10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2018

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38095

Gardner Denver Holdings, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	46-2393770
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

222 East Erie Street, Suite 500

Milwaukee, Wisconsin 53202

(Address of Principal Executive Offices) (Zip Code)

(414) 212-4700

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒   No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
		Emerging growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ☐     No  ☒

The registrant had outstanding 198,762,737 shares of Common Stock, par value $0.01 per share, as of October 24, 2018.

Table of Contents

GARDNER DENVER HOLDINGS, INC. AND SUBSIDIARIES

FORM 10-Q

INDEX

		Page No.
PART I. FINANCIAL INFORMATION
	Item 1. Condensed Consolidated Financial Statements	6
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	42
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	61
	Item 4. Controls and Procedures	62
PART II. OTHER INFORMATION
	Item 1. Legal Proceedings	62
	Item 1A. Risk Factors	62
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	63
	Item 3. Defaults Upon Senior Securities	63
	Item 4. Mine Safety Disclosures	63
	Item 5. Other Information	63
	Item 6. Exhibits	63
SIGNATURES		64

2

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

In addition to historical information, this Quarterly Report on Form 10-Q (this “Form 10-Q”) may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. All statements, other than statements of historical facts included in this Form 10-Q, including statements concerning our plans, objectives, goals, beliefs, business strategies, future events, business conditions, results of operations, financial position, business outlook, business trends and other information, may be forward-looking statements. Words such as “estimates,” “expects,” “contemplates,” “will,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts,” “may,” “should” and variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not historical facts, and are based upon our current expectations, beliefs, estimates and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Our expectations, beliefs, estimates and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs, estimates and projections will result or be achieved and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.

There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this Form 10-Q. Such risks, uncertainties and other important factors that could cause actual results to differ include, among others, the risks, uncertainties and factors set forth under “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, and in this report, as such risk factors may be updated from time to time in our periodic filings with the SEC, and are accessible on the SEC’s website at www.sec.gov, and also include the following:

· We have exposure to the risks associated with instability in the global economy and financial markets, which may negatively impact our revenues, liquidity, suppliers and customers.

· More than half of our sales and operations are in non-U.S. jurisdictions and we are subject to the economic, political, regulatory and other risks of international operations.

· Our revenues and operating results, especially in the Energy segment, depend on the level of activity in the energy industry, which is affected by volatile oil and gas prices.

· Our results of operations are subject to exchange rate and other currency risks. A significant movement in exchange rates could adversely impact our results of operations and cash flows.

· Potential governmental regulations restricting the use, and increased public attention to and litigation regarding the impacts, of hydraulic fracturing or other processes on which it relies could reduce demand for our products.

· We face competition in the markets we serve, which could materially and adversely affect our operating results.

· Large or rapid increases in the cost of raw materials and component parts, substantial decreases in their availability, or our dependence on particular suppliers of raw materials and component parts could materially and adversely affect our operating results.

· Our operating results could be adversely affected by a loss or reduction of business with key customers or consolidation or the vertical integration of our customer base.

· The loss of, or disruption in, our distribution network could have a negative impact on our abilities to ship products, meet customer demand and otherwise operate our business.

· Our ongoing and expected restructuring plans and other cost savings initiatives may not be as effective as we anticipate, and we may fail to realize the cost savings and increased efficiencies that we expect to result from these actions. Our operating results could be negatively affected by our inability to effectively implement such restructuring plans and other cost savings initiatives.

· Our success depends on our executive management and other key personnel.

3

· Credit and counterparty risks could harm our business.

· If we are unable to develop new products and technologies, our competitive position may be impaired, which could materially and adversely affect our sales and market share.

· Cost overruns, delays, penalties or liquidated damages could negatively impact our results, particularly with respect to fixed-price contracts for custom engineered products.

· The risk of non-compliance with U.S. and foreign laws and regulations applicable to our international operations could have a significant impact on our results of operations, financial condition or strategic objectives.

· A significant portion of our assets consists of goodwill and other intangible assets, the value of which may be reduced if we determine that those assets are impaired.

· Our business could suffer if we experience employee work stoppages, union and work council campaigns or other labor difficulties.

· We are a defendant in certain asbestos and silica-related personal injury lawsuits, which could adversely affect our financial condition.

· Acquisitions and integrating such acquisitions create certain risks and may affect our operating results.

· A natural disaster, catastrophe or other event could result in severe property damage, which could adversely affect our operations.

· Information systems failure may disrupt our business and result in financial loss and liability to our customers.

· The nature of our products creates the possibility of significant product liability and warranty claims, which could harm our business.

· Environmental compliance costs and liabilities could adversely affect our financial condition.

· Third parties may infringe upon our intellectual property or may claim we have infringed their intellectual property, and we may expend significant resources enforcing or defending our rights or suffer competitive injury.

· We face risks associated with our pension and other postretirement benefit obligations.

· Our substantial indebtedness could have important adverse consequences and adversely affect our financial condition.

· We may not be able to generate sufficient cash to service all of our indebtedness, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

· Despite our level of indebtedness, we and our subsidiaries may still be able to incur substantially more debt, including off-balance sheet financing, contractual obligations and general and commercial liabilities.  This could further exacerbate the risks to our financial condition described above.

· The terms of the credit agreements governing the Senior Secured Credit Facilities may restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.

· Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

4

· We utilize derivative financial instruments to reduce our exposure to market risks from changes in interest rates on our variable rate indebtedness and we will be exposed to risks related to counterparty credit worthiness or non-performance of these instruments.

· If the financial institutions that are part of the syndicate of our Revolving Credit Facility fail to extend credit under our facility or reduce the borrowing base under our Revolving Credit Facility, our liquidity and results of operations may be adversely affected.

We caution you that the risks, uncertainties and other factors referenced above may not contain all of the risks, uncertainties and other factors that are important to you. In addition, we cannot assure you that we will realize the results, benefits or developments that we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in the way expected. There can be no assurance that (i) we have correctly measured or identified all of the factors affecting our business or the extent of these factors’ likely impact, (ii) the available information with respect to these factors on which such analysis is based is complete or accurate, (iii) such analysis is correct or (iv) our strategy, which is based in part on this analysis, will be successful. All forward-looking statements in this report apply only as of the date of this report or as of the date they were made and, except as required by applicable law, we undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.

All references to “we”, “us”, “our”,  the “Company” or “Gardner Denver” in this Quarterly Report on Form 10-Q mean Gardner Denver Holdings, Inc. and its subsidiaries, unless the context otherwise requires.

Website Disclosure

We use our website www.gardnerdenver.com as a channel of distribution of Company information. Financial and other important information regarding the Company is routinely accessible through and posted on our website. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls and webcasts.  In addition, you may automatically receive e-mail alerts and other information about Gardner Denver Holdings, Inc. when you enroll your e-mail address by visiting the “Email Alerts” section of our website at www.investors.gardnerdenver.com. The contents of our website is not, however, a part of this Quarterly Report on Form 10-Q.

5

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

GARDNER DENVER HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 (Unaudited)

(Dollars in millions, except per share amounts)

	For the Three Month Period Ended September 30,						For the Nine Month Period Ended September 30,
	2018			2017			2018			2017
Revenues	$	689.3		$	649.6		$	1,977.1		$	1,710.4
Cost of sales		426.9			395.7			1,233.6			1,066.0
Gross Profit		262.4			253.9			743.5			644.4
Selling and administrative expenses		107.7			111.0			330.4			338.9
Amortization of intangible assets		31.0			29.5			93.4			87.6
Other operating expense, net		6.0			17.4			10.8			186.7
Operating Income		117.7			96.0			308.9			31.2
Interest expense		24.4			30.1			76.5			115.4
Loss on extinguishment of debt		0.9			34.1			1.0			84.5
Other income, net		(2.4	)		(0.6	)		(6.7	)		(2.4	)
Income (Loss) Before Income Taxes		94.8			32.4			238.1			(166.3	)
Provision (benefit) for income taxes		22.6			4.4			63.2			(41.2	)
Net Income (Loss)		72.2			28.0			174.9			(125.1	)
Less: Net income attributable to noncontrolling interests		-			-			-			0.1
Net Income (Loss) Attributable to Gardner Denver Holdings, Inc.	$	72.2		$	28.0		$	174.9		$	(125.2	)
Basic income (loss) per share	$	0.36		$	0.14		$	0.87		$	(0.71	)
Diluted income (loss) per share	$	0.35		$	0.13		$	0.83		$	(0.71	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

GARDNER DENVER HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(Dollars in millions)

	For the Three Month Period Ended September 30,						For the Nine Month Period Ended September 30,
	2018			2017			2018			2017
Comprehensive Income (Loss) Attributable to Gardner Denver Holdings, Inc.
Net income (loss) attributable to Gardner Denver Holdings, Inc.	$	72.2		$	28.0		$	174.9		$	(125.2	)
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments, net		(21.9	)		41.5			(70.0	)		131.4
Foreign currency gains (losses), net		3.6			(14.8	)		18.7			(44.3	)
Unrecognized gains on cash flow hedges, net		4.4			4.0			20.5			5.5
Pension and other postretirement prior service cost and gain or loss, net		0.9			(0.6	)		3.9			(1.9	)
Total other comprehensive (loss) income, net of tax		(13.0	)		30.1			(26.9	)		90.7
Comprehensive income (loss) attributable to Gardner Denver Holdings, Inc.	$	59.2		$	58.1		$	148.0		$	(34.5	)
Comprehensive Income Attributable to Noncontrolling Interests
Net income attributable to noncontrolling interests	$	-		$	-		$	-		$	0.1
Other comprehensive income, net of tax:
Foreign currency translation adjustments, net		-			-			-			-
Total other comprehensive income, net of tax		-			-			-			-
Comprehensive income attributable to noncontrolling interests	$	-		$	-		$	-		$	0.1
Total Comprehensive Income (Loss)	$	59.2		$	58.1		$	148.0		$	(34.4	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

GARDNER DENVER HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in millions, except share and per share amounts)

	September 30, 2018			December 31, 2017
Assets
Current assets:
Cash and cash equivalents	$	269.0		$	393.3
Accounts receivable, net of allowance for doubtful accounts of $19.1 and $18.7, respectively		525.0			536.3
Inventories		550.1			494.5
Other current assets		63.4			39.5
Total current assets		1,407.5			1,463.6
Property, plant and equipment, net of accumulated depreciation of $238.7 and $203.8, respectively		346.9			363.2
Goodwill		1,268.4			1,227.6
Other intangible assets, net		1,356.8			1,431.2
Deferred tax assets		1.1			1.0
Other assets		135.7			134.6
Total assets	$	4,516.4		$	4,621.2
Liabilities and Stockholders' Equity
Current liabilities:
Short-term borrowings and current maturities of long-term debt	$	7.9		$	20.9
Accounts payable		320.0			269.7
Accrued liabilities		258.9			271.2
Total current liabilities		586.8			561.8
Long-term debt, less current maturities		1,747.4			2,019.3
Pensions and other postretirement benefits		90.5			99.8
Deferred income taxes		279.3			237.5
Other liabilities		189.0			226.0
Total liabilities		2,893.0			3,144.4
Commitments and contingencies (Note 14)
Stockholders' equity:
Common stock, $0.01 par value; 1,000,000,000 shares authorized; 200,876,956 and 198,377,237 shares issued at September 30, 2018 and December 31, 2017, respectively		2.0			2.0
Capital in excess of par value		2,280.8			2,275.4
Accumulated deficit		(403.2	)		(577.8	)
Accumulated other comprehensive loss		(226.4	)		(199.8	)
Treasury stock at cost; 1,937,480and 2,159,266 shares at September 30, 2018 and December 31, 2017, respectively		(29.8	)		(23.0	)
Total stockholders' equity		1,623.4			1,476.8
Total liabilities and stockholders' equity	$	4,516.4		$	4,621.2

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

GARDNER DENVER HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(Unaudited)

(Dollars in millions)

	For the Nine Month Period Ended September 30, 2018
Number of Common Shares Issued (in thousands)
Balance at beginning of period		198.4
Exercise of stock options		0.8
Issuance of common stock for stock-based compensation plans		1.7
Balance at end of period		200.9
Common Stock
Balance at beginning of period	$	2.0
Exercise of stock options		-
Issuance of common stock for stock-based compensation plans		-
Balance at end of period	$	2.0
Capital in Excess of Par Value
Balance at beginning of period	$	2,275.4
Stock-based compensation		9.0
Exercise of stock options		6.3
Issuance of treasury stock for stock-based compensation plans		(9.9	)
Balance at end of period	$	2,280.8
Accumulated Deficit
Balance at beginning of period	$	(577.8	)
Net income attributable to Gardner Denver Holdings, Inc.		174.9
Cumulative-effect adjustment upon adoption of new accounting standard (ASU 2017-12)		(0.3	)
Balance at end of period	$	(403.2	)
Accumulated Other Comprehensive Loss
Balance at beginning of period	$	(199.8	)
Foreign currency translation adjustments, net		(70.0	)
Foreign currency gains, net		18.7
Unrecognized gains on cash flow hedges, net		20.5
Pension and other postretirement prior service cost and gain or loss, net		3.9
Cumulative-effect adjustment upon adoption of new accounting standard (ASU 2017-12)		0.3
Balance at end of period	$	(226.4	)
Treasury Stock
Balance at beginning of period	$	(23.0	)
Purchases of treasury stock		(11.1	)
Share repurchase program		(5.6	)
Issuance of treasury stock for stock-based compensation plans		9.9
Balance at end of period	$	(29.8	)
Total Stockholders' Equity	$	1,623.4

The accompanying notes are an integral part of these condensed consolidated financial statements.

9

GARDNER DENVER HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in millions)

	For the Nine Month Period Ended September 30, 2018			For the Nine Month Period Ended September 30, 2017
Cash Flows From Operating Activities:
Net income (loss)	$	174.9		$	(125.1	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of intangible assets		93.4			87.6
Depreciation in cost of sales		33.9			33.2
Depreciation in selling and administrative expenses		7.3			6.1
Stock-based compensation expense		6.1			166.0
Foreign currency transaction (gains) losses, net		(0.6	)		6.3
Net (gain) loss on asset dispositions		(1.1	)		2.0
Loss on extinguishment of debt		1.0			84.5
Deferred income taxes		27.5			(68.1	)
Changes in assets and liabilities:
Receivables		10.5			(65.9	)
Inventories		(44.7	)		(36.4	)
Accounts payable		57.2			39.8
Accrued liabilities		(34.1	)		(19.8	)
Other assets and liabilities, net		(33.0	)		(26.3	)
Net cash provided by operating activities		298.3			83.9
Cash Flows From Investing Activities:
Capital expenditures		(32.1	)		(36.4	)
Net cash paid in business combinations		(113.6	)		(18.8	)
Proceeds from the termination of derivatives		-			6.2
Disposals of property, plant and equipment		3.1			5.9
Net cash used in investing activities		(142.6	)		(43.1	)
Cash Flows From Financing Activities:
Principal payments on long-term debt		(262.4	)		(2,872.2	)
Premium paid on extinguishment of senior notes		-			(29.7	)
Proceeds from long-term debt		-			2,010.7
Proceeds from the issuance of common stock, net of share issuance costs		-			893.3
Purchase of treasury stock		(16.7	)		(2.6	)
Proceeds from stock option exercises		6.3			-
Purchase of shares from noncontrolling interests		-			(5.2	)
Payments of debt issuance costs		-			(2.9	)
Other		-			0.4
Net cash used in financing activities		(272.8	)		(8.2	)
Effect of exchange rate changes on cash and cash equivalents		(7.2	)		14.6
Net (decrease) increase in cash and cash equivalents		(124.3	)		47.2
Cash and cash equivalents, beginning of period		393.3			255.8
Cash and cash equivalents, end of period	$	269.0		$	303.0
Supplemental Cash Flow Information
Cash paid for income taxes	$	80.8		$	47.4
Cash paid for interest	$	75.2		$	118.1
Capital expenditures in accounts payable	$	4.1		$	3.0
Expenditures directly related to our initial public offering in accounts payable	$	-		$	0.2

The accompanying notes are an integral part of these condensed consolidated financial statements.

10

GARDNER DENVER HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Amounts in millions, except share and per share amounts)

Note 1. Condensed Consolidated Financial Statements

Basis of Presentation

Gardner Denver Holdings, Inc. is a holding company whose operating subsidiaries are Gardner Denver, Inc. (“GDI”) and certain of GDI’s subsidiaries.  GDI is a diversified, global manufacturer of highly engineered, application-critical flow control products and provider of related aftermarket parts and services.  The accompanying condensed consolidated financial statements include the accounts of Gardner Denver Holdings, Inc. and its majority-owned subsidiaries (collectively referred to herein as “Gardner Denver” or the “Company”).  The financial information presented as of any date other than December 31, 2017 has been prepared from the books and records of the Company without audit.  The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information.  Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.  In the opinion of management, the condensed consolidated financial statements include all adjustments, consisting of adjustments associated with acquisition accounting and normal recurring adjustments, necessary for the fair presentation of such financial statements.  All intercompany transactions and accounts have been eliminated in consolidation.

The Company’s unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed with the Securities and Exchange Commission (“SEC”).

The results of operations for the interim periods ended September 30, 2018 are not necessarily indicative of the results to be expected for the full year.  The balance sheet as of December 31, 2017 has been derived from the Company’s audited financial statements as of that date but does not include all of the information and notes required by GAAP for complete financial statements.

In May 2017, the Company sold a total of 47,495,000 shares of common stock in an initial public offering of shares of common stock.  On November 15, 2017 and May 2, 2018, the Company completed secondary offerings of 25,300,000 shares and 30,533,478 shares respectively, of common stock held by affiliates of Kohlberg Kravis Roberts & Co. L.P. (“KKR”).  As a result of the May 2018 secondary offering, the Company is no longer considered a “controlled company” within the meaning of the corporate governance standards of the New York Stock Exchange (“NYSE”).  KKR currently owns 90,721,409 shares of common stock, or approximately 46% of the total outstanding common stock based on the number of shares outstanding as of September 30, 2018.

Prior Year Reclassification

In the first quarter of fiscal year 2018, the Company adopted the provisions of ASU 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”).  The reclassification of certain prior year amounts as a result of the adoption of ASU 2017-07 is detailed below in the section “Adopted Accounting Standard Updates” within this Note 1 “Condensed Consolidated Financial Statements.”

Adopted Accounting Standard Updates (“ASU”)

ASU 2014-09, Revenue from Contracts with Customers (Topic 606)

On January 1, 2018, the Company adopted Financial Accounting Standards Board (“FASB”) ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”) using the modified retrospective approach.  Under the modified retrospective approach, the Company is required to recognize the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of retained earnings as of January 1, 2018, the date of initial application.  The cumulative effect of initially applying ASC 606 was immaterial to the Condensed Consolidated Financial Statements.  Therefore, the Company did not record a cumulative transition adjustment.

11

In conjunction with the adoption of ASC 606, the Company updated its significant accounting policy related to revenue recognition disclosed in Note 1 “Summary of Significant Accounting Policies” of the Consolidated Financial Statements in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2017.  An overview of the Company’s revenue recognition policy under ASC 606 is included in Note 12 “Revenue from Contracts with Customers.”

Results for the three month and nine month periods ended September 30, 2018 are presented under ASC 606.  Prior periods are not adjusted and will continue to be reported in accordance with ASC 605 Revenue Recognition (“ASC 605”).  However, during fiscal year 2018, the Company is required to provide additional disclosures presenting the amount by which each 2018 financial statement line item was affected as a result of applying ASC 606 and an explanation of significant changes in order to present 2018 on a comparative basis under ASC 605.

The following table summarizes the impacts of adopting ASC 606 on the Company’s Condensed Consolidated Statements of Operations for the three month period ended September 30, 2018.

Condensed Consolidated Statements of Operations

	As Reported		Adjustments			Balance Without Adoption of ASC 606
Revenues	$	689.3	$	(8.7	)	$	680.6
Cost of sales		426.9		(5.4	)		421.5
Provision (benefit) for income taxes		22.6		(0.8	)		21.8
Net Income (Loss)		72.2		(2.5	)		69.7

The following table summarizes the impacts of adopting ASC 606 on the Company’s Condensed Consolidated Statements of Operations for the nine month period ended September 30, 2018.

Condensed Consolidated Statements of Operations

	As Reported		Adjustments			Balance Without Adoption of ASC 606
Revenues	$	1,977.1	$	(18.1	)	$	1,959.0
Cost of sales		1,233.6		(11.2	)		1,222.4
Provision (benefit) for income taxes		63.2		(1.8	)		61.4
Net Income (Loss)		174.9		(5.1	)		169.8

The following table summarizes the impacts of adopting ASC 606 on the Company’s Condensed Consolidated Balance Sheets as of September 30, 2018.

Condensed Consolidated Balance Sheets

	As Reported			Adjustments			Balance Without Adoption of ASC 606
Assets
Inventories	$	550.1		$	11.2		$	561.3
Other current assets(1)		63.4			(11.2	)		52.2
Liabilities and Stockholders' Equity
Accrued liabilities		258.9			5.1			264.0
Accumulated deficit		(403.2	)		(5.1	)		(408.3	)

⁽¹⁾ Adjustment represents “Contract asset.”  See Note 12 “Revenue from Contracts with Customers” for an explanation of the Contract assets account included in “Other current assets” in the Condensed Consolidated Balance Sheets.

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ASU 2017-07 Compensation – Retirement Benefits (Topic 715) – Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost

The Company adopted FASB ASU 2017-07 on January 1, 2018, the adoption date.  The Company applied ASU 2017-07 retrospectively for the presentation of the service cost component and the other components of net periodic benefit cost in the income statement and prospectively for the capitalization of the service cost component of net periodic benefit cost in assets.  ASU 2017-07 allows the Company to use the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements.  Applying the practical expedient, the Company reclassified $0.1 million and $0.2 million of expenses from “Selling and administrative expenses” to “Other income, net” within the Condensed Consolidated Statements of Operations for the three month and nine month periods ended September 30, 2017.

ASU 2017-12 Derivatives and Hedging (Topic 815) – Targeted Improvements to Accounting for Hedging Activities

The Company early adopted FASB ASU 2017-12, Derivatives and Hedging (Topic 815) – Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”) on January 1, 2018, the adoption date, using the modified retrospective approach.  As of the adoption date, the Company was the fixed rate payor on 12 interest rate swap contracts that fixed the LIBOR-based index used to determine the interest rates charged on a total of $1,125.0 million of the Company’s LIBOR-based variable rate borrowings.  The Company recorded a cumulative-effect adjustment on the adoption date increasing the opening balance of the “Accumulated deficit” line of the Condensed Consolidated Balance Sheets by $0.3 million and decreasing the “Accumulated Other Comprehensive Loss” line of the Condensed Consolidated Balance Sheets by $0.3 million.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842).  The amendments in this update will replace most of the existing GAAP lease accounting guidance in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements.  The ASU is effective for public companies beginning in the first quarter of 2019.  The ASU requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach.  During March 2018, the FASB approved amendments to create an optional transition method that will provide an option to use the effective date of Topic 842 as the date of initial application of the transition.

The Company established an implementation team and selected a third party lease accounting software solution which will serve as a central repository of active leases and assist in the compliance with the new reporting requirements.  The implementation team has been reassessing business processes, drafting an internal policy to address the new standard, extracting lease data for inclusion in the new lease software, determining a process to identify and update the Company’s incremental borrowing rate and understanding the impact on disclosures.  The team is also determining which practical expedients to elect.  The Company is still finalizing its evaluation of the impact of the new lease standard on its condensed consolidated financial statements and expects to record right of use assets and lease liabilities for its operating leases on its condensed consolidated balance sheets.  The Company will adopt the new standard utilizing the optional transition method.

In March 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220).  The amendments in this update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act.  Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act and will improve the usefulness of information reported to financial statement users.  However, because the amendments only related to the reclassification of the income tax effects of the Tax Cuts and Jobs Act, the underlying guidance that requires the effect of a change in tax laws or rates be included in income from continuing operations is not affected.  The ASU is effective for public companies beginning in the first quarter of 2019.  The Company is currently assessing the impact of this ASU on its condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.  The amendments in this update eliminate, add and modify certain disclosure requirements for fair value measurements as part of its disclosure framework project.  The guidance is effective for public companies beginning in the first quarter of 2020.  Early adoption is permitted.  The Company is currently assessing the impact of this ASU on its consolidated financial statements and evaluating the timing of adoption.

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In August 2018, the FASB issued ASU 2018-14, Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans.  The amendments in this eliminate, add and modify certain disclosure requirements for defined benefit pension plans.  The guidance is effective for public companies beginning with its annual report for fiscal year 2020.  Early adoption is permitted.  The Company is currently assessing the impact of this ASU on its consolidated financial statements and evaluating the timing of adoption.

In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40); Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.  The amendments in this update require implementation costs incurred by customers in cloud computing arrangements (i.e., hosting arrangements) to be capitalized under the same premises of authoritative guidance for internal-use software, and deferred over the noncancellable term of the cloud computing arrangement plus any option renewal periods that are reasonably certain to be exercised by the customer or for which the exercise is controlled by the service provider.  The Company is required to adopt this new guidance in the first quarter of 2020.  Early adoption is permitted.  The Company is currently assessing the impact of this ASU on its consolidated financial statements and evaluating the timing of adoption.

Note 2. Business Combinations

Acquisition of PMI Pump Parts

On May 29, 2018, the Company acquired PMI Pump Parts (“PMI”), a leading manufacturer of plungers and other well service pump consumable products.  The Company acquired all of the assets and assumed certain liabilities of PMI for total consideration of $21.0 million, which consisted of payments to shareholders of $16.5 million, the retirement of PMI third-party debt at closing of $2.2 million, $0.1 million of other debt-like items, a $2.0 million promissory note and a $0.2 million holdback.  The promissory note and holdback are each expected to be paid by the end of the second quarter of 2019 and recorded in “Accrued liabilities.”  The revenues and operating income of PMI are included in the Company’s condensed consolidated financial statements from the acquisition date and are included in the Energy segment.  Goodwill resulting from this acquisition is deductible for tax purposes.

Acquisition of Runtech Systems Oy

On February 8, 2018, the Company acquired 100% of the stock of Runtech Systems Oy (“Runtech”) a leading global manufacturer of turbo vacuum technology systems and optimization solutions for industrial applications.  The Company acquired all of the assets and assumed certain liabilities of Runtech for total cash consideration of $94.9 million, net of cash acquired.  The revenues and operating income of Runtech are included in the Company’s consolidated financial statements from the acquisition date and are included in the Industrials segment.  The preliminary purchase price allocation resulted in the recording of $63.6 million of goodwill and $31.3 million of amortizable intangible assets as of the acquisition date.  None of the goodwill resulting from this acquisition is deductible for tax purposes.

Acquisition of LeROI Compressors

On June 5, 2017, the Company acquired 100% of the stock of LeROI Compressors (“LeROI”), a leading North American manufacturer of gas compression equipment and solutions for vapor recovery, biogas and other process and industrial applications.  The Company acquired all of the assets and assumed certain liabilities of LeROI for total cash consideration of $20.4 million, net of cash acquired.  Included in the cash consideration is an indemnity holdback of $1.9 million recorded in “Accrued liabilities” and expected to be paid by the end of 2021.  The revenues and operating income of LeROI are included in the Company’s condensed consolidated financial statements from the acquisition date and are included in the Industrials segment.  None of the goodwill resulting from this acquisition is deductible for tax purposes.

Acquisition of the Non-Controlling Interest in Tamrotor Kompressorit Oy

On March 3, 2017, the Company acquired the remaining 49% non-controlling interest of Tamrotor Kompressorit Oy (“Tamrotor”), a distributor of the Company’s Industrials segment air compression products.  The Company acquired the remaining interest in Tamrotor for total cash consideration of $5.2 million, consisting entirely of payments to the former shareholders.  Included in the cash consideration was a holdback of $0.5 million that was paid in the third quarter of 2017.  This transaction resulted in an increase to “Capital in excess of par value” of $2.3 million and an increase to “Accumulated other comprehensive loss” of $1.5 million in the Condensed Consolidated Balance Sheets.

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Acquisition Revenues and Operating Income

The following table summarizes the revenue and operating income of these acquisitions for the periods presented subsequent to their date of acquisition.

	Three Month Periods Ended September 30,				Nine Month Periods Ended September 30,
	2018		2017		2018		2017
Revenue	$	25.3	$	5.9	$	63.1	$	7.9
Operating income		2.0		0.5		3.2		0.6

Pro forma information regarding these acquisitions have not been provided as they did not have a material impact on the Company’s consolidated results of operations individually or in the aggregate.

Note 3. Restructuring

Restructuring Programs 2014 to 2016

The Company announced a restructuring program in the Industrials segment in the third quarter of 2014 and that program was revised and expanded during the second quarter of 2016.  In 2016, the Company also announced restructuring programs impacting the Energy and Medical segments.  These restructuring programs were substantially completed as of December 31, 2017.  Through December 31, 2017, $48.0 million had been charged to expense through “Other operating expense, net” in the Condensed Consolidated Statements of Operations ($38.5 million for Industrials, $6.3 million for Energy and $3.2 million for Medical).  The Company does not anticipate any material future expense related to these restructuring programs and any remaining liabilities will be paid as contractually obligated.  The activity associated with these restructuring programs for the nine month period ended September 30, 2018 was not material.

The following table summarizes the activity associated with these restructuring programs for the nine month period ended September 30, 2017.

Balance as of December 31, 2016	$	20.9
Charged to expense - termination benefits		1.9
Charged to expense - other		3.0
Payments		(17.3	)
Other, net		1.0
Balance as of September 30, 2017	$	9.5

As of September 30, 2018, restructuring reserves of $1.7 million related to these programs were included in “Accrued liabilities” and restructuring reserves of $0.2 million are included in “Other liabilities” in the Condensed Consolidated Balance Sheets.  As of December 31, 2017, restructuring reserves of $6.5 million related to these programs were included in “Accrued liabilities” and restructuring reserves of $0.2 million were included in “Other liabilities” in the Condensed Consolidated Balance Sheets.

Restructuring Program 2018

The Company announced a restructuring program primarily involving workforce reductions in the third quarter of 2018.  In the three month period ended September 30, 2018, $5.4 million was charged to expense through “Other operating expense, net” in the Condensed Consolidated Statements of Operations ($3.7 million for Industrials and $1.7 million for Energy).  The Company expects further expense charges in the fourth quarter of 2018 related to these programs impacting the Industrials, Energy and Medical segments.

