What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-02-23 compared with 2023-02-24 · 404 added, 457 removed, 1606 unchanged (35% of the section changed)

8 unchanged sentences

Consolidated Financial Statements:

Consolidated Statements of Operations for the Y ears E nded December 31, 2022, 2021 and 2020

Consolidated Statements of Comprehensive Income (Loss) for the Y ears E nded December 31, 2022, 2021 and 2020

Consolidated Statements of Operations for the Years Ended December 31, 2023, 2022 and 2021

Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2023, 2022 and 2021

Consolidated Balance Sheets as of December 31, 2023 and 2022

Consolidated Statements of Stockholders' Equity for the Y ears E nded December 31, 2022, 2021 and 2020

Consolidated Statements of Cash Flows for the Y ears E nded December 31, 2022, 2021 and 2020

Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2023, 2022 and 2021

Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022 and 2021

Notes to Consolidated Financial Statements

20 unchanged sentences

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill — Refer to Notes 2 and 10 to the financial statements

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Acquisitions – ASPEQ Heating Group and T.

Morrison & Co.

– Customer Relationships, Technology, & Trademarks — Refer to Notes 1, 4, and 10 to the financial statements

Critical Audit Matter Description

In testing the goodwill of its reporting units for potential impairment, the Company applies either a qualitative or quantitative test, in accordance with ASC 350, Intangibles – Goodwill and Other.

A qualitative approach may be applied when the Company concludes that it is not “more likely than not” that the fair value of a reporting unit is less than its carrying value.

A quantitative approach is performed by comparing the fair value of a reporting unit with its carrying amount (“quantitative assessment”).

For reporting units tested for impairment using the quantitative assessment, the Company determines the fair value of each reporting unit using both the income approach and the market approach.

The income approach requires management to make a number of business and valuation assumptions for each reporting unit including annual assumptions of projected revenue growth rates, projected profit margins and discount rate factors.

The market approach requires management to estimate fair value using marketplace fair value data derived from a comparable industry grouping of publicly traded companies and from pricing multiples implied from sales of companies similar to the Company’s reporting units (“market multiples”).

The Company’s goodwill balance was $455.3 as of December 31, 2022.

We identified the valuation of goodwill for two of the Company’s reporting units as a critical audit matter due to the historic performance of each reporting unit as compared to projections and because the determination of the reporting unit fair values was based on significant assumptions that are sensitive to changes and are affected by expected future market and economic conditions.

Auditing the judgments used by management in the quantitative impairment tests required a high degree of auditor judgment and an increased extent of effort, which included the need to involve our fair value specialists.

The assets acquired and liabilities assumed in the T.A.

Morrison & Co.

(“TAMCO”) and ASPEQ Heating Group (“ASPEQ”) transactions have been recorded at estimates of fair value as determined by management, based on information available and assumptions as to future operations, primarily for the final assessment and valuation of acquired intangible assets, including customer relationships of $60.4 for TAMCO, customer relationships of $142.3 for ASPEQ, trademarks of $51.5 for ASPEQ, and technology of $47.8 for ASPEQ.

We identified the aforementioned intangible assets for the TAMCO and ASPEQ acquisitions as a critical audit matter because of the significant estimates and assumptions management makes to fair value these assets.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management's forecast of future cash flows, the selection of the discount rate for the customer relationships, trademarks, and technology, and the selection of the royalty rate for the trademarks and technology.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Company’s assumptions and valuation methodology included the following, among others:

• We tested the design and operating effectiveness of controls over management’s quantitative impairment tests, including controls over forecasts of future cash flows based on estimates of revenue growth rates, profit margins and the determinations of the discount rate, as well as the determination of comparable market multiples.

• We evaluated management’s ability to accurately forecast projected revenue growth rates and profit margins by comparing actual results to management’s historical forecasts.

Our audit procedures related to the Company’s future cash flow forecasts and the selection of the discount rates and royalty rates included the following, among others:

• We tested the design and operating effectiveness of controls over management’s purchase price allocation procedures, including controls over forecasts of future cash flows based on estimates of revenue growth rates, profit margins and the determinations of the discount rates, as well as the determination of royalty rates for trademarks and technology.

• We evaluated management’s ability to accurately forecast projected revenue growth rates and profit margins by comparing actual results to management’s acquisition date forecasts.

• We evaluated the reasonableness of management’s forecasts by comparing the forecasts to:

– Internal communications to management and the Board of Directors

– Historical results

– Third-party economic research, industry performance, and peer company performance

• With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology, the discount rate, and the industry pricing multiples by performing certain procedures, that included:

– Evaluating whether the fair value models being used are appropriate considering the Company’s circumstances and valuation premise identified

– Evaluating the market multiples by considering the selected comparable industry grouping of publicly traded companies

• With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology, the discount rates, and the royalty rates by performing certain procedures, that included:

– Evaluating whether the fair value models being used are appropriate considering the acquired entity’s circumstances and valuation methodology employed

– Testing the underlying source information and mathematical accuracy of the calculations.

98 unchanged sentences

Paid-in capital 1,353.6 1,338.3

Retained deficit ( 51.6 ) ( 51.8 )

Retained earnings (deficit) 38.3 ( 51.6 )

Accumulated other comprehensive income 261.1 257.5

9 unchanged sentences

Stock Paid-In

Capital Retained Deficit Accum.

Capital Retained Earnings (Deficit) Accum.

Comprehensive

3 unchanged sentences

$ 0.5 $ 1,319.9 $ ( 477.2 ) $ 248.5 $ ( 451.6 ) $ 640.1

Impact of adoption of ASU 2016-13 - See Note 3 — — ( 0.5 ) — — ( 0.5 )

Net income — — 425.4 — — 425.4

6 unchanged sentences

Net income — — 0.2 — — 0.2

Other comprehensive income, net — — — 15.4 — 15.4

Other comprehensive loss, net — — — ( 6.4 ) — ( 6.4 )

Incentive plan activity — 12.6 — — — 12.6

1 unchanged sentence

Restricted stock unit vesting — ( 19.4 ) — — 12.1 ( 7.3 )

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

Balance at December 31, 2022

1 unchanged sentence

Net income — — 89.9 — — 89.9

Other comprehensive loss, net — — — ( 6.4 ) — ( 6.4 )

Other comprehensive income, net — — — 3.6 — 3.6

Incentive plan activity — 13.8 — — — 13.8

1 unchanged sentence

Restricted stock unit vesting — ( 11.9 ) — — 6.6 ( 5.3 )

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

Balance at December 31, 2023

49 unchanged sentences

Net cash from (used in) continuing operations 309.6 ( 39.9 ) ( 167.8 )

Net cash from (used in) discontinued operations 1.0 0.2 ( 0.4 )

Net cash from discontinued operations — 1.0 0.2

Net cash from (used in) financing activities 309.6 ( 38.9 ) ( 167.6 )

34 unchanged sentences

In the years leading up to the Spin-Off, these businesses experienced significant declines in revenues and profitability associated with weak demand and increased competition within the global power generation markets.

Based on a review of our post-spin portfolio and the belief that a recovery within the power generation markets was unlikely in the foreseeable future, we decided coming out of the Spin-Off that our strategic focus would be on our (i) scalable growth businesses that serve the heating, ventilation and cooling (“HVAC”) and detection and measurement markets and (ii) power transformers and process cooling systems business.

As a result, we have significantly reduced our exposure to the power generation markets as indicated by the activities summarized below:

9 unchanged sentences

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

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

See Note 4 for additional details regarding DBT's presentation as a discontinued operation and Note 15 regarding the dispute resolution matters.

Since that time, DBT has been involved in various dispute resolution matters related to two large power projects.

See Notes 4 and 15 for additional details regarding DBT's presentation as a discontinued operation and dispute resolution matters.

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

5 unchanged sentences

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

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

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

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

7 unchanged sentences

These indemnification obligations are not subject to any cap or time limitation.

As a result of this transaction, the Company divested all obligations with respect to pending and future asbestos claims relating to these matters.

As a result of this transaction, all asbestos obligations and liabilities and related insurance assets have been removed from our consolidated balance sheets effective November 12, 2022.

The board of managers of the divested subsidiaries each received a solvency opinion from an independent advisory firm that the divested subsidiaries were solvent after giving effect to the Asbestos Portfolio Sale.

3 unchanged sentences

Acquisitions in 2023:

• TAMCO - On April 3, 2023, we completed the acquisition of T.

Morrison & Co.

(“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 $ 125.5 , inclusive of an adjustment to the purchase price of $ 0.2 paid during 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.

• ASPEQ - On June 2, 2023, we completed the acquisition of ASPEQ Heating Group (“ASPEQ”), a leading provider of electrical heating solutions to customers in industrial and commercial markets.

We purchased ASPEQ for cash consideration of $ 421.5 , net of (i) an adjustment to the purchase price of $ 0.3 received during 2023 related to acquired working capital and (ii) cash acquired of $ 0.9 .

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 assump tions as to future operations and are subject to change, primarily for the final assessment and valuation of certain income tax amounts.

Acquisitions in 2022:

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

We purchased ITL for cash proceeds of $ 40.4 , net of cash acquired of $ 1.1 .

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

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

The assets acquired and liabilities assumed in the ITL transaction have been recorded at estimates of fair value as determined by management, based on information available and assump tions as to future operations and are subject to change, primarily for the final assessment and valuation of certain income tax amounts.

Acquisitions in 2021:

3 unchanged sentences

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

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

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

3 unchanged sentences

During the first and second quarters of 2022, we further reduced the estimated liability by $ 0.9 and $ 0.4 , respectively, with such amount recorded within “Other operating (income) expense, net ” in the 2022 consolidated statement of operations.

The estimated fair value of such contingent consideration, which we have reflected as a liability in our consolidated balance sheets, was $ 0.0 and $ 1.5 at December 31, 2022 and 2021, respectively.

The estimated fair value of such contingent consideration was $ 0.0 at December 31, 2023 and 2022 as the financial performance milestones were not met.

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

1 unchanged sentence

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

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

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

W e purchased Cincinnati Fan for cash proceeds of $ 145.2 , net of (i) an adjustment to the purchase price received during 2022 of $ 0.4 related to acquired working capital and (ii) cash acquired of $ 2.5 .

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

Acquisitions in 2020:

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

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

At the time of the acquisition, we recorded a liability of $ 24.3 , which represented the estimated fair value of the contingent consideration.

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

As a result, we revers ed the liability of $ 24.3 , with the offset recorded to “Other operating (income) expense, net” and also recorded an impairment charge related to ULC ’ s goodwill and intangible assets of $ 24.3 .

See Note 10 for further discussion of impairments related to ULC.

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

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

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

Under the terms of the purchase and sales agreement, the seller was eligible for additional cash consideration of up to $ 3.7 , with payment scheduled to be made upon successful achievement of defined financial performance milestones during the twelve months following the date of acquisition.

At the time of the acquisition, we recorded a liability of $ 0.7 which represented the estimated fair value of the contingent consideration.

During the fourth quarter of 2021, we concluded that certain of these financial performance milestones had been achieved, resulting in an increase to the liability of $ 0.6 , with the offset reflected in “Other operating (income) expense, net” in the accompanying 2021 consolidated statement of operations.

The estimated fair value of such contingent consideration of $ 1.3 is reflected as a liability in the accompanying consolidated balance sheet as of December 31, 2021 and was paid during 2022.

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

Foreign Currency Translation and Transactions — The financial statements of our foreign subsidiaries are translated into U.S.

4 unchanged sentences

Revenue Recognition — We recognize revenue in accordance with Accounting Standards Codification (“ASC”) 606.

See Note 5 for our policy for recognizing revenue under ASC 606 as well as the various other disclosures required by ASC 606.

See Note 5 for our policy for recognizing revenue under, as well as the various other disclosures required by, ASC 606.

Research and Development Costs — We expense research and development costs as incurred.

5 unchanged sentences

Capitalized software, net of amortization, totaled $ 3.1 and $ 1.2 as of December 31, 2023 and 2022, respectively.

Capitalized software amortization expense totaled $ 0.1 , $ 1.3 , and $ 2.5 in 2022, 2021, and 2020, respectively.

Capitalized software amortization expense totaled $ 0.1 , $ 0.1 , and $ 1.3 in 2023, 2022, and 2021,

respectively.

We expensed research activities relating to the development and improvement of our products of $ 43.2 , $ 39.1 and $ 30.7 in 2023, 2022 and 2021, respectively.

7 unchanged sentences

The remaining components of pension/postretirement expense/income, primarily interest costs and expected return on plan assets, are recorded on a quarterly basis.

Company-owned Life Insurance Policies — The Company has investments in company-owned life insurance (“COLI”) policies, which are recorded at their cash surrender value at each balance sheet date.

Changes in the cash surrender value during the period are recorded as a gain or loss within “Other income (expense), net” within our consolidated statements of operations.

The value of the company’s investments in COLI assets was $ 76.7 and $ 77.0 at December 31, 2023 and 2022, respectively, recorded in “Other assets” on the consolidated balance sheets.

The Company has the ability to monetize its investment in the COLI policies as an additional source of liquidity.

At December 31, 2023, the Company had not monetized any of its existing COLI policies' cash surrender value.

Income Taxes — We account for income taxes based on the requirements of the Income Taxes Topic of the Codification, which includes an estimate of the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in our consolidated financial statements or tax returns.

11 unchanged sentences

Cash flows from hedging activities are included in the same category as the items being hedged, which are primarily operating activities.

Correction of Prior-Year Classification and Disclosure – Subsequent to issuance of the December 31, 2021 financial statements, management concluded that the impairment charge of $ 24.3 related to our ULC business’ goodwill and intangible assets mentioned above should have been reported in a separate line item within our consolidated statement of operations for the year ended December 31, 2021.

