.2 ) ( 7.3 )

Current-period other comprehensive income (loss) 8.3 ( 1.8 ) ( 1.5 ) 5.0

Current-period other comprehensive loss ( 1.7 ) ( 2.9 ) ( 2.2 ) ( 6.8 )

Balance at end of period $ 237.4 $ 8.1 $ 5.2 $ 250.7

___________________________

(1) Net of tax provision of $ 3.1 a nd $ 3.7 as of July 1, 2023 and December 31, 2022, respectively.

(2) Net of tax provision of $ 2.2 and $ 2.7 as of July 1, 2023 and December 31, 2022, respectively.

The balances as of July 1, 2023 and December 31, 2022 include unamortized prior service credits.

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

(1) Net of tax provision of $ 2.7 a nd $ 3.7 as of September 30, 2023 and December 31, 2022, respectively.

(2) Net of tax provision of $ 1.9 and $ 2.7 as of September 30, 2023 and December 31, 2022, respectively.

The balances as of September 30, 2023 and December 31, 2022 include unamortized prior service credits.

The changes in the components of AOCI, net of tax, for the three months ended October 1, 2022 were as follows:

Adjustment Net Unrealized Gains

9 unchanged sentences

__________________________

(1) Net of tax provision of $ 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 AOCI, net of tax, for the six months ended July 2, 2022 were as follows:

(1) Net of tax provision of $ 4.0 and $ 2.9 as of October 1, 2022 and July 2, 2022, respectively.

(2) Net of tax provision of $ 3.0 and $ 3.2 as of October 1, 2022 and July 2, 2022, respectively.

The balances as of October 1, 2022 and July 2, 2022 include unamortized prior service credits.

The changes in the components of AOCI, net of tax, for the nine months ended October 1, 2022 were as follows:

Adjustment Net Unrealized Gains

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___________________________

(1) Net of tax provision of $ 2.9 and $ 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 following summarizes amounts reclassified from each component of AOCI for the three months ended July 1, 2023 and July 2, 2022:

(1) Net of tax provision of $ 4.0 and $ 0.1 as of October 1, 2022 and December 31, 2021, respectively.

(2) Net of tax provision of $ 3.0 and $ 3.7 as of October 1, 2022 and December 31, 2021, respectively.

The balances as of October 1, 2022 and December 31, 2021 include unamortized prior service credits.

The following summarizes amounts reclassified from each component of AOCI for the three months ended September 30, 2023 and October 1, 2022:

Amount Reclassified from AOCI

Three months ended

July 1, 2023 July 2, 2022 Affected Line Item in the Condensed

September 30, 2023 October 1, 2022 Affected Line Item in the Condensed

Consolidated Statements of Operations

(Gains) losses on qualifying cash flow hedges:

Gains on qualifying cash flow hedges:

FX forward contracts $ — $ ( 0.2 ) Revenues

Swaps ( 2.4 ) ( 0.7 ) Interest expense

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$ ( 0.7 ) $ ( 0.8 )

The following summarizes amounts reclassified from each component of AOCI for the six months ended July 1, 2023 and July 2, 2022:

The following summarizes amounts reclassified from each component of AOCI for the nine months ended September 30, 2023 and October 1, 2022:

Amount Reclassified from AOCI

Six months ended

July 1, 2023 July 2, 2022 Affected Line Item in the Condensed

Nine months ended

September 30, 2023 October 1, 2022 Affected Line Item in the Condensed

Consolidated Statements of Operations

(Gains) losses on qualifying cash flow hedges:

Gains on qualifying cash flow hedges:

FX forward contracts $ — $ ( 0.2 ) Revenues

Swaps ( 6.8 ) — Interest expense

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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, primarily associated with environmental matters, totaled $ 37.7 and $ 39.5 at July 1, 2023 and December 31, 2022, respectively.

Of these amounts, $ 30.6 and $ 30.8 are included in “Other long-term liabilities” within our condensed consolidated balance sheets at July 1, 2023 and December 31, 2022 , 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, primarily associated with environmental matters, totaled $ 37.1 and $ 39.5 at September 30, 2023 and December 31, 2022, respectively.