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The following table summarizes the activity associated with this restructuring program for the nine month period ended September 30, 2018.

Balance as of December 31, 2017	$	-
Charged to expense - termination benefits		4.9
Charged to expense - other		0.5
Payments		(1.0	)
Other, net		-
Balance as of September 30, 2018	$	4.4

As of September 30, 2018, restructuring reserves of $4.4 million are included in “Accrued liabilities” in the Condensed Consolidated Balance Sheets.

Note 4. Inventories

Inventories as of September 30, 2018 and December 31, 2017 consisted of the following.

	September 30, 2018		December 31, 2017
Raw materials, including parts and subassemblies	$	368.1	$	362.6
Work-in-process		84.6		57.9
Finished goods		84.0		60.6
		536.7		481.1
Excess of LIFO costs over FIFO costs		13.4		13.4
Inventories	$	550.1	$	494.5

Note 5. Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill attributable to each reportable segment for the nine month period ended September 30, 2018 is presented in the table below.

	Industrials			Energy			Medical			Total
Balance as of December 31, 2017	$	561.6		$	460.2		$	205.8		$	1,227.6
Acquisition		63.6			8.7			-			72.3
Foreign currency translation and other(1)		(16.7	)		(12.4	)		(2.4	)		(31.5	)
Balance as of September 30, 2018	$	608.5		$	456.5		$	203.4		$	1,268.4

⁽¹⁾ During the nine month period ended September 30, 2018, the Company recorded a decrease in goodwill of $0.2 million as a result of measurement period adjustments in the Industrials segment.

On May 29, 2018, the Company acquired PMI Pump Parts which is included in the Energy segment.  The excess of the purchase price over the estimated fair values of intangible assets, identifiable assets and assumed liabilities was recorded as goodwill.  As of September 30, 2018, the preliminary purchase price allocation resulted in a total of $8.7 million of goodwill.  The allocation of the purchase price is preliminary and subject to refinement based on final fair values of the identified assets acquired and liabilities assumed.

On February 8, 2018, the Company acquired Runtech which is included in the Industrials segment.  The excess of the purchase price over the estimated fair values of intangible assets, identifiable assets and assumed liabilities was recorded as goodwill.  As of September 30, 2018, the preliminary purchase price allocation resulted in a total of $63.6 million of goodwill.  The allocation of the purchase price is preliminary and subject to refinement based on final fair values of the identified assets acquired and liabilities assumed.

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As of September 30, 2018, goodwill included $563.9 million of accumulated impairment losses within the Energy segment since the date of the transaction in which the Company was acquired by an affiliate of Kohlberg Kravis Roberts & Co. L.P. on July 30, 2013 (the “KKR Transaction”).  There were no goodwill impairment charges recorded during the nine month period ended September 30, 2018.

Other intangible assets as of September 30, 2018 and December 31, 2017 consisted of the following.

	September 30, 2018					December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer lists and relationships	$	1,209.9	$	(542.6	)	$	1,226.8	$	(473.0	)
Technology		21.9		(4.6	)		8.1		(4.0	)
Trademarks		37.1		(12.4	)		30.3		(10.6	)
Backlog		69.1		(68.0	)		65.5		(65.5	)
Other		57.3		(28.8	)		53.6		(23.5	)
Unamortized intangible assets:
Trademarks		617.9		-			623.5		-
Total other intangible assets	$	2,013.2	$	(656.4	)	$	2,007.8	$	(576.6	)

Amortization of intangible assets for the three and nine month periods ended September 30, 2018 and 2017 were as follows.

	Three Month Period Ended September 30,				Nine Month Period Ended September 30,
	2018		2017		2018		2017
Intangible asset amortization expense	$	31.0	$	29.5	$	93.4	$	87.6

Amortization of intangible assets is anticipated to be approximately $124.2 million annually in 2019 through 2023 based upon exchange rates as of September 30, 2018.

Note 6. Accrued Liabilities

Accrued liabilities as of September 30, 2018 and December 31, 2017 consisted of the following.

	September 30, 2018		December 31, 2017
Salaries, wages and related fringe benefits	$	67.7	$	97.3
Restructuring		6.4		6.5
Taxes		15.5		34.5
Contract liabilities(1)		90.5		42.7
Product warranty		24.5		22.3
Accrued interest		0.7		0.8
Other		53.6		67.1
Total accrued liabilities	$	258.9	$	271.2

⁽¹⁾ For purposes of comparability, “Advance payments on sales contracts” as of December 31, 2017 was reclassified to “Contract liabilities.”  See Note 12 “Revenue from Contracts with Customers” for an explanation of the Contract liabilities account included in “Accrued liabilities” in the Condensed Consolidated Balance Sheets.

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A reconciliation of the changes in the accrued product warranty liability for the three and nine month periods ended September 30, 2018 and 2017 are as follows.

	Three Month Period Ended September 30, 2018			Three Month Period Ended September 30, 2017			Nine Month Period Ended September 30, 2018			Nine Month Period Ended September 30, 2017
Balance at beginning of period	$	23.9		$	21.7		$	22.3		$	21.7
Product warranty accruals		6.9			6.7			18.5			17.8
Settlements		(6.2	)		(5.0	)		(16.8	)		(17.1	)
Charged to other accounts (1)		(0.1	)		0.2			0.5			1.2
Balance at end of period	$	24.5		$	23.6		$	24.5		$	23.6

⁽¹⁾ Includes primarily the effects of foreign currency translation adjustments for the Company’s subsidiaries with functional currencies other than the USD, and changes in the accrual related to acquisitions.

Note 7. Pension and Other Postretirement Benefits

The following table summarizes the components of net periodic benefit cost for the Company’s defined benefit pension plans and other postretirement benefit plans recognized for the three and nine month periods ended September 30, 2018 and 2017.

	Pension Benefits												Other Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
	Three Month Period Ended September 30, 2018			Nine Month Period Ended September 30, 2018			Three Month Period Ended September 30, 2018			Nine Month Period Ended September 30, 2018			Three Month Period Ended September 30, 2018		Nine Month Period Ended September 30, 2018
Service cost	$	-		$	-		$	0.4		$	1.4		$	-	$	-
Interest cost		0.5			1.5			1.8			5.7			-		0.1
Expected return on plan assets		(1.2	)		(3.5	)		(2.8	)		(8.8	)		-		-
Recognition of:
Unrecognized prior service cost		-			-			-			-			-		-
Unrecognized net actuarial loss		-			-			0.5			1.4			-		-
	$	(0.7	)	$	(2.0	)	$	(0.1	)	$	(0.3	)	$	-	$	0.1

	Pension Benefits												Other Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
	Three Month Period Ended September 30, 2017			Nine Month Period Ended September 30, 2017			Three Month Period Ended September 30, 2017			Nine Month Period Ended September 30, 2017			Three Month Period Ended September 30, 2017		Nine Month Period Ended September 30, 2017
Service cost	$	-		$	-		$	0.5		$	1.4		$	-	$	-
Interest cost		0.6			1.7			2.0			5.8			-		0.1
Expected return on plan assets		(1.1	)		(3.3	)		(2.7	)		(7.7	)		-		-
Recognition of:
Unrecognized prior service cost		-			-			-			-			-		-
Unrecognized net actuarial loss		-			-			1.3			3.7			-		-
	$	(0.5	)	$	(1.6	)	$	1.1		$	3.2		$	-	$	0.1

The components of net periodic benefit cost other than the service cost component are included in “Other income, net” in the Condensed Consolidated Statements of Operations.

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Note 8. Debt

The Company’s debt as of September 30, 2018 and December 31, 2017 is summarized as follows.

	September 30, 2018			December 31, 2017
Short-term borrowings	$	-		$	-
Long-term debt
Revolving credit facility, due 2020	$	-		$	-
Receivables financing agreement, due 2020		-			-
Term loan denominated in U.S. dollars, due 2024 (1)		1,025.9			1,282.3
Term loan denominated in Euros, due 2024 (2)		706.7			735.9
Capitalized leases and other long-term debt		26.4			26.9
Unamortized debt issuance costs		(3.7	)		(4.9	)
Total long-term debt, net, including current maturities		1,755.3			2,040.2
Current maturities of long-term debt		7.9			20.9
Total long-term debt, net	$	1,747.4		$	2,019.3

⁽¹⁾ As of September 30, 2018, the applicable interest rate was 4.99% and the weighted-average rate was 4.78% for the nine month period ended September 30, 2018.

⁽²⁾ As of September 30, 2018, the applicable interest rate was 3.00% and the weighted-average rate was 3.00% for the nine month period ended September 30, 2018.

Senior Secured Credit Facilities

In connection with the KKR Transaction, the Company entered into a senior secured credit agreement with UBS AG, Stamford Branch, as administrative agent, and other agents and lenders party thereto (the “Senior Secured Credit Facilities”) on July 30, 2013.

The Senior Secured Credit Facilities entered into on July 30, 2013 provided senior secured financing in the equivalent of approximately $2,825.0 million, consisting of: (i) a senior secured term loan facility (the “Original Dollar Term Loan Facility”) in an aggregate principal amount of $1,900.0 million; (ii) a senior secured term loan facility (the “Original Euro Term Loan Facility,” together with the Original Dollar Term Loan Facility, the “Term Loan Facilities”) in an aggregate principal amount of €400.0 million; and (iii) a senior secured revolving credit facility (the “Revolving Credit Facility”) in an aggregate principal amount of $400.0 million available to be drawn in U.S. dollars (“USD”), Euros (“EUR”), Great British Pounds (“GBP”) and other reasonably acceptable foreign currencies, subject to certain sublimits for the foreign currencies.

The Company entered into Amendment No. 1 to the Senior Secured Credit Facilities with UBS AG, Stamford Branch, as administrative agent, and the lenders and other parties thereto on March 4, 2016 (“Amendment No.1”) and Amendment No. 2 to the Senior Secured Credit Facilities with UBS AG, Stamford Branch, as administrative agent, and other agents, lenders and parties thereto on August 17, 2017 (“Amendment No. 2”).

Amendment No. 1 reduced the aggregate principal borrowing capacity of the Revolving Credit Facility by $40.0 million to $360.0 million, extended the term of the Revolving Credit Facility to April 30, 2020 with respect to consenting lenders and provided for customary bail-in provisions to address certain European regulatory requirements.

Amendment No. 2 refinanced the Original Dollar Term Loan Facility with a replacement $1,285.5 million senior secured U.S. dollar term loan facility (the ‘‘Dollar Term Loan Facility’’) and the Original Euro Term Loan Facility with a replacement €615.0 million senior secured euro term loan facility (the ‘‘Euro Term Loan Facility’’).  Further the maturity for both term loan facilities was extended to July 30, 2024 and LIBOR Floor was reduced from 1.0% to 0.0%.

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On July 30, 2018, the Revolving Credit Facility principal borrowing capacity decreased to $269.9 million resulting from the maturity of the tranches of the Revolving Credit Facility which were owned by lenders that elected not to modify the original Revolving Credit Facility maturity date.

Any principal amounts outstanding as of April 30, 2020 will be due at that time and required to be paid in full.

The borrower of the Dollar Term Loan Facility and the Euro Term Loan Facility is Gardner Denver, Inc.  Prior to the Company entering into Amendment No. 1, GD German Holdings II GmbH became an additional borrower and successor in interest to Gardner Denver Holdings GmbH & Co. KG. GD German Holdings II GmbH, GD First (UK) Limited and Gardner Denver, Inc. are the listed borrowers under the Revolving Credit Facility. The Revolving Credit Facility includes borrowing capacity available for letters of credit up to $200.0 million and for borrowings on same-day notice, referred to as swingline loans. As of September 30, 2018, the Company had $6.3 million of outstanding letters of credit under the Revolving Credit Facility and unused availability of $263.6 million.

The Senior Secured Credit Facilities provide that the Company will have the right at any time to request incremental term loans and/or revolving commitments in an aggregate principal amount of up to (i) if as of the last day of the most recently ended test period the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (as defined in the Senior Secured Credit Facilities) is equal to or less than 5.50 to 1.00, $250.0 million plus (ii) voluntary prepayments and voluntary commitment reductions of the Senior Secured Credit Facilities prior to the date of any such incurrence plus (iii) an additional amount if, after giving effect to the incurrence of such additional amount, the Company does not exceed a Consolidated Senior Secured Debt to Consolidated EBITDA Ratio of 4.50 to 1.00. The lenders under the Senior Secured Credit Facilities are not under any obligation to provide any such incremental commitments or loans, and any such addition of, or increase in commitments or loans, will be subject to certain customary conditions.

Interest Rate and Fees

Borrowings under the Dollar Term Loan Facility, the Euro Term Loan Facility and the Revolving Credit Facility bear interest at a rate equal to, at the Company’s option, either (a) the greater of LIBOR for the relevant interest period or 0.00% per annum, in each case adjusted for statutory reserve requirements, plus an applicable margin or (b) a base rate (the ‘‘Base Rate’’) equal to the highest of (1) the rate of interest publicly announced by the administrative agent as its prime rate in effect at its principal office in Stamford, Connecticut, (2) the federal funds effective rate plus 0.50% and (3) LIBOR for an interest period of one month, adjusted for statutory reserve requirements, plus 1.00%, in each case, plus an applicable margin. The applicable margin for (i) the Dollar Term Loan Facility is 2.75% for LIBOR loans and 1.75% for Base Rate loans, (ii) the Revolving Credit Facility is 2.75% for LIBOR loans and 1.75% for Base Rate loans and (iii) the Euro Term Loan is 3.00% for LIBOR loans.

The applicable margins under the Revolving Credit Facility may decrease based upon the Company’s achievement of certain Consolidated Senior Secured Debt to Consolidated EBITDA Ratios. In addition to paying interest on outstanding principal under the Senior Secured Credit Facilities, the Company is required to pay a commitment fee of 0.50% per annum to the lenders under the Revolving Credit Facility in respect of the unutilized commitments thereunder. The commitment fee rate was reduced to 0.375% because the Company’s Consolidated Senior Secured Debt to Consolidated EBITDA Ratio is less than or equal to 3.0 to 1.0. The Company must also pay customary letter of credit fees.

Prepayments

The Senior Secured Credit Facilities require the Company to prepay outstanding term loans, subject to certain exceptions, with: (i) 50% of annual excess cash flow (as defined in the Senior Secured Credit Facilities) commencing with the fiscal year ended December 31, 2014 (which percentage will be reduced to 25% if the Company’s  Secured Debt to Consolidated EBITDA Ratio (as defined in the Senior Secured Credit Facilities) is less than or equal to 3.50 to 1.00 but greater than 3.00 to 1.00, and which prepayment will not be required if the Secured Debt to Consolidated EBITDA Ratio is less than or equal to 3.00 to 1.00); (ii) 100% of the net cash proceeds of non-ordinary course asset sales or other dispositions of property, subject to reinvestment rights; and (iii) 100% of the net cash proceeds of any incurrence of debt, other than proceeds from debt permitted under the Senior Secured Credit Facilities.

The foregoing mandatory prepayments will be applied to the scheduled installments of principal of the Term Loan Facilities in direct order of maturity.

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Subject to the following sentence, the Company may voluntarily repay outstanding loans under the Senior Secured Credit Facilities at any time without premium or penalty, subject to certain customary conditions, including reimbursements of the lenders’ redeployment costs actually incurred in the case of a prepayment of LIBOR borrowings other than on the last day of the relevant interest period.

Amortization and Final Maturity

The Dollar Term Loan Facility amortizes in equal quarterly installments in aggregate annual amounts equal to 1.00% of the original principal amount of the Dollar Term Loan Facility, with the balance being payable on July 30, 2024.  In June 2018 and September 2018, the Company used excess cash to repay $100.0 million and $150.0 million, respectively, of principal on outstanding borrowings under the Dollar Term Loan Facility.  In June 2018, the principal prepayment was first applied to the quarterly installments with the remaining balance used to reduce the balance due on July 30, 2024.  As a result of the June 2018 prepayment, the Company is no longer subject to mandatory quarterly principal installment payments on the Dollar Term Loan Facility.  The prepayments resulted in the write-off of unamortized debt issuance costs of $0.3 million and $0.4 million for the three month and nine month periods ended September 30, 2018, included in the “Loss on Debt Extinguishment” line of the Condensed Consolidated Statements of Operations.

The Euro Term Loan Facility includes repayments in equal quarterly installments in aggregate annual amounts equal to 1.00% of the original principal amount of the Euro Term Loan Facility, with the balance being payable on July 30, 2024.

Amendment No. 1 reduced the minimum aggregate principal amount for extension amendments to the facilities from $50.0 million to $35.0 million.

Guarantee and Security

All obligations of the borrowers under the Senior Secured Credit Facilities are unconditionally guaranteed by the Company and all of its material, wholly-owned U.S. restricted subsidiaries, with customary exceptions including where providing such guarantees are not permitted by law, regulation or contract or would result in adverse tax consequences.

All obligations of the borrowers under the Senior Secured Credit Facilities, and the guarantees of such obligations, are secured, subject to permitted liens and other exceptions, by substantially all of the assets of the borrowers and each guarantor, including but not limited to: (i) a perfected pledge of the capital stock issued by the borrowers and each subsidiary guarantor and (ii) perfected security interests in substantially all other tangible and intangible assets of the borrowers and the guarantors (subject to certain exceptions and exclusions). The obligations of the non-U.S. borrowers are secured by certain assets in jurisdictions outside of the United States.

Certain Covenants and Events of Default

The Senior Secured Credit Facilities contain a number of covenants that, among other things, restrict, subject to certain exceptions, the Company’s ability to: incur additional indebtedness and guarantee indebtedness; create or incur liens; engage in mergers or consolidations; sell, transfer or otherwise dispose of assets; create limitations on subsidiary distributions; pay dividends and distributions or repurchase its own capital stock; and make investments, loans or advances, prepayments of junior financings, or other restricted payments. In addition, certain restricted payments constituting dividends or distributions (subject to certain exceptions) are subject to compliance with a Consolidated Total Debt to Consolidated EBITDA Ratio (as defined in the Senior Secured Credit Facilities) of 5.00 to 1.00. Investments in unrestricted subsidiaries are permitted up to an aggregate amount that does not exceed the greater of $100.0 million or 25% of Consolidated EBITDA.

The Revolving Credit Facility also requires the Company’s Consolidated Senior Secured Debt to Consolidated EBITDA Ratio to not exceed 7.50 to 1.00 for each fiscal quarter when outstanding revolving credit loans and swingline loans plus non-cash collateralized letters of credit under the Revolving Credit Facility (excluding (i) letters of credit in an aggregate amount not to exceed $80.0 million existing on the date of the closing of the Senior Secured Credit Facilities and any extensions thereof, replacement letters of credit or letters of credit issued in lieu thereof, in each case, to the extent the face amount of such letters of credit is not increased above the face amount of the letter of credit being extended, replaced or substituted and (ii) other non-cash collateralized letters of credit in an aggregate amount not to exceed $25.0 million, provided that the aggregate amount of non-cash collateralized letters of credit outstanding excluded pursuant to this provision shall not exceed $50.0 million) exceed $120.0 million.

The Senior Secured Credit Facilities also contain certain customary affirmative covenants and events of default, including a change of control.

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Receivables Financing Agreement

In May 2016, the Company entered into the Receivables Financing Agreement, providing for aggregated borrowing of up to $75.0 million governed by a borrowing base. The Receivables Financing Agreement provides for a lower cost alternative in the issuance of letters of credit with the remaining unused capacity providing additional liquidity.  On June 30, 2017, the Company signed the first amendment of the Receivables Financing Agreement which increased the aggregated borrowing capacity by $50.0 million to $125.0 million governed by a borrowing base and extended the term to June 30, 2020.  The Receivables Financing Agreement terminates on June 30, 2020, unless terminated earlier pursuant to its terms.  As of September 30, 2018, the Company had no outstanding borrowings under the Receivables Financing Agreement and $27.3 million of letters of credit outstanding.  As of September 30, 2018 there was $81.4 million of capacity available under the Receivables Financing Agreement.

Borrowings under the Receivables Financing Agreement accrue interest at a reserve-adjusted LIBOR or a base rate, plus 1.6%. Letters of credit accrue interest at 1.6%.  The Company may prepay borrowings or letters of credit or draw on the Receivables Financing Agreement upon one business day prior written notice and may terminate the Receivables Financing Agreement with 15 days’ prior written notice.

As part of the Receivables Financing Agreement, eligible accounts receivable of certain of the Company’s subsidiaries are sold to a wholly owned “bankruptcy remote” special purpose vehicle (“SPV”). The SPV pledges the receivables as security for loans and letters of credit. The SPV is included in the Company’s consolidated financial statements and therefore, the accounts receivable owned by it are included in the Company’s Condensed Consolidated Balance Sheets. However, the accounts receivable owned by the SPV are separate and distinct from the Company’s other assets and are not available to the Company’s other creditors should we become insolvent.

The Receivables Financing Agreement contains various customary representations and warranties and covenants, and default provisions which provide for the termination and acceleration of the commitments and loans under the agreement in circumstances including, but not limited to, failure to make payments when due, breach of representations, warranties or covenants, certain insolvency events or failure to maintain the security interest in the trade receivables, a change in control and defaults under other material indebtedness.

Note 9. Stock-Based Compensation

The Company has outstanding stock-based compensation awards granted under the 2013 Stock Incentive Plan (“2013 Plan”) and the 2017 Omnibus Incentive Plan (“2017 Plan”) as described in Note 15, “Stock-Based Compensation” of the Consolidated Financial Statements in its annual report on Form 10-K for the fiscal year ended December 31, 2017.

Prior to the Company’s initial public offering in May 2017, the Company had certain repurchase rights on stock acquired through the exercise of a stock option that created an implicit service period and created a condition in which an optionee may not receive the economic benefits of the option until the repurchase rights are eliminated.  The repurchase rights creating the implicit service period were eliminated at the earlier of an initial public offering or change of control event.  Before the elimination of the repurchase rights, because an initial public offering or change of control were not probable of occurring, no compensation expense was recorded for equity awards.  The Company recognized a liability for compensation expense measured at intrinsic value when it was probable that an employee would receive benefits under the terms of the plan due to the termination of employment.

Under the terms of the 2013 Plan, concurrent with the initial public offering, the Company no longer retains repurchase rights on stock acquired through the exercise of a stock option and the implicit service period was eliminated on outstanding stock options.

In the three and nine month periods ended September 30, 2017, the Company recognized stock-based compensation expense of approximately $7.8 million and $69.2 million, respectively.  The Company recognized stock-based compensation expense of approximately $0.9 million and $6.1 million for the three and nine month periods ended September 30, 2018, respectively.  These costs are included in “Other operating expense, net” in the Condensed Consolidated Statements of Operations.

The $6.1 million of stock-based compensation expense for the nine month period ended September 30, 2018 included expense for modifications of equity awards for certain former employees of $3.8 million and expense for equity awards granted under the 2013 Plan and 2017 Plan of $5.3 million reduced by a benefit for a reduction in the liability for stock appreciation rights (“SAR”) of $3.0 million.

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The $3.8 million stock-based compensation expense for modifications for the nine month period ended September 30, 2018 provided continued vesting through scheduled vesting dates and extended expiration dates for certain former employees.  The incremental stock-based compensation was determined using the Black-Scholes option pricing model based on assumptions which included expected lives of 1.0 to 1.3 years, a risk-free rate of 2.0%, assumed volatility of 26.8% to 27.3% and an expected dividend rate of 0.0%.

As of September 30, 2018, there was $22.8 million of total unrecognized compensation expense related to outstanding stock options and restricted stock awards.

SARs, granted under the 2013 Plan are expected to be settled in cash and are accounted for as liability awards.  As of September 30, 2018, a liability of approximately $13.8 million for SARs was included in “Accrued liabilities” in the Condensed Consolidated Balance Sheets.

Stock Option Awards

The following assumptions were used to estimate the fair value of options granted (excluding previously disclosed modified awards) during the nine month periods ended September 30, 2018 and 2017 using the Black-Scholes option-pricing model.

	Nine Month Period Ended September 30, 2018			Nine Month Period Ended September 30, 2017
Assumptions:
Expected life of options (in years)		7.0 - 7.5			5.0 - 6.3
Risk-free interest rate		2.9% - 3.0	%		1.9% - 2.1	%
Assumed volatility		34.4 - 35.4			41.2 - 45.8	%
Expected dividend rate		0.0	%		0.0	%

A summary of the Company’s stock option (including SARs) activity for the nine month period ended September 30, 2018 is presented in the following table (underlying shares in thousands).

	Shares			Weighted-Average Exercise Price (per share)
Outstanding at December 31, 2017		12,834		$	9.54
Granted		848		$	31.74
Exercised or settled		(752	)	$	8.36
Forfeited		(433	)	$	16.21
Outstanding at September 30, 2018		12,497		$	10.88
Vested at September 30, 2018		8,612		$	9.03

Restricted Stock Unit Awards

A summary of the Company’s restricted stock unit activity for the nine month period ended September 30, 2018 is presented in the following table (underlying shares in thousands).

	Shares			Weighted-Average Grant-Date Fair Value
Non-vested as of December 31, 2017		-		$	-
Granted		365		$	31.84
Vested		-		$	-
Forfeited		(10	)	$	32.06
Non-vested as of September 30, 2018		355		$	31.83

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Deferred Stock Units

Concurrent with the Company’s initial public offering in May of 2017, the Company’s Board authorized the grant of 5.5 million deferred stock units (“DSU”) to all permanent employees that had not previously received stock-based awards under the 2013 Plan.  The DSUs vested immediately upon grant, however contained restrictions such that the employee may not sell or otherwise realize the economic benefits of the award until certain dates through April 2019.  $2.0 million and $96.8 million of compensation expense for the DSU awards was recognized in the three month and nine month periods ended September 30, 2017, respectively, and included in “Other operating expense, net” in the Condensed Consolidated Statements of Operations.

As of the date of the grant, the fair value of a DSU was determined to be $17.20 assuming a share price at the pricing date of the initial public offering of $20.00 and a discount for lack of marketability commensurate with the period of the sale restrictions.  The Company estimated the fair value of DSUs at the time of grant using the Finnerty discount for lack of marketability pricing model.  The model assumed a holding restriction period of 1.42 years and volatility of 51.5%.

Note 10. Accumulated Other Comprehensive (Loss) Income

The Company’s other comprehensive (loss) income consists of (i) unrealized foreign currency net gains and losses on the translation of the assets and liabilities of its foreign operations; (ii) realized and unrealized foreign currency gains and losses on intercompany notes of a long-term nature and certain hedges of net investments in foreign operations, net of income taxes; (iii) unrealized gains and losses on cash flow hedges (consisting of interest rate swaps), net of income taxes; and (iv) pension and other postretirement prior service cost and actuarial gains or losses, net of income taxes.  The before tax income (loss) and related income tax effect are as follows.

	For the Three Month Period Ended September 30, 2018									For the Nine Month Period Ended September 30, 2018
	Before-Tax Amount			Tax (Expense) or Benefit			Net of Tax Amount			Before-Tax Amount			Tax (Expense) or Benefit			Net of Tax Amount
Foreign currency translation adjustments, net	$	(21.9	)	$	-		$	(21.9	)	$	(70.0	)	$	-		$	(70.0	)
Foreign currency gains, net		4.7			(1.1	)		3.6			24.4			(5.7	)		18.7
Unrecognized gains on cash flow hedges, net		5.8			(1.4	)		4.4			27.1			(6.6	)		20.5
Pension and other postretirement benefit prior service cost and gain or loss, net		1.0			(0.1	)		0.9			3.0			0.9			3.9
Other comprehensive loss	$	(10.4	)	$	(2.6	)	$	(13.0	)	$	(15.5	)	$	(11.4	)	$	(26.9	)

	For the Three Month Period Ended September 30, 2017									For the Nine Month Period Ended September 30, 2017
	Before-Tax Amount			Tax (Expense) or Benefit			Net of Tax Amount			Before-Tax Amount			Tax (Expense) or Benefit			Net of Tax Amount
Foreign currency translation adjustments, net	$	41.5		$	-		$	41.5		$	131.4		$	-		$	131.4
Foreign currency losses, net		(23.5	)		8.7			(14.8	)		(71.2	)		26.9			(44.3	)
Unrecognized gains (losses) on cash flow hedges, net		5.5			(1.5	)		4.0			8.9			(3.4	)		5.5
Pension and other postretirement benefit prior service cost and gain or loss, net		(1.1	)		0.5			(0.6	)		(3.4	)		1.5			(1.9	)
Other comprehensive income	$	22.4		$	7.7		$	30.1		$	65.7		$	25.0		$	90.7

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Changes in accumulated other comprehensive (loss) income by component for the nine month periods ended September 30, 2018 and 2017 are presented in the following tables⁽¹⁾:

	Cumulative Currency Translation Adjustment			Foreign Currency Gains and (Losses)		Unrealized (Losses) Gains on Cash Flow Hedges			Pension and Postretirement Benefit Plans			Total
Balance as of December 31, 2017	$	(166.6	)	$	37.0	$	(29.8	)	$	(40.4	)	$	(199.8	)
Other comprehensive (loss) income before reclassifications		(70.0	)		18.7		11.5			2.8			(37.0	)
Amounts reclassified from accumulated other comprehensive (loss) income		-			-		9.0			1.1			10.1
Other comprehensive (loss) income		(70.0	)		18.7		20.5			3.9			(26.9	)
Cumulative effect adjustment upon adoption of new accounting standard (ASU 2017-12)		-			-		0.3			-			0.3
Balance as of September 30, 2018	$	(236.6	)	$	55.7	$	(9.0	)	$	(36.5	)	$	(226.4	)

	Cumulative Currency Translation Adjustment			Foreign Currency Gains and (Losses)			Unrealized (Losses) Gains on Cash Flow Hedges			Pension and Postretirement Benefit Plans			Total
Balance as of December 31, 2016	$	(324.2	)	$	88.6		$	(42.2	)	$	(64.6	)	$	(342.4	)
Other comprehensive income (loss) before reclassifications		131.4			(44.3	)		(3.1	)		(4.2	)		79.8
Amounts reclassified from accumulated other comprehensive (loss) income		-			-			8.6			2.3			10.9
Other comprehensive income (loss)		131.4			(44.3	)		5.5			(1.9	)		90.7
Balance as of September 30, 2017	$	(192.8	)	$	44.3		$	(36.7	)	$	(66.5	)	$	(251.7	)

⁽¹⁾ All amounts are net of tax.  Amounts in parentheses indicate debits.