This amount, which was previously classified within “Other operating (income) expense, net,” has been reclassified to “Impairment of goodwill and intangible assets” for the year ended December 31, 2021.

As a result of this immaterial correction, “Other operating (income) expense, net” for the year ended December 31, 2021 reflects income of $ 4.1 whereas the expense disclosed prior to reclassification for the year ended December 31, 2021 was $ 20.2 .

In addition, management concluded that, although the assessment of our reportable segments was performed using the appropriate measures as defined by the Segment Reporting Topic of the Codification, the disclosure of operating income for each of our reportable segments (“Segment Income”) was not consistent with the measure used by our Chief Operating Decision Maker (“CODM”) when evaluating the results of, or allocating resources to, our reportable segments.

We previously disclosed that Segment Income is determined before considering impairments and special charges, long-term incentive compensation, certain other operating income/expense, and other indirect corporate expenses.

Our CODM also excludes the impact of intangible asset amortization, inventory step-up charges, and certain other acquisition-related costs from Segment Income.

Accordingly, Segment Income, as presented in Note 7, now excludes all of the items noted above.

This change had no impact to the amounts previously presented in our consolidated statements of operations for the years ended December 31, 2021 and 2020.

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 years ended December 31, 2021 and 2020 is summarized below:

December 31, 2021 December 31, 2020

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

HVAC reportable segment $ 104.2 $ 3.5 $ 107.7 $ 102.7 $ 3.5 $ 106.2

Detection and Measurement reportable segment 69.7 23.2 92.9 69.1 11.8 80.9

Total income for segments 173.9 26.7 200.6 171.8 15.3 187.1

Corporate expense 60.5 — 60.5 49.7 — 49.7

Acquisition related costs (1)

— 5.1 5.1 — 1.3 1.3

Long-term incentive compensation expense 12.8 — 12.8 13.1 — 13.1

Amortization of intangible assets — 21.6 21.6 — 14.0 14.0

Impairment of goodwill and intangible assets 30.0 — 30.0 0.7 — 0.7

Special charges, net 1.0 — 1.0 2.4 — 2.4

Other operating (income) expense, net ( 4.1 ) — ( 4.1 ) 9.0 — 9.0

Consolidated operating income $ 73.7 $ — $ 73.7 $ 96.9 $ — $ 96.9

_______________________________________________________________

(1) Includes cost incurred in connection with acquisitions, including additional “Cost of products sold” related to the step-up of inventory (to fair value) acquired in connection with acquisitions of $ 2.6 and $ 0.3 during the years ended December 31, 2021 and 2020, respectively, as well as integration costs of $ 0.7 and $ 1.0 during the years ended December 31, 2021 and 2020, respectively.

The year ended December 31, 2021 also includes a non-cash impairment charge of $ 1.8 .

(2) Use of Estimates

6 unchanged sentences

Certain other estimates and assumptions are further explained in the related notes.

Accounts Receivable Allowances — We provide allowances for estimated losses on uncollectible accounts based on our historical experience, current and future economic and market conditions, and the evaluation of the likelihood of success in

collecting specific customer receivables.

In addition, we maintain allowances for customer returns, discounts and invoice pricing discrepancies, with such allowances primarily based on historical experience.

8 unchanged sentences

Inventory — We estimate losses for excess and/or obsolete inventory and the net realizable value of inventory based on the aging and historical utilization of the inventory and the evaluation of the likelihood of recovering the inventory costs based on anticipated demand and selling price.

Acquisitions — We record acquisitions that meet the definition of a business combination using the acquisition method of accounting.

We include the operating results of acquired entities from their respective dates of acquisition and recognize and measure the identifiable assets acquired, liabilities assumed, including contingent consideration as of the acquisition date, at fair value.

The excess, if any, of total consideration transferred in a business combination over the fair value of identifiable assets acquired and liabilities assumed is recognized as goodwill.

Costs incurred as a result of a business combination, other than costs related to the issuance of debt or equity securities, are recorded in the period the costs are incurred.

Additionally, at each reporting period, contingent consideration is remeasured to fair value, with changes recorded in “Other operating (income) expense, net” within our consolidated statements of operations.

Long-Lived Assets and Intangible Assets Subject to Amortization — We continually review whether events and circumstances subsequent to the acquisition of any long-lived assets, including intangible assets subject to amortization, have occurred that indicate the remaining estimated useful lives of those assets may warrant revision or that the remaining balance of those assets may not be fully recoverable.

1 unchanged sentence

We will record an impairment charge to the extent that the carrying value of the assets exceed their fair values as determined by valuation techniques appropriate in the circumstances, which could include the use of similar projections on a discounted basis.

In determining the estimated useful lives of definite-lived intangibles, we consider the nature, competitive position, life cycle position, and historical and expected future operating cash flows of each acquired asset, as well as our commitment to support these assets through continued investment and legal infringement protection.

In determining the estimated useful lives of definite-lived intangible assets, we consider the nature, competitive position, life cycle position, and historical and expected future cash flows of each acquired asset, as well as our commitment to support these assets through continued investment and legal infringement protection.

Definite-lived intangible assets such as customer relationships, technology and other intangible assets with finite useful lives are amortized on a straight-line basis over their estimated economic lives.

The weighted-average remaining useful lives approximate the following as of December 31, 2023.

Technology 12 years

Customer relationships 11 years

Other 7 years

Goodwill and Indefinite-Lived Intangible Assets — We review goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter and continually assess whether a triggering event has occurred to determine whether the carrying value exceeds the implied fair value.

4 unchanged sentences

Our quantitative analysis of the fair value of reporting units is based generally on discounted projected cash flows, but we also consider factors such as comparable industry price multiples.

We employ cash flow projections that we believe to be reasonable under current and forecasted circumstances, the results of which form the basis for making judgments about the carrying values of the reported net assets of our reporting units.

We employ cash flow projections that we believe to be reasonable under current and forecasted circumstances, the results of which

form the basis for making judgments about the carrying values of the reported net assets of our reporting units.

Many of our businesses closely follow changes in the industries and end markets that they serve.

58 unchanged sentences

Since the sale of Balcke Dürr, the guarantees have expired and, as of the third quarter of 2021, all the bonds have been returned.

We accounted for our contingent obligation in accordance with the Guarantees Topic of the Codification, which required that we record a liability for the estimated fair value of the parent company guarantees and the bonds in connection with the accounting for the sale of Balcke Dürr.

Under the related purchase agreement, Balcke Dürr provided cash collateral and the parent company of the buyer provided a partial guarantee in the event any of the bonds were called.

We recorded an asset for the estimated fair value of the cash collateral provided by Balcke Dürr and the partial guarantee provided by the parent company of the buyer, with the estimated fair values based on the terms and conditions and relative risk associated with each of these securities.

As the guarantees have expired and the bonds have been returned, we no longer have assets or liabilities recorded for this matter.

2 unchanged sentences

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

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13.

ASU 2016-13 changes how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income, including trade receivables, based on historical experience, current conditions, and reasonable and supportable forecasts.

The requirements of ASU 2016-13 are to be applied on a modified retrospective basis, which entails recognizing the initial effect of adoption in retained earnings.

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

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

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

The London Interbank Offered Rate (“LIBOR”) was discontinued on June 30, 2023.

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

2021-01 and No.

2 unchanged sentences

It also provides optional expedients to enable companies to continue to apply hedge accounting to certain hedging relationships impacted by the reference rate reform.

Application of the guidance in the amendments is optional, is only available in certain situations, and is only available for companies to apply until December 31, 2024.

Application of the guidance in the amendments is optional, is only available in certain situations, and is only available for

companies to apply until December 31, 2024.

In conjunction with entering into an amended and restated credit agreement (the “Credit Agreement”) on August 12, 2022, we adopted this guidance with no material impact on our consolidated financial statements.

Refer to Note 13 for additional information on the Credit Agreement.

In October 2021, the FASB issued ASU No.

2021-08, Business Combinations (Topic 805):

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

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

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

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

In November 2023, the FASB issued ASU No.

Among other new disclosure requirements, ASU 2023-07 requires companies to disclose significant segment expenses that are regularly provided to the chief operating decision maker.

ASU 2023-07 will be effective for annual periods beginning on January 1, 2024 and interim periods beginning on January 1, 2025.

ASU 2023-07 must be applied retrospectively to all prior periods presented in the financial statements.

We are currently evaluating the disclosure impact of ASU 2023-07;

however, the standard will not have an impact on the Company’s consolidated financial position, results of operations or cash flows.

In December 2023, the FASB issued ASU No.

2023-09, which requires companies to disclose, on an annual basis, specific categories in the effective tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold.

In addition, ASU 2023-09 requires companies to disclose additional information about income taxes paid.

ASU 2023-09 will be effective for annual periods beginning January 1, 2025 and will be applied on a prospective basis with the option to apply the standard retrospectively.

We are currently evaluating the disclosure impact of ASU 2023-09;

however, the standard will not have an impact on the Company’s consolidated financial position, results of operations or cash flows.

(4) Acquisitions, Discontinued Operations, and the Asbestos Portfolio Sale

As indicated in Note 1, on September 2, 2020, November 11, 2020, April 19, 2021, August 2, 2021, December 15, 2021, and March 31, 2022, we completed the acquisitions of ULC, Sensors & Software, Sealite, ECS, Cincinnati Fan, and ITL, respectively.

As indicated in Note 1, on April 19, 2021, August 2, 2021, December 15, 2021, March 31, 2022, and April 3, 2023 we completed the acquisitions of Sealite, ECS, Cincinnati Fan, ITL, and TAMCO, respectively.

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

Acquisition of ASPEQ

As indicated in Note 1, on June 2, 2023, we completed the acquisition of ASPEQ for $ 421.5 , net of (i) an adjustment to the purchase price of $ 0.3 received during 2023 related to acquired working capital and (ii) cash acquired of $ 0.9 .

We financed the acquisition with available cash and borrowings under our senior credit facilities.

The assets acquired and liabilities assumed have been recorded at preliminary estimates of fair value as determined by management, based on information currently available and on current assumptions as to future operations and are subject to change upon completion of the acquisition method of accounting.

Final determination of the fair values of certain assets and liabilities will be completed within the measurement period of up to one year from the acquisition date, as permitted under GAAP.

The following is a summary of the recorded preliminary fair values of the assets acquired and liabilities assumed for ASPEQ as of June 2, 2023:

Assets acquired:

Current assets, including cash and equivalents of $ 0.9

Property, plant and equipment 10.6

Goodwill 191.1

Intangible assets 246.1

Other assets 1.3

Total assets acquired 491.2

Current liabilities assumed 10.9

Non-current liabilities assumed (1)

Net assets acquired $ 422.4

___________________________

(1) Includes net deferred income tax liabilities and other liabilities of $ 56.9 and $ 1.0 , respectively.

The identifiable intangible assets acquired consist of customer relationships, trademarks, technology, and customer backlog of $ 142.3 , $ 51.5 , $ 47.8 , and $ 4.5 , respectively, with such amounts based on a preliminary assessment of the related fair values.

We expect to amortize the customer relationships, technology, and customer backlog assets over 12.0 , 16.0 , and 1.0 years, respectively, with the trademarks acquired being indefinite-lived.

We acquired gross receivables of $ 18.0 , which had a fair value at the acquisition date of $ 17.9 based on our estimates of cash flows expected to be recovered.

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 recognized revenues and net income for ASPEQ of $ 63.9 and $ 3.6 , respectively, for the year ended December 31, 2023 with the net income impacted by charges during the year ended December 31, 2023 of (i) $ 13.2 associated with amortization of the various intangible assets mentioned above and (ii) $ 3.6 associated with the excess fair value (over historical cost) of inventory acquired which has been subsequently sold.

During the year ended December 31, 2023, we incurred acquisition-related costs for ASPEQ of $ 5.4 , which have been recorded to “Selling, general and administrative” within our consolidated statements of operations and “Corporate expense” within consolidated operating income in Note 7.

The following unaudited pro forma information presents our consolidated results of operations for the years ended December 31, 2023 and 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.

The pro forma results include estimates and assumptions that management believes are reasonable;

however, these results do not include any anticipated cost savings or expenses of the planned integration of ASPEQ.

These pro forma consolidated 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.

Years ended December, 31

Revenues $ 1,788.4 $ 1,564.7

Income (loss) from continuing operations 150.4 ( 3.8 )

Net income (loss) 95.6 ( 23.4 )

Income (loss) from continuing operations per share of common stock:

Basic $ 3.30 $ ( 0.08 )

Diluted $ 3.23 $ ( 0.08 )

Net income (loss) per share of common stock:

Basic $ 2.10 $ ( 0.52 )

Diluted $ 2.05 $ ( 0.52 )

Sale of Transformer Solutions Business

2 unchanged sentences

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

Major line items constituting pre-tax income and after-tax income of Transformer Solutions for the period January 1, 2021 to October 1, 2021 and the year ended December 2020 are shown below:

Major line items constituting pre-tax income and after-tax income of Transformer Solutions for the period January 1, 2021 to October 1, 2021 are shown below:

Revenues $ 313.5

2 unchanged sentences

Selling, general and administrative 28.4

Other income, net — 0.9

Income before tax 27.9

5 unchanged sentences

In connection with the wind-down, we recorded a charge of $ 19.9 to “ Gain (loss) on disposition of discontinued operations, net of tax” within our consolidated statement of operations for the year ended December 31, 2021 to reflect the write-off of historical currency translation amounts associated with DBT that had been previously reported within “ Stockholders' equity.”