Of these amounts, $ 30.1 and $ 30.8 are included in “Other long-term liabilities” within our condensed consolidated balance sheets at September 30, 2023 and December 31, 2022 , 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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As a result of this transaction, the Company divested all obligations with respect to pending and future asbestos claims relating to these subsidiaries.

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

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.

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.

During the nine months ended October 1, 2022, our payments for asbestos-related claims, net of respective insurance recoveries of $ 27.7 , were $ 20.2 .

During the three and nine months ended October 1, 2022, we recorded charges for asbestos-related matters of $ 21.7 and $ 24.0 , respectively, with $ 16.5 and $ 18.8 , respectively, recorded to continuing operations and the remainder to discontinued operations.

Of such charges, $ 21.7 (continuing operations - $ 16.5 and discontinued operations - $ 5.2 ) resulted from a ruling by a North Carolina trial court, during the third quarter of 2022, that certain excess insurance carriers associated with our asbestos product liability matters are not required to cover the costs of defending suits that are dismissed without an indemnity payment.

Large Power Projects in South Africa

Overview - Since 2008, DBT had been executing on two large power projects in South Africa (Kusile and Medupi), on which it has 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.

It is possible that some outstanding claims may not be resolved until after the prime contractors complete their scopes of work.

Our future financial position, operating results, and cash flows could be materially impacted by the resolution of current and any future claims.

Claims by DBT - DBT has asserted claims against MHI of approximately South African Rand 1,000.0 (or $ 53.5 ).

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 606.0 (or $ 32.4 ), 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.

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.

In addition to existing asserted claims, DBT believes it has additional claims and rights to recovery based on its performance under the contracts with, and actions taken by, MHI.

DBT is continuing to evaluate the claims and the amounts owed to it under the contracts based on MHI’s failure to comply with its contractual obligations.

The amounts DBT may recover for current and potential future claims against MHI are not currently known given (i) the extent of current and potential future claims by MHI against DBT (see below for further discussion) and (ii) the unpredictable nature of any dispute resolution processes that may occur in connection with these current and potential future claims.

No revenue has been recorded in the accompanying condensed consolidated financial statements with respect to current or potential future claims against MHI.

On July 23, 2020, a dispute adjudication panel issued a ruling in favor of DBT on certain matters related to the Kusile and Medupi projects.

The panel (i) ruled that DBT had achieved takeover on 9 of the units;

(ii) ordered 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;

(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);

and (v) ruled that MHI waived its rights to assert delay damages against DBT on one of the units of the Kusile project.

The ruling is subject to MHI’s rights to seek further arbitration in the matter, as provided in the contracts.

As such, the incentive payments noted above have not been recorded in our accompanying condensed consolidated statements of operations.

On February 22, 2021, a dispute adjudication panel issued a ruling in favor of DBT related to costs incurred in connection with delays on two units of the Kusile project.

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

This ruling was subject to final and binding arbitration in this matter.

In March 2023, an arbitration tribunal upheld the decision of the dispute adjudication panel.

As a result, the South African Rand 126.6 (or $ 6.8 ) was recorded as income during the quarter ended April 1, 2023, with such amount recorded within “Gain (loss) on disposition of discontinued operations, net of tax.” Additionally, in June 2023, the arbitration tribunal ruled DBT was entitled to recover $ 1.3 of legal costs incurred related to the arbitration.

Such amount was recorded to “Gain (loss) on disposition of discontinued operations, net of tax” during the quarter ended July 1, 2023.

On April 28, 2021, a dispute adjudication panel issued a ruling in favor of DBT related to costs incurred in connection with delays on two units of the Medupi project.

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 accompanying 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).

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.

Similar to the interim claim, we

believe the vast majority of the damages summarized in the revised claim are unsubstantiated and, thus, any loss for the majority of these claims is considered remote.

The remainder of the claims in both the interim notification and the revised version largely appear to be direct in nature.

On September 21, 2022, an arbitration tribunal ruled that only South African Rand 349.6 (or $ 18.7 ) of MHI’s revised claim had been brought appropriately before a dispute adjudication board as required under the relevant subcontracts, with MHI’s other claims dismissed from the arbitration proceedings.