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Reclassifications out of accumulated other comprehensive (loss) income for the nine month periods ended September 30, 2018 and 2017 are presented in the following table.

Amount Reclassified from Accumulated Other Comprehensive (Loss) Income
Details about Accumulated Other Comprehensive (Loss) Income Components	For the Nine Month Period Ended September 30, 2018			For the Nine Month Period Ended September 30, 2017			Affected Line in the Statement Where Net Income is Presented
Loss on cash flow hedges
Interest rate swaps	$	11.8		$	13.9		Interest expense
		11.8			13.9		Total before tax
		(2.8	)		(5.3	)	Benefit for income taxes
	$	9.0		$	8.6		Net of tax
Amortization of defined benefit pension and other postretirement benefit items	$	1.4		$	3.7		(1)
		1.4			3.7		Total before tax
		(0.3	)		(1.4	)	Benefit for income taxes
	$	1.1		$	2.3		Net of tax
Total reclassifications for the period	$	10.1		$	10.9		Net of tax

⁽¹⁾ These components are included in the computation of net periodic benefit cost.  See Note 7 “Pension and Other Postretirement Benefits” for additional details.

Note 11. Hedging Activities and Fair Value Measurements

Hedging Activities

The Company is exposed to certain market risks during the normal course of its business arising from adverse changes in interest rates and foreign currency exchange rates.  The Company selectively uses derivative financial instruments (“derivatives”), including foreign currency forward contracts and interest rate swaps, to manage the risks from fluctuations in foreign currency exchange rates and interest rates, respectively.  The Company does not purchase or hold derivatives for trading or speculative purposes.  Fluctuations in interest rates and foreign currency exchange rates can be volatile, and the Company’s risk management activities do not totally eliminate these risks.  Consequently, these fluctuations could have a significant effect on the Company’s financial results.

The Company’s exposure to interest rate risk results primarily from its variable-rate borrowings.  The Company manages its debt centrally, considering tax consequences and its overall financing strategies.  The Company manages its exposure to interest rate risk by maintaining a mixture of fixed and variable rate debt and, from time to time, using pay-fixed interest rate swaps as cash flow hedges of variable rate debt in order to adjust the relative fixed and variable proportions.

A substantial portion of the Company’s operations is conducted by its subsidiaries outside of the United States in currencies other than the USD.  Almost all of the Company’s non-U.S. subsidiaries conduct their business primarily in their local currencies, which are also their functional currencies. Other than the USD, the EUR, GBP, and Chinese Yuan are the principal currencies in which the Company and its subsidiaries enter into transactions.  The Company is exposed to the impacts of changes in foreign currency exchange rates on the translation of its non-U.S. subsidiaries’ assets, liabilities and earnings into USD.  The Company has certain U.S. subsidiaries borrow in currencies other than the USD.

The Company and its subsidiaries are also subject to the risk that arises when they, from time to time, enter into transactions in currencies other than their functional currency.  To mitigate this risk, the Company and its subsidiaries typically settle intercompany trading balances monthly. The Company also selectively uses forward currency contracts to manage this risk. These contracts for the sale or purchase of European and other currencies generally mature within one year.

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Derivative Instruments

The following table summarizes the notional amounts, fair values and classification of the Company’s outstanding derivatives by risk category and instrument type within the Condensed Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017.

	September 30, 2018
	Derivative Classification	Notional Amount (1)		Fair Value (1) Other Current Assets		Fair Value (1) Other Assets		Fair Value (1) Accrued Liabilities		Fair Value (1) Other Liabilities
Derivatives Designated as Hedging Instruments
Interest rate swap contracts	Cash Flow	$	1,025.0	$	-	$	-	$	3.4	$	14.2
Derivatives Not Designated as Hedging Instruments
Foreign currency forwards	Fair Value	$	26.5	$	-	$	-	$	0.3	$	-
	December 31, 2017
	Derivative Classification	Notional Amount (1)		Fair Value (1) Other Current Assets		Fair Value (1) Other Assets		Fair Value (1) Accrued Liabilities		Fair Value (1) Other Liabilities
Derivatives Designated as Hedging Instruments
Interest rate swap contracts	Cash Flow	$	1,125.0	$	-	$	-	$	16.1	$	30.6
Derivatives Not Designated as Hedging Instruments
Foreign currency forwards	Fair Value	$	94.4	$	-	$	-	$	1.2	$	-

⁽¹⁾ Notional amounts represent the gross contract amounts of the outstanding derivatives excluding the total notional amount of positions that have been effectively closed through offsetting positions.  The net gains and net losses associated with positions that have been effectively closed through offsetting positions but not yet settled are included in the asset and liability derivatives fair value columns, respectively.

Gains and losses on derivatives designated as cash flow hedges included in the Condensed Consolidated Statements of Comprehensive (Loss) Income for the three and nine month periods ended September 30, 2018 and 2017, are as presented in the table below.  See Note 1 “Condensed Consolidated Financial Statements” for a discussion of the adoption of ASU 2017-12.

	For the Three Month Periods Ended September 30,						For the Nine Month Periods Ended September 30,
	2018			2017			2018			2017
Interest rate swap contracts
Gain (loss) recognized in AOCI on derivatives	$	1.8		$	1.4		$	15.2		$	(4.9	)
Loss reclassified from AOCI into income (effective portion)(1)		(3.3	)		(4.1	)		(11.2	)		(13.9	)
Loss reclassified from AOCI into income (missed forecast)(2)		(0.6	)		-			(0.6	)		-

⁽¹⁾ Losses on derivatives reclassified from accumulated other comprehensive income (“AOCI”) into income (effective portion) were included in “Interest expense” in the Condensed Consolidated Statements of Operations, the same income statement line item as the earnings effect of the hedged item.

⁽²⁾ During the three month period ended September 30, 2018, the Company used excess cash to pay down $150.0 million of its Dollar Term Loan Facility.  Due to this unforecasted pay down of debt, the Company paid $2.7 million in the amendment of the interest rate swap contracts to reflect the updated forecasted cash flows.  The updated forecasts caused certain hedged items to be deemed probable of not occurring in the future and thus, the Company accelerated the release of AOCI related to those hedged items.  Losses reclassified from AOCI into income (missed forecast) were included in “Loss on extinguishment of debt” in the Condensed Consolidated Statements of Operations.

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As of September 30, 2018, the Company is the fixed rate payor on 11 interest rate swap contracts that effectively fix the LIBOR-based index used to determine the interest rates charged on a total of $1,025.0 million of the Company’s LIBOR-based variable rate borrowings.  These contracts carry fixed rates ranging from 3.3% to 4.3% and have expiration dates ranging from 2018 to 2020.  These swap agreements qualify as hedging instruments and have been designated as cash flow hedges of forecasted LIBOR-based interest payments.  Based on LIBOR-based swap yield curves as of September 30, 2018, the Company expects to reclassify losses of $13.3 million out of AOCI into earnings during the next 12 months.  The Company’s LIBOR-based variable rate borrowings outstanding as of September 30, 2018 were $1,025.9 million and €608.9 million.

The Company had two foreign currency forward contracts outstanding as of September 30, 2018 with notional amounts of $9.3 million and $17.2 million. These contracts are used to hedge the change in fair value of recognized foreign currency denominated assets or liabilities caused by changes in currency exchange rates.  The changes in the fair value of these contracts generally offset the changes in the fair value of a corresponding amount of the hedged items, both of which are included in the “Other operating expense, net” line on the face of the Condensed Consolidated Statements of Operations.  The Company’s foreign currency forward contracts are subject to master netting arrangements or agreements between the Company and each counterparty for the net settlement of all contracts through a single payment in a single currency in the event of default on or termination of any one contract with that certain counterparty.  It is the Company’s practice to recognize the gross amounts in the Condensed Consolidated Balance Sheets.  The amount available to be netted is not material.

The Company’s (losses) gains on derivative instruments not designated as accounting hedges and total net foreign currency (losses) gains for the three and nine month periods ended September 30, 2018 and 2017 were as follows.

	For the Three Month Periods Ended September 30,						For the Nine Month Periods Ended September 30,
	2018			2017			2018		2017
Foreign currency forward contracts (losses) gains	$	(0.4	)	$	(1.8	)	$	5.8	$	(6.7	)
Total foreign currency transaction gains (losses), net		0.8			(1.7	)		0.6		(6.3	)

The Company has a significant investment in consolidated subsidiaries with functional currencies other than the USD, particularly the EUR.  The Company designated its Original Euro Term Loan as a hedge of the Company’s net investment in subsidiaries with EUR functional currencies in 2017 until it was extinguished and replaced on August 17, 2017 by a €615.0 million Euro Term Loan, further described in Note 8 “Debt.”  On August 17, 2017, the Company designated the €615.0 million Euro Term Loan as a hedge of the Company’s net investment in subsidiaries with EUR functional currencies.  As of September 30, 2018, the Euro Term Loan of €608.9 million remained designated.

For the period from January 1, 2017 to August 16, 2017, the Company designated two cross currency interest rate swaps, each with a USD notional amount of $100.0 million as hedges of its net investment in EUR functional subsidiaries.  Both cross currency interest rate swaps were terminated on August 16, 2017.  The losses and gains from the change in the fair value of the designated net investment hedges were recorded through other comprehensive income.  The recorded Accumulated Other Comprehensive (Loss) Income at the termination of the cross currency interest rate swaps will remain in Accumulated Other Comprehensive (Loss) Income until there is a substantial liquidation of the Company’s net investment in subsidiaries with EUR functional currencies.

The Company’s gains and (losses), net of income tax, associated with changes in the value of debt and designated cross currency interest rate swaps for the three and nine month periods ended September 30, 2018 and 2017 and the net balance of such gains and (losses) included in accumulated other comprehensive (loss) income as of September 30, 2018 and 2017 were as follows.

	For the Three Month Periods Ended September 30,					For the Nine Month Periods Ended September 30,
	2018		2017			2018		2017
Gain (loss), net of income tax, recorded through other comprehensive income	$	3.5	$	(13.6	)	$	18.0	$	(43.2	)
Balance included in accumulated other comprehensive (loss) income as of September 30, 2018 and 2017, respectively						$	50.1	$	39.2

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For the periods presented, all cash flows associated with derivatives are classified as operating cash flows in the Condensed Consolidated Statements of Cash Flows.

Fair Value Measurements

A financial instrument is defined as cash or cash equivalents, evidence of an ownership interest in an entity, or a contract that creates a contractual obligation or right to deliver or receive cash or another financial instruments from another party.  The Company’s financial instruments consist primarily of cash and cash equivalents, trade accounts receivables, trade accounts payables, deferred compensation assets and obligations, derivatives and debt instruments.  The carrying values of cash and cash equivalents, trade accounts receivables, trade accounts payables, and variable rate debt instruments are a reasonable estimate of their respective fair values.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or more advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.  The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure the fair value as follows.

Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities as of the reporting date.

Level 2 Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities as of the reporting date.

Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2018.

	Level 1		Level 2		Level 3		Total
Financial Assets
Trading securities held in deferred compensation plan(1)	$	6.3	$	-	$	-	$	6.3
Total	$	6.3	$	-	$	-	$	6.3
Financial Liabilities
Foreign currency forwards(2)	$	-	$	0.3	$	-	$	0.3
Interest rate swaps(3)		-		17.6		-		17.6
Deferred compensation plan(1)		6.3		-		-		6.3
Total	$	6.3	$	17.9	$	-	$	24.2

⁽¹⁾ Based on the quoted price of publicly traded mutual funds which are classified as trading securities and accounted for using the mark-to-market method.

⁽²⁾ Based on calculations that use readily observable market parameters as their basis, such as spot and forward rates.

⁽³⁾ Measured as the present value of all expected future cash flows based on the LIBOR-based swap yield curves as of September 30, 2018.  The present value calculation uses discount rates that have been adjusted to reflect the credit quality of the Company and its counterparties.

Note 12. Revenue from Contracts with Customers

Overview

The Company adopted ASC 606 on January 1, 2018 using the modified retrospective method.  See Note 1 “Condensed Consolidated Financial Systems” for further discussion of the adoption.

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The Company recognizes revenue when control is transferred to the customer.  The amount of revenue recognized includes adjustments for any variable consideration, such as rebates, sales discounts, liquidated damages, etc., which are included in the transaction price, and allocated to each performance obligation.  The variable consideration is estimated throughout the course of the contract using the Company’s best estimates.  Judgments impacting variable consideration related to material rebate and sales discount programs, and significant contracts containing liquidated damage clauses are governed by robust management review processes.

The majority of the Company’s revenues are derived from short duration contracts and revenue is recognized at a single point in time when control is transferred to the customer, generally at shipment or when delivery has occurred or services have been rendered.

The Company has certain long duration engineered to order (“ETO”) contracts that require highly engineered solutions designed to customer specific applications.  For contracts where the contractual deliverables have no alternative use and the contract termination clauses provide for the recovery of cost plus a reasonable margin, revenue is recognized over time based on the Company’s progress in satisfying the contractual performance obligations, generally measured as the ratio of actual costs incurred to date to the estimated total costs to complete the contract.  For contracts with termination provisions that do not provide for recovery of cost and a reasonable margin, revenue is recognized at a point in time, generally at shipment or delivery to the customer.  Identification of performance obligations, determination of alternative use, assessment of contractual language regarding termination provisions, and estimation of total project costs are all significant judgments required in the application of ASC 606.

Contractual specifications and requirements may be modified.  The Company considers contract modifications to exist when the modification either creates new or changes the existing enforceable rights and obligations.  In the event a contract modification is for goods or services that are not distinct in the contract, and therefore, form part of a single performance obligation that is partially satisfied as of the modification date, the effect of the contract modification on the transaction price and the Company’s measure of progress for the performance obligation to which it relates, is recognized on a cumulative catch-up basis.

Taxes assessed by a government authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.  Sales commissions are due at the earlier of collection of payment from customers or recognition of revenue.  Applying the practical expedient from ASC 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less.  These costs are included in the “Selling and administrative expenses” line of the Condensed Consolidated Statements of Operations.

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Disaggregation of Revenue

The following table provides disaggregated revenue by reportable segment for the three month period ended September 30, 2018.

	Industrials		Energy		Medical		Total
Primary Geographic Markets
United States	$	96.7	$	200.1	$	31.1	$	327.9
Other Americas		19.9		29.4		0.7		50.0
Total Americas	$	116.6	$	229.5	$	31.8	$	377.9
EMEA		156.2		44.9		27.7		228.8
Asia Pacific		47.2		24.4		11.0		82.6
Total	$	320.0	$	298.8	$	70.5	$	689.3
Product Categories
Original equipment(1)	$	221.2	$	127.8	$	68.3	$	417.3
Aftermarket(2)		98.8		171.0		2.2		272.0
Total	$	320.0	$	298.8	$	70.5	$	689.3
Pattern of Revenue Recognition
Revenue recognized at point in time(3)	$	309.4	$	278.5	$	70.5	$	658.4
Revenue recognized over time(4)		10.6		20.3		-		30.9
Total	$	320.0	$	298.8	$	70.5	$	689.3

⁽¹⁾ Revenues from sales of capital equipment within the Industrials and Energy Segments and sales of components to original equipment manufacturers in the Medical Segment.

⁽²⁾ Revenues from sales of spare parts, accessories, other components and services in support of maintaining customer owned, installed base of the Company’s original equipment.

⁽³⁾ Revenues from short and long duration product and service contracts recognized at a point in time when control is transferred to the customer generally when products delivery has occurred and services have been rendered.

⁽⁴⁾ Revenues primarily from long duration ETO product contracts and certain contracts for the delivery of a significant volume of substantially similar products recognized over time as contractual performance obligations are completed.

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The following table provides disaggregated revenue by reportable segment for the nine month period ended September 30, 2018.

	Industrials		Energy		Medical		Total
Primary Geographic Markets
United States	$	278.2	$	538.6	$	77.2	$	894.0
Other Americas		58.1		85.0		2.1		145.2
Total Americas	$	336.3	$	623.6	$	79.3	$	1,039.2
EMEA		481.8		115.3		82.4		679.5
Asia Pacific		147.6		75.2		35.6		258.4
Total	$	965.7	$	814.1	$	197.3	$	1,977.1
Product Categories
Original equipment(1)	$	662.5	$	337.7	$	190.5	$	1,190.7
Aftermarket(2)		303.2		476.4		6.8		786.4
Total	$	965.7	$	814.1	$	197.3	$	1,977.1
Pattern of Revenue Recognition
Revenue recognized at point in time(3)	$	931.2	$	776.3	$	197.3	$	1,904.8
Revenue recognized over time(4)		34.5		37.8		-		72.3
Total	$	965.7	$	814.1	$	197.3	$	1,977.1

⁽¹⁾ Revenues from sales of capital equipment within the Industrials and Energy Segments and sales of components to original equipment manufacturers in the Medical Segment.

⁽²⁾ Revenues from sales of spare parts, accessories, other components and services in support of maintaining customer owned, installed base of the Company’s original equipment.

⁽³⁾ Revenues from short and long duration product and service contracts recognized at a point in time when control is transferred to the customer generally when products delivery has occurred and services have been rendered.

⁽⁴⁾ Revenues primarily from long duration ETO product contracts and certain contracts for the delivery of a significant volume of substantially similar products recognized over time as contractual performance obligations are completed.

Performance Obligations

The majority of the Company’s contracts have a single performance obligation as the promise to transfer goods and/or services.  For contracts with multiple performance obligations, the Company utilizes observable prices to determine standalone selling price or cost plus margin if a standalone price is not available.  The Company has elected to expense shipping and handling costs as incurred.

The Company’s primary performance obligations include delivering standard or configured to order (“CTO”) goods to customers, designing and manufacturing a broad range of equipment customized to a customer’s specifications in ETO arrangements, rendering of services (maintenance and repair contracts) and certain extended or service type warranties.  For incidental items that are immaterial in the context of the contract, costs are expensed as incurred or accrued at delivery.

As of September 30, 2018, for contracts with an original duration greater than one year, the Company expects to recognize revenue in the future related to unsatisfied (or partially satisfied) performance obligations of $168.0 million in the next twelve months and $72.9 million in periods thereafter.  The performance obligations that are unsatisfied (or partially satisfied) are primarily related to orders for goods or services that were placed prior to the end of the reporting period and have not been delivered to the customer, on-going work on ETO contracts where revenue is recognized over time, and service contracts with an original duration greater than one year.

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Contract Balances

The following table provides the contract balances as of September 30, 2018 and December 31, 2017 presented in the Condensed Consolidated Balance Sheets.

	September 30, 2018		December 31, 2017
Accounts receivable, net of allowance for doubtful accounts of $19.1 and $18.7, respectively	$	525.0	$	536.3
Contract assets		13.9		-
Contract liabilities		90.5		42.7

Accounts receivable – Amounts due where the Company's right to receive cash is unconditional.

Contract assets – The Company's rights to consideration for the satisfaction of performance obligations subject to constraints apart from timing.  Contract assets are transferred to receivables when the right to collect consideration becomes unconditional.  Contract assets are presented net of progress billings and related advances from customers.

Contract liabilities – Advance payments received from customers for contracts for which revenue is not yet recognized.  The increase in the contract liabilities account as of September 30, 2018 and December 31, 2017 was due primarily to the acquisition of Runtech of $29.6 million.  The remaining change is due to the timing of milestone payments received related to projects for production later this year, partially offset by contract liability balances converted to revenue in the period.  Contract liability balances are generally recognized in revenue within twelve months.

Contract assets and liabilities are reported on the Condensed Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period.  Contract assets and liabilities are presented net on a contract level, where required.

Payments from customers are generally due 30-60 days after invoicing.  Invoicing for sales of standard products generally coincides with shipment or delivery of goods.  Invoicing for CTO and ETO contracts typically follows a schedule for billing at contractual milestones.  Payments milestones normally include down payments upon the contract signing, completion of product design, completion of customer's preliminary inspection, shipment or delivery, completion of installation, and customer's on-site inspection.  The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets) and customer advances and deposits (contract liabilities) on the Condensed Consolidated Balance Sheets.

The Company has elected the practical expedient from ASC 606-10-32-18 and does not adjust the transaction price for the effects of a financing component if, at contract inception, the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

Note 13. Income Taxes

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act ("Tax Act"). The Tax Act makes broad and complex changes to the U.S. tax code that affected 2017, including, but not limited to, (1) requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries that is payable over eight years and (2) bonus depreciation that will allow for full expensing of qualified property.

The Tax Act also establishes new tax laws that affected 2018, including, but not limited to (1) the reduction of the U.S. federal corporate tax rate from 35% to 21%; (2) the elimination of the corporate alternative minimum tax ("AMT"); (3) the creation of the base erosion anti-abuse tax ("BEAT"), a new minimum tax; (4) a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries; (5) a new provision designed to tax global intangible low-taxed income ("GILTI"), which allows for the possibility of using foreign tax credits ("FTC") and a deduction of up to 50% to offset the income tax liability (subject to some limitations); (6) a new limitation on deductible interest expense; (7) the repeal of the domestic production activity deduction; (8) limitations on the deductibility of certain executive compensation; (9) limitations on the use of FTCs to reduce the U.S. income tax liability; and (10) limitations on net operating losses ("NOL") generated after December 31, 2017, to 80% of taxable income.

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The SEC staff issued SAB 118, which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company's accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, a company must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, a company should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act.

The Company has not completed the accounting for the income tax effects of certain elements of the Tax Act. If the Company was able to make reasonable estimates of the effects of elements for which an analysis is not yet complete, the Company recorded provisional adjustments, as described above. If the Company was not yet able to make reasonable estimates of the impact of certain elements, the Company has not recorded any adjustments related to those elements and have continued accounting for them in accordance with ASC 740 on the basis of the tax laws in effect before the Tax Act. As the Company completes the accounting of the income tax effects of the Tax Act, the Company anticipates that additional charges or benefits may be recorded at such time as prescribed by ASC 740 and SAB 118, and as further information becomes available regarding the Tax Act, the Company may make further adjustments to the provisions that have been recorded in the financial statements. The Company also continues to examine the impact of this tax reform legislation.

The Tax Act reduces the corporate tax rate to 21%, effective January 1, 2018. While the Company was able to make a reasonable estimate of the impact of the reduction in the corporate rate, that estimate may be affected by other analyses related to the Tax Act, including, but not limited to, a calculation of deemed repatriation of deferred foreign income and the state tax effect of adjustments made to federal temporary differences.  In the nine month period ended September 30, 2018, the benefit recognized of $89.6 million in 2017 was increased by $8.2 million to $97.8 million in the three month period ended September 30, 2018.  No additional changes were made to the $69.0 million benefit related to the reduction of the ASC 740-30 liability.  These both remain estimates as of September 30, 2018.

The Deemed Repatriation Transition Tax ("Transition Tax") is a tax on previously untaxed accumulated and current earnings and profits ("E&P") of certain of the Company's foreign subsidiaries. To determine the amount of the Transition Tax, we must determine, in addition to other factors, the amount of post-1986 E&P of the relevant subsidiaries, the amount of non-U.S. income taxes paid on such earnings, and the impact of the accumulated overall foreign source loss on the Company's ability to utilize foreign tax credits.  As of the nine month period ended September 30, 2018, the Company revised its estimate for the Transition Tax obligation to $51.7 million from the $63.3 million expensed in 2017.  The Company continues to gather additional information to more precisely compute the amount of the Transition Tax obligation.  The Transition Tax obligation remains an estimate as of September 30, 2018.

The Company's accounting for the following elements of the Tax Act is incomplete, and no provisional adjustments, other than the adjustment related to the effects of the transitional tax, were recorded related to ASC 740-30.

Due to complexities, the Company has not yet determined if a change to the policy concerning permanent reinvestment will be made as a result of the Tax Act. No additional adjustments relating to ASC 740-30 have been recorded in accordance with SAB 118.

For 2018, the Tax Act creates a new requirement that certain income (i.e., GILTI) earned by controlled foreign corporations ("CFC") must be included currently in the gross income of the CFCs' U.S. shareholder. GILTI is the excess of the shareholder's "net CFC tested income" over the net deemed tangible income return, which is currently defined as the excess of (1) 10% of the aggregate of the U.S. shareholder's pro rata share of the qualified business asset investment of each CFC with respect to which it is a U.S. shareholder over (2) the amount of certain interest expense taken into account in the determination of net CFC-tested income.

Under U.S. GAAP, the Company is allowed to make an accounting policy choice of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the "period cost method") or (2) factoring such amounts into a company's measurement of its deferred taxes (the "deferred method").   The Company has determined that it will follow the period costs method (option 1 above) going forward.  The tax provision for the nine month period ended September 30, 2018 reflects this decision.  All of the additional calculations and rule changes found in the Tax Act have been considered in the tax provision for the three and nine month periods ended September 30, 2018.

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The following table summarizes the Company's provision (benefit) for income taxes and effective income tax provision rate for the three and nine month periods ended September 30, 2018 and 2017.

	For the Three Month Periods Ended September 30,						For the Nine Month Periods Ended September 30,
	2018			2017			2018			2017
Income (loss) before income taxes	$	94.8		$	32.4		$	238.1		$	(166.3	)
Provision (benefit) for income taxes	$	22.6		$	4.4		$	63.2		$	(41.2	)
Effective income tax rate		23.8	%		13.6	%		26.5	%		24.8	%

The increase in the provision for income taxes for the three month period ended September 30, 2018 when compared to the same three month period in 2017 is primarily due to the overall increase in global earnings when compared to the prior year.  The effective income tax provision rate was impacted by the increase in global earnings and reduced by the windfall tax benefit to result in an overall increase in the rate for the three month period ended September 30, 2018 when compared to the same three month period of 2017.

The increase in the provision for income taxes and increase in the effective income tax provision rate for the nine month period ended September 30, 2018 when compared to the same nine month period of 2017 is primarily due to the overall increase in global earnings when compared to the prior year.

Note 14. Supplemental Information

The components of "Other operating expense, net" for the three month and nine month periods ended September 30, 2018 and 2017 are as follows.

	For the Three Month Periods Ended September 30,						For the Nine Month Periods Ended September 30,
	2018			2017			2018			2017
Other Operating Expense, Net
Foreign currency transaction (gains) losses, net	$	(0.8	)	$	1.7		$	(0.6	)	$	6.3
Restructuring charges, net (1)		5.4			2.8			5.4			4.9
Environmental remediation expenses (2)		-			-			-			0.9
Stock-based compensation expense (3)		1.1			9.8			2.9			166.0
Shareholder litigation settlement recoveries(4)		-			-			(4.5	)		-
Acquisition related expenses and non-cash charges(5)		0.5			0.7			6.3			2.4
Losses (gains) on asset and business disposals		0.1			(0.6	)		(1.1	)		2.0
Other, net		(0.3	)		3.0			2.4			4.2
Total other operating expense, net	$	6.0		$	17.4		$	10.8		$	186.7

⁽¹⁾ See Note 3 "Restructuring."

⁽²⁾ Estimated environmental remediation costs recorded on an undiscounted basis for a former production facility.

⁽³⁾ Represents stock-based compensation expense recognized for the three month period ended September 30, 2018 of $0.9 million and employer taxes related to stock option exercises of $0.2 million.  Represents stock-based compensation expense recognized for the nine month period ended September 30, 2018 of $6.1 million, reduced by $3.2 million primarily due to a decrease in the estimated accrual for employer taxes related to DSUs as a result of the achievement of employer tax caps in counties outside of the United States.

Represents stock-based compensation expense recognized for stock options outstanding of $7.8 million and $69.2 million for the three month and nine month periods ended September 30, 2017 and DSUs granted to employees at the date of the initial public offering of $2.0 million and $96.8 million under the 2013 Stock Incentive Plan for the three and nine month periods ended September 30, 2017.

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⁽⁴⁾ Represents an insurance recovery of the Company's shareholder litigation settlement in 2014.

⁽⁵⁾ Represents costs associated with successful and/or abandoned acquisitions, including third-party expenses, post-closure integration costs and non-cash charges and credits arising from fair value purchase accounting adjustments.

Note 15. Contingencies

The Company is a party to various legal proceedings, lawsuits and administrative actions, which are of an ordinary or routine nature for a company of its size and sector. The Company believes that such proceedings, lawsuits and administrative actions will not materially adversely affect its operations, financial condition, liquidity or competitive position. A more detailed discussion of certain of these proceedings, lawsuits and administrative actions is set forth below.

Asbestos and Silica Related Litigation

The Company has also been named as a defendant in a number of asbestos-related and silica-related personal injury lawsuits. The plaintiffs in these suits allege exposure to asbestos or silica from multiple sources and typically the Company is one of approximately 25 or more named defendants.

Predecessors to the Company sometimes manufactured, distributed and/or sold products allegedly at issue in the pending asbestos and silica-related lawsuits (the "Products"). However, neither the Company nor its predecessors ever mined, manufactured, mixed, produced or distributed asbestos fiber or silica sand, the materials that allegedly caused the injury underlying the lawsuits. Moreover, the asbestos-containing components of the Products, if any, were enclosed within the subject Products.

Although the Company has never mined, manufactured, mixed, produced or distributed asbestos fiber or silica sand nor sold products that could result in a direct asbestos or silica exposure, many of the companies that did engage in such activities or produced such products are no longer in operation. This has led to law firms seeking potential alternative companies to name in lawsuits where there has been an asbestos or silica related injury.