Major line items constituting pre-tax loss and after-tax loss of DBT for the years ended December 31, 2021 and 2020 are shown below:

As previously disclosed, DBT had asserted claims against the remaining prime contractor on two 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 $ 54.4 ) 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 $ 153.2 ), 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 had occurred or may have occurred 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 third quarter of 2023.

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

Such charge is included in “Gain (loss) on disposition of discontinued operations, net of tax” for the year ended December 31, 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 $ 7.0 ) was recorded as income during the first quarter of 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 received from MHI was recorded to “Gain (loss) on disposition of discontinued operations, net of tax” during the year ended December 31, 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.

Such amount received from MHI was recorded to “Gain (loss) on disposition of discontinued operations, net of tax” during the year ended December 31, 2023.

Major line items constituting pre-tax loss and after-tax loss of DBT for the years ended December 31, 2021 are shown below:

Revenues $ 0.5

3 unchanged sentences

Special charges, net 1.3

Other income (expense), net ( 1.2 ) 1.9

Other expense, net 1.2

Interest income, net ( 0.1 )

20 unchanged sentences

Total liabilities of DBT $ 39.5 $ 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 $ 26.2 at December 31, 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 14 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.

Major line items constituting pre-tax income and after-tax income of Heat Transfer for the year ended December 31, 2020 are shown below:

Revenues $ 3.9

Costs and expenses:

Cost of products sold 3.1

Selling, general and administrative 0.1

Special charges, net 0.4

Income before tax 0.3

Income tax provision ( 0.1 )

Income after tax $ 0.2

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 consolidated balance sheets as of December 31, 2023 and 2022.

1 unchanged sentence

December 31, 2023 December 31, 2022

Accounts receivable, net $ — $ 0.1

Other current assets $ 0.3 $ 0.2

5 unchanged sentences

For the years ended December 31, 2023, 2022 and 2021, results of operations from our businesses reported as discontinued operations were as follows:

Year ended December 31,

2023 2022 2021

6 unchanged sentences

Loss from discontinued operations ( 69.0 ) ( 17.3 ) ( 37.8 )

( 17.3 ) ( 37.8 ) ( 16.6 )

Income tax benefit 15.3 2.1 2.7

Loss from discontinued operations, net (3)

Heat Transfer

Income (loss) from discontinued operations ( 0.4 ) ( 0.3 ) 0.3

Income tax (provision) benefit 0.1 — ( 0.1 )

Income (loss) from discontinued operations, net ( 0.3 ) ( 0.3 ) 0.2

( 53.7 ) ( 15.2 ) ( 35.1 )

All other (4)

8 unchanged sentences

Income for the year ended December 31, 2021 resulted primarily from the gain on sale of the business of $ 382.2 , as well as the results of operations for the year.

Income for the year ended December 31, 2020 related to the results of operations for the year.

(2) During the fourth quarter of 2021, we liquidated certain recently acquired entities.

As a result of this action, we recorded a net income tax benefit of $ 16.5 within our 2021 consolidated statement of operations, which included an income tax charge of $ 10.9 within continuing operations and income tax benefit of $ 27.4 within discontinued operations.

(3) Loss for the years ended December 31, 2022, 2021, and 2020 resulted primarily from legal costs incurred in connection with various dispute resolution matters related to two large power projects.

As a result of this action, we recorded a net income tax benefit of $ 16.5 within our 2021 consolidated statement of operations, which included an income tax charge of $ 10.9 within continuing operations and an income tax benefit of $ 27.4 within discontinued operations.

(3) Loss for the year ended December 31, 2023 resulted primarily from the charge, and related income tax impacts, recorded in connection with the Settlement Agreement referred to above and legal costs in connection with the various dispute resolution matters.

This loss for the year ended December 31, 2023 was partially offset by the arbitration awards received, which are discussed above.

Loss for the years ended December 31, 2022 and 2021 resulted primarily from legal costs incurred in connection with various dispute resolution matters prior to the Settlement Agreement.

In addition, and as previously noted, the year ended December 31, 2021 includes a charge of $ 19.9 related to the write-off of historical translation amounts.

(4) Loss for the years ended December 31, 2022, 2021, and 2020 resulted primarily from asbestos-related charges and revisions to liabilities, including income tax liabilities, retained in connection with prior dispositions.

(4) Loss for the years ended December 31, 2023, 2022, and 2021 resulted primarily from revisions to liabilities, including income tax liabilities, retained in connection with prior dispositions and, for the years ended December 31, 2022 and 2021, asbestos-related charges for businesses previously disposed of.

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 previous business divestitures may be materially adjusted in subsequent periods.

Net cash used in discontinued operations for the year ended December 31, 2023 related primarily to (i) cash payments of $ 25.3 made by DBT to MHI during 2023 in connection with the Settlement Agreement, and (ii) disbursements of $ 14.7 for professional fees and support costs incurred principally in connection with the claims resolved by the Settlement Agreement, 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 year ended D ecember 31, 2022 related primarily to (i) disbursements for professional fees incurred in connection with the claims activities related to the large power projects in South Africa prior to the Settlement Agreement, (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.

These disburseme nts were partially offset by proceeds from stock options exercised of $ 1.0 .

Net cash from discontinued operations for the year ended December 31, 2021 related primarily to proceeds received in connection with the sale of Transformer Solutions of $ 620.6 .

In addition, cash flows from discontinued operations included cash flows from operations generated by Transformer Solutions, partially offset by cash flows used in DBT's operations and disbursements related to liabilities retained in connection with other dispositions.

Asbestos Portfolio Sale

25 unchanged sentences

Remaining performance obligations represent performance obligations that have yet to be satisfied.

As a practical expedient, we do not disclose performance obligations (i) that are part of a contract that has an original expected duration of less than one year and/or (ii) where our right to consideration corresponds directly to the value transferred to the customer.

Performance obligations for contracts with an original duration in excess of one year that have yet to be satisfied as of the end of a period primarily relate to our Aids to Navigation systems, communication technologies products, large process cooling systems, as well as certain of our fare collection systems.

As a practical expedient, we do not disclose performance obligations (i) that are part of a contract that has an original expected duration of less

than one year and/or (ii) where our right to consideration corresponds directly to the value transferred to the customer.

Performance obligations for contracts with an original duration in excess of one year that have yet to be satisfied as of the end of a period primarily relate to our aids to navigation systems, communication technologies products, large process cooling systems, as well as certain of our transportation systems.

As of December 31, 2023, the aggregate amount allocated to remaining performance obligations after the effect of practical expedients was $ 152.4 .

3 unchanged sentences

When determining the relative standalone selling price of the option, we first determine the incremental discount that the customer would receive by exercising the option and then adjust that value based on the probability of option exercise (based, where possible, on historical experience).

Revenue is recognized for the option as either the option is exercised or when it expires.

Revenue is recognized for the option either when the option is exercised or when it expires.

Contract Combination and Modification - We assess each contract at its inception to determine whether it should be combined with other contracts for revenue recognition purposes.

19 unchanged sentences

We establish provisions for estimated returns and warranties primarily based on contract terms and historical experience, using the expected value method.

Certain businesses offer extended warranties, which are considered separate performance obligations.

Certain of our businesses offer extended warranties, which are considered separate performance obligations.

Contract Costs - We have elected to apply the practical expedient provided under ASC 606 which allows an entity to expense incremental costs of obtaining or fulfilling a contract when incurred if the amortization period of the asset that the entity otherwise would have recorded is one year or less.

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment costs and are included in cost of products sold.

The net asset recorded for incremental costs incurred to obtain or fulfill contracts, after consideration of the practical expedient mentioned above, is not material to our consolidated financial statements.

net asset recorded for incremental costs incurred to obtain or fulfill contracts, after consideration of the practical expedient mentioned above, is not material to our consolidated financial statements.

Nature of Goods and Services, Satisfaction of Performance Obligations, and Payment Terms

Our HVAC product lines include package and process cooling equipment, residential and commercial boilers, comfort heating and ventilation products, and engineered air movement solutions.

Performance obligations for our HVAC product lines relate primarily to the delivery of equipment and components, construction and reconstruction of cooling towers and other

components, and providing installation, replacement/spare parts and various other services.

Our HVAC product lines include package and process cooling equipment, residential and commercial boilers, electrical heating and ventilation products, and engineered air movement solutions.

Performance obligations for our HVAC product lines relate primarily to the delivery of equipment and components, construction and reconstruction of cooling towers and other components, and providing installation, replacement/spare parts and various other services.

Performance obligations related to equipment and components are satisfied at the time of shipment or delivery (i.e., control is transferred at a point in time).

7 unchanged sentences

Payments on longer-term contracts are generally commensurate with milestones defined in the related contract, while payments for the replacement/spare parts contracts typically occur 30 to 60 days after delivery.

Our detection and measurement product lines include underground pipe and cable locators, inspection and rehabilitation equipment, robotic systems, fare collection systems, communication technologies, and obstruction lighting.

Performance obligations for these product lines relate to delivery of equipment and components, installation and other short-term services, long-term maintenance and software subscription services, pipeline remediation services and development of robotics, and obstruction lighting solutions.

Our detection and measurement product lines include underground pipe and cable locators, inspection and rehabilitation equipment, robotic systems, transportation systems, communication technologies, and aids to navigation.

Performance obligations for equipment and components generally are satisfied at the time of shipment or delivery (i.e., control is transferred at a point in time).

2 unchanged sentences

Payment terms for equipment and components are typically 30 to 60 days after shipment or delivery, while payment for services typically occurs at completion for shorter-term engagements (less than three months in duration) and throughout the service period for longer-term engagements (generally greater than three months in duration).

These product lines have varying contract lengths ranging from one to eighteen months (with the longer term contracts generally associated with our Aids to Navigation systems, fare collection systems, and communication technologies products lines), with the typical duration being one to three months .

These product lines have varying contract lengths ranging from one to eighteen months (with the longer term contracts generally associated with our aids to navigation systems, transportation systems, and communication technologies product lines), with the typical duration being one to three months .

Customer prepayments, progress billings, and retention payments are customary for some of our longer-term contracts.

7 unchanged sentences

Major product lines

Package and process cooling equipment and services, and engineered air quality solutions $ 537.0 $ — $ 537.0

Boilers, comfort heating, and ventilation 376.8 — 376.8

Package and process cooling equipment and services, and engineered air movement solutions $ 683.2 $ — $ 683.2

Boilers, electrical heating, and ventilation 439.1 — 439.1

Underground locators, inspection and rehabilitation equipment, and robotic systems — 264.1 264.1

Communication technologies, obstruction lighting, and fare collection systems — 285.0 285.0

Communication technologies, aids to navigation, and transportation systems — 354.8 354.8

$ 1,122.3 $ 618.9 $ 1,741.2

6 unchanged sentences

Major product lines

Package and process cooling equipment and services, and engineered air quality solutions $ 433.8 $ — $ 433.8

Boilers, comfort heating, and ventilation 318.3 — 318.3

Package and process cooling equipment and services, and engineered air movement solutions $ 537.0 $ — $ 537.0

Boilers, electrical heating, and ventilation 376.8 — 376.8

Underground locators, inspection and rehabilitation equipment, and robotic systems — 262.1 262.1

Communication technologies, obstruction lighting, and fare collection systems — 210.6 210.6

Communication technologies, aids to navigation, and transportation systems — 285.0 285.0

$ 913.8 $ 547.1 $ 1,460.9

6 unchanged sentences

Major product lines

Package and process cooling equipment and services $ 447.1 $ — $ 447.1

Boilers, comfort heating, and ventilation 293.7 — 293.7

Package and process cooling equipment and services, and engineered air movement solutions $ 433.8 $ — $ 433.8

Boilers, electrical heating, and ventilation 318.3 — 318.3

Underground locators, inspection and rehabilitation equipment, and robotic systems — 256.8 256.8

Communication technologies, obstruction lighting, and fare collection systems — 169.5 169.5

Communication technologies, aids to navigation, and transportation systems — 210.6 210.6

$ 752.1 $ 467.4 $ 1,219.5

20 unchanged sentences

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

T he $ 32.6 increase i n our net contract balance from December 31, 2021 to December 31, 2022 was d ue primarily to revenue recognized during the period, partially offset by cash payments received from customers during the period.

The timing of revenue recognition, invoicing and cash collections results in contract accounts receivable, contract assets, and customer advances and deposits (contract liabilities) on our consolidated balance sheets.

In general, we receive payments from customers based on a billing schedule established in our contracts.

During the years ended December 31, 2023 and 2022, changes in contract balances were not materially impacted by any other factors besides the acquisition of ASPEQ and TAMCO.

During 2023, we recognized revenues of $ 37.4 related to our contract liabilities at December 31, 2022.

3 unchanged sentences

We review if an arrangement is a lease at inception and conclude whether the contract contains an identified asset if we have the right to obtain substantially all the economic benefit and direct the use of the asset.

Operating leases with right-of-use (“ROU”) assets are reflected within “Other assets,” “Accrued expenses,” and “Other long-term liabilities” within our consolidated balance sheets.

Operating leases with right-of-use (“ROU”) assets are reflected within “Other assets,” “Accrued expenses,” and “Other long-term liabilities” within our

consolidated balance sheets.

Finance leases are included in “Property, plant and equipment,” “Current maturities of long-term debt,” and “Long-term debt.”

6 unchanged sentences

Our leases have remaining lease terms of one year to 10 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the lease within one year .

We rent or sublease certain space within owned facilities to third parties under operating leases, with the impact of these lease arrangements being immaterial to our consolidated financial statements.

We rent or sublease certain space within our facilities to third parties under operating leases, with the impact of these lease arrangements being immaterial to our consolidated financial statements.