Additionally, in May 2023, the arbitration tribunal ruled DBT was entitled to recover $ 5.5 of legal costs incurred related to the arbitration.

Such amount was recorded to “Gain (loss) on disposition of discontinued operations, net of tax” during the quarter ended July 1, 2023.

MHI subsequently referred the claims dismissed from the arbitration, with approximately South African Rand 394.4 (or $ 21.1 ) related to claims that are direct in nature, to a new dispute adjudication panel.

The panel held a hearing on these matters in June 2023 and a ruling is expected in the third quarter of 2023.

DBT has numerous defenses and, thus, we do not believe that DBT has a probable loss associated with any of these claims.

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

DBT intends to vigorously defend itself against these claims.

Although it is reasonably possible that some loss may be incurred in connection with these claims, we currently are unable to estimate the potential loss or range of potential loss associated with these claims due to the (i) lack of support provided by MHI for these claims;

(ii) complexity of contractual relationships between the end customer, MHI, and DBT;

(iii) legal interpretation of the contract provisions and application of South African law to the contracts;

and (iv) unpredictable nature of any dispute resolution processes that have occurred or 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 $ 21.8 ) 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 accompanying 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.

In March 2023, MHI submitted to DBT notices of intent to claim totaling South African Rand 1,664.0 (or $ 89.1 ) related to DBT’s filter and heater scopes of work, alleging that DBT provided defective product.

MHI has provided minimal support for these allegations and DBT believes it has numerous defenses against them.

Thus, we do not believe that DBT has a probable loss associated with these allegations and DBT intends to vigorously defend itself against them.

As such, no amounts have been recorded in the accompanying condensed consolidated financial statements with respect to these allegations.

We currently are unable to estimate the range of potential loss, if any, associated with these allegations due to the (i) lack of support provided by MHI;

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

During that 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.

Since substantial completion of the works, DBT’s remaining responsibilities related largely to resolution of various claims, primarily between itself and MHI, the remaining prime contractor.

As noted below, SPX and DBT entered into a Settlement Agreement with MHI during the third quarter of 2023.

Prior to the Settlement Agreement, DBT had asserted claims against MHI of approximately South African Rand 1,000.0 (or $ 52.1 ) and MHI had asserted, or issued letters of intent to claim for, alleged damages against DBT.

(ii) complexity of contractual relationships between the end customer, MHI, and DBT;

(iii) legal interpretation of the contract provisions and application of South African law to the contracts;

and (iv) unpredictable nature of any dispute resolution processes that may occur in connection with these claims.

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

In September of 2020, MHI made a demand, and received payment of South African Rand 239.6 (or $ 14.3 at the time of payment), on certain of these bonds.

In May 2021, MHI made an additional demand, and received payment of South African Rand 178.7 (or $ 12.5 at the time of payment), on certain of the remaining bonds at such time.

In both cases, we funded the payment as required under the terms of the bonds and our senior credit agreement.

In its demands, MHI purported that DBT failed to carry out its obligations to rectify certain alleged product defects and that DBT failed to meet certain project milestones.

DBT denies liability for such allegations and, thus, fully intends to seek, and believes it is legally entitled to, reimbursement of the South African Rand 418.3 (or $ 22.4 ) that has been paid.

On October 11, 2022, a dispute adjudication panel ruled MHI drew on amounts in excess of the bond values stipulated in the contracts and was required to refund DBT South African Rand 90.8 (or $ 5.0 at the time of payment) of the previously demanded amounts, plus interest of South African Rand 12.5 (or $ 0.7 at the time of payment).

MHI paid these amounts on October 14, 2022.

We have reflected the remaining South African Rand 327.5 (or $ 17.5 and $ 19.1 as of July 1, 2023 and December 31, 2022, respectively ) within “Assets of DBT and Heat Transfer” on the accompanying condensed consolidated balance sheets as of July 1, 2023 and December 31, 2022.

All other bonds previously issued in favor of MHI have been returned or cancelled by the issuing banks.

In addition, SPX Technologies, Inc.

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 statements of operations.

and (iv) unpredictable nature of any dispute resolution processes that may have occurred in connection with these claims.