The Company believes that the pending and future asbestos and silica-related lawsuits are not likely to, in the aggregate, have a material adverse effect on its consolidated financial position, results of operations or liquidity, based on: the Company's anticipated insurance and indemnification rights to address the risks of such matters; the limited potential asbestos exposure from the Products described above; the Company's experience that the vast majority of plaintiffs are not impaired with a disease attributable to alleged exposure to asbestos or silica from or relating to the Products or for which the Company otherwise bears responsibility; various potential defenses available to the Company with respect to such matters; and the Company's prior disposition of comparable matters. However, inherent uncertainties of litigation and future developments, including, without limitation, potential insolvencies of insurance companies or other defendants, an adverse determination in the Adams County Case (discussed below), or other inability to collect from the Company's historical insurers or indemnitors, could cause a different outcome. While the outcome of legal proceedings is inherently uncertain, based on presently known facts, experience, and circumstances, the Company believes that the amounts accrued on its balance sheet are adequate and that the liabilities arising from the asbestos and silica-related personal injury lawsuits will not have a material adverse effect on the Company's consolidated financial position, results of operations or liquidity. "Accrued liabilities" and "Other liabilities" on the Condensed Consolidated Balance Sheet include a total litigation reserve of $98.3 million and $105.6 million as of September 30, 2018 and December 31, 2017, with respect to potential liability arising from the Company's asbestos-related litigation. Asbestos related defense costs are excluded from the asbestos claims liability and are recorded separately as services are incurred. In the event of unexpected future developments, it is possible that the ultimate resolution of these matters may be material to the Company's consolidated financial position, results of operation or liquidity.

The Company has entered into a series of agreements with certain of its or its predecessors' legacy insurers and certain potential indemnitors to secure insurance coverage and/or reimbursement for the costs associated with the asbestos and silica-related lawsuits filed against the Company. The Company has also pursued litigation against certain insurers or indemnitors, where necessary. The Company has an insurance recovery receivable for probable asbestos related recoveries of approximately $95.9 million and $100.4 million as of September 30, 2018 and December 31, 2017, respectively, which was included in "Other assets" on the Consolidated Balance Sheets. During the nine month period ended September 30, 2018 the Company received asbestos related insurance recoveries of $10.1 million, of which $4.5 million related to the recovery of indemnity payments, and was recorded as a reduction of the insurance recovery receivable in "Other assets" on the Condensed Consolidated Balance Sheets, and $5.6 million related to reimbursement of previously expensed legal defense costs, and was recorded as a reduction of "Selling and administrative expenses" in the Condensed Consolidated Statements of Operations.

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The largest such recent action, Gardner Denver, Inc. v. Certain Underwriters at Lloyd's, London, et al., was filed on July 9, 2010, in the Eighth Judicial Circuit, Adams County, Illinois, as case number 10-L-48 (the "Adams County Case"). In the lawsuit, the Company seeks, among other things, to require certain excess insurer defendants to honor their insurance policy obligations to the Company, including payment in whole or in part of the costs associated with the asbestos-related lawsuits filed against the Company. In October 2011, the Company reached a settlement with one of the insurer defendants, which had issued both primary and excess policies, for approximately the amount of such defendant's policies that were subject to the lawsuit. Since then, the case has been proceeding through the discovery and motions process with the remaining insurer defendants. On January 29, 2016, the Company prevailed on the first phase of that discovery and motions process ("Phase I"). Specifically, the Court in the Adams County Case ruled that the Company has rights under all of the policies in the case, subject to their terms and conditions, even though the policies were sold to the Company's former owners rather than to the Company itself. On June 9, 2016, the Court denied a motion by several of the insurers who sought permission to appeal the Phase I ruling immediately rather than waiting until the end of the whole case as is normally required. The case is now proceeding through the discovery process regarding the remaining issues in dispute ("Phase II").

A majority of the Company's expected future recoveries of the costs associated with the asbestos-related lawsuits are the subject of the Adams County Case.

The amounts recorded by the Company for asbestos-related liabilities and insurance recoveries are based on currently available information and assumptions that the Company believes are reasonable based on an evaluation of relevant factors. The actual liabilities or insurance recoveries could be higher or lower than those recorded if actual results vary significantly from the assumptions. There are a number of key variables and assumptions including the number and type of new claims to be filed each year, the resolution or outcome of these claims, the average cost of resolution of each new claim, the amount of insurance available, allocation methodologies, the contractual terms with each insurer with whom the Company has reached settlements, the resolution of coverage issues with other excess insurance carriers with whom the Company has not yet achieved settlements, and the solvency risk with respect to the Company's insurance carriers. Other factors that may affect the future liability include uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, legal rulings that may be made by state and federal courts, and the passage of state or federal legislation. The Company makes the necessary adjustments for the asbestos liability and corresponding insurance recoveries on an annual basis unless facts or circumstances warrant assessment as of an interim date.

Environmental Matters

The Company has been identified as a potentially responsible party ("PRP") with respect to several sites designated for cleanup under U.S. federal "Superfund" or similar state laws that impose liability for cleanup of certain waste sites and for related natural resource damages. Persons potentially liable for such costs and damages generally include the site owner or operator and persons that disposed or arranged for the disposal of hazardous substances found at those sites. Although these laws impose joint and several liability on PRPs, in application the PRPs typically allocate the investigation and cleanup costs based upon the volume of waste contributed by each PRP. Based on currently available information, the Company was only a small contributor to these waste sites, and the Company has, or is attempting to negotiate, de minimis settlements for their cleanup. The cleanup of the remaining sites is substantially complete and the Company's future obligations entail a share of the sites' ongoing operating and maintenance expense. The Company is also addressing four on-site cleanups for which it is the primary responsible party. Three of these cleanup sites are in the operation and maintenance stage and one is in the implementation stage.

The Company has undiscounted accrued liabilities of $7.0 million and $7.5 million as of September 30, 2018 and December 31, 2017, respectively, on its Condensed Consolidated Balance Sheet to the extent costs are known or can be reasonably estimated for its remaining financial obligations for the environmental matters discussed above and does not anticipate that any of these matters will result in material additional costs beyond amounts accrued. Based upon consideration of currently available information, the Company does not anticipate any material adverse effect on its results of operations, financial condition, liquidity or competitive position as a result of compliance with federal, state, local or foreign environmental laws or regulations, or cleanup costs relating to these matters.

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Note 16. Segment Results

A description of the Company's three reportable segments, including the specific products manufactured and sold follows below.

In the Industrials segment, the Company designs, manufactures, markets and services a broad range of air compression, vacuum and blower products across a wide array of technologies and applications. Almost every manufacturing and industrial facility, and many service and process industries, use air compression and vacuum products in a variety of applications such as operation of pneumatic air tools, vacuum packaging of food products and aeration of waste water. The Company maintains a leading position in its markets and serves customers globally. The Company offers comprehensive aftermarket parts and an experienced direct and distributor-based service network world-wide to complement all of its products.

In the Energy segment, the Company designs, manufactures, markets and services a diverse range of positive displacement pumps, liquid ring vacuum pumps and compressors, and engineered loading systems and fluid transfer equipment, consumables, and associated aftermarket parts and services. It serves customers in the upstream, midstream, and downstream oil and gas markets, and various other markets including petrochemical processing, power generation, transportation, and general industrial. The Company is one of the largest suppliers in these markets and has long-standing customer relationships. Its positive displacement pumps are used in the oilfield for drilling, hydraulic fracturing, completion and well servicing. Its liquid ring vacuum pumps and compressors are used in many power generation, mining, oil and gas refining and processing, chemical processing and general industrial applications including flare gas and vapor recovery, geothermal gas removal, vacuum de-aeration, enhanced oil recovery, water extraction in mining and paper and chlorine compression in petrochemical operations. Its engineered loading systems and fluid transfer equipment ensure the safe handling and transfer of crude oil, liquefied natural gas, compressed natural gas, chemicals, and bulk materials.

In the Medical segment, the Company designs, manufactures and markets a broad range of highly specialized gas, liquid and precision syringe pumps and compressors primarily for use in the medical, laboratory and biotechnology end markets. The Company's customers are mainly medium and large durable medical equipment suppliers that integrate the Company's products into their final equipment for use in applications such as oxygen therapy, blood dialysis, patient monitoring, wound treatment, and others. Further, with the recent acquisitions, the Company has expanded into liquid handling components and systems used in biotechnology applications including clinical analysis instrumentation. The Company also has a broad range of end use deep vacuum products for laboratory science applications.

The Chief Operating Decision Maker ("CODM") evaluates the performance of the Company's reportable segments based on, among other measures, Segment Adjusted EBITDA. Management closely monitors the Segment Adjusted EBITDA of each reportable segment to evaluate past performance and actions required to improve profitability. Inter-segment sales and transfers are not significant. Administrative expenses related to the Company's corporate offices and shared service centers in the United States and Europe, which includes transaction processing, accounting and other business support functions, are allocated to the business segments. Certain administrative expenses, including senior management compensation, treasury, internal audit, tax compliance, certain information technology, and other corporate functions, are not allocated to the business segments.

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The following table provides summarized information about the Company's operations by reportable segment and reconciles Segment Adjusted EBITDA to Income (Loss) Before Income Taxes for the three month and nine month periods ended September 30, 2018 and 2017.

	For the Three Month Period Ended September 30,					For the Nine Month Period Ended September 30,
	2018			2017		2018			2017
Revenue
Industrials	$	320.0		$	288.2	$	965.7		$	819.0
Energy		298.8			301.6		814.1			719.4
Medical		70.5			59.8		197.3			172.0
Total Revenue	$	689.3		$	649.6	$	1,977.1		$	1,710.4
Segment Adjusted EBITDA
Industrials	$	72.1		$	63.1	$	210.0		$	173.7
Energy		94.9			98.6		242.5			199.2
Medical		20.5			16.8		54.4			46.9
Total Segment Adjusted EBITDA	$	187.5		$	178.5	$	506.9		$	419.8
Less items to reconcile Segment Adjusted EBITDA to Income (Loss) Before Income Taxes(1):
Corporate expenses not allocated to segments(a)	$	5.3		$	13.8	$	14.8		$	30.9
Interest expense		24.4			30.1		76.5			115.4
Depreciation and amortization expense		44.4			43.5		134.6			126.9
Sponsor fees and expenses(b)		-			-		-			17.3
Restructuring and related business transformation costs(c)		12.3			6.3		25.2			20.5
Acquisition related expenses and non-cash charges(d)		2.8			1.2		13.1			3.1
Environmental remediation loss reserve(e)		-			-		-			0.9
Expenses related to public stock offerings(f)		0.3			0.5		2.2			3.6
Establish public company financial reporting compliance(g)		1.3			3.8		3.2			7.2
Stock-based compensation(h)		1.1			9.8		2.9			166.0
Foreign currency transaction (gains) losses, net		(0.8	)		1.7		(0.6	)		6.3
Loss on extinguishment of debt(i)		0.9			34.1		1.0			84.5
Shareholder litigation settlement recoveries(j)		-			-		(4.5	)		-
Other adjustments(k)		0.7			1.3		0.4			3.5
Income (Loss) Before Income Taxes	$	94.8		$	32.4	$	238.1		$	(166.3	)

⁽¹⁾ The reconciling items for the three month and nine month periods ended September 30, 2017 have been reclassified to conform to the methodology used in the three and nine month periods ended September 30, 2018, and include the following.

^(a) Includes insurance recoveries of asbestos legal fees of $5.6 million in the nine month period ended September 30, 2018.

^(b) Represents management fees and expenses paid to the Company's Sponsor.

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 ^(c) Restructuring and related business transformation costs consist of the following.

	For the Three Month Period Ended September 30,						For the Nine Month Period Ended September 30,
	2018			2017			2018			2017
Restructuring charges	$	5.4		$	2.8		$	5.4		$	4.9
Severance, sign-on, relocation and executive search costs		(0.1	)		0.6			3.8			2.2
Facility reorganization, relocation and other costs		1.1			1.0			2.4			3.9
Information technology infrastructure transformation		0.3			0.8			0.5			3.4
Losses (gains) on asset and business disposals		0.1			(0.6	)		(1.1	)		2.0
Consultant and other advisor fees		3.4			0.5			10.0			1.7
Other, net		2.1			1.2			4.2			2.4
Total restructuring and related business transformation costs	$	12.3		$	6.3		$	25.2		$	20.5

^(d) Represents costs associated with successful and/or abandoned acquisitions, including third-party expenses, post-closure integration costs and non-cash charges and credits arising from fair value purchase accounting adjustments.

^(e) Represents estimated environmental remediation costs and losses relating to a former production facility.

^(f) Represents expenses related to the Company's initial public offering and subsequent secondary offerings.

^(g) Represents third party expenses to comply with the requirements of Sarbanes-Oxley in 2018 and the accelerated adoption of new accounting standards (ASC 606 – Revenue from Contracts with Customers and ASC 842 - Leases) in the first quarter of 2018 and 2019 respectively, one year ahead of the required adoption dates for a private company.  These expenses were previously included in "Expenses related to initial stock offering" and prior periods have been restated to conform to current period presentation.

^(h) Represents stock-based compensation expense recognized for the three month period ended September 30, 2018 of $0.9 million and employer taxes related to stock option exercises of $0.2 million.  Represents stock-based compensation expense recognized for the nine month period ended September 30, 2018 of $6.1 million, reduced by $3.2 million primarily due to a decrease in the estimated accrual for employer taxes related to DSUs as a result of the achievement of employer tax caps in countries outside of the United States.

Represents stock-based compensation expense recognized for stock options outstanding of $7.8 million and $69.2 million for the three month and nine month periods ended September 30, 2017 and DSUs granted to employees at the date of the initial public offering of $2.0 million and $96.8 million under the 2013 Stock Incentive Plan for the three and nine month periods ended September 30, 2017.

⁽ⁱ⁾ Represents losses on extinguishment of the senior notes and a portion of the U.S. Term Loan and losses reclassified from AOCI into income related to the amendment of the interest rate swaps in conjunction with the debt repayment.

^(j) Represents an insurance recovery of the Company's shareholder litigation settlement in 2014.

^(k) Includes (i) the effects of the amortization of prior service costs and the amortization of gains in pension and other postretirement benefits (OPEB) expense, (ii) certain legal and compliance costs and (iii) other miscellaneous adjustments.

Note 17. Related Party Transactions

Affiliates of KKR participated as (i) a lender in the Company's Senior Secured Credit Facilities discussed in Note 8, "Debt," (ii) an underwriter in the Company's initial public offering, and (iii) a provider of services for the fiscal year 2017 debt refinancing transaction.  KKR held a position in the Euro Term Loan Facility of €38.6 million as of September 30, 2018.

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The Company entered into a monitoring agreement, dated July 30, 2013, with KKR pursuant to which KKR provided management, consulting and financial advisory services to the Company and its divisions, subsidiaries, parent entities and controlled affiliates.  Under the terms of the monitoring agreement the Company was, among other things, obligated to pay KKR (or such affiliate(s) as KKR designates) an aggregate annual management fee in the initial annual amount of $3.5 million, payable in arrears at the end of each fiscal quarter, plus upon request all reasonable out of pocket expenses incurred in connection with the provision of services under the agreement.  The management fee increased at a rate of 5% per year effective on January 1, 2014.  In May 2017, in connection with the Company's initial public offering, the monitoring agreement was terminated and the Company paid a termination fee of $16.2 million during the nine month period ended September 30, 2017 which was included in the "Selling and administrative expenses" line of the Condensed Consolidated Statements of Operations.  The Company incurred management fees, excluding the termination fee, to KKR of $1.1 million and no out of pocket expenses for the nine month period ended September 30, 2017.

Note 18. Earnings (Loss) Per Share

The computations of basic and diluted loss per share are as follows.

	For the Three Month Period Ended September 30,				For the Nine Month Period Ended September 30,
	2018		2017		2018		2017
Net income (loss)	$	72.2	$	28.0	$	174.9	$	(125.1	)
Less: Net income attributable to noncontrolling interests		-		-		-		0.1
Net income (loss) attributable to Gardner Denver Holdings, Inc.	$	72.2	$	28.0	$	174.9	$	(125.2	)
Average shares outstanding:
Basic		201.9		201.3		201.8		175.7
Diluted		209.1		208.1		209.6		175.7
Income (loss) per share:
Basic	$	0.36	$	0.14	$	0.87	$	(0.71	)
Diluted	$	0.35	$	0.13	$	0.83	$	(0.71	)

The DSUs described in Note 15, "Stock-Based Compensation" of the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2017 are considered outstanding shares for the purpose of computing basic earnings (loss) per share because they will become issued solely upon the passage of time.

As of September 30, 2018, there was 0.8 million anti-dilutive shares that were not included in the computation of diluted earnings per share.  For the nine month period ended September 30, 2017, there was 12.3 million of potentially dilutive stock-based awards that were not included in the computation of diluted loss per share because their inclusion would be anti-dilutive.

Note 19. Share Repurchase Program

On August 1, 2018, the Board of Directors of Gardner Denver authorized a share repurchase program pursuant to which the Company may repurchase up to $250.0 million of its common stock over the next two years, effective immediately and through July 31, 2020, the date on which the repurchase program will expire.  Under the repurchase program, Gardner Denver is authorized to repurchase shares through open market purchases, privately-negotiated transactions or otherwise in accordance with all applicable securities laws and regulations, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Securities Act of 1934.  The share repurchase program does not obligate Gardner Denver to acquire any particular amount of common stock, and it may be suspended or terminated at any time at the Company's discretion.  The timing and amount of any purchases of common stock will be based on Gardner Denver's liquidity, general business and market conditions, debt covenant restrictions and other factors, including alternative investment opportunities and Gardner Denver's desire to repay indebtedness.

During the three and nine month period ended September 30, 2018, the Company repurchased 223,911 shares under the August 1, 2018 program at a weighted average price of $24.86 per share for an aggregate value of $5.6 million.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion contains management's discussion and analysis of our financial condition and result of operations and should be read together with the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q.  This discussion contains forward-looking statements that reflect our plans, estimates and beliefs and involve numerous risks and uncertainties, including, but not limited to, those described in the "Risk Factors" section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2017.  Actual results may differ materially from those contained in any forward-looking statements.  You should carefully read the "Special Note Regarding Forward-Looking Statements" in this Quarterly Report on Form 10-Q.

Overview

Our Company

We are a leading global provider of mission-critical flow control and compression equipment and associated aftermarket parts, consumables and services, which we sell across multiple attractive end-markets within the industrial, energy and medical industries. We manufacture one of the broadest and most complete ranges of compressor, pump, vacuum and blower products in our markets, which, combined with our global geographic footprint and application expertise, allows us to provide differentiated product and service offerings to our customers. Our products are sold under a collection of premier, market-leading brands, including Gardner Denver, CompAir, Nash, Emco Wheaton, Robuschi, Elmo Rietschle and Thomas, which we believe are globally recognized in their respective end-markets and known for product quality, reliability, efficiency and superior customer service.

Our Segments

We report our results of operations through three reportable segments: Industrials, Energy and Medical.

Industrials

We design, manufacture, market and service a broad range of air compression, vacuum and blower products, including associated aftermarket parts, consumables and services, across a wide array of technologies and applications for use in diverse end-markets. Compressors are used to increase the pressure of air or gas, vacuum products are used to remove air or gas in order to reduce the pressure below atmospheric levels and blower products are used to produce a high volume of air or gas at low pressure. We sell our Industrials products through an integrated network of direct sales representatives and independent distributors, which is strategically tailored to meet the dynamics of each target geography or end-market.

Energy

We design, manufacture, market and service a diverse range of positive displacement pumps, liquid ring vacuum pumps, compressors and integrated systems, engineered fluid loading and transfer equipment and associated aftermarket parts, consumables and services. The highly engineered products offered by our Energy segment serve customers across upstream, midstream and downstream energy markets, as well as petrochemical processing, transportation and general industrial sectors.

Medical

We design, manufacture and market a broad range of highly specialized gas, liquid and precision syringe pumps and compressors that are specified by medical and laboratory equipment suppliers and integrated into their final equipment for use in applications, such as oxygen therapy, blood dialysis, patient monitoring, laboratory sterilization and wound treatment, among others. We offer a comprehensive product portfolio across a breadth of pump technologies to address the medical and laboratory sciences pump and fluid handling industry, as well as a range of end-use vacuum products for laboratory science applications, and we recently expanded into liquid pumps and automated liquid handling components and systems.

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Components of Our Revenue and Expenses

Revenues

We generate revenue from sales of our highly engineered, application-critical products and by providing associated aftermarket parts, consumables and services. We sell our products and deliver aftermarket services both directly to end-users and through independent distribution channels, depending on the product line and geography. Below is a description of our revenues by segment and factors impacting total revenues.

Industrials Revenue

Our Industrials Segment Revenues are generated primarily through sales of air compression, vacuum and blower products to customers in multiple industries and geographies. A significant portion of our sales in the Industrials segment are made to independent distributors. The majority of Industrials segment revenues are derived from short duration contracts and revenue is recognized at a single point in time when control is transferred to the customer, generally at shipment or when delivery has occurred or services have been rendered.  Certain contracts may involve significant design engineering to customer specifications, and depending on the contractual terms, revenue is recognized either over the duration of the contract or at contract completion when equipment is delivered to the customer. Our large installed base of products in our Industrials segment drives demand for recurring aftermarket support services primarily composed of replacement part sales to our distribution partners and, to a lesser extent, by directly providing replacement parts and repair and maintenance services to end customers. Revenue for services is recognized when services are performed. Historically, our shipments and revenues have peaked during the fourth quarter as our customers seek to fully utilize annual capital spending budgets.

Energy Revenue

Our Energy Segment Revenues are generated primarily through sales of positive displacement pumps, liquid ring vacuum pumps, compressors and integrated systems and engineered fluid loading and transfer equipment and associated aftermarket parts, consumables and services for use primarily in upstream, midstream, downstream and petrochemical end-markets across multiple geographies. The majority of Energy segment revenues are derived from short duration contracts and revenue is recognized at a single point in time when control is transferred to the customer, generally at shipment or when delivery has occurred or services have been rendered. Certain contracts with customers in the mid- and downstream and petrochemical markets are higher sales value and often have longer lead times and involve more application specific engineering. Depending on the contractual terms, revenue is recognized either over the duration of the contract or at contract completion when equipment is delivered to the customer. Provisions for estimated losses on uncompleted contracts are recognized in the period in which such losses are determined to be probable. As a result, the timing of these contracts can result in significant variation in reported revenue from quarter to quarter. Our large installed base of products in our Energy segment drives demand for recurring aftermarket support services to customers, including replacement parts, consumables and repair and maintenance services. The mix of aftermarket to original equipment revenue within the Energy segment is impacted by trends in upstream energy activity in North America. Revenue for services is recognized when services are performed. In response to customer demand for faster access to aftermarket parts and repair services, we expanded our direct aftermarket service locations in our Energy segment, particularly in North American markets driven by upstream energy activity. Energy segment products and aftermarket parts, consumables and services are sold both directly to end customers and through independent distributors, depending on the product category and geography.

Medical Revenue

Our Medical Segment Revenues are generated primarily through sales of highly specialized gas, liquid and precision syringe pumps that are specified by medical and laboratory equipment suppliers for use in medical and laboratory applications. Our products are often subject to extensive collaborative design and specification requirements, as they are generally components specifically designed for, and integrated into, our customers' products. Revenue is recognized when control is transferred to the customer, generally at shipment or when delivery has occurred. Our Medical segment also has limited aftermarket revenues related to certain products.

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Expenses

Cost of Sales

Cost of sales includes the costs we incur, including purchased materials, labor and overhead related to manufactured products and aftermarket parts sold during a period. Depreciation related to manufacturing equipment and facilities is included in cost of sales. Purchased materials represent the majority of costs of sales, with steel, aluminum, copper and partially finished castings representing our most significant materials inputs. We have instituted a global sourcing strategy to take advantage of coordinated purchasing opportunities of key materials across our manufacturing plant locations.

Cost of sales for services includes the direct costs we incur, including direct labor, parts and other overhead costs including depreciation of equipment and facilities, to deliver repair, maintenance and other field services to our customers.

Selling and Administrative Expenses

Selling and administrative expenses consist of (i) salaries and other employee-related expenses for our selling and administrative functions and other activities not associated with the manufacture of products or delivery of services to customers; (ii) facility operating expenses for selling and administrative activities, including office rent, maintenance, depreciation and insurance; (iii) marketing and direct costs of selling products and services to customers including internal and external sales commissions; (iv) research and development expenditures; (v) professional and consultant fees; (vi) Sponsor fees and expenses; (vii) expenses related to our  public stock offerings and to establish public company reporting compliance; and (viii) other miscellaneous expenses. Certain corporate expenses, including those related to our shared service centers in the United States and Europe, that directly benefit our businesses are allocated to our business segments. Certain corporate administrative expenses, including corporate executive compensation, incentive compensation adjustments, treasury, certain information technology, internal audit and tax compliance, are not allocated to the business segments.

Amortization of Intangible Assets

Amortization of intangible assets includes the periodic amortization of intangible assets recognized when an affiliate of our Sponsor acquired us on July 30, 2013 and intangible assets recognized in connection with businesses we acquired since July 30, 2013, including customer relationships and trademarks.

Other Operating Expense, Net

Other operating expense, net includes foreign currency gains and losses, restructuring charges, certain litigation and contract settlement losses and recoveries, environmental remediation, stock-based compensation expense, acquisition related expenses, and other miscellaneous operating expenses.

Benefit or Provision for Income Taxes

The benefit or provision for income taxes includes U.S. federal, state and local income taxes and all non-U.S. income taxes. We are subject to income tax in approximately 32 jurisdictions outside of the United States. Because we conduct operations on a global basis, our effective tax rate depends, and will continue to depend, on the geographic distribution of our pre-tax earnings among several different taxing jurisdictions. Our effective tax rate can also vary based on changes in the tax rates of the different jurisdictions, the availability of tax credits and non-deductible items.

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Items Affecting our Reported Results

General Economic Conditions and Capital Spending in the Industries We Serve

Our financial results closely follow changes in the industries and end-markets we serve. Demand for most of our products depends on the level of new capital investment and planned and unplanned maintenance expenditures by our customers. The level of capital expenditures depends, in turn, on the general economic conditions as well as access to capital at reasonable cost. In particular, demand for our Industrials products generally correlates with the rate of total industrial capacity utilization and the rate of change of industrial production. Capacity utilization rates above 80% have historically indicated a strong demand environment for industrial equipment. In our Energy segment, demand for our products that serve upstream energy end-markets are influenced heavily by energy prices and the expectation as to future trends in those prices. Energy prices have historically been cyclical in nature and are affected by a wide range of factors. As energy prices start improving from low levels observed in the first half of 2016, we have observed increases in drilled but uncompleted wells, global land rig count, wells and footage drilled as well as drilling and completion capital expenditures to positively impact our results of operations. In the midstream and downstream portions of our Energy segment, overall economic growth and industrial production, as well as secular trends, impact demand for our products. In our Medical segment we expect demand for our products to be driven by favorable trends, including the growth in healthcare spend and expansion of healthcare systems due to an aging population requiring medical care and increased investment in health solutions and safety infrastructures in emerging economies. Over longer time periods, we believe that demand for all of our products also tends to follow economic growth patterns indicated by the rates of change in the GDP around the world, as augmented by secular trends in each segment. Our ability to grow and our financial performance will also be affected by our ability to address a variety of challenges and opportunities that are a consequence of our global operations, including efficiently utilizing our global sales, manufacturing and distribution capabilities and engineering innovative new product applications for end-users in a variety of geographic markets.

Foreign Currency Fluctuations

A significant portion of our revenues, approximately 52% for the nine month period ended September 30, 2018, was denominated in currencies other than the U.S. dollar. Because much of our manufacturing facilities and labor force costs are outside of the United States, a significant portion of our costs are also denominated in currencies other than the U.S. dollar. Changes in foreign exchange rates can therefore impact our results of operations and are quantified when significant to our discussion.

Seasonality

Historically, our shipments and revenues have peaked during the fourth quarter as our customers seek to fully utilize annual capital spending budgets. Also, our EMEA operations generally experience a slowdown during the July, August and December holiday seasons. General economic conditions may, however, impact future seasonal variations.

Factors Affecting the Comparability of our Results of Operations

As a result of a number of factors, our historical results of operations are not comparable from period to period and may not be comparable to our financial results of operations in future periods. Key factors affecting the comparability of our results of operations are summarized below.

Upstream Energy

We sell products and provide services to customers in upstream energy markets, primarily in the United States. For the upstream energy end-market, in our Energy segment we manufacture pumps and associated aftermarket products and services used in drilling, hydraulic fracturing and well service applications, while in our Industrials segment we sell dry bulk frac sand blowers, which are used in hydraulic fracturing operations. We refer to these products and services in the Energy and Industrial segments as "upstream energy." Our Medical segment is not exposed to the upstream energy industry.

Our exposure to upstream energy production levels, coupled with reduced exploration activity and the deferral of maintenance and growth in capital expenditures by upstream energy companies, favorably impacted our financial results in the nine month period ended September 30, 2018.

The average daily closing of West Texas Intermediate spot market crude oil prices for the nine month period ended September 30, 2018 increased to $66.93 from $49.30 in the same period in 2017. As a result, there has been increased exploration activity and capital expenditures by upstream energy companies. According to Baker Hughes, Inc., the average weekly U.S. land rig count increased to 1,001 during the nine month period ended September 30, 2018 from 841 in 2017, and, according to Spears & Associates, Inc., the annual average monthly new wells drilled in the United States increased to 1,911 for the nine month period ended September 30, 2018 from 1,822 in the same period in 2017.  We have experienced increased demand for our upstream energy products and services in the nine month period ended September 30, 2018 compared to the same nine months in 2017.

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Restructuring and Other Business Transformation Initiatives

Our top priority since the completion of the KKR Transaction in 2013 has been the transformation of our business. In 2014, we commenced operational excellence initiatives to streamline our cost structure and support margin expansion, including through manufacturing footprint reduction, selling and administrative expense efficiency, and strategic sourcing in our Industrials segment.  This program was revised and expanded in the second quarter of 2016, and also in 2016, similar restructuring programs were announced for the Energy and Medical segments.  Restructuring charges, program related facility reorganization, relocation and other costs, and related capital expenditures were impacted most significantly by these business transformation initiatives. These restructuring programs were substantially completed as of December 31, 2017.  Under the 2014 to 2016 restructuring programs, we incurred restructuring charges of $2.8 million and $4.9 million in the three and nine month periods ended September 30, 2017.

We announced a restructuring program in the third quarter of 2018 which primarily involves workforce reductions.  In the three and nine month periods ended September 30, 2018, we incurred restructuring charges of $5.4 million.

In addition, we incurred program related facility reorganization, relocation and other costs of $6.9 million and $3.5 million in the three month periods ended September 30, 2018 and 2017, respectively, and $19.8 million and $15.6 million in the nine month periods ended September 30, 2018 and 2017.