The components of lease expense were as follows:

8 unchanged sentences

__________________________

(1) Includes short-term lease cost of $ 3.7 and $ 4.3 , at December 31, 2022 and 2021 respectively.

(1) Includes short-term lease cost of $ 3.5 and $ 3.7 , for the years ended December 31, 2023 and 2022, respectively.

Supplemental cash flow information related to leases was as follows:

46 unchanged sentences

HVAC Reportable Segment

Our HVAC reportable segment engineers, designs, manufactures, installs and services package and process cooling products and engineered air movement solutions for the HVAC industrial and power generation markets, as well as boilers and comfort heating and ventilation products for the residential and commercial markets.

Our HVAC reportable segment engineers, designs, manufactures, installs and services package and process cooling products and engineered air movement solutions for the HVAC industrial and power generation markets, as well as boilers and electrical heating and ventilation products for the residential, industrial, and commercial markets.

The primary distribution channels for the segment’s products are direct to customers, independent manufacturing representatives, third-party distributors, and retailers.

The segment serves a customer base in North America, Europe, and Asia.

The segment serves a global customer base in North America, Europe, and Asia.

Detection and Measurement Reportable Segment

Our Detection and Measurement reportable segment engineers, designs, manufactures, services, and installs underground pipe and cable locators, inspection and rehabilitation equipment, robotic systems, fare collection systems, communication technologies, and obstruction lighting.

Our Detection and Measurement reportable segment engineers, designs, manufactures, services, and installs underground pipe and cable locators, inspection and rehabilitation equipment, robotic systems, transportation systems, communication technologies, and aids to navigation.

The primary distribution channels for the segment’s products are direct to customers and third-party distributors.

The segment serves a global customer base, with a strong presence in North America, Europe, Africa and Asia.

The segment serves a global customer base in North America, Europe, Africa and Asia.

Corporate Expense

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

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

Financial data for our reportable segments for the years ended December 31, 2023, 2022 and 2021 were as follows:

11 unchanged sentences

Impairment of goodwill and intangible assets (2)

13.4 30.0 0.7

Special charges, net 0.8 0.4 1.0

12 unchanged sentences

Total depreciation and amortization $ 63.2 $ 46.4 $ 42.3

2022 2021 2020

Identifiable assets:

HVAC reportable segment $ 853.3 $ 808.4 $ 632.2

Detection and Measurement reportable segment 920.1 835.4 772.5

General corporate and eliminations (4)

114.6 406.4 45.6

Insurance recovery assets (5)

— 526.2 496.4

Discontinued operations 42.9 52.2 387.0

Total identifiable assets $ 1,930.9 $ 2,628.6 $ 2,333.7

Geographic Areas:

13 unchanged sentences

The year ended December 31, 2021 also includes a non-cash impairment charge of $ 1.8 .

(2) The year ended December 31, 2022 includes impairment charges of $ 12.9 related to the goodwill and trademarks of ULC and $ 0.5 related to certain other trademarks.

(2) The year ended December 31, 2022 includes impairment charges of $ 12.9 related to the goodwill and trademarks of ULC Robotics (“ULC”) and $ 0.5 related to certain other trademarks.

The year ended December 31, 2021 includes impairment charges of $ 29.5 related to the goodwill and trademarks of ULC and $ 0.5 related to certain other trademarks.

The year ended December 31, 2020 includes impairment charges of $ 0.7 related to certain other trademarks.

(3) The year ended December 31, 2022 includes a loss on the Asbestos Portfolio Sale of $ 73.9 as well as charges of $ 2.3 for asbestos product liability matters incurred prior to the Asbestos Portfolio Sale, partially offset by a reduction in the fair value/liability associated with contingent consideration related to the ECS acquisition of $ 1.3 .

(3) The year ended December 31, 2023 includes a charge of $ 9.0 related to the resolution of a dispute with a former representative at one of our businesses within the Detection and Measurement reportable segment .

The year ended December 31, 2022 includes a loss on

the Asbestos Portfolio Sale of $ 73.9 as well as charges of $ 2.3 for asbestos product liability matters incurred prior to the Asbestos Portfolio Sale, partially offset by a reduction in the fair value/liability associated with contingent consideration related to the ECS acquisition of $ 1.3 .

For 2021, includes income of $ 24.3 and $ 6.7 related to the reduction of the liabilities associated with contingent consideration for the ULC and ECS acquisitions, respectively, partially offset by charges of (i) $ 26.3 for asbestos product liability matters and (ii) $ 0.6 related to revisions to the liability associated with the contingent consideration for the Sensors & Software acquisition.

For 2020, includes charges of $ 9.4 for asbestos product liability matters, net of a gain of $ 0.4 related to revisions to certain liabilities retained in connection with the 2016 sale of the dry cooling business.

(4) General corporate and eliminations is comprised of general corporate assets and includes elimination or netting of intercompany amounts, primarily related to certain deferred tax balances and cash management arrangements.

(5) Insurance recovery assets were associated with asbestos product liability matters.

As indicated in Note 1, we divested these assets on November 1, 2022 in connection with the Asbestos Portfolio Sale.

Refer to Notes 1 and 4 for additional details.

(4) Revenues are included in the above geographic areas based on the country that recorded the revenue.

(5) Our CODM does not review asset information for our reportable segments as this information is not used to assess performance or allocate resources.

(8) Special Charges, Net

17 unchanged sentences

Employee termination costs $ 0.8 $ 0.1 $ 1.0

Other cash costs, net — — 1.0

Non-cash asset write-downs — 0.3 —

8 unchanged sentences

HVAC – Charges for 2023 related to severance costs associated with a restructuring action at one of the segment’s cooling businesses.

This action resulted in the termination of 1 employee.

Detection & Measurement – Charges for 2023 related to severance costs associated with a restructuring action at one of the segment's location and inspection businesses.

This action resulted in the termination of 14 employees.

Detection & Measurement – Charges for 2022 related to asset impairment charges associated with the relocation of certain operations at the segment’s obstruction lighting business.

2022 Charges:

5 unchanged sentences

Total $ 0.1 $ — $ 0.3 $ 0.4

HVAC – Charges for 2021 related to severance costs associated with a restructuring action at one of the segment’s heating businesses.

HVAC – Charges for 2022 related to severance costs associated with a restructuring action at one of the segment’s cooling businesses.

This action resulted in the termination of 2 employees.

Detection & Measurement – Charges for 2021 related primarily to severance costs associated with restructuring actions at the segment’s location and inspection businesses.

These actions resulted in the termination of 44 employees.

Detection & Measurement – Charges for 2022 related to asset impairment charges associated with the relocation of certain operations at the segment’s aids to navigation business.

2021 Charges:

5 unchanged sentences

Total $ 1.0 $ — $ — $ 1.0

HVAC — Charges for 2020 related to severance costs associated with restructuring actions at the segment’s Cooling Americas and heating businesses.

These actions resulted in the termination of 11 employees.

Detection & Measurement — Charges for 2020 related to severance costs for a restructuring action at the segment's fare collection systems business.

HVAC — Charges for 2021 related to severance costs associated with a restructuring action at one of the segment’s heating businesses.

This action resulted in the termination of 6 employees.

Detection & Measurement — Charges for 2021 related primarily to severance costs associated with restructuring actions at the segment's location and inspection businesses.

The action resulted in the termination of 44 employees.

Corporate — Charges for 2020 related primarily to (i) asset impairment and other charges associated with the move to a new corporate headquarters and (ii) cost incurred for a legal entity reorganization initiative.

The following is an analysis of our restructuring liabilities for the years ended December 31, 2023, 2022 and 2021:

5 unchanged sentences

___________________________________________________________________

(1) The years ended December 31, 2022, 2021 and 2020 excluded $ 0.3 , $ 0.0 and $ 0.4 , respectively, of non-cash charges that impacted special charges but not the restructuring liabilities.

(1) The year ended December 31, 2022 excluded $ 0.3 of non-cash charges that impacted special charges but not the restructuring liabilities.

(9) Inventories, Net

10 unchanged sentences

Combinations (1)

Impairments (2)

Impairments Foreign

Translation December 31,

11 unchanged sentences

___________________________________________________________________

(1) Reflects (i) goodwill acquired with the ITL acquisition of $ 10.8 , (ii) an increase in Sealite’s goodwill of $ 0.2 resulting from revisions to the valuation of certain assets and liabilities, and (iii) an increase in Cincinnati Fan’s goodwill of $ 8.9 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 ITL acquisition have been recorded at estimates of fair value and are subject to change upon completion of acquisition accounting.

(2) During the fourth quarter of 2022, in connection with the annual impairment analyses of ULC’s goodwill and indefinite-lived intangible assets, we determined that the carrying value of ULC’s net assets exceeded the estimated fair value of the business, resulting in an impairment charge of $ 12.9 , with $ 12.0 related to goodwill and $ 0.9 to the ULC trademarks.

After such impairment charge, ULC had no goodwill and $ 5.4 of trademarks included in our consolidated balance sheet as of December 31, 2022.

(1) Reflects (i) goodwill acquired with the TAMCO and ASPEQ acquisitions of $ 51.3 and $ 191.1 , 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.

The changes in the carrying amount of goodwill, for the year ended December 31, 2022, were as follows:

16 unchanged sentences

___________________________________________________________________

(1) Reflects (i) goodwill acquired with the Sealite, ECS and Cincinnati Fan acquisitions of $ 47.7 , $ 25.9 and $ 46.0 , respectively, (ii) and increase in ULC’s goodwill of $ 3.1 resulting from revisions to the valuation of certain assets and liabilities, and (iii) an increase in Sensors & Software's goodwill of $ 2.0 resulting from revisions to the valuation of certain assets and liabilities.

(2) As indicated in Note 1, we concluded during the third quarter of 2021 that the operating and financial performance milestones related to the ULC contingent consideration would not be achieved, resulting in the reversal of the related liability of $ 24.3 , with the offset to “Other operating (income) expense, net.” We also concluded that the lack of achievement of these milestones, along with lower than anticipated future cash flows, were indicators of potential impairment related to ULC’s indefinite-lived intangible assets and goodwill.

As such, we performed quantitative analyses of ULC’s goodwill and indefinite-lived intangible assets for impairment during the third quarter of 2021.

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

As a result, we recorded an impairment charge of $ 24.3 during the third quarter, with $ 23.3 related to goodwill and the remainder to trademarks.

In connection with our annual impairment analyses of ULC’s goodwill and indefinite-lived intangibles, during the fourth quarter of 2021, we determined that the carrying value of ULC’s net assets exceeded the implied fair value of the business by $ 5.2 .

As a result, we recorded impairment charges of $ 4.9 and $ 0.3 related to the business’s goodwill and trademarks, respectively.

(1) Reflects (i) goodwill acquired with the ITL acquisition of $ 10.8 , (ii) and increase in Sealite’s goodwill of $ 0.2 resulting from revisions to the valuation of certain assets and liabilities, and (iii) an increase in Cincinnati Fan's goodwill of $ 8.9 resulting from revisions to the valuation of certain assets and liabilities.

(2) During the fourth quarter of 2022, in connection with the annual impairment analyses of ULC's goodwill and indefinite-lived intangible assets, we determined that the carrying value of ULC's net assets exceeded fair value of the business, resulting in an impairment charge of $ 12.9 , with $ 12.0 related to goodwill and $ 0.9 to the ULC trademarks.

After such impairment charge, ULC had no goodwill and $ 5.4 of trademarks included in our consolidated balance sheet as of December 31, 2022.

Identifiable intangible assets were as follows:

14 unchanged sentences

___________________________________________________________________

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

(2) During the fourth quarter of 2022, in connection with our annual impairment analyses, we recorded impairment charges of $ 1.4 , with $ 0.9 related to ULC’s trademarks (see above) and the remainder to certain other trademarks.

Other changes during 2022 related primarily to foreign currency translation.

(1) The identifiable intangible assets associated with the TAMCO acquisition consist of customer relationships of $ 60.4 , technology of $ 9.4 , 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.

Amortization expense was $ 43.9 , $ 28.5 and $ 21.6 for the years ended December 31, 2023, 2022 and 2021, respectively.

6 unchanged sentences

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

During the fourth quarter of 2022, we performed quantitative analyses on the goodwill of our Cincinnati Fan and ULC reporting units.

The Cincinnati Fan analysis indicated that the fair value of its net assets exceeded the related carrying value by less than 10 %.

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

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 December 31, 2022, Cincinnati Fan’s goodwill totaled $ 54.8 .

As previously discussed, our fourth quarter 2022 quantitative analysis of the ULC reporting unit resulted in an impairment charge of $ 12.9 , with $ 12.0 related to goodwill and $ 0.9 to the ULC trademarks.

After recording this impairment charge, there is no goodwill remaining related to the ULC acquisition.

Our quantitative analysis of trademarks is based on applying estimated royalty rates to projected revenues, with resulting cash flows discounted at a rate of return that reflects current market conditions.

In addition to the impairment charges related to the ULC trademarks of $ 0.9 and $ 1.3 , respectively, during 2022 and 2021, we recorded impairment charges of $ 0.5 , $ 0.5 and $ 0.7 , respectively, during 2022, 2021, and 2020 related to certain other trademarks.

During the fourth quarter of 2023, we performed a quantitative analysis on the goodwill of our Engineered Air Movement (“EAM”) reporting unit (the aggregation of our Cincinnati Fan and TAMCO businesses).

The EAM analysis indicated that the fair value of its net assets exceeded the related carrying value by approximately 30 %.

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

If EAM 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 December 31, 2023, EAM’s goodwill totaled $ 106.7 .

In addition, the fair value of the assets related to the ASPEQ acquisition approximate their carrying value.