Prior to the Settlement Agreement, DBT had experienced success in enforcing its rights through dispute resolution processes, including favorable arbitration rulings during 2023 related to awards for (i) costs incurred in connection with delays

on the Kusile project of South African Rand 126.6 (or $ 6.8 ) during the first quarter of 2023 and (ii) recovery of legal costs related to arbitration proceedings of $ 6.8 during the second quarter of 2023, with such amounts recorded within “Loss on disposition of discontinued operations, net of tax.” There were no rulings or awards during the third quarter of 2023.

Resolution of Remaining Prime Contractor Claims - We have invested, and would have continued to invest, significant management and financial resources to defend and pursue these matters.

On September 5, 2023, SPX Technologies and DBT entered into the Settlement Agreement with MHI to affect the negotiated resolution of all outstanding claims between the parties with respect to the large power projects.

The Settlement Agreement provides for full and final settlement and the mutual release of all claims between the parties with respect to the projects, including any claim against SPX Technologies, Inc.

as guarantor of DBT’s performance on the projects.

Refer to Note 3 for additional details.

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 subcontractors.

The subcontractor 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.

Claim for Contingent Consideration Related to ULC Robotics (“ULC”) Acquisition

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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 17 sites that we own or control, or formerly owned and controlled, as of July 1, 2023 and December 31, 2022.

We had liabilities for site investigation and/or remediation at 17 sites that we own or control, or formerly owned and controlled, as of September 30, 2023 and December 31, 2022.

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 July 1, 2023 and December 31, 2022, 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 September 30, 2023 and December 31, 2022, 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 July 1, 2023 , we had gross unrecognized tax ben efits of $ 2.5 (net unrecognized tax benefits of $ 2.4 ).

These unrecognized tax benefits would impact our effective tax rate from continuing operations if recognized.

As of September 30, 2023 , we had gross unrecognized tax be nefits of $ 2.4 (net unrecognized tax benefits of $ 2.4 ).

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 July 1, 2023, gross accrued interest totaled $ 1.3 (net accrued interest of $ 1.2 ).

As of July 1, 2023, we had no accrual for penalties included in our unrecognized tax benefits.

As of September 30, 2023, gross accrued interest totaled $ 1.3 (net accrued interest of $ 1.2 ).

As of September 30, 2023, 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 $ 1.0 .

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Other Tax Matters

For the three months ended July 1, 2023, we recorded an income tax provision of $ 7.8 on $ 46.1 of pre-tax income from continuing operations, resulting in an effective rate of 16.9 %.

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

The most significant items impacting the income tax provision for the second quarters of 2023 and 2022 were (i) $ 1.2 and $ 0.7 of tax benefits, respectively, related to revisions to liabilities for uncertain tax positions and (ii) $ 0.5 and $ 0.0 , respectively, of excess tax benefits associated with stock-based compensation awards that vested and/or were exercised during the period.

In addition, the rate for the three months ended July 1, 2023 was favorably impacted by a tax benefit of $ 1.8 related to the release of valuation allowances recognized against certain deferred tax assets, as we now expect these deferred tax assets to be realized.

For the six months ended July 1, 2023, we recorded an income tax provision of $ 19.1 on $ 96.5 of pre-tax income from continuing operations, resulting in an effective rate of 19.8 %.

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

The most significant items impacting the income tax provision during the first half of 2023 and 2022 were (i) $ 1.4 and $ 0.7 , respectively, of excess tax benefits associated with stock-based compensation awards that vested and/or were exercised during the periods and (ii) the $ 1.2 and $ 0.7 , respectively, of the tax benefits noted above related to revisions to liabilities for uncertain tax positions.

In addition, the current year's rate was favorably impacted by a tax benefit of $ 1.8 related to the release of valuation allowances recognized against certain deferred tax assets, as we now expect these deferred tax assets to be realized.

For the three months ended September 30, 2023, we recorded an income tax provision of $ 12.4 on $ 48.1 of pre-tax income from continuing operations, resulting in an effective rate of 25.8 %.

This compares to an income tax benefit for the three months ended October 1, 2022 of $ 2.5 on $ 10.0 of pre-tax income from continuing operations, resulting in an effective rate of ( 25.0 )%.