We generally expect that the savings associated with these restructuring programs will recover the associated costs within two to three years of such costs being incurred.

Acquisitions

Given our global reach, market leading position in our various product categories, strong channel access and aftermarket presence and operational excellence competency, we provide an attractive acquisition platform in the flow control and compression equipment sectors. Part of our strategy for growth is to acquire complementary flow control and compression equipment businesses, which provide access to new technologies or geographies or improve our aftermarket offerings.

In June 2017, within our Industrials segment, we acquired a leading North American manufacturer of gas compression equipment and solutions for vapor recovery, biogas and other process and industrial applications for approximately $20.4 million (inclusive of an indemnity holdback of $1.9 million recorded in "Accrued liabilities").  In February 2018, within our Industrials segment, we acquired a leading global manufacturer of turbo vacuum technology systems and optimization solutions for industrial applications for approximately $94.9 million, net of cash acquired.  In May 2018, within our Energy segment, we acquired a manufacturer of plungers and other well service pump components for approximately $21.0 million, net of cash acquired (inclusive of a $2.0 million promissory note and a $0.2 million holdback recorded in "Accrued liabilities").

See Note 2 "Business Combinations" to our condensed consolidated financial statements included elsewhere in this Form 10-Q for the impact of the acquisitions on revenue and operating earnings from the date of acquisition.

Sponsor Management Fees and Expenses

Through the date of our initial public offering, our Sponsor charged an annual management fee, as well as fees and expenses for services provided.  In May 2017, in connection with our initial public offering, the monitoring agreement was terminated in accordance with its terms and we paid a termination fee of approximately $16.2 million.  Sponsor fees and expenses, excluding the termination fee, were $1.1 million for the nine month period ended September 30, 2017.

Stock-Based Compensation Expense

Under the terms of the 2013 Stock Incentive Plan and the 2017 Omnibus Incentive Plans stock-based compensation expense of $0.9 million and $6.1 million was recognized for the three month and nine month periods ended September 30, 2018.

Under the terms of the 2013 Plan, concurrent with the initial public offering, we recognized stock-based compensation expense of approximately $69.2 million related to time-based and performance-based stock options for the nine month period ended September 30, 2017.  We also recognized $96.8 million of compensation expense related to a grant of 5.5 million deferred stock units ("DSU") to employees at the date of the initial public offering.

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We expect to make stock-based awards to employees and recognize stock-based compensation expense in future periods.  Prior to our initial public offering which occurred in May 2017, no stock-based compensation expense was recognized.

Income Taxes

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act ("Tax Act"). The Tax Act makes broad and complex changes to the U.S. tax code that impact the fourth quarter of 2017 and full year 2018.

See Note 13 "Income Taxes" to our condensed consolidated financial statements included elsewhere in this Form 10-Q.

Outlook

Industrials Segment

The mission-critical nature of our Industrials products across manufacturing processes drives a demand environment and outlook that are highly correlated with global and regional industrial production, capacity utilization and long-term GDP growth. In the United States and Europe, we are poised to continue benefiting from expected growth in real GDP, along with a continued rebound in industrial production activity in 2018. In APAC, despite the recent deceleration, GDP growth remains robust. In the third quarter of 2018, we had $313.4 million of orders in our Industrials segment, an increase of 6.5% over the third quarter of 2017, or an 8.0% increase on a constant currency basis.

Energy Segment

Our Energy segment has a diverse range of equipment and associated aftermarket parts, consumables and services for a number of market sectors with energy exposure, spanning upstream, midstream, downstream and petrochemical applications. Demand for certain of our Energy products has historically corresponded to the supply and demand dynamics related to oil and natural gas products, and has been influenced by oil and natural gas prices, the level and intensity of hydraulic fracturing activity, rig count, drilling activity and other economic factors. These factors have caused the level of demand for certain of our Energy products to change at times (both positively and negatively) and we expect these trends to continue in the future.  In the third quarter of 2018, we had $260.6 million of orders in our Energy segment, an increase of 3.8% over the third quarter of 2017, or a 5.1% increase on a constant currency basis.

An increased number of drilling rigs have reentered the market as crude oil prices have improved from low points observed during the first half of 2016 and the number of drilled but uncompleted wells has grown 100% from December 2013 to September 2018. Land rig count in the United States has increased 169% from 384 rigs in May 2016 to 1,034 rigs in September 2018 compared to a relatively flat rig count growth in the rest of the world over this same time period. We believe we are well positioned to benefit from the expected growth in drilling rigs and improvements in crude oil prices. In addition, secular industry trends that are driving increased demand of newer, fit-for-purpose equipment with innovations that increase productivity. As a result of our expanded direct aftermarket service locations, particularly within North America, we believe we are well positioned to benefit from both the increasing intensity of hydraulic fracturing activity and the increase in the backlog of drilled but uncompleted wells.  There has been recent discussion in the market about Permian take away capacity constraints which may defer some of the previously expected growth coming out of that region until new capacity comes on line, which is anticipated for the first half of 2019 from gas pipelines potentially being converted to crude pipelines, as well as increased pipeline capacity to come on line in the second half of 2019.

Our midstream and downstream products provide relatively stable demand with attractive, long-term growth trends related to an expected increase in the production and transportation of hydrocarbons. Demand for our petrochemical industry products correlates with growth in the development of new petrochemical plants as well as activity levels therein. Advancements in the development of unconventional natural gas resources in North America over the past decade have resulted in the abundant availability of locally sourced natural gas as feedstock for petrochemical plants in North America, supporting long-term growth.

Medical Segment

In 2018, we continue to see an uptick in demand for products and services in the Medical space driven by attractive secular growth trends in the aging population requiring medical care, emerging economies modernizing and expanding their healthcare systems and increased investment globally in health solutions. Our entry into Liquid diaphragm pumps and Liquid Handling Automation Systems is seeing favorable response from the market driven by the need for higher healthcare efficiency, requiring premium and high performance systems. In the third quarter of 2018, we had $73.5 million of orders in our Medical segment, an increase of 20.3% over the third quarter of 2017, or a 21.1% increase on a constant currency basis.

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How We Assess the Performance of Our Business

We manage operations through the three business segments described above. In addition to our consolidated GAAP financial measures, we review various non-GAAP financial measures, including Adjusted EBITDA, Adjusted Net Income and Free Cash Flow.

We believe Adjusted EBITDA and Adjusted Net Income are helpful supplemental measures to assist us and investors in evaluating our operating results as they exclude certain items whose fluctuation from period to period do not necessarily correspond to changes in the operations of our business. Adjusted EBITDA represents net income (loss) before interest, taxes, depreciation, amortization and certain non-cash, non-recurring and other adjustment items. We believe that the adjustments applied in presenting Adjusted EBITDA are appropriate to provide additional information to investors about certain material non-cash items and about non-recurring items that we do not expect to continue at the same level in the future. Adjusted Net Income is defined as net income (loss) including interest, depreciation and amortization of non-acquisition related intangible assets and excluding other items used to calculate Adjusted EBITDA and further adjusted for the tax effect of these exclusions.

We use Free Cash Flow to review the liquidity of our operations. We measure Free Cash Flow as cash flows from operating activities less capital expenditures. We believe Free Cash Flow is a useful supplemental financial measure for us and investors in assessing our ability to pursue business opportunities and investments and to service our debt. Free Cash Flow is not a measure of our liquidity under GAAP and should not be considered as an alternative to cash flows from operating activities.

Management and our board of directors regularly use these measures as tools in evaluating our operating and financial performance and in establishing discretionary annual compensation. Such measures are provided in addition to, and should not be considered to be a substitute for, or superior to, the comparable measures under GAAP. In addition, we believe that Adjusted EBITDA, Adjusted Net Income and Free Cash Flow are frequently used by investors and other interested parties in the evaluation of issuers, many of which also present Adjusted EBITDA, Adjusted Net Income and Free Cash Flow when reporting their results in an effort to facilitate an understanding of their operating and financial results and liquidity.

Adjusted EBITDA, Adjusted Net Income and Free Cash Flow should not be considered as alternatives to net income (loss) or any other performance measure derived in accordance with GAAP, or as alternatives to cash flow from operating activities as a measure of our liquidity. Adjusted EBITDA, Adjusted Net Income and Free Cash Flow have limitations as analytical tools, and you should not consider such measures either in isolation or as substitutes for analyzing our results as reported under GAAP.

Included in our discussion of our consolidated and segment results below are changes in revenues and Adjusted EBITDA on a Constant Currency basis. Constant Currency information compares results between periods as if exchange rates had remained constant period over period. We define Constant Currency revenues and Adjusted EBITDA as total revenues and Adjusted EBITDA excluding the impact of foreign exchange rate movements and use it to determine the Constant Currency revenue and Adjusted EBITDA growth on a year-over-year basis. Constant Currency revenues and Adjusted EBITDA are calculated by translating current period revenues and Adjusted EBITDA using corresponding prior period exchange rates. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP. Results on a Constant Currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not a measure of performance presented in accordance with GAAP.

See "Non-GAAP Financial Measures" below for reconciliation information.

Results of Operations

Consolidated results should be read in conjunction with the segment results section herein and Note 16 "Segment Results" of our unaudited Consolidated Financial Statements included elsewhere in this report, which provides more detailed discussions concerning certain components of our Condensed Consolidated Statements of Operations.  All intercompany accounts and transactions have been eliminated within the consolidated results.

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The following table presents selected Consolidated Results of Operations of our business for the three and nine month periods ended September 30, 2018 and 2017.

	For the Three Month Period Ended September 30,						For the Nine Month Period Ended September 30,
	2018			2017			2018			2017
Condensed Consolidated Statement of Operations:
Revenues	$	689.3		$	649.6		$	1,977.1		$	1,710.4
Cost of sales		426.9			395.7			1,233.6			1,066.0
Gross profit		262.4			253.9			743.5			644.4
Selling and administrative expenses		107.7			111.0			330.4			338.9
Amortization of intangible assets		31.0			29.5			93.4			87.6
Other operating expense, net		6.0			17.4			10.8			186.7
Operating income		117.7			96.0			308.9			31.2
Interest expense		24.4			30.1			76.5			115.4
Loss on extinguishment of debt		0.9			34.1			1.0			84.5
Other income, net		(2.4	)		(0.6	)		(6.7	)		(2.4	)
Income (loss) before income taxes		94.8			32.4			238.1			(166.3	)
Provision (benefit) for income taxes		22.6			4.4			63.2			(41.2	)
Net income (loss)		72.2			28.0			174.9			(125.1	)
Less: Net income attributable to noncontrolling interest		-			-			-			0.1
Net income (loss) attributable to Gardner Denver Holdings, Inc	$	72.2		$	28.0		$	174.9		$	(125.2	)
Percentage of Revenues:
Gross profit		38.1	%		39.1	%		37.6	%		37.7	%
Selling and administrative expenses		15.6	%		17.1	%		16.7	%		19.8	%
Operating income		17.1	%		14.8	%		15.6	%		1.8	%
Net income (loss)		10.5	%		4.3	%		8.8	%		(7.3	%)
Adjusted EBITDA		26.4	%		25.4	%		24.9	%		22.7	%
Other Financial Data:
Adjusted EBITDA(1)		182.2			164.7			492.1			388.9
Adjusted Net Income (1)		102.7			85.2			276.1			149.2
Cash flows - operating activities		103.8			63.9			298.3			83.9
Cash flows - investing activities		(11.2	)		(2.4	)		(142.6	)		(43.1	)
Cash flows - financing activities		(158.3	)		(9.1	)		(272.8	)		(8.2	)
Free Cash Flow (1)		92.5			54.3			266.2			47.5

⁽¹⁾ See the "Non-GAAP Financial Measures" section included in this Quarterly Report for a reconciliation to the nearest GAAP measure.

Revenues

Revenues for the three month period ended September 30, 2018 were $689.3 million, an increase of $39.7 million, or 6.1%, compared to $649.6 million for the same three month period in 2017.  The increase in revenues was due primarily to higher revenues from upstream energy exposed markets in our Energy segment (1.5% or $9.7 million), higher volume in our Industrials segment including acquisitions as well as higher volume in other markets in our Energy segment and our Medical segment (4.6% or $30.0 million) and improved pricing (1.2% or $7.7 million), partially offset by the unfavorable impact of foreign currencies (1.2% or $7.7 million).  The percentage of consolidated revenues derived from aftermarket parts and services was 39.5% in the three month period ended September 30, 2018 compared to 40.5% in the same three month period in 2017.

Revenues for the nine month period ended September 30, 2018 were $1,977.1 million, an increase of $266.7 million, or 15.6% compared to $1,710.4 million for the same nine month period in 2017.  The increase in revenues was due primarily to higher revenues from upstream energy exposed markets in our Energy segment (5.2% or $89.4 million), higher volume in our Industrials segment including acquisitions as well as higher volume in other markets in our Energy segment and our Medical segment (6.7% or $114.9 million), the favorable impact of foreign currencies (2.6% or $43.7 million) and improved pricing (1.1% or $18.7 million).  The percentage of consolidated revenues derived from aftermarket parts and services was 39.8% in the nine month period ended September 30, 2018 compared to 42.1% in the same nine month period in 2017.

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Gross Profit

Gross profit for the three month period ended September 30, 2018 was $262.4 million, an increase of $8.5 million, or 3.3%, compared to $253.9 million for the same three month period in 2017, and as a percentage of revenues was 38.1% for the three month period ended September 30, 2018 and 39.1% for the same three month period in 2017.  The decrease in gross profit as a percentage of revenues primarily reflects reduced volume of energy downstream project revenues and growth rates for original equipment revenues greater than growth rates for aftermarket revenues in our Industrials segment.

Gross profit for the nine month period ended September 30, 2018 was $743.5 million, an increase of $99.1 million, or 15.6% compared to $644.4 million in the same nine month period in 2017, and as a percentage of revenues was 37.6% for the nine month period ended September 30, 2018 and 37.7% for the same nine month period in 2017.  The slight decrease in gross profit as a percentage of revenues reflects primarily due to growth rates for original equipment revenues greater than growth rates for aftermarket revenues in our Industrials segment offset by increased volume from upstream energy exposed markets.

Selling and Administrative Expenses

Selling and administrative expenses were $107.7 million for the three month period ended September 30, 2018, a decrease of $3.3 million, or 3.0%, compared to $111.0 million for the same three month period in 2017.  Selling and administrative expenses as a percentage of revenues decreased to 15.6% for the three month period ended September 30, 2018 from 17.1% in the same three month period in 2017.  The decrease in selling and administrative expenses primarily reflects lower incentive compensation, partially offset by higher salaries and higher professional and consulting fees.

Selling and administrative expenses were $330.4 million for the nine month period ended September 30, 2018, a decrease of $8.5 million, or 2.5%, compared to $338.9 million for the same nine month period in 2017.  Selling and administrative expenses as a percentage of revenues decreased to 16.7% for the nine month period ended September 30, 2018 from 19.8% in the same nine month period in 2017.  The decrease in selling and administrative expenses primarily reflects lower incentive compensation, lower sponsor fees, and insurance recoveries of asbestos legal fees in 2018 ($5.6 million), partially offset by higher salaries and higher professional and consulting fees.

Amortization of Intangible Assets

Amortization of intangible assets was $31.0 million for the three month period ended September 30, 2018, an increase of $1.5 million, compared to $29.5 million in the same three month period in 2017.  The increase was primarily due to amortization of intangibles acquired in the first and second quarters of 2018.

Amortization of intangible assets was $93.4 million for the nine month period ended September 30, 2018, an increase of $5.8 million, compared to $87.6 million in the same nine month period in 2017.  The increase was primarily due to amortization of intangibles acquired in the first and second quarters of 2018.

Other Operating Expense, Net

Other operating expense, net for the three month period ended September 30, 2018 was $6.0 million, a decrease of $11.4 million, compared to $17.4 million in the same three month period in 2017.  The decrease was primarily due to lower stock-based compensation expense ($8.7 million) and increased foreign currency transaction gains, net ($2.5 million, consisting of $0.8 million of gains in the three month period ended September 30, 2018 compared to losses of $1.7 million in the same period in 2017), partially offset by increased restructuring charges, net ($2.6 million), and lower gains on asset and business disposals ($0.6 million).

Other operating expense, net for the nine month period ended September 30, 2018 was $10.8 million, a decrease of $175.9 million, compared to $186.7 million in the same nine month period in 2017.  The decrease was primarily due to lower stock-based compensation expense ($163.1 million), increased foreign currency transaction gains, net ($6.9 million, consisting of $0.6 million of gains in the nine month period ended September 30, 2018 compared to losses of $6.3 million in the same period in 2017), a shareholder litigation settlement recovery received in 2018 ($4.5 million), increased gains on asset and business disposals ($3.1 million, consisting of $1.1 million of gains in the nine month period ended September 30, 2018 compared to losses of $2.0 million in the same period in 2017), and lower environmental remediation expenses ($0.9 million), and partially offset by increased acquisition related expenses and non-cash charges ($3.9 million).

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Interest Expense

Interest expense for the three month period ended September 30, 2018 was $24.4 million, a decrease of $5.7 million, compared to $30.1 million in the same three month period in 2017.  The decrease was primarily due to reduced debt as a result of repayments in 2018 and a lower weighted-average interest rate of approximately 5.2% for the three month period ended September 30, 2018 compared to 6.0% in the same three month period in 2017.

Interest expense for the nine month period ended September 30, 2018 was $76.5 million, a decrease of $38.9 million, compared to $115.4 million in the same nine month period in 2017.  The decrease was primarily due to reduced debt as a result of repayments of debt with proceeds from our initial public offering in May 2017 and repayments in 2018, and a lower weighted-average interest rate of approximately 5.1% in the nine month period ended September 30, 2018 compared to 6.2% in the same nine month period in 2017.

Other Income, Net

Other income, net was $2.4 million in the three month period ended September 30, 2018, an increase of $1.8 million, compared to $0.6 million in the same three month period in 2017.  The increase was primarily due to the decrease of $1.3 million in the other components of net periodic benefit cost.

Other income, net was $6.7 million in the nine month period ended September 30, 2018, an increase of $4.3 million, compared to $2.4 million in the same nine month period in 2017.  The increase was primarily due to the decrease of $3.9 million in the other components of net periodic benefit cost.

Provision (Benefit) for Income Taxes

The provision for income taxes was $22.6 million resulting in a 23.8% effective income tax provision rate for the three month period ended September 30, 2018, compared to a provision for income taxes of $4.4 million resulting in a 13.6% effective income tax rate in the same three month period in 2017.  The increase in the provision for income taxes for the three month period ended September 30, 2018 when compared to the same three month period of 2017 is primarily due to the overall increase in global earnings when compared to the prior year.  The effective income tax provision rate was impacted by the increase in global earnings and reduced by the windfall tax benefit to result in an overall increase in the rate.

The provision for income taxes was $63.2 million resulting in a 26.5% effective income tax provision for the nine month period ended September 30 2018, compared to a benefit for income taxes of ($41.2) million resulting in a 24.8% effective income tax benefit rate in the same nine month period in 2017. The increase in the provision for income taxes and increase in the effective income tax provision rate for the nine month period ended September 30, 2018 when compared to the same nine month period of 2017 is primarily due to the increase in global earnings.

Net Income (Loss)

Net income was $72.2 million for the three month period ended September 30, 2018 compared to a net income of $28.0 million in the same three month period in 2017.  The increase in net income was primarily due to higher gross profit on increased revenues, reduced interest expense, lower selling and administrative expenses, reduced loss on the extinguishment of debt, and lower other operating expenses, net, partially offset by an increased provision for income taxes and higher amortization expenses.

Net income was $174.9 million for the nine month period ended September 30, 2018 compared to a net loss of $125.1 million in the same nine month period in 2017.  The increase in net income was primarily due to higher gross profit on increased revenues, reduced interest expense, lower selling and administrative expenses, reduced loss on the extinguishment of debt, and lower other operating expenses, net, partially offset by an increased provision for income taxes and higher amortization expenses.

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Adjusted EBITDA

Adjusted EBITDA increased $17.5 million to $182.2 million for the three month period ended September 30, 2018 compared to $164.7 million in the same three month period in 2017.  Adjusted EBITDA as a percentage of revenues increased 100 basis points to 26.4% for the three month period ended September 30, 2018 from 25.4% for the same three month period in 2017.  The increase in Adjusted EBITDA was primarily due to higher volume including acquisitions in our Industrials segment as well as our Medical segment ($16.3 million), lower selling and administrative expenses ($9.0 million), improved pricing ($7.7 million), and increased revenues in upstream energy exposed markets in our Energy segment ($3.5 million), partially offset by lower volume in the other markets in our Energy segment ($5.3 million), the unfavorable impact of foreign currencies ($2.0 million), and growth rates for original equipment revenues greater than growth rates for aftermarket revenues and continued investments in innovation, including research and development and in emerging markets, in our Industrials segment ($7.6 million).

Adjusted EBITDA increased $103.2 million to $492.1 million for the nine month period ended September 30, 2018 compared to $388.9 million in the same nine month period in 2017.  Adjusted EBITDA as a percentage of revenues increased 220 basis points to 24.9% for the nine month period ended September 30, 2018 from 22.7% for the same nine month period in 2017.  The increase in Adjusted EBITDA was primarily due to increased revenues in upstream energy exposed markets in our Energy segment ($47.5 million), higher volume including acquisitions in our Industrials segment as well as our Medical segment ($44.7 million), improved pricing ($18.7 million), lower selling and administrative expenses ($16.3 million), and the favorable impact of foreign currencies ($9.8 million), partially offset by growth rates for original equipment revenues greater than growth rates for aftermarket and continued investments in innovation, including research and development and in emerging markets, in our Industrials segment ($21.5 million).

Adjusted Net Income

Adjusted Net Income increased $17.5 million to $102.7 million for the three month period ended September 30, 2018, compared to $85.2 million in the same three month period in 2017.  The increase was due to increased Adjusted EBITDA, lower interest expense, and lower depreciation expense, partially offset by a higher income tax provision as adjusted and increased amortization of non-acquisition related intangible assets.

Adjusted Net Income increased $126.9 million to $276.1 million for the nine month period ended September 30, 2018 compared to $149.2 million in the same nine month period in 2017.  The increase was due to increased Adjusted EBITDA and lower interest expense, partially offset by a higher income tax provision as adjusted, increased depreciation expense and amortization of non-acquisition related intangible assets.

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Non-GAAP Financial Measures

Set forth below are the reconciliations of Net Income (Loss) to Adjusted EBITDA and Adjusted Net Income and Cash Flows from Operating Activities to Free Cash Flow.

	For the Three Month Periods Ended September 30,					For the Nine Month Periods Ended September 30,
	2018			2017		2018			2017
Net Income (Loss)(1)	$	72.2		$	28.0	$	174.9		$	(125.1	)
Plus:
Interest expense		24.4			30.1		76.5			115.4
Provision (benefit) for income taxes		22.6			4.4		63.2			(41.2	)
Depreciation expense		13.4			13.9		41.2			39.3
Amortization expense(a)		31.0			29.5		93.4			87.6
Sponsor fees and expenses(b)		-			-		-			17.3
Restructuring and related business transformation costs(c)		12.3			6.3		25.2			20.5
Acquisition related expenses and non-cash charges(d)		2.8			1.2		13.1			3.1
Environmental remediation loss reserve(e)		-			-		-			0.9
Expenses related to public stock offerings(f)		0.3			0.5		2.2			3.6
Establish public company financial reporting compliance(g)		1.3			3.8		3.2			7.2
Stock-based compensation(h)		1.1			9.8		2.9			166.0
Foreign currency transaction (gains) losses, net		(0.8	)		1.7		(0.6	)		6.3
Loss on extinguishment of debt(i)		0.9			34.1		1.0			84.5
Shareholder litigation settlement recoveries(j)		-			-		(4.5	)		-
Other adjustments(k)		0.7			1.4		0.4			3.5
Adjusted EBITDA	$	182.2		$	164.7	$	492.1		$	388.9
Minus:
Interest expense	$	24.4		$	30.1	$	76.5		$	115.4
Income tax provision, as adjusted(l)		37.9			33.3		87.7			77.8
Depreciation expense		13.4			13.9		41.2			39.3
Amortization of non-acquisition related intangible assets		3.8			2.2		10.6			7.2
Adjusted Net Income	$	102.7		$	85.2	$	276.1		$	149.2
Free Cash Flow
Cash flows - operating activities	$	103.8		$	63.9	$	298.3		$	83.9
Minus:
Capital expenditures		11.3			9.6		32.1			36.4
Free Cash Flow	$	92.5		$	54.3	$	266.2		$	47.5

⁽¹⁾ The reconciling items for the three and nine month periods ended September 30, 2017 have been reclassified to conform to the methodology used in the three and nine month periods ended September 30, 2018, and include the following.

^(a) Represents $27.2 million and $27.3 million of amortization of intangible assets arising from the KKR transaction and other acquisitions (customer relationships and trademarks) and $3.8 million and $2.2 million of amortization of non-acquisition related intangible assets, in each case for the three month periods ended September 30, 2018 and 2017, respectively.  Represents $82.8 million and $80.4 million of amortization of intangible assets arising from the KKR transaction and other acquisitions (customer relationships and trademarks) and $10.6 million and $7.2 million of amortization of non-acquisition related intangible assets, in each case for the nine month periods ended September 30, 2018 and 2017, respectively.

^(b) Represents management fees and expenses paid to our Sponsor.

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^(c) Restructuring and related business transformation costs consisted of the following.

	For the Three Month Period Ended September 30,						For the Nine Month Period Ended September 30,
	2018			2017			2018			2017
Restructuring charges	$	5.4		$	2.8		$	5.4		$	4.9
Severance, sign-on, relocation and executive search costs		(0.1	)		0.6			3.8			2.2
Facility reorganization, relocation and other costs		1.1			1.0			2.4			3.9
Information technology infrastructure transformation		0.3			0.8			0.5			3.4
Losses (gains) on asset and business disposals		0.1			(0.6	)		(1.1	)		2.0
Consultant and other advisor fees		3.4			0.5			10.0			1.7
Other, net		2.1			1.2			4.2			2.4
Total restructuring and related business transformation costs	$	12.3		$	6.3		$	25.2		$	20.5

^(d) Represents costs associated with successful and/or abandoned acquisitions, including third-party expenses, post-closure integration costs and cash charges and credits arising from fair value purchase accounting adjustments.

^(e) Represents estimated environmental remediation costs and losses relating to a former production facility.

^(f) Represents certain expenses related to our initial public offering and subsequent secondary offerings.

^(g) Represents third party expenses to comply with the requirements of Sarbanes-Oxley in 2018 and the accelerated adoption of the new accounting standards (ASC 606 – Revenue from Contracts with Customers and ASC 842 - Leases) in the first quarter of 2018 and 2019 respectively, one year ahead of the required adoption dates for a private company.  These expenses were previously included in "Expenses related to initial stock offering" and prior periods have been restated to conform to current period presentation.

^(h) Represents stock-based compensation expense recognized for the three month period ended September 30, 2018 of $0.9 million and employer taxes related to stock option exercises of $0.2 million.  Represents stock-based compensation expense recognized for the nine month period ended September 30, 2018 of $6.1 million, reduced by $3.2 million primarily due to a decrease in the estimated accrual for employer taxes related to DSUs as a result of the achievement of employer tax caps in countries outside of the United States.

Represents stock-based compensation expense recognized for stock options outstanding of $7.8 million and $69.2 million for the three month and nine month periods ended September 30, 2017 and DSUs granted to employees at the date of the initial public offering of $2.0 million and $96.8 million under the 2013 Stock Incentive Plan for the three and nine month periods ended September 30, 2017.

⁽ⁱ⁾ Represents losses on extinguishment of the senior notes and a portion of the U.S. Term Loan and losses reclassified from AOCI into income related to the amendment of the interest rate swaps in conjunction with the debt repayment.

^(j) Represents an insurance recovery of our shareholder litigation settlement in 2014.

^(k) Includes (i) effects of amortization of prior service costs and amortization of gains in pension and other postemployment (OPEB) expense, (ii) certain legal and compliance costs and (iii) other miscellaneous adjustments.

^(l) Represents our income tax provision adjusted for the tax effect of pre-tax items excluded from Adjusted Net Income and the removal of applicable discrete tax items.  The tax effect of pre-tax items excluded from Adjusted Income is computed using the statutory tax rate related to the jurisdiction that was impacted by the adjustment after taking into account the impact of permanent differences and valuation allowances.  Discrete tax items include changes in tax laws or rates, changes in uncertain tax positions relating to prior years and changes in valuation allowances.  All impacts relating to the Tax Cuts and Jobs Act of 2017 have been included as adjustments on the "Tax law change" line of the table below.

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The income tax provision, as adjusted for each of the periods presented below consisted of the following.

	For the Three Month Period Ended September 30,					For the Nine Month Period Ended September 30,
	2018		2017			2018			2017
Provision (benefit) for income taxes	$	22.6	$	4.4		$	63.2		$	(41.2	)
Tax impact of pre-tax income adjustments		11.3		30.3			27.9			119.0
Tax law change		4.0		-			(3.9	)		-
Discrete tax items		-		(1.4	)		0.5			-
Income tax provision, as adjusted	$	37.9	$	33.3		$	87.7		$	77.8

Segment Results

We classify our businesses into three segments: Industrials, Energy and Medical.  Our Corporate operations (as described below) are not discussed separately as any results that had a significant impact on operating results are included in the "Results of Operations" discussion above.

We evaluate the performance of our Segments based on Segment Revenues and Segment Adjusted EBITDA.  Segment Adjusted EBITDA is indicative of operational performance and ongoing profitability.  Our management closely monitors Segment Adjusted EBITDA to evaluate past performance and identify actions required to improve profitability.

The Segment measurements provided to and evaluated by the chief operating decision maker are described in Note 16 "Segment Results" in the "Notes to Consolidated Financial Statements" included in this Report.

Included in our discussion of our Segment results below are changes in Segment Revenues and Segment Adjusted EBITDA on a Constant Currency basis. Constant Currency information compares results between periods as if exchange rates had remained constant period over period. We define Constant Currency as changes in Segment Revenues and Segment Adjusted EBITDA excluding the impact of foreign exchange rate movements. We use these measures to determine the Constant Currency Segment Revenues and Segment Adjusted EBITDA growth on a year-on-year basis. Constant Currency Segment Revenues and Segment Adjusted EBITDA are calculated by translating current period Segment Revenues and Segment Adjusted EBITDA using prior period exchange rates. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP. Results on a constant currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not a measure of performance presented in accordance with GAAP.