If ASPEQ is unable to achieve its current financial forecast, we may be required to record an impairment charge in a future period related its goodwill or indefinite-lived intangible assets.

As of December 31, 2023, ASPEQ's goodwill and indefinite-lived intangible assets totaled $ 191.1 and $ 51.5 , respectively.

We concluded during the third quarter of 2021 that the operating and financial performance milestones related to the ULC contingent consideration would not be achieved, resulting in the reversal of the related liability of $ 24.3 , with the offset recorded to “Other operating (income) expense, net.” We also concluded that the lack of achievement of these milestones, along with lower than anticipated future cash flows, were indicators of potential impairment related to ULC’s indefinite-lived intangible assets and goodwill.

As such, we performed quantitative analyses of ULC’s goodwill and indefinite-lived intangible assets for impairment during the third quarter of 2021.

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

As a result, we recorded an impairment charge of $ 24.3 during the third quarter, with $ 23.3 related to goodwill and the remainder to trademarks.

As a result, we recorded impairment charges of $ 4.9 and $ 0.3 related to the business’s goodwill and trademarks, respectively.

During 2023, 2022 and 2021, we recorded impairment charges of $ 0.0 , $ 0.5 , and $ 0.5 , respectively, related to certain other trademarks.

(11) Employee Benefit Plans

6 unchanged sentences

Actuarial Gains and Losses - As indicated in Notes 1 and 2, changes in fair value of plan assets and actuarial gains and losses related to our pension and postretirement plans are recorded to earnings during the fourth quarter of each year, unless earlier remeasurement is required.

During the fourth quarter of 2023, we initiated the wind-up of our Canadian defined benefit pension plans, collectively the ( “ Canadian Pension Plans ” ).

The Company is currently seeking regulatory approval for the wind-up, and we expect the process to be completed during 2025.

This action had no material impact on the consolidated financial statements for the year ended December 31, 2023.

Defined Benefit Pension Plans

Plan assets — Our investment strategy is based on the long-term growth and protection of principle while mitigating overall risk to ensure that funds are available to pay benefit obligations.

The domestic plan assets are invested in a broad range of investment classes, including fixed income securities and domestic and international equities.

Plan assets — Our investment strategy is based on the long-term growth and protection of principal while mitigating overall risk to ensure that funds are available to pay benefit obligations.

The domestic plan assets are invested in a broad range of

investment classes, including fixed income securities and domestic and international equities.

We engage various investment managers who are regularly evaluated on long-term performance, adherence to investment guidelines and the ability to manage risk commensurate with the investment style and objective for which they were hired.

4 unchanged sentences

A small portion of U.S.

plan assets (Level 3 assets) is allocated to private equity partnerships and real estate asset fund investments for diversification, providing opportunities for above market returns.

plan assets is allocated to private equity partnerships and real estate asset fund investments (Level 3 assets) for diversification, providing opportunities for above market returns.

Allowable investments under the plan agreements include fixed income securities, equity securities, mutual funds, venture capital funds, real estate and cash and equivalents.

22 unchanged sentences

Commingled global fund allocation 15 % 23 % 17 %

Government securities — % — % — %

Short-term investments (1)

5 unchanged sentences

Markets for Identical

(Level 1) Significant

Assets (Level 1) Significant

Observable Inputs

4 unchanged sentences

Government securities 34.4 — 34.4 —

Government securities 13.9 — 13.9 —

Equity securities:

5 unchanged sentences

Short-term investments (5)

17.4 14.7 2.7 —

Total $ 295.5 $ 14.7 $ 279.9 $ 0.9

17 unchanged sentences

Short-term investments (5)

10.4 10.4 — —

Total $ 292.7 $ 6.0 $ 285.8 $ 0.9

10 unchanged sentences

municipal securities, interest rate swaps, options and futures.

(5) Short-term investments are valued at $ 1.00 /unit, which approximates fair value.

(5) Amounts are generally invested in actively managed common trust funds or interest-bearing accounts.

1 unchanged sentence

pension plans in amounts equal to the minimum funding requirements of the Employee Retirement Income Security Act of 1974, plus additional amounts that may be approved from time to time.

During 2022 , we made no contributions to our qualified domestic pension plans, and direct benefit paym ents of $ 5.6 to our non-qualified domestic pension plans.

In 2023, we do not expect to make any minimum required funding contributions to our qualified domestic pension plans and expect to make direct benefit payments of $ 5.3 to our non-qualif ied domestic pension plans.

During 2023 , we made no contributions to our qualified domestic pension plans and made direct benefit payments of $ 5.4 to our non-qualified domestic pension plans.

In 2024, we do not expect to make any minimum required funding contributions to our

qualified domestic pension plans and expect to make direct benefit payments of $ 5.2 to our non-qualif ied domestic pension plans.

In 2023, we made contr ibutions o f $ 1.8 to our foreign pension plans.

2 unchanged sentences

Benefit payments are paid from plan assets or directly by us for our non-funded plans.

The expected benefit payments are estimated based on the same assumptions used at December 31, 2022 to measure our obligations and include benefits attributable to estimated future employee service.

The expected benefit payments are estimated based on the same assumptions used at December 31, 2023 to measure our obligations.

Estimated future benefit payments:

5 unchanged sentences

2028 25.7 4.3

2027 23.6 6.7

Subsequent five years 84.6 24.9

_________________________

(1) Payments for the foreign pension plans include amounts payable of $ 35.1 in connection with the Canadian Pension Plans wind-up mentioned above.

Obligations and Funded Status — The funded status of our pension plans is dependent upon many factors, including returns on invested assets and the level of market interest rates.

8 unchanged sentences

Interest cost 13.0 10.5 5.6 3.7

Actuarial gains ( 66.4 ) ( 12.9 ) ( 52.7 ) ( 4.8 )

Actuarial (gains) losses 7.6 ( 66.4 ) 5.4 ( 52.7 )

Settlements — ( 17.1 ) — —

20 unchanged sentences

Net amount recognized $ ( 74.4 ) $ ( 70.1 ) $ 4.0 $ 6.4

Amount recognized in accumulated other comprehensive income (pre-tax) consists of — net prior service costs (credits) $ — $ ( 0.1 ) $ 1.0 $ 1.2

Amount recognized in accumulated other comprehensive income (pre-tax) consists of — net prior service costs $ — $ — $ 1.0 $ 1.0

The following is information about our pension plans that had accumulated benefit obligations in excess of the fair value of their plan assets at December 31, 2023 and 2022:

5 unchanged sentences

Fair value of plan assets 164.8 170.2 — —

The accumulated benefit obligation for all domestic and foreign pension plans was $ 246.9 and $ 109.5 , r espectively, at December 31, 2022 and $ 335.4 and $ 182.4 , respectively, at December 31, 2021.

The accumulated benefit obligation for all domestic and foreign pension plans w as $ 245.7 and $ 120.2 , res pectively, at December 31, 2023 and $ 246.9 and $ 109.5 , respectively, at December 31, 2022.

Components of Net Periodic Pension Benefit (Income) Expense — Net periodic pension benefit (income) expense for our domestic and foreign pension plans included the following components:

45 unchanged sentences

(1) The discount rate for the year ended December 31, 2022 includes adjustments due to remeasurements in the U.S.

Plan during the second and third quarters.

Plan during the second and third quarters of 2022.

We review the pension assumptions annually.

4 unchanged sentences

Transfer of Retiree Life Insurance Benefits - 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 paid to the insurance carrier of $ 10.0 .

This transaction resulted in a settlement loss of $ 0.7 recorded to “Other income (expense), net” during 2022.

This transaction resulted in a settlement loss of $ 0.7 recorded to “Other

income (expense), net” during 2022.

In addition, and in connection with this transfer, we remeasured the assets and liabilities of the Plans as of the transfer date, which resulted in an actuarial gain of $ 0.4 recorded to “Other income (expense), net”.

Employer Contributions and Future Benefit Payments — Our postretirement medical plans are unfunded and have no plan assets, but are instead funded by us on a pay-as-you-go basis in the form of direct benefit payments or policy premium payments.

In 2022, we made benefit payments of $ 4.4 to our postretirement benefit plans.

In 2023, we made benefit payments of $ 4.0 to our p ostretirement benefit plans.

Following is a summary, as of December 31, 2023, of the estimated future benefit payments for our postretirement plans in each of the next five fiscal years and in the aggregate for five fiscal years thereafter.

The expected benefit payments are estimated based on the same assumptions used at December 31, 2022 to measure our obligations and include benefits attributable to estimated future employee service.

The expected benefit payments are estimated based on the same assumptions used at December 31, 2023 to measure our obligations.

Postretirement Payments

6 unchanged sentences

Loss on settlement of retiree life insurance benefits — 0.7

Actuarial gains ( 7.0 ) ( 3.9 )

Actuarial (gains) losses 0.2 ( 7.0 )

Transfer to insurance carrier for cash consideration — ( 10.0 )

8 unchanged sentences

The actuarial gains and losses for our postretirement benefit plans in 2023 and 2022 were primarily related to a change in the discount rate used to measure the benefit obligations of those plans.

The net periodic postretirement benefit (income) expense included the following components:

The net periodic postretirement benefit income included the following components:

Year ended December 31,

19 unchanged sentences

_______________________________________

(1) The discount rate for the year ended December 31, 2022 includes an adjustment due to a remeasurement in the Plans that took place in the first quarter.

(1) The discount rate for the year ended December 31, 2022 includes an adjustment due to a remeasurement in the Plans that took place in the first quarter of 2022.

The accumulated postretirement benefit obligation was determined using the terms and conditions of our various plans, together with relevant actuarial assumptions and health care cost trend rates.

11 unchanged sentences

Compensation expense is recorded based on the market value of shares as the shares are contributed to employee accounts.

We recorded $ 7.8 i n 2022, $ 7.8 in 2021 and $ 7.7 in 2020 as compensation expense related to the matching contribution.

We recorded $ 9.8 i n 2023, and $ 7.8 in 2022 and 2021, as compensation expense related to the matching contribution.

Certain collectively-bargained employees participate in the DC Plan with company contributions not being made in SPX common stock, although SPX common stock is offered as an investment option under these plans.

6 unchanged sentences

Lastly, these assets are accounted for as trading securities.

During 2022, 2021 and 2020, we recorded compensation expense of $ 0.2 , $ 0.2 and $ 0.2 , respectively, relating to our matching contributions to the SRSP.

During each of 2023, 2022 and 2021, we recorded compensation expense of $ 0.2 relating to our matching contributions to the SRSP.

(12) Income Taxes

6 unchanged sentences

$ 186.3 $ 27.1 $ 69.9

(Provision for) benefit from income taxes:

Provision for income taxes:

United States $ ( 51.1 ) $ ( 18.9 ) $ ( 5.4 )

51 unchanged sentences

Accelerated depreciation 16.1 14.4

Deferred income — 20.2

Other 9.0 16.2

7 unchanged sentences

Of these amounts, $ 14.2 expire in 2024 and $ 165.1 expire at various times between 2025 and 2043.

The remaining carryforwards have no expir ation date.

The remaining carryforwards have no expiration date.

Realization of deferred tax assets, including those associated with net operating loss and credit carryforwards, is dependent upon generating sufficient taxable income in the appropriate tax jurisdiction.

2 unchanged sentences

However, deferred tax assets could be reduced in the near term if our estimates of taxable income are significantly reduced or tax planning strategies are no longer viable.

Our valuation allowance decreased by $ 20.7 in 2022 and by $ 2.2 in 2021.

The 2022 decrease was primarily driven by the utilization of certain attributes in foreign jurisdictions.

Our valuation allowance increased by $ 6.1 in 2023 and decreased by $ 20.7 in 2022.

The 2023 increase was primarily driven by the generation of certain attributes in foreign jurisdictions where we believe it is more likely than not that such attributes will not be realized.

The amount of income tax that we pay annually is dependent on various factors, including the timing of certain deductions.

13 unchanged sentences

Unrecognized Tax Benefits

A s of December 31, 2022, we had gross and net unrecognized tax benefits of $ 4.5 and $ 4.0 , resp ectively.

A s of December 31, 2023, we had gross and net unrecognized tax benefits of $ 2.2 .

All of these net unrecognized tax benefits would impact our effective tax rate from continuing operations if recognized.

1 unchanged sentence

We classify interest and penalties related to unrecognized tax benefits as a component of our income tax provision/benefit.

As of December 31, 2022, gross accrued interest total ed $ 1.9 (net accrued interest of $ 1.7 ), while the related amounts as of December 31, 2021 and 2020 were $ 2.6 (net accrued interest of $ 2.2 ) and $ 3.8 (net accrued interest of $ 3.0 ), respectively.

As of December 31, 2023, gross and net accrued interest total ed $ 1.3 , while the related amounts as of December 31, 2022 and 2021 were $ 1.9 (net accrued interest of $ 1.7 ) and $ 2.6 (net accrued interest of $ 2.2 ), respectively.

Our income tax provision for the years ended December 31, 2023, 2022, and 2021 included gross interest income of $ 0.2 , $ 0.6 , and $ 1.0 , respectively, resulting from adjustments to our liability for uncertain tax positions.

13 unchanged sentences

Unrecognized tax benefit — ending balance $ 2.2 $ 4.5 $ 7.1

Organization for Economic Co-operation and Development ( “ OECD ” ) Pillar Two Model Rules

In December 2021, the OECD issued model rules for a new global minimum tax framework ( “ Pillar Two ” ), and various governments around the world have issued, or are in the process of issuing, legislation to implement these rules.

The Company is within the scope of the OECD Pillar Two model rules and is assessing the impact thereof.