The most significant items impacting the income tax provision for the third quarter of 2023 are (i) $ 0.8 of foreign withholding tax, and (ii) $ 0.3 of excess tax benefits associated with stock-based compensation awards that vested and/or were exercised during the period.

The most significant item impacting the income tax benefit for the third quarter of 2022 was a tax benefit of $ 4.2 related to the release of valuation allowances recognized against certain deferred tax assets as we now expect these deferred tax assets to be realized.

For the nine months ended September 30, 2023, we recorded an income tax provision of $ 31.5 on $ 144.6 of pre-tax income from continuing operations, resulting in an effective rate of 21.8 %.

This compares to an income tax provision for the nine months ended October 1, 2022 of $ 4.5 on $ 49.1 of pre-tax income from continuing operations, resulting in an effective rate of 9.2 %.

The most significant items impacting the income tax provision during the first nine months of 2023 and 2022 were (i) $ 1.8 and $ 4.2 , respectively, of tax benefit related to the release of valuation allowances recognized against certain deferred tax assets as we now expect these deferred tax assets to be realized, (ii) $ 1.7 and $ 0.7 , respectively, of excess tax benefits associated with stock-based compensation awards that vested and/or were exercised during the period, and (iii) $ 1.2 and $ 0.7 , respectively, of tax benefits related to revisions to liabilities for uncertain tax positions.

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

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We believe that any uncertain tax positions related to these examinations have been adequately provided for.

An unfavorable resolution of one or more of the above matters could have a material impact on our results of operations or cash flows in the quarter and year in which an adjustment is recorded or the tax is due or paid.

An unfavorable resolution of one or more of the above matters could have a material impact on our financial position, 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.

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Such contingent consideration totaled $ 1.3 , and was paid during the quarter ended April 2, 2022.

In connection with the acquisition of Enterprise Control Systems Ltd in 2021, the seller was eligible for additional cash consideration of up to $ 15.8 , with payment of such contingent consideration dependent upon the achievement of certain milestones.

In connection with the acquisition of Enterprise Control Systems Ltd.

in 2021, the seller was eligible for additional cash consideration of up to $ 15.2 , with payment of such contingent consideration dependent upon the achievement of certain milestones.

During the first and second quarters of 2022, we concluded the probability of achieving the financial performance milestones had lessened due to a delay in the execution of certain large orders.

Thus, during the quarters ended April 2, 2022 and July 2, 2022, we 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 at July 1, 2023 and December 31, 2022 as we determined no additional cash consideration was due to the seller.

We estimate the fair value of contingent consideration based on the probability of the acquired business achieving the applicable milestones.

Thus, during the quarters ended April 2, 2022 and July 2, 2022, we 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 at September 30, 2023 and December 31, 2022 as we determined no additional cash consideration was due to the seller.

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

As of July 1, 2023, 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 September 30, 2023, 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.

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The value is updated annually, during the first quarter, based on the investee ’s most recent audited financial statements.

Duri ng the three and six months ended July 1, 2023 and July 2, 2022, we recorded gains of $ 0.0 and $ 0.0 , and $ 3.6 and $ 4.4 , respectively, to “Other income (expense), net” to reflect an increase in the estimated fair value of the equity security.

As of July 1, 2023 and December 31, 2022, the equity security had an estimated fair value of $ 39.4 and $ 35.8 , respectively.

Indebtedness and Other — The estimated fair value of our debt instruments as of July 1, 2023 and December 31, 2022 approximated the related carrying values due primarily to the variable market-based interest rates for such instruments.

During the three and nine months ended September 30, 2023 and October 1, 2022 , we re corded gains (losses) of $ 0.0 and $( 7.4 ), respectively, and $ 3.6 and $( 3.0 ), respectively, to “Other income (expense), net” to reflect the change in the estimated fair value of the equity security.

As of September 30, 2023 and December 31, 2022, the equity security had an estimated fair value of $ 39.4 and $ 35.8 , respectively.

Indebtedness and Other — The estimated fair value of our debt instruments as of September 30, 2023 and December 31, 2022 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