Segment Results for the Three and Nine Month Periods Ended September 30, 2018 and 2017

The following tables display Segment Revenues, Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin (Segment Adjusted EBITDA as a percentage of Segment Revenues) for each of our Segments and illustrates, on a percentage basis, the impact of foreign currency fluctuations on Segment Revenues and Segment Adjusted EBITDA growth.

Industrials Segment Results

	For the Three Month Periods Ended September 30,						Percent Change			Constant Currency Percent Change
	2018			2017			2018 vs. 2017			2018 vs. 2017
Segment Revenues	$	320.0		$	288.2			11.0	%		12.5	%
Segment Adjusted EBITDA	$	72.1		$	63.1			14.3	%		15.4	%
Segment Margin		22.5	%		21.9	%

Segment Revenues for the three month period ended September 30, 2018 were $320.0 million, an increase of $31.8 million, or 11.0%, compared to $288.2 million in the same three month period in 2017.  The increase in Segment Revenues was due to higher volume including acquisitions (10.1% or $29.2 million), and improved pricing (2.4% or $6.9 million), partially offset by the unfavorable impact of foreign currencies (1.5% or $4.3 million).  The percentage of Segment Revenues derived from aftermarket parts and services was 30.9% in the three month period ended September 30, 2018 compared to 33.4% in the same three month period in 2017.

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Segment Adjusted EBITDA for the three month period ended September 30, 2018 was $72.1 million, an increase of $9.0 million, or 14.3%, compared to $63.1 million in the same three month period in 2017.  The increase in Segment Adjusted EBITDA was primarily due to higher volume including acquisitions ($10.4 million), and improved pricing ($6.9 million), partially offset by the unfavorable impact of foreign currencies ($0.7 million), and growth rates for original equipment revenues greater than growth rates for aftermarket and continued investments in innovation, including research and development and in emerging markets ($7.6 million).

	For the Nine Month Periods Ended September 30,								Percent Change			Constant Currency Percent Change
	2018				2017				2018 vs. 2017			2018 vs. 2017
Segment Revenues		$	965.7			$	819.0			17.9	%		14.1	%
Segment Adjusted EBITDA		$	210.0			$	173.7			20.9	%		16.4	%
Segment Margin			21.7	%			21.2	%

Segment Revenues for the nine month period ended September 30, 2018 was $965.7 million an increase of $146.7 million, or 17.9%, compared to $819.0 million in the same nine month period in 2017.  The increase in Segment Revenues was due to higher volume including acquisitions (12.1% or $98.7 million), the favorable impact of foreign currencies (3.8% or $31.2 million) and improved pricing (2.1% or $16.8 million).  The percentage of Segment Revenues derived from aftermarket parts and service was 31.4% in the nine month period ended September 30, 2018, compared to 34.6% in the same nine month period in 2017.

Segment Adjusted EBITDA for the nine month period ended September 30, 2018 was $210.0 million, an increase of $36.3 million, or 20.9%, compared to $173.7 million in the same nine month period in 2017.  Segment Adjusted EBITDA Margin increased 50 basis points to 21.7% from 21.2% in 2017.  The increase in Segment Adjusted EBITDA was primarily due to higher volume including acquisitions ($34.9 million), improved pricing ($16.8 million) and the favorable impact of foreign currencies ($7.8 million), partially offset by growth rates for original equipment revenues greater than growth rates for aftermarket and continued investments in innovation, including research and development and in emerging markets ($21.5 million).

Energy Segment Results

	For the Three Month Period Ended September 30,						Percent Change			Constant Currency Percent Change
	2018			2017			2018 vs. 2017			2018 vs. 2017
Segment Revenues	$	298.8		$	301.6			(0.9	)%		0.2	%
Segment Adjusted EBITDA	$	94.9		$	98.6			(3.8	)%		(2.7	)%
Segment Margin		31.8	%		32.7	%

Segment Revenues for the three month period ended September 30, 2018 were $298.8 million, a decrease of $2.8 million, or 0.9%, compared to $301.6 million in the same three month period in 2017.  The decrease in Segment Revenues was due to lower volume in other markets of our Energy Segment (3.2% or $9.8 million), the unfavorable impact of foreign currencies (0.9% or $2.7 million), partially offset by higher revenues from upstream energy exposed markets (3.2% or $9.7 million).  The percentage of Segment Revenues derived from aftermarket parts and services was 57.2% in the three month period ended September 30, 2018 compared to 54.7% in the same three month period in 2017.

Segment Adjusted EBITDA for the three month period ended September 30, 2018 was $94.9 million, a decrease of $3.7 million, or 3.8% compared to $98.6 million in the same three month period in 2017.  Segment Adjusted EBITDA Margin decreased 90 basis points to 31.8% from 32.7% in 2017.  The decrease in Segment Adjusted EBITDA was primarily due to lower volume in other markets of our Energy Segment ($5.3 million), the unfavorable impact of foreign currencies ($1.1 million), partially offset by higher revenues from upstream energy exposed markets ($3.5 million).

	For the Nine Month Period Ended September 30,						Percent Change			Constant Currency Percent Change
	2018			2017			2018 vs. 2017			2018 vs. 2017
Segment Revenues	$	814.1		$	719.4			13.2	%		12.2	%
Segment Adjusted EBITDA	$	242.5		$	199.2			21.7	%		21.3	%
Segment Margin		29.8	%		27.7	%

56

Segment Revenues for the nine month period ended September 30, 2018 were $814.1 million, an increase of $94.7 million, or 13.2%, compared to $719.4 million in the same nine month period in 2017.  The increase in Segment Revenues was due to higher revenues from upstream energy exposed markets (12.4% or $89.4 million) and the favorable impact of foreign currencies (0.9% or $6.3 million), partially offset by lower volume in other markets of our Energy Segment (0.1% or $1.0 million).  The percentage of Segment Revenues derived from aftermarket parts and service was 58.5% in the nine month period ended September 30, 2018 compared to 59.9% in the same nine month period in 2017.

Segment Adjusted EBITDA for the nine month period ended September 30, 2018 was $242.5 million, an increase of $43.3 million, or 21.7%, compared to $199.2 million in the same nine month period in 2017.  Segment Adjusted EBITDA Margin increased 210 basis points to 29.8% from 27.7% in 2017.  The increase in Segment Adjusted EBITDA was primarily due to increased revenues from upstream energy exposed markets ($47.5 million) and the favorable impacts of foreign currencies ($0.6 million).

Medical Segment Results

	For the Three Month Period Ended September 30,						Percent Change			Constant Currency Percent Change
	2018			2017			2018 vs. 2017			2018 vs. 2017
Segment Revenues	$	70.5		$	59.8			17.9	%		18.9	%
Segment Adjusted EBITDA	$	20.5		$	16.8			22.0	%		23.2	%
Segment Margin		29.1	%		28.1	%

Segment Revenues for the three month period ended September 30, 2018 were $70.5 million, an increase of $10.7 million, or 17.9%, compared to $59.8 million in the same three month period in 2017.  The increase in Segment Revenues was due to higher volume (18.4% or $11.0 million), partially offset by the unfavorable impact of foreign currencies (1.0% or $0.6 million).  The percentage of Segment Revenues derived from aftermarket parts and services was 3.1% in the three month period ended September 30, 2018 compared to 3.3% in the same three month period in 2017.

Segment Adjusted EBITDA for the three month period ended September 30, 2018 was $20.5 million, an increase of $3.7 million, or 22.0%, compared to $16.8 million in the same three month period in 2017.  Segment Adjusted EBITDA Margin increased 100 basis points to 29.1% from 28.1% in 2017.  The increase in Segment Adjusted EBITDA was primarily due to higher volume ($5.9 million), partially offset by the unfavorable impact of foreign currencies ($0.2 million).

	For the Nine Month Period Ended September 30,						Percent Change			Constant Currency Percent Change
	2018			2017			2018 vs. 2017			2018 vs. 2017
Segment Revenues	$	197.3		$	172.0			14.7	%		11.1	%
Segment Adjusted EBITDA	$	54.4		$	46.9			16.0	%		11.7	%
Segment Margin		27.6	%		27.3	%

Segment Revenues for the nine month period ended September 30, 2018 were $197.3 million, an increase of $25.3 million, or 14.7%, compared to $172.0 million in the same nine month period in 2017.  The increase in Segment Revenues was due to higher volume (10.5% or $18.1 million) and the favorable impact of foreign currencies (3.6% or $6.2 million).  The percentage of Segment Revenues derived from aftermarket parts and service was 3.4% in the nine month period ended September 30, 2018 compared to 3.8% in the same nine month period in 2017.

Segment Adjusted EBITDA for the nine month period ended September 30, 2018 was $54.4 million, an increase of $7.5 million, or 16.0% compared to $46.9 million in the same nine month period in 2017.  Segment Adjusted EBITDA Margin increased 30 basis points to 27.6% from 27.3% in 2017.  The increase in Segment Adjusted EBITDA was primarily due to higher volume ($9.8 million) and the favorable impact of foreign currencies ($2.0 million).

Liquidity and Capital Resources

Our investment resources include cash generated from operations and borrowings under our Revolving Credit Facility and the Receivables Financing Agreement.

57

As of September 30, 2018, we had $6.3 million of outstanding letters of credit written against the Revolving Credit Facility and $263.6 million of unused availability.  We also had $27.3 million of letters of credit outstanding against the Receivables Financing Agreement and $81.4 million of unused availability.

See the description of these line-of-credit resources as well as our outstanding debt obligations in Note 8 "Debt" to the Condensed Consolidated Financial Statements.

As of September 30, 2018 and 2017, we were in compliance with all of our debt covenants and no event of default had occurred or was ongoing.

Liquidity

A substantial portion of our liquidity needs arise from debt service requirements, and from the ongoing cost of operations, working capital and capital expenditures.

	September 30, 2018		December 31, 2017
Cash and cash equivalents	$	269.0	$	393.3
Short-term borrowings and current maturities of long-term debt		7.9		20.9
Long-term debt		1,747.4		2,019.3
Total debt	$	1,755.3	$	2,040.2

We can increase the borrowing availability under the Senior Secured Credit Facilities by up to $250.0 million in the form of additional commitments under the Revolving Credit Facility and/or incremental term loans plus an additional amount so long as we do not exceed a specified senior secured leverage ratio.  We can incur additional secured indebtedness under the Term Loan Facilities if certain specified conditions are met under the credit agreement governing the Senior Secured Credit Facilities.  Our liquidity requirements are significant primarily due to debt service requirements.  See Note 8 "Debt" to our condensed consolidated financial statements included elsewhere in this Form 10-Q.

Our principal sources of liquidity have been existing cash and cash equivalents, cash generated from operations and borrowings under the Senior Secured Credit Facilities and the Receivables Financing Agreement. Our principal uses of cash will be to provide working capital, meet debt service requirements, fund capital expenditures and finance strategic plans, including possible acquisitions. Additionally, on August 1, 2018 our Board of Directors authorized a share repurchase program pursuant to which we may repurchase up to $250 million of our common stock over the next two years.  The share repurchase program does not obligate us to acquire any particular amount of common stock, and it may be suspended or terminated at any time at our discretion. We may also seek to finance capital expenditures under capital leases or other debt arrangements that provide liquidity or favorable borrowing terms. We continue to consider acquisition opportunities, but the size and timing of any future acquisitions and the related potential capital requirements cannot be predicted. In the event that suitable businesses are available for acquisition upon acceptable terms, we may obtain all or a portion of the necessary financing through the incurrence of additional long-term borrowings. As market conditions warrant, we and our major equity holders, including our Sponsor and its affiliates, may from time to time, seek to repurchase debt securities that we have issued or loans that we have borrowed, including the borrowings under the Senior Secured Credit Facilities, in privately negotiated or open market transactions, by tender offer or otherwise. Based on our current level of operations and available cash, we believe our cash flow from operations, together with availability under the Revolving Credit Facility and the Receivables Financing Agreement, will provide sufficient liquidity to fund our current obligations, projected working capital requirements, debt service requirements and capital spending requirements for the foreseeable future. Our business may not generate sufficient cash flows from operations or future borrowings may not be available to us under our Revolving Credit Facility or the Receivables Financing Agreement in an amount sufficient to enable us to pay our indebtedness, or to fund our other liquidity needs. Our ability to do so depends on, among other factors, prevailing economic conditions, many of which are beyond our control. In addition, upon the occurrence of certain events, such as a change in control, we could be required to repay or refinance our indebtedness. We may not be able to refinance any of our indebtedness, including the Senior Secured Credit Facilities, on commercially reasonable terms or at all. Any future acquisitions, joint ventures or other similar transactions may require additional capital and there can be no assurance that any such capital will be available to us on acceptable terms or at all.

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The majority of our cash is in jurisdictions outside of the United States.  However, we believe our U.S. operations will generate sufficient cash flows from operations along with our availability under the Revolving Credit Facility and the Receivables Financing Agreement to satisfy our cash needs in the United States.  As a result of the KKR transaction and the significant increase in our long-term debt balance as of July 30, 2013, at the acquisition date, we modified our assertion concerning the permanent reinvestment of undistributed earnings for non-U.S. subsidiaries in these foreign operations. We intend to repatriate certain foreign earnings for the purpose of servicing our Senior Secured Credit Facilities, which will result in net U.S. tax liabilities as these foreign earnings are distributed.  We have previously asserted that we intend to repatriate about $200.0 million of accumulated earnings and while we currently have sufficient cash flows in the U.S. as of September 30, 2018 we are maintaining that assertion.  We are still evaluating our position from a business perspective in light of the Tax Cuts and Jobs Act and have only adjusted our deferred liability for the impacts of the transitional tax.  Our deferred income tax liability related to unremitted earnings as of September 30, 2018 is $9.1 million which consists mainly of withholding taxes.  There have been no changes to the policy on the taxation of unremitted earnings as a result of changes to the U.S. Tax Law, in accordance with SAB 118, as we are not currently able to reasonably estimate the impact as of the filing of the quarterly report for the periods ended September 30, 2018.

Working Capital

	September 30, 2018		December 31, 2017
Net Working Capital:
Current assets	$	1,407.5	$	1,463.6
Less: Current liabilities		586.8		561.8
Net working capital	$	820.7	$	901.8
Operating Working Capital:
Accounts receivable and contract assets	$	538.9	$	536.3
Plus: Inventories (excluding LIFO)		536.7		481.1
Less: Accounts payable		320.0		269.7
Less: Contract liabilities		90.5		42.7
Operating working capital	$	665.1	$	705.0

Net working capital decreased $81.1 million to $820.7 million as of September 30, 2018 from $901.8 million as of December 31, 2017.     Operating working capital decreased $39.9 million to $665.1 million as of September 30, 2018 from $705.0 million as of December 31, 2017 due to higher accounts payable and higher contract liabilities, partially offset by higher accounts receivable and contract assets and higher inventories.  During 2018, management has proactively focused on improving working capital performance, specifically for accounts receivable and accounts payable, through the enhancement of centralized processes designed to improve the timing of customer cash collections and to standardize and extend vendor payment terms and pay practices.  Excluding the impact of 2018 acquisitions, these efforts resulted in a decrease in accounts receivable despite increased revenues in the third quarter of 2018 versus the fourth quarter of 2017 and an increase in accounts payable at the quarter ended September 30, 2018 as compared to December 31, 2017.  The increase in contract assets resulted from the adoption of ASC 606 in the first quarter of 2018.  The increase in inventories was primarily due to additions to inventory in anticipation of increased demand for certain products, higher inventory costs related to projects expected to ship later in the year and from the impact of acquisitions in 2018.  The increase in contract liabilities was primarily due to an acquisition in the first quarter of 2018 and the timing of customer milestone payments for in-process engineered to order contracts at the end of the third quarter 2018 compared to the end of the fourth quarter of 2017.

Cash Flows

The following table reflects the major categories of cash flows for the nine month periods ended September 30, 2018 and 2017, respectively.

	For the Nine Month Periods Ended September 30,
	2018			2017
Cash flows - operating activities	$	298.3		$	83.9
Cash flows - investing activities		(142.6	)		(43.1	)
Cash flows - financing activities		(272.8	)		(8.2	)
Free cash flow (1)		266.2			47.5

⁽¹⁾ See the "Non-GAAP Financial Measures" section included in this Quarterly Report for a reconciliation to the nearest GAAP measure.

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Operating Activities

Cash provided by operating activities increased $214.4 million to $298.3 million for the nine month period ended September 30, 2018 from $83.9 million in the same nine month period in 2017, primarily due to higher net income (excluding non-cash charges for stock-based compensation, depreciation and amortization, foreign currency transaction losses, and deferred income taxes) and from cash generated by reduced operating working capital.

Operating working capital generated cash of $33.6 million in the nine month period ended September 30, 2018 compared to using cash of $55.4 million in the same nine month period in 2017.  Changes in accounts receivable and contract assets used cash of $3.9 million in the nine month period ended September 30, 2018 compared to using cash of $65.9 million in the same nine month period in 2017.  Changes in inventory used cash of $44.7 million in the nine month period ended September 30, 2018 compared to using cash of $36.4 million in the nine month period in 2017.  Changes in accounts payable generated cash of $57.2 million in the nine month period ended September 30, 2018 compared to generating cash of $39.8 million in the same nine month period in 2017.  Changes in contract liabilities generated cash of $25.0 million in the nine month period ended September 30, 2018 compared to generating cash of $7.1 million in the same nine month period in 2017.

Investing Activities

Cash used in investing activities included capital expenditures of $32.1 million and $36.4 million for the nine month periods ended September 30, 2018 and 2017, respectively.  We currently expect capital expenditures to total approximately $50.0 million to $60.0 million for the full year in 2018.  Cash paid in business combinations for the nine month periods ended September 30, 2018 and 2017 were $113.6 million and $18.8 million, respectively.  Proceeds from the termination of derivatives for the nine month period ended September 30, 2017 was $6.2 million.  Net proceeds from the disposals of property, plant and equipment were $3.1 million and $5.9 million for the nine month periods ended September 30, 2018 and 2017, respectively.

Financing Activities

Cash used in financing activities of $272.8 million for the nine month period ended September 30, 2018 reflects repayments of long-term borrowings of $262.4 million and purchases of treasury stock of $16.7 million, partially offset by proceeds from stock option exercises of $6.3 million.  Cash used in financing activities of $8.2 million for the nine month period ended September 30, 2017 reflects a premium paid on the extinguishment of senior notes of $29.7 million, purchases of treasury stock of $2.6 million, purchases of shares of noncontrolling interests of $5.2 million, the payment of debt issuance costs of $2.9 million, and net repayments of long-term borrowings of $861.5 million, partially offset by proceeds from the issuance of common stock, net of share issuance costs of $893.3 million.

Free Cash Flow

Free cash flow increased $218.7 million to $266.2 million in the nine month period ended September 30, 2018 from $47.5 million in the same nine month period in 2017 due to increased cash provided by operating activities of $214.4 million and a decrease in capital expenditures of $4.3 million.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are materially likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Estimates

Management has evaluated the accounting estimates used in the preparation of the Company's condensed consolidated financial statements and related notes and believe those estimates to be reasonable and appropriate. Certain of these accounting estimates require the application of significant judgment by management in selecting appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on historical experience, trends in the industry, information provided by customers and information available from other outside sources, as appropriate.  Besides the critical accounting estimates related to ASC 606 documented herein, the most significant areas involving management judgments and estimates may be found in the section "Critical Accounting Estimates" of "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and in Note 1 "Summary of Significant Accounting Policies" of "Item 8. Financial Statements and Supplementary Data" included in our annual report on Form 10-K for the fiscal year ended December 31, 2017.

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Revenue Recognition (ASC 606)

Accounting for long-term ETO contracts which require revenue recognition over time involves the use of various techniques to estimate total contract revenue and costs.  For long-term contracts, we estimate the profit on a contract as the difference between the total estimated revenue and total expected costs to complete a contract and that profit is recognized over the life of the contract.  Such estimates are governed by a robust management review process.

Contract estimates are based on various assumptions to project the outcome of future events that may extend for more than a year.  These assumptions include labor productivity and availability, the complexity of the work to be performed, estimated cost, availability of materials, and the performance of subcontractors.

As a significant change in one or more of these estimates could affect the profitability of our contracts, we review and update our contract-related estimates regularly.  We recognize adjustments resulting from changes in estimated profits on contracts under the cumulative catch-up method.  Under this method, the impact of an adjustment to the amount of profit recognized to date is recorded in the period that adjustment is identified.  Revenues and profit in future periods of contract performance is recognized using the adjusted estimate.  Provisions for estimated losses on uncompleted contracts are recognized in the period in which such losses are determined to be probable.

Environmental Matters

Information with respect to the effect of compliance with environmental protection requirements and resolution of environmental claims on us and our manufacturing operations is contained in Note 18 "Contingencies" of the Consolidated Financial Statements in our annual report on Form 10-K for the fiscal year ended December 31, 2017.  We believe that as of September 30, 2018, there have been no material changes to this information.

Recent Accounting Pronouncements

The information set forth in Note 1 "Condensed Consolidated Financial Statements" to our Condensed Consolidated Financial Statements under Part I, Item 1, "Financial Statements" under the heading "Recently Issued Accounting Pronouncements" is incorporated herein by reference.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to interest rate risk as a result of our variable-rate borrowings. We manage our exposure to interest rate risk by maintaining a mixture of fixed and variable debt, and from time to time, use pay-fixed interest rate swaps as cash flow hedges of our variable rate debt in order to adjust the relative fixed and variable portions.

In addition, we are exposed to foreign currency risks that arise from our global business operations. Changes in foreign currency exchange rates affect the translation of local currency balances of foreign subsidiaries, transaction gains and losses associated with intercompany loans with foreign subsidiaries and transactions denominated in currencies other than a subsidiary's functional currency. While future changes in foreign currency exchange rates are difficult to predict, our revenues and earnings may be adversely affected if the U.S. dollar further strengthens.

We seek to minimize our exposure to foreign currency risks through a combination of normal operating activities, including by conducting our international business operations primarily in their functional currencies to match expenses with revenues and the use of foreign currency forward exchange contracts and debt denominated in currencies other than the U.S. dollar. In addition, to mitigate the risk arising from entering into transactions in currencies other than our functional currencies, we typically settle intercompany trading balances monthly.

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As of September 30, 2018, there have been no material changes to our market risk assessment previously disclosed in the annual report on Form 10-K for the fiscal year ended December 31, 2017.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company maintains a set of disclosure controls and procedures as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission ("SEC") rules and forms, and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. The design of any disclosure controls and procedures is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. In accordance with Rule 13a-15(b) of the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of the Company's management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of its disclosure controls and procedures. Based on that evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures, as of the end of the period covered by this Quarterly Report on Form 10-Q, were effective to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and is accumulated and communicated to the Company's management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Internal Control over Financial Reporting

There has not been any change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information set forth in Note 14 "Contingencies" to our Condensed Consolidated Financial Statements under Part I Item 1 "Financial Statements," is incorporated herein by reference.

ITEM 1A. RISK FACTORS

As of September 30, 2018, there have been no material changes to our risk factors in our annual report on Form 10-K for the fiscal year ended December 31, 2017.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

Information on our purchases of equity securities during the third quarter ended September 30, 2018 is as follows.

	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs		Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in millions)
Month #1 (July 1, 2018 to July 31, 2018)		-	$	-		-	$	-
Month #2 (August 1, 2018 to August 31, 2018)		-		-		-		250.0
Month #3 (September 1, 2018 to September 30, 2018)		223,911		24.86		223,911		244.4

On August 1, 2018, the Board of Directors of Gardner Denver authorized a $250.0 million share repurchase program which expires on July 31, 2020.  As of September 30, 2018, we had approximately $244.4 million remaining for future share repurchases under this program.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following is a list of all exhibits filed or furnished as part of this report.

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosures other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose.  In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual statement of affairs as of the date they were made or at any other time.

Exhibit No.	Description
10.1	Employment Contract, dated September 11, 2018 between Gardner Denver Deutschland GmbH and Enrique Miñarro Viseras (furnished herewith)
31.1	Certification of Periodic Report by Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
31.2	Certification of Periodic Report by Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

63

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: October 29, 2018	GARDNER DENVER HOLDINGS, INC.
	By:	/s/ Philip T. Herndon
	Name: Philip T. Herndon
	Vice President and Chief Financial Officer
	(Principal Financial Officer)

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EX-10.1

Exhibit 10.1

Arbeitsvertrag / Employment Contract

zwischen / between

CompAir Drucklufttechnik – Zweigniederlassung der Gardner Denver Deutschland GmbH, Argenthaler Straße 11,

55469 Simmern

- nachfolgend auch „Arbeitgeber" genannt / hereinafter also referred to as “Employer" -

und / and

Enrique Minarro Viseras, 2A The Orchard, Marlow, SL7 3EF, United Kingdom

- nachfolgend au h “Mitarbeiter” genannt / hereinafter also referred to as “Employee“ –

	§ 1 Beginn und Aufgabenbereich	§ 1 Commencement and Field of Duties
(1)	Der Mitarbeiter ist seit dem 10.05.2016 und wird weiterhin als VP/GM EMEA Region (Vice President/General Manager Europe, Middle East, Africa) im Betrieb des Arbeitgebers in Simmern als leitender Angestellter beschäftigt.	The Employee is employed since May 10, 2016 and will continue to be employed as managerial employee ("leitender Angestellter") as VP/GM EMEA Region (Vice President/General Manager Europe, Middle East, Africa) in the division Department at the Employer's plant in Simmern.
(2)	Seine Hauptaufgaben ergeben sich aus der als Anlage 1 beigefügten Arbeitsplatzbeschreibung. Der Mitarbeiter ist verpflichtet, zur Erfüllung seiner Aufgaben im Wirtschaftsraum Europa, Naher Osten und Afrika zu reisen sowie an den Sitz der Muttergesellschaft in den USA.	The job description, which is attached to this Contract as Exhibit 1, provides for a description of the main tasks he shall fulfill. In order to fulfill his tasks the Employee is obliged to travel in the economic region Europe, Middle East and Africa as well as to the USA.
(3)	Der Arbeitgeber behält sich vor, unter Berücksichtigung der Interessen des Mitarbeiters -     dem Mitarbeiter bei gleicher Tätigkeit andere seinen Kenntnissen und Fähigkeiten entsprechende gleichwertige Aufgaben zuzuweisen -       dem Mitarbeiter einen anderen Arbeitsort außerhalb des Betriebs in Simmern zuzuweisen und/oder -     dem Mitarbeiter eine andere seinen Kenntnissen und Fähigkeiten entsprechende Tätigkeit zuzuweisen, sofern diese im Verhältnis zur bisherigen Tätigkeit mindestens gleichwertig ist.	The Employer reserves the right to assign to the Employee, taking into account his interests, -    different equivalent tasks (within the same job) that  are in accordance with his knowledge and abilities -      a different place of work outside the plant in Simmern and/or -    a different job that is in accordance with his knowledge and abilities, provided that this job is at least on a par with the previous job.
(4)	Der Mitarbeiter ist verpflichtet, auf Anordnung des	If required by business needs, the employee shall also