As of December 31, 2023, we believe the implementation of these rules will not have a material impact on our financial results.

Other Tax Matters

During 2023, our income tax provision was impacted most significantly by (i) $ 2.3 of tax benefits related to changes in our estimate of valuation allowances recognized against certain deferred tax assets as we now expect to realize these deferred tax assets, (ii) $ 1.8 of excess tax benefits associated with stock-based compensation awards that vested and/or were exercised during the period, and (iii) $ 1.1 of tax benefits related to revisions to liabilities for uncertain tax positions.

During 2022, our income tax provision was impacted most significantly by (i) the loss on the Asbestos Portfolio Sale (see Note 4) which generated a tax benefit of only $ 1.1 , (ii) a tax benefit of $ 4.7 related to the release of valuation allowances recognized against certain deferred tax assets, as we now expect to realize these deferred tax assets, primarily due to the 2022 Holding Company Reorganization (see Note 1), (iii) $ 3.0 of tax benefits related to statute expirations and other revisions to liabilities for uncertain tax positions, and (iv) $ 1.7 of excess tax benefits associated with stock-based compensation awards that vested and/or were exercised during the year.

During 2021, our income tax provision was impacted most significantly by (i) earnings in jurisdictions with lower statutory tax rates, (ii) $ 4.3 of income tax benefits related to various valuation allowance adjustments, primarily due to foreign tax credits for which the future realization is now considered likely, and (iii) a benefit of $ 3.5 related to the resolution of certain liabilities for uncertain tax positions and interest associated with various refund claims, partially offset by $ 13.2 of tax expense associated with global intangible low-taxed income created by the liquidation of various entities.

During 2020, our income tax provision was impacted most significantly by (i) earnings in jurisdictions with lower statutory tax rates, (ii) $ 4.2 of tax benefits related to various audit settlements, statute expirations, and other adjustments to liabilities for uncertain tax positions, and (iii) $ 2.8 of excess tax benefits resulting from stock-based compensation awards that vested and/or were exercised during the year.

for which the future realization is now considered likely, and (iii) a benefit of $ 3.5 related to the resolution of certain liabilities for uncertain tax positions and interest associated with various refund claims, partially offset by $ 13.2 of tax expense associated with global intangible low-taxed income created by the liquidation of various entities.

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

Accruals for these uncertain tax positions are recorded in “Income taxes payable” and “Deferred and other income taxes” in the accompanying consolidated

balance sheets based on the expectation as to the timing of when the matters will be resolved.

Accruals for these uncertain tax positions are recorded in “Income taxes payable” and “Deferred and other income taxes” in the accompanying consolidated balance sheets based on the expectation as to the timing of when the matters will be resolved.

As events change and resolutions occur, these accruals are adjusted, such as in the case of audit settlements with taxing authorities.

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

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

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

In connection with such, we recorded a tax benefit of $ 2.2 during the year ended December 31, 2021 related to the resolution of certain liabilities for uncertain tax positions and interest associated with various refund claims.

We are not currently under examination by the Internal Revenue Service and the statue of limitations has closed for 2018 and 2019.

We believe any contingencies in open years are adequately provided for.

State income tax returns generally are subject to examination for a period of three to five years after filing the respective tax returns.

The impact on such tax returns of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states.

We have various state income tax returns in the process of examination.

We regularly have various state income tax returns in the process of examination.

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

We have various foreign income tax returns under examination.

We regularly have various foreign income tax returns under examination.

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 adverse effect 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 adverse effect on our results of operations or cash flows in the period 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.

3 unchanged sentences

Revolving loans (1)

Term loan (1)(2)

$ — $ 569.1 $ ( 569.1 ) $ — $ —

Term loans (2)(3)

244.3 300.0 ( 3.4 ) ( 1.0 ) 539.9

Trade receivables financing arrangement (4)

— 178.0 ( 162.0 ) — 16.0

Other indebtedness (5)

5 unchanged sentences

_____________________________________________________________

(1) As noted below, we amended our senior credit agreement on August 12, 2022.

The amendment made available a new term loan facility in the amount of $ 245.0 , the proceeds of which were primarily used to repay the outstanding balance of $ 237.4 under the then-existing term loan facility.

(2) The term loan is repayable in quarterly installments equal to 0.625 % of the initial term loan balance of $ 245.0 , 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 balance is payable in full on August 12, 2027.

(1) The revolving loan facility was utilized as the initial funding mechanism for the TAMCO and ASPEQ acquisitions and was repaid with the funds borrowed on the Incremental Term Loan (see additional discussion below) and cash generated from operations.

(2) As noted below, we amended our senior credit agreement on April 21, 2023, with the amendment making available an incremental term loan facility (“Incremental Term Loan”) in the amount of $ 300.0 .

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 initial term loan balances 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 $ 1.7 and $ 0.7 at December 31, 2023 and December 31, 2022, respectively.

1 unchanged sentence

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

At December 31, 2022, we had $ 45.7 of available borrowing capacity under this facility .

At December 31, 2023, we had $ 44.0 of available borrowing capacity under this facility after giving effect to outstanding borrowings of $ 16.0 .

(5) Primarily includes balances under a purchase card program of $ 1.9 and $ 1.8 and finance lease obligations of $ 0.5 and $ 0.7 at December 31, 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.

The purchase card program allows for payment beyond the normal

payment terms for goods and services acquired under the program.

As this arrangement extends the payment of these purchases beyond their normal payment terms through third-party lending institutions, we have classified these amounts as short-term debt.

(5) “Other” includes the impact of amortization of debt issuance costs associated with the term loan.

(6) “Other” includes the impact of amortization of debt issuance costs associated with the term loans.

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

Maturities of long-term debt payable during each of the five years subsequent to December 31, 2023 are $ 17.3 , $ 27.4 , $ 27.4 , $ 470.0 , and $ 0.0 , respectively.

Senior Credit Facilities

On August 12, 2022, we entered into the Credit Agreement to, among other things, extend the term of the facilities under the Credit Agreement (with the aggregate of each facility comprising the “Senior Credit Facilities”) and provide for committed senior secured financing with an aggregate amount of $ 770.0 which consists of the following facilities at December 31, 2022 (each with a final maturity of August 12, 2027):

• A term loan facility in an aggregate principal amount of $ 245.0 ;

On April 21, 2023 (the “Incremental Amendment Effective Date”), we entered into an Incremental Facility Activation Notice (the “Incremental Amendment”) with Bank of America, N.A., as administrative agent (the “Administrative Agent”), and the lenders party thereto, which amends the Amended and Restated Credit Agreement, dated as of August 12, 2022 (as amended, the “Credit Agreement”), among the Company, the lenders party thereto, Deutsche Bank AG, as foreign trade facility agent, and the Administrative Agent.

The Incremental Amendment provides for an Incremental Term Loan in the aggregate amount of $ 300.0 , which was available in up to three drawings (subject to customary conditions) from the Incremental Amendment Effective Date to October 18, 2023.

The proceeds of the Incremental Term Loan were available to be used to finance, in part, permitted acquisitions, to pay related fees, costs and expenses and for other lawful corporate purposes.

The Incremental Term Loan will mature on August 12, 2027.

We may voluntarily prepay the Incremental Term Loan, in whole or in part, without premium or penalty.

In June 2023, we borrowed $ 300.0 under the Incremental Term Loan in connection with the ASPEQ acquisition.

The credit facilities (the “Senior Credit Facilities”) under the Credit Agreement consist of the following at December 31, 2023 (each with a final maturity of August 12, 2027):

• Term loan facilities in an aggregate principal amount of $ 545.0 ($ 245.0 and $ 300.0 related to our original term loan and the Incremental Term Loan, respectively);

• A multicurrency revolving credit facility, available for loans and letters of credit in Dollars, Euro, Sterling and other currencies, in an aggregate principal amount up to the equivalent of $ 500.0 (with sub-limits equal to the equivalents of $ 200.0 for financial letters of credit, $ 50.0 for non-financial letters of credit, and $ 150.0 for non-U.S.

4 unchanged sentences

• Allows SPX to seek additional commitments, without consent from the existing lenders, to add incremental term loan facilities and/or increase the commitments in respect of the revolving credit facility and/or the bilateral foreign credit instrument facility by up to an aggregate principal amount not to exceed (x) the greater of (i) $ 200.0 and (ii) the amount of Consolidated EBITDA (as defined in the Credit Agreement) for the four fiscal quarters ended most recently before the date of determination, plus (y) an unlimited amount so long as, immediately after giving effect thereto, our Consolidated Senior Secured Leverage Ratio (defined in the Credit Agreement generally as the ratio of consolidated total debt (excluding the face amount of undrawn letters of credit, bank undertakings, or analogous instruments and net of unrestricted cash and cash equivalents) at the date of determination secured by liens to Consolidated EBITDA for the four fiscal quarters ended most recently before such date) does not exceed 2.75 :1.00, plus (z) an amount equal to all voluntary prepayments of the term loan facility and voluntary prepayments accompanied by permanent commitment reductions of the revolving credit facility and foreign credit instrument facility;

• Establishes per annum fees charged and applies interest rate margins, as follows:

• Establishes per annum fees charged and applies interest rate margins to all the credit facilities under the Credit Agreement, other than the Incremental Term Loan, as follows:

Ratio Revolving Commitment Fee Financial Letter of Credit Fee Foreign Credit Instrument (“FCI”) Commitment Fee

8 unchanged sentences

0.200 % 1.250 % 0.200 % 0.750 % 1.250 % 0.250 %

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

Consolidated Leverage Ratio Commitment Fee Term SOFR Loans

Less than 2.00 to 1.0

0.225 % 1.500 % 0.500 %

Greater than or equal to 2.00 to 1.0 but less than 3.00 to 1.0

0.250 % 1.625 % 0.625 %

Greater than or equal to 3.00 to 1.0

0.275 % 1.875 % 0.875 %

The interest rates applicable to loans under the Senior Credit Facilities are, at our option, equal to either (i) an alternate base rate (the highest of (a) the federal funds effective rate plus 0.5 %, (b) the prime rate of Bank of America, N.A., and (c) the one-month Term SOFR rate plus 1.0 %) or (ii) the Term SOFR rate for the applicable interest period plus 0.1 %, plus, in each case, an applicable margin percentage, which varies based on the Consolidated Leverage Ratio (defined in the Credit Agreement generally as the ratio of consolidated total debt (excluding the face amount of undrawn letters of credit, bank undertakings or analogous instruments and net of unrestricted cash and cash equivalents) at the date of determination to Consolidated EBITDA for the four fiscal quarters ended most recently before such date).

22 unchanged sentences

We are permitted under the Credit Agreement to repurchase capital stock and pay cash dividends in an unlimited amount if our Consolidated Leverage Ratio is (after giving pro forma effect to such payments) less than 2.75 to 1.00.

If our Consolidated Leverage Ratio is (after giving pro forma effect to such payments) greater than or equal to 2.75 to 1.00, the aggregate amount of such repurchases and dividend declarations cannot exceed (A) $ 100.0 in any fiscal year plus (B) an additional amount for all such repurchases and dividend declarations made after September 1, 2015 equal to the sum of (i) $ 100.0 plus (ii) a positive amount equal to 50 % of cumulative Consolidated Net Income (as defined in the Credit Agreement generally as consolidated net income subject to certain adjustments solely for the purposes of determining this basket) during the period from September 1, 2015 to the end of the most recent fiscal quarter preceding the date of such repurchase or dividend declaration for which financial statements have been (or were required to be) delivered (or, in case such Consolidated Net Income is a deficit, minus

100 % of such deficit) plus (iii) certain other amounts, less our previous usage of such additional amount for certain other investments and restricted junior payments.

At December 31, 2023, we had $ 489.2 of available borrowing capacity under our revolving credit facilities, after giving effect to $ 10.8 reserved for outstanding letters of credit.

1 unchanged sentence

At December 31, 2023, we were in compliance with all covenants of our Credit Agreement.

In connection with the 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.

As mentioned previously, during the second quarter of 2023, we capitalized $ 1.3 of debt issuance costs associated with the Incremental Term Loan.

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 a portion of the 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 initial term loan.

During 2021, we reduced the issuance capacity of our then-existing foreign credit instrument facilities resulting in a charge of $ 0.2 to “Loss on amendment/refinancing of senior credit agreement” associated with the write-off of unamortized deferred financing costs.

3 unchanged sentences

We are party to a trade receivables financing agreement, whereby we can borrow, on a continuous basis, up to $ 60.0 .

Availability of funds may fluctuate over time given, among other things, changes in eligible receivable balances, but will not exceed the $ 50.0 program limit.

Availability of funds may fluctuate over time given, among other things, changes in eligible receivable balances, but will not

exceed the $ 60.0 program limit.

The facility contains representations, warranties, covenants and indemnities customary for facilities of this type.

2 unchanged sentences

At December 31, 2023, the aggregate amount of borrowing capacity under these facilities was $ 20.0 , while there were no borrowings outstanding.

Company-owned Life Insurance

The Company has investments in COLI policies, which are recorded at their cash surrender value at each balance sheet date.

The Company has the ability to monetize its investment in the COLI policies as an additional source of liquidity.

At December 31, 2023, the Company had not monetized any of its existing COLI policies’ cash surrender value.

See Note 1 for additional details of the COLI policies.

(14) Derivative Financial Instruments and Concentrations of Credit Risk

1 unchanged sentence

We previously maintained interest rate swap agreements that matured in March 2021 and effectively converted borrowings under our senior credit facilities to a fixed rate of 2.535 %, plus the applicable margin.

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

In 2020 we entered into additional interest swap agreements (“Swaps”).

The Swaps have a remaining notional amount of $ 218.8 , cover the period through November 2024, and effectively convert this portion of the borrowings under our senior credit facilities to a fixed rate of 1.077 %, plus the applicable margin.

In connection with entering into the Credit Agreement, the Swaps were amended to be based on SOFR as opposed to LIBOR.

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

In connection with an August 2022 amendment of the Credit Agreement, the Swaps were amended to be based on SOFR as opposed to LIBOR.

As mentioned in Note 3, we applied the optional expedient per ASU No.

2020-04 and No.

2021-01 and, thus, continue to designate and account for our interest rate swap agreements as cash flow hedges.

2021-01, and 2022-06 and, thus, continue to designate and account for our interest rate swap agreements as cash flow hedges.

As of December 31, 2023 and 2022, the unrealized gain, net of tax, recorded in AOCI was $ 5.7 and $ 11.0 , respectively.

In addition, the fair value of our interest rate swap agreements was $ 14.7 (with $ 8.7 recorded as a current asset and $ 6.0 as a non-current asset) as of December 31, 2022, and $ 0.6 (with $ 2.5 recorded as a non-current asset and $ 1.9 as a current liability) as of December 31, 2021.

In addition, the fair value of our interest rate swap agreements was $ 7.5 (with $ 7.5 recorded as a current asset) as of December 31, 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 fair value of our interest rate swap agreements are reclassified into earnings as a component of interest expense when the forecasted transaction impacts earnings.

2 unchanged sentences

Our objective is to preserve the economic value of non-functional currency-denominated cash flows and to minimize the impact of changes as a result of currency fluctuations.

Our principal currency exposures relate to the South African Rand, British Pound Sterling (“GBP”), and Euro.

Our principal currency exposures relate to the South African Rand, British Pound Sterling, and Euro.

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

1 unchanged sentence

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

In addition to the above, 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 South African Rand 480.9 (or $ 24.9 at the time of execution) and a fair value of $ 1.3 , which is included within “Assets of DBT and Heat Transfer” on the consolidated balance sheet as of December 31, 2023, all of which are scheduled to mature within one year.

Refer to Note 4 for additional details.

Commodity Contracts

2 unchanged sentences

Immediately prior to the sale, we extinguished the existing commodity contracts and reclassified from AOCI a net loss of $ 0.6 to “Gain (loss) on disposition of discontinued operations, net of tax” within our consolidated statement of operations for the year ended December 31, 2021.

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

Prior to extinguishment, we designated and accounted for these contracts as cash flow hedges and the change in fair value was included in AOCI.

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

Concentrations of Credit Risk

Financial instruments that potentially subject us to significant concentrations of credit risk consist of cash and equivalents, trade accounts receivable, and interest rate swap and foreign currency forward contracts.

Financial instruments that potentially subject us to significant concentrations of credit risk consist of cash and equivalents, trade accounts receivable, COLI policies, and interest rate swaps and FX forward contracts.

These financial instruments, other than trade accounts receivable, are placed with high-quality financial institutions throughout the world.

10 unchanged sentences

Numerous claims, complaints and proceedings arising in the ordinary course of business have been asserted or are pending against us or certain of our subsidiaries (collectively, “claims”).

These claims relate to litigation matters (e.g., class actions, derivative lawsuits and contracts, intellectual property and competitive claims), environmental matters, product liability matters (which, prior to the Asbestos Portfolio Sale, were predominately associated with alleged exposure to asbestos-containing materials), and other risk management matters (e.g., general liability, automobile, and workers’ compensation claims).

These claims relate to litigation matters (e.g., contracts, intellectual property and competitive claims), environmental matters, product liability matters (which, prior to the Asbestos Portfolio Sale, were predominately associated with alleged exposure to asbestos-containing materials), and other risk management matters (e.g., general liability, automobile, and workers’ compensation claims).

Additionally, we may become subject to other claims of which we are currently unaware, which may be significant, or the claims of which we are aware may result in our incurring significantly greater loss than we anticipate.

1 unchanged sentence

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

Our recorded liabilities related to these matters totaled $ 39.5 and $ 658.8 at December 31, 2022 and 2021, respectively.

Of these amounts, $ 30.8 and $ 584.3 are included in “Other long-term liabilities” within our consolidated balance sheets at December 31, 2022 and 2021, respectively, with the remainder included in “Accrued expenses.” The decline in liabilities is primarily related to the Asbestos Portfolio Sale.

The liabilities we record for these matters are based on a number of assumptions, including historical claims and payment experience.

Our recorded liabilities related to these matters, primarily associated with environmental matters, totaled $ 37.9 and $ 39.5 at December 31, 2023 and 2022, respectively.

Of these amounts, $ 29.4 and $ 30.8 are included in “Other long-term liabilities” within our consolidated balance sheets at December 31, 2023 and 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.

As a result, our current assumptions for estimating these liabilities may not

prove accurate, and we may be required to adjust these liabilities in the future, which could result in charges to earnings.

As a result, our current assumptions for estimating these liabilities may not prove accurate, and we may be required to adjust these liabilities in the future, which could result in charges to earnings.

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

Resolution of Dispute with Former Representative

On January 18, 2024, a jury ruled that one of our businesses within the Detection and Measurement reportable segment had breached its contract and implied duties of good faith and fair dealings in connection with an agreement entered into with a former representative.

On January 26, 2024, we negotiated a settlement requiring a payment to the former representative of $ 9.0

to resolve all claims related to the matter.

This amount was recorded to “Other operating (income) expense, net” within the consolidated statement of operations for the year ended December 31, 2023.

Asbestos Matters

Prior to the Asbestos Portfolio Sale, our asbestos-related claims were typical in certain of the industries in which we operate or pertain to legacy businesses we no longer operate.

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

Insurance recovery assets (1)

Liabilities for claims (2)

_____________________________________________________________

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

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

The liabilities we recorded for asbestos-related claims were based on a number of assumptions.

In estimating our liabilities for asbestos-related claims, we considered, among other things, the following:

• The number of pending claims by disease type and jurisdiction.

• Historical information by disease type and jurisdiction with regard to:

◦ Average number of claims settled with payment (versus dismissed without payment);

◦ Average claim settlement amounts.

• The period over which we could reasonably project asbestos-related claims (projected through 2057 at December 31, 2021 ).

The assets we recorded for asbestos-related claims represented amounts that we believe we were entitled to recover under agreements we had with insurance companies.

The amount of these assets was based on a number of assumptions, including the continued solvency of the insurers and our legal interpretation of our rights for recovery under the agreements we had with the insurers.

As indicated in Note 1, we completed the Asbestos Portfolio Sale on November 1, 2022, which resulted in the divestiture of three wholly-owned subsidiaries that hold asbestos liabilities and certain assets, including related insurance assets.

As a result of this transaction, all asbestos obligations and liabilities and related insurance assets have been removed from our consolidated balance sheets effective November 12, 2022.

During the years ended December 31, 2022 and 2021 our (receipts) payments for asbestos-related claims, net of respective insurance recoveries of $ 31.6 and $ 53.9 , were $ 20.1 , and $( 0.3 ), respectively.

3 unchanged sentences

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 $ 58.4 ).

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 732.6 (or $ 42.8 ), 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 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 ta keover 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 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 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 consolidated statements of operations.

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

The hearing on this matter occurred in December 2022, with the ruling from such hearing yet to be received.

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 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 (approximately South African Rand 790.0 or $ 46.1 ).

On September 21, 2022, an arbitration tribunal ruled that only South African Rand 349.6 (or $ 20.4 ) 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.

On November 25, 2022, MHI notified DBT of its intent to refer the claims dismissed from the arbitration to a new dispute adjudication panel.

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 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;

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 $ 54.4 ) 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.

In April and July 2019, DBT received notifications of intent to claim liquidated damages totaling South African Rand 407.2 (or $ 23.8 ) 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 consolidated financial statements with respect to these claims.

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

MHI has made other claims against DBT totaling South African Rand 176.2 (or $ 10.3 ) and has also alleged that it has incurred additional remedial costs related to portions of DBT’s scope of work.

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

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

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

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 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 $ 24.4 ) 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 $ 19.1 ) within “ Assets of DBT and Heat Transfer ” on the accompanying consolidated balance sheet as of December 31, 2022.

The remaining bond of South African Rand 29.2 (or $ 1.7 ) was issued to MHI as a performance guarantee in the event of a breach of DBT’s contractual obligations.

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

In addition, 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 o f such amount and, thus, the amount received by DBT has not been reflected in our 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 $ 7.0 ) 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 “Gain (loss) on disposition of discontinued operations, net of tax.”

Resolution of Remaining Prime Contractor Claims - We have invested, and would have continued to invest, significant management and financial resources to defend and pursue the above 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 4 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 o f such amount and, thus, the amount received by DBT has not been reflected in our consolidated statements of operations.

Claim for Contingent Consideration Related to ULC Acquisition

3 unchanged sentences

As a result, we reversed the liability of $ 24.3 during the third quarter of 2021, with the offset recorded to “Other operating (income) expense, net.”

On August 23, 2022, the seller of ULC initiated a breach-of-contract lawsuit against us in the United States District Court for the Eastern District of New York claiming that it is entitled to a portion of the additional cash consideration totaling $ 15.0 linked to certain operating performance milestones.

SPX has numerous defenses against this claim and, thus, we do not believe we have a probable loss associated with the claim.

On August 23, 2022, the seller of ULC initiated a breach-of-contract lawsuit against us in the United States District Court for the Eastern District of New York claiming that it is entitled to a portion of the additional cash consideration linked to certain operating performance milestones totaling $ 15.0 .

If successful with their claim the plaintiff is also eligible to recover prejudgment interest and attorney's fees.

We have defenses against the claim and, thus, while we do not believe we have a probable loss associated with the claim, it is reasonably possible we may incur a loss associated with it.

Litigation Matters

27 unchanged sentences

We are self-insured for certain of our workers’ compensation, automobile, product and general liability, disability and health costs, and we believe that we maintain adequate accruals to cover our retained liability.

Our accruals for risk management matters are determined by us, are based on claims filed and estimates of claims incurred but not yet reported, and generally are not discounted.

Our accruals for risk management

matters are determined by us, are based on claims filed and estimates of claims incurred but not yet reported, and generally are not discounted.

We consider a number of factors, including third-party actuarial valuations, when making these determinations.

We maintain third-party stop-loss insurance policies to cover certain liability costs in excess of predetermined retained amounts.

This insurance may be insufficient or unavailable (e.g., because of insurer insolvency) to protect us against loss exposures.

This insurance may be insufficient or unavailable (e.g., because of insurer insolvency) to protect us against potential loss exposures.

Executive Agreements

2 unchanged sentences

The Compensation Committee of the Board of Directors has approved severance benefit agreements for our other six executive officers.

These agreements cover each executive’s entitlements in the event that the executive’s employment is terminated for

other than cause, death or disability, or the executive resigns with good reason.

These agreements cover each executive’s entitlements in the event that the executive’s employment is terminated for other than cause, death or disability, or the executive resigns with good reason.

The Compensation Committee of the Board of Directors has also approved change of control agreements for each of our executive officers, which cover each executive’s entitlements following a change of control.

12 unchanged sentences

Common Stock and Treasury Stock

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

Pursuant to this re-authorization, during the second quarter of 2022, we repurchased 0.707 shares of our common stock for aggregate cash payments of $ 33.7 .

As of December 31, 2022, the remaining maximum approximate amount of our common stock that may be purchased under this authorization is $ 66.3 .

On May 9, 2023, and May 10, 2022, our Board of Directors re-authorized management, in its sole discretion, to repurchase, in any fiscal year, up to $ 100.0 of our common stock, subject to maintaining compliance with all covenants of our Credit Agreement.

Pursuant to this authorization, during the second quarter of 2022, we repurchased 0.707 shares of our common stock for aggregate cash payments of $ 33.7 .

As of December 31, 2023, the maximum approximate amount of our common stock that may be purchased under this authorization is $ 100.0 .

At December 31, 2023, we had 200.0 authorized shares of common stock (par value $ 0.01 ).

6 unchanged sentences

Restricted stock units — 0.191 0.191

Share repurchases — ( 0.707 ) ( 0.707 )

Other 0.340 — 0.340

1 unchanged sentence

Restricted stock units — 0.115 0.115

Share repurchases — ( 0.707 ) ( 0.707 )

Other 0.268 — 0.268

13 unchanged sentences

We grant RSU’s to non-employee directors under the 2019 Plan.

The 2022, 2021 and 2020 grants to non-employee directors generally vest over a 1 year-period, with the 2022 grants scheduled to vest in their entirety immediately prior to the annual meeting of stockholders in May 2023.

The 2023, 2022 and 2021 grants to non-employee directors generally vest over a 1 year-period, with the 2023 grants of 0.014 RSU’s scheduled to vest in their entirety immediately prior to the annual meeting of stockholders in May 2024.

Stock options may be granted to key employees in the form of incentive stock options or non-qualified stock options.

9 unchanged sentences

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

We issued PSU’s to eligible participants on March 1, 2022 and 2021, and February 20, 2020.

We issued PSU’s to eligible participants on March 1, 2023, 2022, and 2021.

We used the following assumptions in determining the fair value of these awards:

10 unchanged sentences

Peer group within S&P 600 Capital Goods Index 50.98 % n/a 1.44 %

February 20, 2020

March 1, 2021

SPX 42.88 % — % 0.25 % 60.24 %

23 unchanged sentences

Stock Options

On March 1, 2022 and 2021, and February 20, 2020, we granted stock options totaling 0.105 , 0.105 , and 0.125 , respectively.