	Arbeitgebers im Rahmen des Arbeitsverhältnisses auch Urlaubs-/Krankheitsvertretungen auszuführen, ohne dass er bei der Vertretung einer höher bezahlten Arbeitskraft Anspruch auf höhere Vergütung hat.	replace other employees due to their illness or vacation absence without entitlement for a higher pay in case the missing employee is paid higher.
	§ 2 Arbeitszeit	§ 2 Working Hours
(1)	Die regelmäßige Arbeitszeit beträgt - exklusive Pausenzeiten - 40 Stunden wöchentlich. Beginn und Ende der Arbeitszeit und der Pausen richten sich nach den betrieblichen Arbeitszeitregelungen in der jeweils gültigen Fassung.	The regular working time is 40 hours per week - exclusive of any break times. Start and end of the regular working time as well as breaks comply with the company's working time regulation, as amended from time to time.
(2)	Bei betrieblicher Notwendigkeit ist der Mitarbeiter ver- pflichtet, in gesetzlich zulässigem Umfang auch Überstunden und Mehrarbeit zu leisten sowie an Samstagen, Sonn- und Feiertagen zu arbeiten. Eine betriebliche Notwendigkeit liegt vor ·       zur Einhaltung von Fertigstellungsterminen oder Fristen, ·       zur Abdeckung vorübergehender Arbeitsspitzen, ·     zur Wahrnehmung von Terminen, die aufgrund Vorgaben Dritter (Kunden, Lieferanten o.ä.) oder der mangelnden Verfügbarkeit anderer Arbeitnehmer Überstunden bedingen, ·     zur Abdeckung sonstigen nicht planbaren Personalbedarfs, insbesondere in Vertretungssituationen oder ·   im Falle sonstiger betrieblicher Erfordernisse, die im Einzelfall auch unter Berücksichtigung der Interessen der Arbeitnehmer die Anordnung vorübergehender Überstunden rechtfertigen.	If required by business needs (e.g., in case of delays occurring during the performance of tasks, absences of colleagues such as sickness or annual leave or any other increase in workload), the Employee shall also work overtime and extra time and work on Saturdays, Sundays and public holidays within the legally permissible limits. Operational requirements shall be given in the event that ·       time limits or dates for completion of work must be met; ·       temporary work peaks must be covered; ·     meetings must be attended which cause Overtime based on the instruction of third parties (customers, suppliers etc.) or based on the lack of availability of other employees; ·    other, non-foreseeable staff requirements must be covered, in particular in stand-in situations; or ·    other operational reasons require and justify the instruction of temporary Overtime even if taking into account the interests of the Employee.
	§ 3 Vergütung	§ 3 Remuneration
(1)	Der Mitarbeiter erhält ein festes Brutto-Jahresgehalt in Höhe von EUR 330.000,00 (für volle 12 Monate), zahlbar in zwölf Monatsraten zu je EUR 27.500,00 brutto jeweils zum Monatsende. Die Zahlung des festen Brutto-Jahresgehalts erfolgt, sofern keine Zeiten ohne gesetzliche Zahlungsverpflichtungen entstehen. Durch dieses Gehalt sind auch etwaige unter Beachtung ggf. anwendbarer gesetzlicher Vorgaben geleistete Überstunden des Mitarbeiters sowie im gesetzlich zulässigen Rahmen erbrachte Mehrarbeit i. S. d. § 1 Abs. 2 abgegolten; dies gilt auch dann, wenn die Überstunden bzw. Mehrarbeit im gesetzlich zulässigen   Rahmen an Samstagen, Sonn- oder Feiertagen erbracht   werden. Gehaltsüberprüfungen	The Employee shall be paid a fixed annual salary in the gross amount of EUR 330,000.00 (for 12 full months), payable in twelve monthly installments in the gross amount of EUR 27,500.00 at the end of each month. The fixed gross annual salary shall be paid as long as there are no periods involved that are not subject to statutory payment obligations. This salary shall also cover any overtime, which the Employee works in compliance with statutory requirements, if applicable, as well as excess work, which the Employee does within the legally permissible limits, pursuant to § 1 para. 2; this shall also apply when the overtime and excess work is done on a Saturday, Sunday or public holiday within the legally permissible limits. Salary  reviews   will   take   place  according to company

	finden entsprechend den betrieblichen Regelungen statt.	practice.
(2)	Der Mitarbeiter nimmt weiterhin an dem Management Incentive Programm („MIP") des Arbeitgebers teil und hat die Möglichkeit unter den Voraussetzungen des jeweils gültigen Management Incentive Programms („MIP-Regelungen“) (insbesondere bei Erreichen der dort geregelten Ziele) eine jährliche Leistungsprämie von bis zu 60 Prozent seines festen Brutto-Jahresgehalts nach Abs. (1) bei einer Zielerreichung von 100% zu erhalten. Nach Maßgabe der MIP-Regelungen kann die jährliche Leistungsprämie bei einer Zielerreichung über 100% 60 Prozent des festen Brutto-Jahresgehalts nach Abs. (1) übersteigen. Bei unterjährigem Beginn oder Ende des Arbeitsverhältnisses errechnet sich die Leistungsprämie entsprechend zeitanteilig.	The Employee continues to be eligible to earn an annual cash incentive award under the Employer's Management Incentive Plan ("MIP"), subject to the terms and conditions of such plan as in effect from time to time (“MIP Rules”) (particularly in achieving the objectives regulated therein) in the amount of up to 60 percent of his fixed annual salary according to paragraph (1) for on-target performance. Subject to the MIP Rules, the annual cash incentive award can exceed 60 percent of the fixed gross annual salary according to paragraph (1) for performance which exceeds target. Should the employment begin or end during the year, the annual cash incentive shall be pro-rated accordingly.
(3)	Der Mitarbeiter nimmt an dem Long Term Incentive Plan (LTI) der Gardner Denver, Inc. unter den jeweils gültigen Voraussetzungen teil.	The Employee is eligible to participate in the Long Term Incentive Plan (LTI) of Gardner Denver, Inc., subject to the terms of such plan.
(4)	Der Mitarbeiter erhält einen Wohnungskostenzuschuss von EUR 3.000,00 brutto monatlich. Hierauf anfallende Steuern und sonstige Abgaben trägt der Mitarbeiter.	The Employee shall be paid a monthly housing allowance of EUR 3,000.00 gross. Any taxes or other charges incurred by this payment shall be born by the Employee.
(5)	Der Mitarbeiter erhält gegen Vorlage geeigneter Nachweise beim Arbeitgeber einen jährlichen Zuschuss für Schulkosten in Höhe der in einem Kalenderjahr von dem Mitarbeiter tatsächlich geleisteten Schulkosten, maximal jedoch in Höhe von EUR 53.061,00 jährlich. Sofern Steuern hierauf anfallen sollten, trägt diese der Arbeitgeber. Der Mitarbeiter ist verpflichtet, dem Arbeitgeber jährlich einen von ihm erzielten Steuervorteil aus der steuerlichen Geltendmachung der Schulkosten innerhalb eines Monats nach Zugang des Steuerbescheids zu erstatten. Der Mitarbeiter legt dem Arbeitgeber über den erzielten Steuervorteil jährlich geeignete Nachweise vor. Bei unterjährigem Beginn oder Ende des Arbeitsverhältnisses errechnet sich der Zuschuss entsprechend zeitanteilig. Während des Arbeitsverhältnisses entfällt der Anspruch des Mitarbeiters auf den jährlichen Zuschuss für Schulkosten und die Übernahme hierauf anfallender Steuern durch den Arbeitgeber ersatzlos mit Ablauf einer Frist von sechs Monaten ab dem Zeitpunkt, in dem der Arbeitgeber gegenüber dem Mitarbeiter in Textform erklärt hat, dass ein Wohnsitz des Mitarbeiters in Deutschland nicht mehr erforderlich ist.	The Employee shall be paid, upon provision of suitable evidence to the Employer, an annual school allowance in the amount of the school fees that the Employee paid in one calendar year, however limited to a maximum annual amount of EUR 53,061.00. Should this payment cause any tax burden, these will have to be born by the Employer alone. The Employee shall, within one month after receiving his tax assessment notice, reimburse the Employer each year for any tax benefit that he has obtained from the tax deductibility of the school fees. The Employee shall each year provide the Employer with suitable evidence of the tax benefit obtained. In case of beginning or ending of the employment during the year, the annual assistance shall be pro-rated accordingly. During the employment relationship, the Employee’s entitlement to the annual allowance for school fees and the payment by the Employer of any taxes incurred by this shall cease to exist six months after the date on which the Employer stated to the Employee in writing that the latter is no longer required to reside in Germany.
(6)	Der Mitarbeiter hat alle Entgeltabrechnungen und - Zahlungen unverzüglich zu überprüfen sowie zu viel bezahlte Bezüge anzuzeigen und zurückzuzahlen. Er kann sich auf den Einwand der Entreicherung nicht berufen, wenn er die Überzahlung erkannt hat oder hätte erkennen müssen oder wenn die Überzahlung auf Umständen beruht, die er zu vertreten hat.	The Employee shall verify any salary invoices and payments without delay as well as report and refund any overpayments. The Employee shall not be entitled to raise the objection of the loss of enrichment, if he recognized or should have recognized the overpayment or if the overpayment is due to circumstances which the Employee is responsible for.

	§ 4 Dienstwagen	§ 4 Company Car
(1)	Das Unternehmen stellt dem Mitarbeiter weiterhin einen Dienstwagen (basierend auf der Gardner Denver Car Policy) zur Erfüllung seiner dienstlichen Aufgaben und auch zur privaten Nutzung zur Verfügung. Das Recht zur privaten Nutzung kann durch den Arbeitgeber widerrufen werden, wenn das Arbeitsverhältnis gekündigt und der Mitarbeiter wirksam von der Arbeitspflicht freigestellt ist oder wenn das Arbeitsverhältnis ruht (z. B. Elternzeit). Im Falle der Ausübung des Widerrufsrechts steht dem Mitarbeiter kein Entschädigungsanspruch für die nicht mehr bestehende Nutzungsmöglichkeit zu.	The Employer continues to provide a company car (based on Gardner Denver Car Policy) to the Employee for the performance of his official duties and for private usage. The Employer may revoke the right to use the company car for private purposes if both party has given notice of termination of employment to the other party and if the Employer has effectively released the Employee from his work duties or if the employment relationship has been suspended (e.g. parental leave). If the Employer makes use of the right of revocation, the Employee shall not be entitled to any claim for compensation for the loss of further use of the car.
(2)	Die Bestimmungen über die Dienstwagengewährung werden im Übrigen im KFZ-Überlassungsvertrag sowie in den jeweiligen betrieblichen Regelungen gesondert geregelt. Die Versteuerung des geldwerten Vorteils erfolgt aufgrund der jeweils gültigen steuerlichen Vorschriften und ist vom Mitarbeiter zu leisten.	The regulations regarding the provision of a company car will be specified in the Vehicle Usage Agreement as well as in the respective operative regulations. Taxation of a benefit in kind shall be handled on the basis of applicable fiscal regulations and shall be paid by the Employee.
(3)	Alternativ zur Gestellung eines Dienstwagens, der auch privat genutzt werden kann, zahlt der Arbeitgeber einen monatlichen Brutto-Zuschuss in Höhe von EUR 1.250,00.	Alternatively and in lieu of a company car, which can also be used for private purposes by the employee, the employer will grant a monthly gross amount as a car allowance of EUR 1.250,00.
	§ 5 Wegfall und Freiwilligkeit von Vergütungsbestandteilen	§ 5 Cessation and Voluntariness of Elements of Remuneration
(1)	Auf Vergütungsbestandteile, die dem Mitarbeiter aus einem bestimmten Grund, z. B. wegen besonderer Arbeitsbedingungen oder bestimmter Sonderaufgaben, gewährt werden, hat der Mitarbeiter keinen Anspruch mehr, wenn der Grund für die Gewährung des betreffenden Vergütungsbestandteils entfällt.	The Employee shall no longer be entitled to such elements of remuneration that were granted to him for a specific reason, e.g. due to particular working conditions or the assignment of specific tasks, if the specific reason for the grant of the respective element of remuneration ceases to exist.
(2)	Bei nicht aufgrund zwingend anwendbarer Bestimmungen geleisteten Gratifikationen, Prämien und anderen Einmalzahlungen des Arbeitgebers, die nicht Bestandteil des laufenden monatlichen Arbeitsentgelts sind, handelt es sich auch ohne besonderen Hinweis stets um freiwillige Leistungen des Arbeitgebers, auf die - auch bei wiederholter Gewährung - kein Rechtsanspruch besteht, weder für die Gegenwart noch für die Zukunft. Der Arbeitgeber behält sich vor, jedes Jahr neu zu entscheiden, ob und in welcher Höhe derartige Leistungen gewährt werden.	Bonuses, premiums and other single payments that are granted by the Employer but not based on mandatory provisions and that are not part of the running monthly remuneration are always - even without any special note - voluntary payments made by the Employer. The Employee does not have any legal claim for these voluntary payments, neither at present nor for the future; this shall also apply in case of recurring payments. The Employer reserves the right to decide each year whether, and in what amount, it awards such voluntary payments.
(3)	Betriebliche Sonderleistungen des Arbeitgebers oder sonstige Vergünstigungen, die aus sozialen Gründen gewährt werden, sind ebenfalls freiwillige Leistungen, auf die - auch bei wiederholter Gewährung - kein Rechtsanspruch besteht, weder für die Gegenwart noch für die Zukunft.	Operational special payments made by the Employer or any other benefits granted for social reasons are voluntary payments as well. The Employee does not have any legal claim for these voluntary payments, neither at present nor for the future; this shall also apply in case of recurring payments.
	§ 6 Urlaub	§ 6 Vacation
(1)	Der Urlaub beträgt im Falle der Verteilung der Arbeitszeit auf 5 Arbeitstage pro Woche 30 Arbeitstage pro Kalenderjahr (gesetzlicher Urlaubsanspruch von 20 Arbeitstagen pro Jahr zuzüglich eines vertraglichen Urlaubsanspruchs von 10 Arbeitstagen pro Jahr).	In case the working time is allocated to 5 working days per week, the Employee shall be entitled to an annual vacation of 30 working days (statutory leave entitlement of 20 working days per year and additional contractual leave entitlement of 10 working days per year).
(2)	Bei unterjährigem Beginn oder unterjähriger	If the term of this Employment Contract begins or expires

	Beendigung des Arbeitsverhältnisses hat der Mitarbeiter für das betreffende Kalenderjahr lediglich Anspruch auf 1/12 des Jahresurlaubs (bestehend aus gesetzlichen Urlaub und vertraglichem Urlaub) pro vollen Monat des Arbeitsverhältnisses, soweit dadurch nicht der gesetzliche Mindesturlaubsanspruch nach §§ 3, 5 BUrIG berührt wird.	at any time other than the beginning or the end of a calendar year, the Employee shall only be entitled to 1/12 of the annual vacation (consisting of the statutory and the contractual vacation entitlement) per full month of employment, as far as the statutory minimum claim for vacation pursuant to § 3 and § 5 Federal Holiday with Pay Act is not affected.
(3)	Die zeitliche Festlegung des Urlaubs ist mit dem Vorgesetzten rechtzeitig abzustimmen. Mit der Urlaubserteilung erfüllt die Gesellschaft zunächst den Anspruch des Mitarbeiters auf den gesetzlichen Mindesturlaub, dann einen gegebenenfalls bestehenden Anspruch auf gesetzlichen Zusatzurlaub. Erst nach vollständiger Erfüllung des gesetzlichen Mindesturlaubsanspruchs und eines etwaigen Anspruchs auf gesetzlichen Zusatzurlaub wird der vertragliche Mehrurlaub erteilt.	The timing of vacation shall be agreed with the competent superior in due time. By granting vacation the Company first fulfils the minimum statutory vacation entitlement, followed by an entitlement to statutory additional vacation, if any. Only upon complete fulfilment of the minimum statutory vacation entitlement and the statutory additional vacation, if any, the contractual vacation entitlement shall be granted.
(4)	Das Urlaubsjahr ist das Kalenderjahr, Der Urlaub muss bis spätestens 31. Dezember des laufenden Jahres genommen werden. Bis zu diesem Zeitpunkt nicht genommener Urlaub verfällt grundsätzlich entschädigungslos; dies gilt für den vertraglichen Urlaubsanspruch auch dann, wenn der Urlaub wegen Krankheit bis zu diesem Zeitpunkt nicht genommen werden konnte. Lediglich der gesetzliche Urlaubsanspruch nach dem BUrIG, der wegen Krankheit bis zu diesem Zeitpunkt nicht genommen werden konnte, verfällt nicht bereits zu diesem Zeitpunkt, sondern erst zum 31. März des darauffolgenden, d.h. übernächsten Kalenderjahres.	The year of vacation is the calendar year. Vacation must be taken by December 31 of the current year. Vacation, which was not taken until this date, generally lapses without any compensation due; this shall also apply to the contractual vacation entitlement, even if this vacation could not be taken by then due to illness. Only the statutory vacation according to the Federal Holiday with Pay Act that could not be taken until then due to illness shall not  already lapse at that time but only on March 31 of the subsequent year, i.e. of the year, which follows the following year.
	§ 7 Beendigung und Ruhen des Arbeitsverhältnisses	§ 7 Termination and Suspension of the Employment Relationship
(1)	Dieser Vertrag wird auf unbestimmte Zeit geschlossen.	This Employment Contract is entered into for an indefinite period of time.
(2)	a.  Der Mitarbeiter kann das Arbeitsverhältnis mit einer Kündigungsfrist von 6 Monaten zum Ende des Kalendermonats kündigen. Der Arbeitgeber kann das Arbeitsverhältnis mit einer Kündigungsfrist von 6 Monaten zum Ende des Kalendermonats kündigen. b.   Sofern der Arbeitgeber das Arbeitsverhältnis aus nicht verhaltensbedingten Gründen kündigt und der Mitarbeiter wegen einer solchen Kündigung einen Abwicklungsvertrag mit demselben Beendigungsdatum schließt, erhält der Mitarbeiter wegen der Beendigung des Arbeitsverhältnisses eine Bruttobfindung von sechs Bruttomonatsgehältern i.S.d. § 3 Abs. 1 des Arbeitsvertrags, zahlbar mit dem auf die Beendigung des Arbeitsverhältnisses folgen-den Gehaltslauf abzüglich gesetzlich vorgegebener Abzüge (die „Bruttoabfindung“). c.    Der Anspruch auf die Bruttoabfindung ist ausgeschlossen, sofern der Mitarbeiter eine Kündigung des Arbeitgebers i.S.d. UAbs. b) gerichtlich überprüfen lässt oder das Arbeitsverhältnis selbst kündigt.	a.    The Employee can terminate the employment relationship with 6 months’ notice to the end of the calendar month. The Employer can terminate the employment relationship with 6 months’ notice to the end of the calendar month. b.    Where the Employer terminates the employment relationship for non-conduct-related reasons, the Employee shall, subject to entering into a settlement agreement based on such a termination and with the same termination date, be entitled to receive a gross severance payment due to the termination of the employment relationship equal to 6 gross monthly salaries pursuant to section 3 para. 1 of the Employment Contract, payable in the payroll payment following the end of the employment relationship and subject to deductions required by law (the “Gross Severance Payment”). c.     The entitlement to the Gross Severance Payment is excluded if the Employee applies for judicial review of a termination by the Employer pursuant to subpara. b) or if the Employee terminates the employment relationship himself.
(3)	Das  Recht  zur  fristlosen  Kündigung  aus wichtigem Grund  bleibt  unberührt.  Eine  unwirksame  fristlose	The  right  to  terminate  the  employment  with  immediate effect for an important reason remains unaffected. An

	Kündigung gilt als ordentliche Kündigung zum nächstmöglichen zulässigen Termin.	invalid termination with immediate effect shall be regarded as regular termination as from the next possible permitted time.
(4)	Der Arbeitgeber ist berechtigt, den Mitarbeiter ab Ausspruch einer Kündigung durch eine der Parteien bis zum Ablauf der Kündigungsfrist und gegebenenfalls im Rahmen eines eventuell geltend gemachten Weiterbeschäftigungsanspruchs bis zum rechtskräftigen Abschluss eines etwaigen Rechtsstreits über die Wirksamkeit der Kündigung ganz oder teilweise widerruflich oder unwiderruflich von der Arbeitspflicht freizustellen. Vergütungsansprüche bleiben dem Mitarbeiter während der Freistellung erhalten, soweit die gesetzlichen Voraussetzungen des Annahmeverzuges gemäß § 615 BGB erfüllt sind. Während der Freistellung findet - mit Ausnahme der Resturlaubszeiten - auch § 615 Satz 2 BGB Anwen- dung. Eine unwiderrufliche Freistellung erfolgt unter Anrechnung der dem Mitarbeiter eventuell noch zustehenden Urlaubsansprüche, wobei der Urlaub zu Beginn der Freistellungsphase gewährt wird, soweit dem keine schutzwürdigen Belange des Mitarbeiters entgegenstehen. Das gesetzliche Wettbewerbsverbot gilt in jedem Falle bis zur rechtlichen Beendigung des Arbeitsverhältnisses.	The Employer shall have the right to release the Employee from his work duties in part or in whole, revocably or irrevocably, as soon as either Party gave notice of termination to the other Party until the expiration of the notice period and, if applicable, in connection with a claim for further employment that the Employee may have asserted, until the final and absolute conclusion of a possible legal dispute regarding the effectiveness of the termination. The Employee's entitlement to remuneration during the period of release shall remain unaffected, provided that the statutory requirements for default of acceptance pursuant to Section 615 German Civil Code are met. Section 615 2nd sentence German Civil Code shall also apply during the period of release except for periods of remaining vacation. In case of an irrevocable release, the period of release shall be set off against any remaining vacation entitlement; vacation will be granted at the be- ginning of the period of release, unless this affects interests of the Employee worthy of protection. The statutory prohibition of competition will at any rate continue to apply until the employment legally terminates.
(5)	Der voran stehende Absatz gilt entsprechend bei anderen Streitigkeiten über den Fortbestand des Arbeitsverhältnisses.	The preceding paragraph shall apply accordingly to any other disputes on the further existence of the employment relationship.
(6)	Das Arbeitsverhältnis endet ohne Kündigung mit Ablauf des Monats, in dem der Mitarbeiter die für ihn maßgebliche Regelaltersgrenze für den Bezug der gesetzlichen Altersrente erreicht hat, oder in dem Zeitpunkt, ab dem der Mitarbeiter eine Altersrente, gleich aus welchem Rechtsgrund, bezieht. Das Arbeitsverhältnis endet ebenfalls ohne Kündigung mit Ablauf des Monats, indem dem Mitarbeiter der Bescheid eines Rentenversicherungsträgers über eine unbefristete Rente wegen vollständiger Erwerbsminderung zugeht, wenn der Mitarbeiter nicht vor Ablauf der Widerspruchsfrist seinen Antrag zurücknimmt oder auf eine Rente auf Zeit einschränkt, bei späterem Beginn des entsprechenden Rentenbezugs jedoch erst mit Ablauf des dem Rentenbeginn vorhergehenden Tages.	The employment relationship shall terminate, without the need of a formal notice of termination, at the end of the month, in which the Employee achieves his regular retirement age for payment of the statutory old-age pension, or at the time when the Employee receives an old-age pension, irrespective of the legal basis. The employment relationship shall also terminate, without the need of a formal notice of termination, at the end of the month, in which the Employee receives the pension approval certificate of a Pensions Regulatory Authority regarding the grant of an indefinite annuity for complete reduction in earning capacity, unless the Employee withdraws his application prior to the expiration of the opposition period or reduces his application to a temporary annuity; if the annuity payments start only at a later date, the employment relationship terminates only at the end of the day preceding the day when the annuity payments starts.
(7)	Das Arbeitsverhältnis ruht während des Bezugs von Arbeitslosengeld sowie ab dem Zeitpunkt, indem dem Mitarbeiter der Bescheid eines Rentenversicherungsträgers über eine Rente auf Zeit wegen vollständiger Erwerbsminderung zugeht, für die Dauer des Rentenbezugs. Das Recht, das Arbeitsverhältnis nach Maßgabe der gesetzlichen Regelungen zu kündigen, bleibt hiervon unberührt.	The employment relationship shall be suspended as long as the Employee receives unemployment benefits as well as from the time, when the Employee receives the pension approval certificate of a Pensions Regulatory Authority regarding the grant of a temporary annuity for complete reduction in earning capacity, for the duration of the annuity payments. The right to terminate the employment relationship in accordance with the statutory provisions shall remain unaffected thereby.
(8)	Der Mitarbeiter hat den Arbeitgeber unverzüglich über den Zugang eines Rentenbescheids oder den Bezug von Arbeitslosengeld zu unterrichten.	The Employee shall inform the Employer without delay about the receipt of any pension approval certificate or the receipt of unemployment benefits.
	§ 8 Arbeitsverhinderung	§ 8 Incapacity for Work
(1)	Jede Arbeitsverhinderung ist, sobald sie dem Mitarbeiter bekannt ist, dem Arbeitgeber unter Angabe der Gründe (z. B. Krankheit) und der voraussichtlichen Dauer  sowie  ggf.  der  Adresse  eines  vom Wohnsitz	The Employee shall report any incapacity for work to the Employer without delay as soon as the incapacity has become known to him, specifying the reason (e.g. illness) and the expected duration as well as, if applicable, the

	abweichenden Aufenthaltsortes unverzüglich mitzuteilen. Gleiches gilt, wenn die Arbeitsverhinderung länger als erwartet andauert.	precise whereabouts if different from the Employee's residence. The same shall apply if the incapacity for work persists longer than expected.
(2)	Im Falle der Arbeitsunfähigkeit wegen Krankheit hat der Mitarbeiter außerdem auch die hierfür geltenden besonderen gesetzlichen und betrieblichen Mitteilungs- und Nachweispflichten zu erfüllen.	In case of incapacity for work owing to illness, the Employee shall also meet the applicable specific statutory and company's obligations to furnish information and proof.
(3)	Entgeltfortzahlung wird nach den gesetzlichen Bestim- mungen gewährt. Solange der Mitarbeiter seinen Mitteilungs- und Nachweispflichten nicht nachkommt, ist der Arbeitgeber unter den Voraussetzungen des § 7 EFZG berechtigt, die Fortzahlung des Arbeitsentgeltes zu verweigern.	The Employer shall continue to pay the remuneration as determined by German law. As long as the Employee fails to comply with his obligations to furnish information and proof, the Employer shall have the right to refuse continued payment of remuneration in accordance with Section 7 of the Act on Continued Remuneration.
	§ 9 Ärztliche Untersuchung	§ 9 Medical Examination
(1)	Der Mitarbeiter ist verpflichtet, sich auf Verlangen des Arbeitgebers einer ärztlichen Untersuchung zu unterziehen, wenn Zweifel an der gesundheitlichen Eignung des Mitarbeiters für die ihm obliegenden Tätigkeiten bestehen oder der Arbeitgeber ein sonstiges berechtigtes Interesse an einer ärztlichen Untersuchung hat. Der Arbeitgeber trägt die Kosten dieser Untersuchung, wenn diese nicht von einem Dritten übernommen werden.	At the Employer's request, the Employee shall undergo a medical examination, if there are doubts about the Employee's physical and/or mental aptitude for the work duties that he shall fulfill or if the Employer has any other legitimate interest in a medical examination. The Employer shall bear the costs of this medical examination, unless they are covered by a third party.
(2)	Der Arbeitgeber ist berechtigt, die Untersuchung durch einen Arbeitsmediziner zu verlangen.	The Employer shall have the right to require the examination by an occupational health physician.
(3)	Der Mitarbeiter ist verpflichtet, den Arbeitgeber über die Ergebnisse der Untersuchung zu unterrichten, soweit sie die Frage der gesundheitlichen Eignung des Mitarbeiters für die ihm obliegenden Tätigkeiten betreffen. Auf Verlangen des Arbeitgebers ist der Mitarbeiter weiterhin verpflichtet, den behandelnden Arzt insoweit von der Schweigepflicht zu entbinden, als es um die Frage der gesundheitlichen Eignung des Mitarbeiters für die ihm obliegende Tätigkeit geht.	The Employee shall inform the Employer about the results of such examination as far as they concern the Employee's physical and/or mental aptitude for the work duties that he shall fulfill. Furthermore, at the Employer's request the Employee shall release the examining physician of the professional obligation not to disclose any confidential medical communication, as far as the Employee's physical and/or mental aptitude for the work duties that he shall fulfill is concerned.
	§ 10 Arbeitsmittel / Informations- und Kommunikationstechnik; Verschwiegenheits- und Herausgabepflichten	§ 10 Work Equipment / Information and Communication Technology; Obligations of Secrecy and to Return
(1)	Dem Mitarbeiter ist es untersagt, Software des Arbeitgebers oder Software, für die der Arbeitgeber eine Lizenz besitzt, zu kopieren und/oder auf Computern des Arbeitgebers Software ohne vorherige Zustimmung des Arbeitgebers zu installieren.	The Employee shall not copy any software of the Employer or software licensed by the Employer; he shall not install any software on the Employer's computers without the Employer's prior approval.
(2)	Der Mitarbeiter darf Mittel der Informations- und Kommunikationstechnik des Arbeitgebers (z. B. Internet und E-Mail-System) ausschließlich nach Maßgabe erteilter Weisungen des Arbeitgebers nutzen; soweit danach eine Nutzung zu privaten Zwecken nicht ausdrücklich gestattet ist, ist sie untersagt.	The Employee is allowed to use the Employer's means of information and communication technology (e.g. Internet and e-mail system) exclusively according to the instructions of the Employer; insofar as the use for private purposes is not explicitly allowed according to these instructions, the use for private purposes is prohibited.
(3)	Der Mitarbeiter hat über alle ihm zur Kenntnis gelangenden Angelegenheiten des Arbeitgebers Stillschweigen zu bewahren, soweit es sich um Betriebs- und Geschäftsgeheimnisse handelt. Dies gilt auch für solche Tatsachen, die der Arbeitgeber als vertraulich bezeichnet oder bei denen aus den Umständen ersichtlich ist, dass sie gegenüber Dritten nicht offenbart werden dürfen.	The Employee shall keep in confidence all matters affecting the Employer that he may become aware of as far as they concern company or business secrets. This shall also apply to any facts that the Employer characterized as confidential or where it is obvious under the prevailing circumstances that they should not be disclosed to third parties.
(4)	Die Verschwiegenheitspflicht erstreckt sich auch auf die im dritten Absatz dieses § 10 bezeichneten Angelegenheiten anderer Unternehmen, mit denen der   Arbeitgeber   rechtlich,   organisatorisch   oder wirtschaftlich verbunden ist oder mit denen er in	The obligation of secrecy shall also apply to matters as described in the 3rd paragraph of this Section 10 if they concern other companies to which the Employer is legally, organizationally or economically affiliated or maintains

	geschäftlichem Kontakt steht.	business relations.
(5)	Die Verschwiegenheitspflicht umfasst auch den Inhalt dieses Vertrages, soweit der Mitarbeiter nicht aufgrund gesetzlicher Vorschriften zu entsprechenden Angaben verpflichtet ist.	The obligation of secrecy shall also apply to the content of this Contract, unless the Employee is obligated to provide information based on statutory provisions.
(6)	Die in Absatz 3 bis 5 dieses § 10 geregelten Verschwiegenheitspflichten des Mitarbeiters bestehen - unbeschadet weitergehender gesetzlicher Vorschriften - auch nach Beendigung des Arbeitsverhältnisses fort; der Mitarbeiter darf die geheim zu haltenden Tatsachen auch nicht durch Weitergabe an Dritte verwerten.	The Employee's obligations of secrecy as stipulated in paras. 3 to 5 of this Section 10 shall continue to apply beyond the termination of the Employment Contract - without prejudice to farther reaching statutory provisions; the Employee shall not utilize the facts that are to be kept in confidence by passing them on to third parties either.
(7)	Ein Verstoß gegen eine der in den Absätzen 3 bis 6 genannten Pflichten stellt einen wichtigen Grund dar, der den Arbeitgeber zur außerordentlichen Kündigung des Arbeitsverhältnisses zwischen den Parteien berechtigt. Übt der Arbeitgeber dieses Recht zur außerordentlichen Kündigung nicht aus, so berührt dies das Recht zur außerordentlichen Kündigung in einem Wiederholungsfall nicht.	A breach of one of the obligations outlined in Paragraphs 3 to 6 constitutes important cause, which shall entitle the Employer to issue an extraordinary termination of the employment contract between the parties. If the Employer does not exercise this right to extraordinary termination, this shall not affect the right to extraordinary termination in the event such a breach is repeated.
(8)	Der Mitarbeiter ist verpflichtet, alle seine dienstlichen Tätigkeiten betreffenden Schriftstücke, Informationsträger und sonstigen Unterlagen - auch soweit es sich um seine persönlichen Aufzeichnungen, die Geschäftsvorgänge betreffen, handelt - als ihm anvertrautes Eigentum des Arbeitgebers sorgfältig zu behandeln und aufzubewahren und sie dem Arbeitgeber auf dessen Verlangen jederzeit, spätestens aber bei Beendigung des Arbeitsverhältnisses zurückzugeben; das gilt auch für Abschriften, Vervielfältigungen, gespeicherte Daten und Gegenstände. Dem Mitarbeiter steht daran kein Zurückbehaltungsrecht zu. Geschäftliche Unterlagen dürfen nur zu geschäftlichen Zwecken verwendet werden. Das Anfertigen von Abschriften, Auszügen oder Kopieren von Geschäftsunterlagen - auch EDV-technischer Art - ist nur für dienstliche Zwecke zulässig.	The Employee shall handle with care as property of the Employer that has been entrusted to him all documents, data carriers and other records concerning his work for the Employer - even if they are his personal recordings regarding business processes - and maintain them in safe keeping as well as return them to the Employer on demand at any time, however, upon the termination of the employment relationship at the latest; this shall also apply to any copies, replications, saved data and objects. The Employee shall have no right of retention over any such records and objects. Business records shall be used only for business purposes. It is not permitted to make copies or extracts or duplicates of business records - including those of EDP-technical nature - for purposes other than business purposes.
(9)	Auf Verlangen des Arbeitgebers ist der Mitarbeiter verpflichtet, schriftlich zu versichern, dass er solche Unterlagen, sei es im Original oder in Kopie, nicht mehr besitzt und auch nicht an Dritte weitergegeben hat.	At the Employer's request, the Employee shall assure in writing that he is no longer in possession of such docu-ments - be they in original or copy - and has not passed them on to any third party.
(10)	Andere Vereinbarungen der Parteien oder Erklärungen des Mitarbeiters bezüglich Geheimhaltungspflichten bleiben unberührt; dies gilt insbesondere soweit sie zusätzliche Pflichten des Mitarbeiters begründen.	Any other agreements of the Parties or declarations of the Employee regarding obligations of secrecy shall remain unaffected, in particular as far as they create any additional obligations of the Employee.
	§ 11 Erfindungen und andere Schöpfungen	§ 11 Inventions and other Creations
(1)	Der Mitarbeiter hat während der Dauer des Arbeitsverhältnisses gemachte Erfindungen - auch nicht dienstlicher Art - dem Arbeitgeber unverzüglich mitzuteilen. Im Übrigen gelten für Arbeitnehmererfindungen die gesetzlichen Bestimmungen.	The Employee shall inform the Employer without delay of any inventions made during the term of the employment relationship - also of unofficial nature. Apart from this, the statutory provisions shall apply to inventions of the Employee.
(2)	Soweit nicht das Arbeitnehmererfindungsgesetz einschlägig ist, stehen alle Arbeitsergebnisse automatisch dem Arbeitgeber zu. Dies gilt unabhängig davon, ob sie von dem Mitarbeiter allein oder zusammen mit anderen Arbeitnehmern erarbeitet wurden. Gleiches gilt für Ergebnisse, die zwar nicht auf einen unmittelbaren Arbeitsauftrag zurückzuführen sind, aber mit dem Tätigkeitsbereich des Mitarbeiters	As far as the Law on Employee Inventions is not applicable, the Employer shall automatically have a right to all work results. This shall apply irrespective of whether or not the result was produced by the Employee alone or jointly with other employees. The same shall apply to results that are not directly attributable to a work order but that are connected with the Employee's scope of functions.