On March 1, 2023, 2022, and 2021, we granted stock options totaling 0.074 , 0.105 , and 0.105 , respectively.

The exercise price per share of these options is $ 71.93 , $ 48.97 , and $ 58.34 , resp ectively, and the maximum contractual term of these options is ten years .

The fair value of each stock option granted on March 1 2022 and 2021, and February 20, 2020 was $ 19.33 , $ 23.49 , and $ 17.40 , respectively.

The fair value of each stock option granted on March 1, 2023, 2022, and 2021 was $ 31.20 , $ 19.33 , and $ 23.49 , respectively.

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

March 1, 2022 March 1, 2021 February 20, 2020

March 1, 2023 March 1, 2022 March 1, 2021

Annual expected stock price volatility 37.15 % 38.62 % 41.15 %

2 unchanged sentences

Expected life of stock option (in years) 6.0 6.0 6.0

Annual expected stock price volatility for the March 1 2022 and 2021, and February 20, 2020 grants were based on a weighted average of SPX’s stock volatility since the Spin-Off and an average of the most recent six-year historical volatility of a peer company group.

Annual expected stock price volatility for the March 1, 2023, 2022, and 2021 grants were based on a weighted average of SPX’s stock volatility since the Spin-Off and an average of the most recent six-year historical volatility of a peer company group.

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

21 unchanged sentences

The changes in the components of accumulated other comprehensive income, net of tax, for the year ended December 31, 2023 were as follows:

Adjustment Net Unrealized

Postretirement

Liability Adjustment (2)

Adjustment Net Unrealized Gains on Qualifying Cash Flow Hedges (1)

Pension and Postretirement Liability Adjustment (2)

Balance at December 31, 2022 $ 239.1 $ 11.0 $ 7.4 $ 257.5

Other comprehensive income (loss) before reclassifications ( 13.6 ) 11.7 0.1 ( 1.8 )

Other comprehensive income before reclassifications 11.9 1.5 — 13.4

Amounts reclassified from accumulated other comprehensive income — ( 6.8 ) ( 3.0 ) ( 9.8 )

6 unchanged sentences

The changes in the components of accumulated other comprehensive income, net of tax, for the year ended December 31, 2022 were as follows:

Adjustment Net Unrealized

Gains (Losses) on

Hedges (1) Pension and

Adjustment Net Unrealized Gains on Qualifying Cash

Flow Hedges (1)

Postretirement

Liability Adjustment (2) Total

Liability Adjustment (2)

Balance at December 31, 2021 $ 252.7 $ 0.5 $ 10.7 $ 263.9

Other comprehensive income (loss) before reclassifications ( 13.6 ) 11.7 0.1 ( 1.8 )

Amounts reclassified from accumulated other comprehensive income (loss) 19.9 ( 0.4 ) ( 3.6 ) 15.9

Amounts reclassified from accumulated other comprehensive income — ( 1.2 ) ( 3.4 ) ( 4.6 )

Current-period other comprehensive income (loss) ( 13.6 ) 10.5 ( 3.3 ) ( 6.4 )

1 unchanged sentence

__________________________________________________________________

(1) Net of tax (provision) benefit of $( 0.1 ) and $ 1.4 as of December 31, 2021 and 2020 , respectively.

(1) Net of tax provision of $ 3.7 and $ 0.1 as of December 31, 2022 and 2021 , respectively.

(2) Net of tax provision of $ 2.7 and $ 3.7 as of December 31, 2022 and 2021 , respectively.

The balances as of December 31, 2022 and 2021 include unamorti zed prior service credits.

2 unchanged sentences

Consolidated Statements of

(Gains) losses on qualifying cash flow hedges:

Gains on qualifying cash flow hedges:

FX forward contracts $ — $ ( 0.1 ) Revenues

Commodity contracts — ( 3.8 ) Income from discontinued operations, net of tax

Swaps ( 9.3 ) ( 1.5 ) Interest expense

6 unchanged sentences

$ ( 3.0 ) $ ( 3.4 )

Loss on reclassification of foreign currency translation adjustments:

DBT $ — $ 19.9 Gain (loss) on disposition of discontinued operations, net of tax

Income taxes — —

Common Stock in Treasury

19 unchanged sentences

These guarantees and bonds provided protections for Balcke Dürr customers in regard to advance payments, performance, and warranties on projects in existence at the time of sale.

In addition, certain bonds related to lease obligations and foreign tax matters in existence at the time of sale.

In addition, certain bonds related to lease

obligations and foreign tax matters in existence at the time of sale.

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

Also, at the time of sale, Balcke Dürr provided cash collateral of Euro 4.0 and the parent company of the buyer provided a guarantee of Euro 5.0 as a security for the above indemnification s (Euro 0.0 and Euro 0.0 , resp ectively, at December 31, 2022).

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

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

As of December 31, 2021, the guarantees had expired and bonds had been returned.

Summarized below are the liability (related to the parent company guarantees and bank and surety bonds) and asset (related to the cash collateral and guarantee provided by the parent company of the buyer) recorded at the time of sale, along with the change in the liability and the asset during 2021 and 2020.

December 31, 2021 December 31, 2020

Guarantees and Bonds Liability (1)

Indemnification Assets (1)

Summarized below is the liability along with the change in the liability during 2021.

December 31, 2021

Guarantees and Bonds Liability

Indemnification Assets (1)

Balance at beginning of year $ 1.8

Reduction/Amortization for the period (1)

( 1.7 ) — ( 0.4 ) ( 0.3 )

Impact of changes in foreign currency rates ( 0.1 )

1 unchanged sentence

___________________________

(1) In connection with the sale, we estimated the fair value of the existing parent company guarantees and bank and surety bonds considering the probability of default by Balcke Dürr and an estimate of the amount we would be obligated to pay in the event of a default.

Additionally, we estimated the fair value of the cash collateral provided by Balcke Dürr and the guarantee provided by the parent company of the buyer based on the terms and conditions and relative risk associated with each of these securities (unobservable inputs - Level 3).

(1) We reduced the liability generally at the earlier of the completion of the related underlying project milestones or the expiration of the guarantees or bonds.

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

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

Contingent Consideration for Sensors & Software, ECS, and ULC Acquisitions — In connection with the acquisition of Sensors & Software, the sellers were eligible for additional cash consideration of up to $ 3.7 , with payment of such contingent consideration dependent upon the achievement of certain milestones.

The estimated fair value of such contingent consideration totaled $ 1.3 as of December 31, 2021 with the amount reflected as a liability within the respective consolidated balance sheet.

The $ 1.3 was paid during 2022.

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

Contingent Consideration for the Sensors & Software, ECS, and ULC Acquisitions — In connection with the acquisition of Sensors & Software in 2020, the sellers were eligible for additional cash consideration of up to $ 3.8 , with payment of such contingent consideration dependent upon the achievement of certain milestones.

The fair value of contingent consideration totaled $ 1.3 , and was paid during 2022.

In connection with the acquisition of ECS in 2021, the seller was eligible for additional cash consideration of up to $ 16.0 , with payment of such contingent consideration dependent upon the achievement of certain milestones.

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

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

Thus, during 2022 we reduced the fair value/liability by $ 1.3 , with such amounts recorded to “Other operating income (expense), net.” The estimated fair value of such contingent consideration was $ 0.0 at December 31, 2023 and December 31, 2022 as we determined no additional cash consideration was due to the seller.

As it relates to the ULC acquisition, and as indicated in Note 10, we concluded during the third quarter of 2021 that the operating and financial milestones related to the ULC contingent consideration were not achieved, resulting in the reversal of the related liability of $ 24.3 .

In connection with the acquisition of ECS, the seller was eligible for additional cash consideration of up to $ 15.0 , with payment of such contingent consideration dependent upon the achievement of certain milestones.

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

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

During 2022, we further reduced the fair value/liability by $ 1.3 .

The estimated fair value of such contingent consideration was $ 0.0 and $ 1.5 at December 31, 2022 and December 31, 2021, respectively, with the latter amount reflected as a liability within the respective consolidated balance sheet.

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

14 unchanged sentences

During the years ended December 31, 2023, 2022, and 2021, we recorded gains (losses) of $ 3.6 , $( 3.0 ) a nd $ 11.8 , respectively, to “Other income (expense), net” related to changes in the estimated fair value of such equity security.

In addition, we received a distribution during 2020 of $ 3.5 included within “cash flows from operating activities” in our consolidated statement of cash flows.

As of December 31, 2022 and 2021, the equity security had an estimated fair value of $ 35.8 and $ 38.8 , respectively.

As of December 31, 2023 and 2022, the equity security had an estimated fair value of $ 39.4 and $ 35.8 , respectively, recorded in “ Other assets ” on the consolidated balance sheets.

We are restric ted from transferring this investment without approval of the manager of the investee.

1 unchanged sentence

See Note 13 for fur ther details.

(18) Quarterly Results (Unaudited)

2022 2021 2022 2021 2022 2021 2022 2021

Revenues $ 307.1 $ 287.2 $ 354.0 $ 296.6 $ 370.5 $ 285.7 $ 429.3 $ 350.0

Gross profit 104.0 104.4 124.6 102.3 133.1 95.8 162.2 129.3

Income (loss) from continuing operations, net of tax (1)

13.0 23.0 19.1 17.7 12.5 13.9 ( 24.8 ) 4.4

Income (loss) from discontinued operations, net of tax (1)(2)

( 1.6 ) 3.8 ( 6.1 ) 44.2 ( 9.4 ) 316.4 ( 2.5 ) 2.0

Net income (loss)

$ 11.4 $ 26.8 $ 13.0 $ 61.9 $ 3.1 $ 330.3 $ ( 27.3 ) $ 6.4

Basic income (loss) per share of common stock:

Continuing operations, net of tax $ 0.29 $ 0.51 $ 0.42 $ 0.39 $ 0.28 $ 0.31 $ ( 0.55 ) $ 0.10

Discontinued operations, net of tax ( 0.04 ) 0.08 ( 0.13 ) 0.98 ( 0.21 ) 6.98 ( 0.05 ) 0.04

Net income (loss) $ 0.25 $ 0.59 $ 0.29 $ 1.37 $ 0.07 $ 7.29 $ ( 0.60 ) $ 0.14

Diluted income (loss) per share of common stock:

Continuing operations, net of tax $ 0.28 $ 0.50 $ 0.41 $ 0.38 $ 0.27 $ 0.30 $ ( 0.55 ) $ 0.10

Discontinued operations, net of tax ( 0.03 ) 0.08 ( 0.13 ) 0.95 ( 0.20 ) 6.78 ( 0.05 ) 0.04

Net income (loss) $ 0.25 $ 0.58 $ 0.28 $ 1.33 $ 0.07 $ 7.08 $ ( 0.60 ) $ 0.14

___________________________________________________________________

The sum of the quarters' income per share may not equal the full year per share amounts.

(1) During the second and third quarters of 2022, we recognized pre-tax actuarial losses of $ 3.8 and $ 2.4 , respectively, associated with our pension and postretirement benefit plans.

During the fourth quarter of 2022 and 2021, we recognized pre-tax actuarial gains of $ 8.0 and $ 9.9 , respectively, associated with our pension and postretirement benefit plans.

During the third quarter of 2022, we recorded charges of $ 21.7 ($ 16.5 to continuing operations and $ 5.2 to discontinued operations) as a result of changes in estimates associated with the assets recorded for asbestos product liability matters.

During the fourth quarter of 2021, we recorded charges of $ 46.3 ($ 44.6 to continuing operations and $ 1.7 to discontinued operations) as a result of changes in estimates associated with the assets and liabilities recorded for asbestos product liability matters.

See Note 15 for additional details.

During the fourth quarter of 2022, we recorded a loss of $ 73.9 as a result of the Asbestos Portfolio Sale.

During the fourth quarter of 2022, we recorded impairment charges of $ 13.4 related to (i) the goodwill and indefinite-lived intangible assets of ULC ( $ 12.9 ) and (ii) certain other indefinite-lived intangible assets ($ 0.5 ) .

During the fourth quarter of 2021, we recorded impairment charges of $ 5.7 related to (i) the goodwill and indefinite-lived intangible assets of ULC ( $ 5.2 ) and (ii) certain other indefinite-lived intangible assets ($ 0.5 ).

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

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

In connection with the sale, we recorded a gain of $ 357.7 to “Gain (loss) on disposition of discontinued operations, net of tax” within our consolidated statement of operations for the third quarter 2021.

During the fourth quarter of 2021, we increased the gain on the sale of Transformer Solutions by $ 24.5 , with the additional gain related primarily to the utilization of income tax benefits associated with liquidating certain recently acquired entities.

In the fourth quarter of 2021, and in connection with the completion of the wind-down of our DBT business, we recorded a charge of $ 19.9 to discontinued operations to reflect the write-off of historical currency translation amounts associated with DBT that had been previously reported within “Stockholders’ equity.”

(3) We establish actual interim closing dates using a fiscal calendar, which requires our businesses to close their books on the Saturday closest to the end of the first calendar quarter, with the second and third quarters being 91 days in length.

Our fourth quarter ends on December 31.

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

This practice only affects the quarterly reporting periods and not the annual reporting period.

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

(18) Subsequent Events

On February 7, 2024, we completed the acquisition of Ingénia Technologies Inc.

(“Ingénia”) which specializes in the design and manufacture of custom air handling units that demand high levels of precision and reliability in healthcare, pharmaceutical, education, food processing and industrial end markets.

We purchased Ingénia for net cash consideration of CAD 398.8 (or $ 295.7 at the time of payment) which was funded through borrowings on our revolving credit facilities under our Credit Agreement.

The post-acquisition results of Ingénia will be reflected within our HVAC reportable segment.

Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data