	zusammenhängen.
(3)	Soweit der Mitarbeiter Urheberrechte oder andere nicht übertragbare Schutzrechte an Arbeitsergebnissen erwirbt, überträgt er bereits hiermit alle diesbezüglichen ausschließlichen, zeitlich, räumlich und inhaltlich unbeschränkten Nutzungs- und Verwertungsrechte hinsichtlich aller bekannten Nutzungs- und Verwertungsarten auf den Arbeitgeber, insbesondere das Recht zur Vervielfältigung, Verbreitung (auch in digitalisierter Form), der öffentlichen Wiedergabe und der Vorführung sowie das Recht zur Vornahme von Bearbeitungen, anderen Umgestaltungen und Verfilmungen. Dies gilt insbesondere, ungeachtet der Übertragungs- und Trägertechniken, für Printmedien, Rundfunk, Film und/oder digitale Medien (z. B. Telekommunikations- und Datendienste, z. B. Online-Dienste sowie Datenbanken und elektronische Trägermedien, z. B. magnetische, optische, magnetooptische und elektronische Trägermedien wie CD-ROM und Disketten). Dies schließt die Befugnis des Arbeitgebers ein, ohne gesonderte Zustimmung für jeden Einzelfall Nutzungs- oder Verwertungsrechte ganz oder teilweise auf andere zu übertragen oder anderen Nutzungs- oder Verwertungsrechte einzuräumen. Ansprüche des Mitarbeiters für die Übertragung dieser Rechte auf den Arbeitgeber sind durch das arbeitsvertragliche Entgelt abgegolten; diese Vergütung schließt auch die Nutzungserfolge und die Verwertungserlöse insbesondere aus Verkäufen und/oder Lizenzverträgen mit Dritten ein. Weitergehende Vergütungsansprüche sind ausgeschlossen.	Should the Employee acquire copyrights or other non- transferable protective rights to work results, the Employee already herewith assigns all related exclusive use and exploitation rights to the Employer with respect to all known manners of use and exploitation, which are not limited in their application with regard to time, territory and content, in particular but not limited to the right of reproduction, the right of distribution (also digitalized), of public reproduction and of performance and the right of development, other modifications, and film rights. This shall especially apply to print media, radio, film and/or digital media (e.g., telecommunications and data services, e.g., online services, databases, and electronic media carriers, e.g., magnetic, optical, magnetic-optical and electronic media carriers such as CD-ROM and discs), regardless of carrier and transmission technology. This shall include the authority of the Employer to transfer use or exploitation rights in whole or in part to others or grant others the right  of use or exploitation without separate consent for every individual case. Any claims of the Employee resulting from the transfer of such rights to the Employer shall be deemed compensated for by the contractual remuneration; such remuneration shall also cover any proceeds resulting from the use and any other proceeds of the exploitation, especially from sales and/or license agreements with third parties.
(4)	Höchstvorsorglich verzichtet der Mitarbeiter auf etwaige Vergütungsansprüche für die Rechtsübertragung, es sei denn nach deutschem Recht ist zwingend eine zusätzliche Vergütung vorgeschrieben. Die Übertragung der obengenannten Rechte bleibt von der Beendigung des Arbeitsverhältnisses unberührt. Der Mitarbeiter ist nicht berechtigt, seine Arbeitsergebnisse direkt oder indirekt zu verwerten.	The Employee shall not have any further claims for remuneration. As a matter of precaution, the Employee hereby waives any claims to remuneration regarding the transfer of rights, unless German Law mandatorily provides for additional remuneration. The transfer of the above- mentioned rights shall remain unaffected by the expiration of the employment relationship. The Employee is not entitled to directly or indirectly utilise his work results.
	§ 12 Wettbewerbsverbot, Nebentätigkeit	§ 12 Prohibition of Competition, Contractual Penalty, Secondary Employment
(1)	Solange das Arbeitsverhältnis besteht, darf der Mitar- beiter im Geschäftszweig des Arbeitgebers oder der verbundenen Unternehmen und auf verwandten Gebieten weder für eigene noch für fremde Rechnung Geschäfte machen oder ein Handelsgewerbe im Geschäftszweig des Arbeitsgebers betreiben. Es ist ihm auch untersagt, sich an einem anderen Unternehmen, das sich auf diesen Gebieten betätigt, unmittelbar oder mittelbar zu beteiligen, für ein solches tätig zu werden oder ein solches Unternehmen in sonstiger Weise zu fördern. Das Gleiche gilt für Unternehmen, mit denen der Arbeitgeber in Geschäftsbeziehungen steht. Der Erwerb und das Halten von bis zu 5 % der Stimm- und	As long as the employment relationship persists, the Employee may not engage in any activity in the branch of business of the Employer or its related companies or in related areas for his own account or for the account of a third party. He shall also be prohibited from establishing commerce in the Employer's line of business. Furthermore, he may not - directly or indirectly - hold a participation in a company, which is active in the same line of business as the Employer or its related companies, and may not work for such a company or support it in any other way. The same shall apply to enterprises, which have business relationships with the Employer. The Employee shall be entitled, however, to acquire and to hold up to 5% of the voting and profit distribution rights of listed companies.

	Gewinnbezugsrechte an börsennotierten Gesellschaften sind jedoch gestattet.
(2)	Im Übrigen dürfen Nebentätigkeiten - gleich ob selbstständige oder unselbständige - nur mit vorheriger schriftlicher Zustimmung des Arbeitgebers ausgeübt werden. Hat der Mitarbeiter dem Arbeitgeber schriftlich die beabsichtigte Nebentätigkeit unter Angabe von Art, Ort und Dauer angezeigt und stehen sachliche Gründe (z. B. Beeinträchtigung der Arbeitsleistungen des Mitarbeiters, Beeinträchtigung sonstiger Interessen des Arbeitgebers) der Aufnahme der Nebentätigkeit nicht entgegen, wird der Arbeitgeber unverzüglich zustimmen. Der Arbeitgeber kann seine Zustimmung befristet oder unter einem Widerrufsvorbehalt erteilen. Die Zustimmung ist jederzeit, gegebenenfalls unter Einhaltung einer angemessenen Frist, widerruflich, sofern eine Beeinträchtigung des Arbeitsverhältnisses eintritt.	Apart from this, secondary employments - whether self- employed or as an employee - shall be permitted only with the prior written approval of the Employer. If the Employee informed the Employer in writing of the envisaged activity, specifying type, place and duration, and if there are no objective reasons (e.g. impairment to the services rendered by the Employee, impairment of any other interests of the Employer) opposed to this activity, the Employer will immediately give its approval. The Employer is entitled to give the approval only for a limited period of time or subject to the right of revocation. The consent is subject to revocation at any time if an adverse effect of the employment relationship appears, observing a reasonable notice period, if applicable.
	§ 13 Vertragsstrafe	§ 13 Contract Penalty
(1)	In folgenden Fällen kann der Arbeitgeber von dem Mitarbeiter eine Vertragsstrafe verlangen: · falls der Mitarbeiter gegen die Verschwiegenheitsverpflichtungen des § 10 Absätze 3 bis 6 verstößt, ·       falls der Mitarbeiter gegen das Wettbewerbsverbot des § 12 Absatz 1 verstößt.	The Employer may require the Employee to pay a contract penalty in the following cases: ·      if the Employee breaches the confidentiality obligation pursuant to Section 10, Paragraphs 3 to 6 ·       if the Employee breaches the non-competition clause pursuant to Section 12 Para. 2, Paragraph 1.
(2)	Die Vertragsstrafe fällt nur an, wenn der Mitarbeiter schuldhaft, d.h. fahrlässig oder vorsätzlich gehandelt hat.	The contract penalty shall only be applied if the Employee has acted in a culpable, i.e. negligent or intentional, manner.
(3)	Für jeden Fall der Zuwiderhandlung gegen die Verschwiegenheitsverpflichtungen oder gegen das Wettbewerbsverbot gemäß Absatz 2 hat der Mitarbeiter eine Vertragsstrafe in Höhe von einem Bruttomonatsgehalt zu zahlen. Im Fall eines Dauerverstoßes (verbotene Beteiligung an einem Konkurrenzunternehmen oder Aufnahme einer unselbständigen oder selbständigen Tätigkeit für ein Konkurrenzunternehmen von jeweils länger als einem Monat) wird die Vertragsstrafe für jeden angefangenen Monat neu verwirkt. Die Vertragsstrafe ist in ihrer Höhe auf ein Drittel des Bruttojahresgehalts gemäß § 3 Absatz 1 pro Monat und insgesamt auf maximal zwei Bruttojahresgehälter gemäß § 3 Absatz 1 begrenzt. Die Geltendmachung eines darüber hinausgehenden Schadens bleibt vorbehalten.	The Employee shall be liable to pay a contractual penalty in the amount of one month's gross salary for every breach of the confidentiality obligation or the competition ban under the 2nd Paragraph. In case of a continuing breach (prohibited interest in a competing company or start of independent or employment-based activity for a competing company for a period exceeding more than one month) the penalty shall be due anew for each separate month, or part thereof, that the breach continues. The amount of the contract penalty shall be limited to one third of the gross annual salary pursuant to Section 3 Paragraph 1 per month and as a total to a maximum of two gross annual salaries pursuant to Section 3 Paragraph 1. Company's claim for damage compensation above and beyond such penalty remains unaffected.
	§ 14 Abtretung und Verpfändung, Pfändungen	§ 14 Assignment and Pledge, Garnishments
	Die Abtretung und Verpfändung von Vergütungsansprüchen des Mitarbeiters an Dritte ist ausgeschlossen.	Assignment and pledge of claims of the Employee for remuneration to third parties shall be prohibited.
	§ 15 Persönliche Daten	§ 15 Personal Data
(1)	Änderungen persönlicher Daten, die für das Arbeitsverhältnis von Bedeutung sein können,	Changes of personal data that may be significant for the employment relationship, in particular changes of address

	insbesondere Änderungen der Anschrift und des Familienstandes, sind unverzüglich mitzuteilen.	and marital status, shall be reported without delay.
(2)	Der Mitarbeiter stimmt hiermit der Erhebung, Verarbeitung und Nutzung seiner Daten unter Einschluss von personenbezogenen Daten zu, soweit sie im Rahmen der Zweckbestimmung des Arbeitsverhältnisses erfolgen, insbesondere der Durchführung und Abwicklung des Arbeitsverhältnisses dienen. Das Einverständnis des Mitarbeiters erstreckt sich auch darauf, dass diese Daten Dritten, insbesondere anderen Niederlassungen von Gardner Denver oder anderen Konzernunternehmen zum Zwecke der Weiterverarbeitung im Rahmen der vorstehend geschilderten Zweckbestimmung überlassen werden.	The Employee herewith agrees to the collection, processing and usage of his date including personal data in ac- cordance with the purposes of the employment relationship, in particular the purpose of the performance and processing of the employment relationship. This consent of the Employee shall also cover the transfer of such data to third parties, particularly other branch offices of Gardner Denver or other group companies for further processing in accordance with the purposes described above.
	§ 16 Gruppenunfallversicherung	§ 16 Group Accident Insurance
	Der Mitarbeiter wird für die Dauer des Arbeitsverhältnisses in die gängige Gruppenunfallversicherung des Unternehmens zu den jeweils gültigen Bedingungen aufgenommen und dafür als Exempt Employee eingestuft.	Furthermore, for the duration of the employment, the Employee will be included in the standard Group Accident Insurance of the Company on the usual terms, as amended, and categorized as Exempt Employee for this purpose.
	§ 17 Ausschlussfrist	§ 17 Preclusion Period
	Alle Ansprüche aus dem Arbeitsverhältnis und solche, die mit dem Arbeitsverhältnis in Verbindung stehen, sind innerhalb von drei Monaten nach Fälligkeit gegenüber der anderen Vertragspartei schriftlich geltend zu machen. Ansprüche, die nicht innerhalb dieser Frist geltend gemacht werden, sind verwirkt. Ausgenommen von dieser Ausschlussfrist sind nur Haftungsansprüche aus vorsätzlichen Schädigungen, sowie arbeitnehmerseitige Ansprüche auf den gesetzlichen Mindestlohn gemäß Mindestlohngesetz.	All claims, which are based on the employment or are connected with it, must be asserted in writing vis-à-vis the other party within a period of three months after the due date. Claims, which are not asserted in due time, shall forfeit. This term of exclusion shall not apply, however, to liability claims resulting from willful causation of damages, and claims of the Employee according to the German Minimum Wage Law.
	§ 18 Inkrafttreten; Aufhebung früherer Vereinbarungen; Vertragsänderungen; Nebenabreden; anwendbares Recht; Vertragssprache; Begriffsverwendung	§ 18 Entry into force; Cancellation of previous Agreements; Amendments to the Contract; Subsidiary Agreements; Applicable Law; Contractual language; Use of Terms
(1)	Dieser Vertrag tritt rückwirkend mit Wirkung ab 11. Septem-ber 2018 in Kraft und ersetzt ab dem Inkrafttreten sämtliche früheren schriftlichen oder mündlichen Vereinbarungen zwischen den Parteien, insbesondere den Arbeitsvertrag vom 29. April 2016 einschließlich etwaiger Nachträge.	This agreement enters into force with retroactive effect as of 11 September 2018 and replaces, upon entry into force, all prior written or verbal agreements between the Parties, in particular the Employment Contract dated 29 April 2016 including any possible addendum.
(2)	Änderungen und Ergänzungen dieses Vertrags durch individuelle Vertragsabreden i. S. d. § 305 b BGB sind formlos wirksam. Im Übrigen bedürfen Änderungen und Ergänzungen des Vertrags der Schriftform; mündliche Vereinbarungen über die Aufhebung dieses Schriftformerfordernisses sind nichtig.	Changes and amendments to this Agreement based on individual binding agreements in terms of § 305 b German Civil Code do not require a specific form. Apart from this, however, changes and amendments to the Contract must be in written form; verbal agreements on the cancellation of this written form requirement are invalid.
(3)	Mündliche Nebenabreden sind nicht getroffen worden.	There are no verbal subsidiary agreements of any kind agreed.
(4)	Für das Arbeitsverhältnis gelten ergänzend die jeweils gültigen Arbeitsanordnungen und Richtlinien (policies und directives) sowie der Verhaltenskodex des Betriebes, in dem der Mitarbeiter regelmäßig eingesetzt ist.	Additional to this Employment Contract effective work orders as well as policies and directives and the Code of Conduct of the specific location where the employee is deployed regularly, apply.
(5)	Auf diesen Vertrag findet das Recht der Bundesrepublik Deutschland Anwendung.	This Contract is subject to German law.

(6)	Dieser Vertrag ist in deutscher und englischer Sprache geschlossen. Bei Widersprüchen ist der deutsche Vertragstext maßgeblich.	This Contract is concluded in the German and English lan- guages. In case of any discrepancy, the German wording shall prevail.
(7)	Ausschließlich aus Gründen der besseren Lesbarkeit wird in diesem Vertrag einheitlich der männliche Begriff „Mitarbeiter" verwendet; damit ist keinerlei Diskriminierung von Mitarbeiterinnen verbunden.	Only for reasons of improved readability this Contract con- sistently provides for the masculine term "Employee"; this does in no way involve any discrimination of female em- ployees.
	§ 19 Teilunwirksamkeit	§ 19 Partial Invalidity
	Sollten einzelne Bestimmungen dieses Vertrages unwirksam sein, wird hierdurch die Wirksamkeit des übrigen Vertrages nicht berührt. Die unwirksame Bestimmung ist durch eine Regelung zu ersetzen, die dem Zweck der weggefallenen Bestimmung am nächsten kommt.	Should individual provisions of this agreement be invalid, it shall be without prejudice to the validity of the other provi- sions. The invalid provision shall be replaced by a provi- sion, which most closely effects the purpose of the invalid provision.
	§ 20 Wahrung der Interessen des Arbeitgebers	§ 20 Protecting the Interests of the Employer
(1)	Der Mitarbeiter hat die Interessen des Arbeitgebers wahrzunehmen und in jeder Hinsicht zu fördern.	The Employee shall represent the interests of the Employer and promote them in all respects.
(2)	Geschäftliche Verbindungen mit Lieferanten, Kunden und sonstigen Geschäftspartnern dürfen nicht zum persönlichen Vorteil genutzt werden. Informationen aus dem geschäftlichen Bereich dürfen nicht privat genutzt werden. Im Interessenbereich des Arbeitgebers dürfen Privatgeschäfte nicht vorgenommen werden.	The Employee shall not use business contacts with sup- pliers, customers and other business partners for his per- sonal benefit. Information from business transactions shall not be used for private purposes. No private business transactions shall be carried out within the Employer's sphere of interest.
(3)	Nicht geringfügige Geschenke oder andere Vorteile von Personen, die mit dem Arbeitgeber in Geschäftsverbindung stehen oder eine solche anstreben, darf der Mitarbeiter nicht annehmen. Im Zweifelsfall dürfen Geschenke und Vorteile nur nach vorheriger schriftlicher Zustimmung des Arbeitgebers angenommen werden. Der Mitarbeiter ist verpflichtet, etwaige Angebote von Geschenken und anderen Vorteilen dem Arbeitgeber unverzüglich mitzuteilen.	The Employee shall not accept any gifts or other benefits, which are not of minimal value, from persons having or striving for a business relationship with the Employer. In case of doubt, the Employee shall accept gifts and benefits only with the prior written consent of the Employer. The Employee is obligated to report any offers of gifts and other benefits to the Employer without delay.
	§ 21 Hinweis auf die Einhaltung des Allgemeinen Gleichbehandlungsgesetzes (AGG)	§ 21 Information on Compliance with the General Equal Treatment Act (AGG)
	Ziel des Arbeitgebers ist es, jede Benachteiligung, die sich aus Gründen der Rasse oder wegen der ethnischen Herkunft, des Geschlechts, der Religion, der Weltanschauung, einer Behinderung, des Alters oder der sexuellen Identität ergibt, zu verhindern bzw. zu beseitigen. Aus diesem Grund fordert der Arbeitgeber von allen seinen Mitarbeitern, Benachteiligungen und Diskriminierungen betreffend die o.g. Kriterien zu unterlassen. Sollten solche Benachteiligungen oder Belästigungen trotzdem auftreten, wird der Arbeitgeber mit entsprechenden Maßnahmen reagieren und solche Fälle für die Zukunft verhindern. Mitarbeiter, die diskriminierende Äußerungen oder Handlungen vornehmen, müssen mit Disziplinarmaßnahmen, wie z. B. Ermahnungen, Abmahnungen, und Versetzungen sowie in besonders schwerwiegenden Fällen mit der Kündigung ihres Arbeitsverhältnisses, rechnen.	The objective of the Employer is to prevent and eliminate all forms of discrimination based on race or ethnic origin, gen- der, religion and philosophy of life, handicap, age or sexual identity. For this reason, the Employer demands from all employees to refrain from any discrimination regarding the above-mentioned criteria. Should such discrimination or harassment occur nonetheless, the Employer will react to this by taking respective action and prevent such cases for the future. Employees involved in discriminatory remarks and actions will have to face disciplinary measures, e.g. admonitions, warnings, and transfers and, in particularly se- rious cases, the termination of their employment relation- ship.

Simmern, den …..........................

CompAir Drucklufttechnik – Zweigniederlassung der Gardner Denver Deutschland GmbH

Andrew Schiesl

Geschäftsführer

(Arbeitgeber/Employer)

Simmern, den ………………….

Enrique Minarro Viseras

(Mitarbeiter/Employee)

EX-31.1

Exhibit 31.1

CERTIFICATION OF PERIODIC REPORT UNDER SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Vicente Reynal, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarterly period ended September 30, 2018 of Gardner Denver Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 29, 2018
	/s/ Vicente Reynal
	Vicente Reynal
	Chief Executive Officer and Director
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PERIODIC REPORT UNDER SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Philip T. Herndon, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarterly period ended September 30, 2018 of Gardner Denver Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 29, 2018
	/s/ Philip T. Herndon
	Philip T. Herndon
	Vice President and Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Gardner Denver Holdings, Inc. (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2018 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Vicente Reynal, Chief Executive Officer and Director of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

  •  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

  •  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.

Date: October 29, 2018
	/s/ Vicente Reynal
	Vicente Reynal
	Chief Executive Officer and Director
	(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Gardner Denver Holdings, Inc. (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2018 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Philip T. Herndon, Vice President and Chief Financial Officer of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

  •  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

  •  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.

Date: October 29, 2018
	/s/ Philip T. Herndon
	Philip T. Herndon
	Vice President and Chief Financial Officer
	(Principal Financial Officer)

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Oct. 24, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	GARDNER DENVER HOLDINGS, INC.
Entity Central Index Key	0001699150
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		198,762,737
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) [Abstract]
Revenues	$ 689.3	$ 649.6	$ 1,977.1	$ 1,710.4
Cost of sales	426.9	395.7	1,233.6	1,066.0
Gross Profit	262.4	253.9	743.5	644.4
Selling and administrative expenses	107.7	111.0	330.4	338.9
Amortization of intangible assets	31.0	29.5	93.4	87.6
Other operating expense, net	6.0	17.4	10.8	186.7
Operating Income	117.7	96.0	308.9	31.2
Interest expense	24.4	30.1	76.5	115.4
Loss on extinguishment of debt	0.9	34.1	1.0	84.5
Other income, net	(2.4)	(0.6)	(6.7)	(2.4)
Income (Loss) Before Income Taxes	94.8	32.4	238.1	(166.3)
Provision (benefit) for income taxes	22.6	4.4	63.2	(41.2)
Net Income (Loss)	72.2	28.0	174.9	(125.1)
Less: Net income attributable to noncontrolling interests	0.0	0.0	0.0	0.1
Net Income (Loss) Attributable to Gardner Denver Holdings, Inc.	$ 72.2	$ 28.0	$ 174.9	$ (125.2)
Basic income (loss) per share (in dollars per share)	$ 0.36	$ 0.14	$ 0.87	$ (0.71)
Diluted income (loss) per share (in dollars per share)	$ 0.35	$ 0.13	$ 0.83	$ (0.71)

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018		Sep. 30, 2017
Comprehensive Income (Loss) Attributable to Gardner Denver Holdings, Inc.
Net income (loss) attributable to Gardner Denver Holdings, Inc.	$ 72.2	$ 28.0	$ 174.9		$ (125.2)
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments, net	(21.9)	41.5	(70.0)		131.4
Foreign currency gains (losses), net	3.6	(14.8)	18.7		(44.3)
Unrecognized gains on cash flow hedges, net	4.4	4.0	20.5		5.5
Pension and other postretirement prior service cost and gain or loss, net	0.9	(0.6)	3.9		(1.9)
Total other comprehensive (loss) income, net of tax	(13.0)	30.1	(26.9)	[1]	90.7	[1]
Comprehensive income (loss) attributable to Gardner Denver Holdings, Inc.	59.2	58.1	148.0		(34.5)
Comprehensive Income Attributable to Noncontrolling Interests
Net income attributable to noncontrolling interests	0.0	0.0	0.0		0.1
Other comprehensive income, net of tax:
Foreign currency translation adjustments, net	0.0	0.0	0.0		0.0
Total other comprehensive income, net of tax	0.0	0.0	0.0		0.0
Comprehensive income attributable to noncontrolling interests	0.0	0.0	0.0		0.1
Total Comprehensive Income (Loss)	$ 59.2	$ 58.1	$ 148.0		$ (34.4)

[1] All amounts are net of tax. Amounts in parentheses indicate debits.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 269.0	$ 393.3
Accounts receivable, net of allowance for doubtful accounts of $19.1 and $18.7, respectively	525.0	536.3
Inventories	550.1	494.5
Other current assets	63.4	39.5
Total current assets	1,407.5	1,463.6
Property, plant and equipment, net of accumulated depreciation of $238.7 and $203.8, respectively	346.9	363.2
Goodwill	1,268.4	1,227.6
Other intangible assets, net	1,356.8	1,431.2
Deferred tax assets	1.1	1.0
Other assets	135.7	134.6
Total assets	4,516.4	4,621.2
Current liabilities:
Short-term borrowings and current maturities of long-term debt	7.9	20.9
Accounts payable	320.0	269.7
Accrued liabilities	258.9	271.2
Total current liabilities	586.8	561.8
Long-term debt, less current maturities	1,747.4	2,019.3
Pensions and other postretirement benefits	90.5	99.8
Deferred income taxes	279.3	237.5
Other liabilities	189.0	226.0
Total liabilities	2,893.0	3,144.4
Commitments and contingencies (Note 14)
Stockholders' equity:
Common stock, $0.01 par value; 1,000,000,000 shares authorized; 200,876,956 and 198,377,237 shares issued at September 30, 2018 and December 31, 2017, respectively	2.0	2.0
Capital in excess of par value	2,280.8	2,275.4
Accumulated deficit	(403.2)	(577.8)
Accumulated other comprehensive loss	(226.4)	(199.8)
Treasury stock at cost; 1,937,480 and 2,159,266 shares at September 30, 2018 and December 31, 2017, respectively	(29.8)	(23.0)
Total stockholders' equity	1,623.4	1,476.8
Total liabilities and stockholders' equity	$ 4,516.4	$ 4,621.2

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Current assets:
Accounts receivable, allowance for doubtful accounts	$ 19.1	$ 18.7
Property, plant and equipment, accumulated depreciation	$ 238.7	$ 203.8
Stockholders' equity:
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	1,000,000,000	1,000,000,000
Common stock, shares issued (in shares)	200,876,956	198,377,237
Treasury stock (in shares)	1,937,480	2,159,266

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) shares in Millions, $ in Millions	Common Stock [Member]	Capital in Excess of Par Value [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Loss [Member]		Treasury Stock [Member]	Total
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative-effect adjustment upon adoption of new accounting standard (ASU 2017-12) | ASU 2017-12 [Member]			$ (0.3)	$ 0.3	[1]
Balance at beginning of period at Dec. 31, 2017	$ 2.0	$ 2,275.4	(577.8)	(199.8)		$ (23.0)	$ 1,476.8
Balance at beginning of period (in shares) at Dec. 31, 2017	198.4
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation		9.0
Exercise of stock options	$ 0.0	6.3
Exercise of stock options (in shares)	0.8
Purchases of treasury stock						(11.1)
Share repurchase program						(5.6)
Issuance of common stock/treasury stock for stock-based compensation plans	$ 0.0	(9.9)				9.9
Issuance of common stock for stock-based compensation plans (in shares)	1.7
Net income attributable to Gardner Denver Holdings, Inc.			174.9				174.9
Foreign currency translation adjustments, net				(70.0)			(70.0)
Foreign currency gains, net				18.7			18.7
Unrecognized gains on cash flow hedges, net				20.5			20.5
Pension and other postretirement prior service cost and gain or loss, net				3.9			3.9
Balance at end of period at Sep. 30, 2018	$ 2.0	$ 2,280.8	$ (403.2)	$ (226.4)		$ (29.8)	$ 1,623.4
Balance at end of period (in shares) at Sep. 30, 2018	200.9

[1] All amounts are net of tax. Amounts in parentheses indicate debits.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash Flows From Operating Activities:
Net income (loss)	$ 174.9	$ (125.1)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of intangible assets	93.4	87.6
Depreciation in cost of sales	33.9	33.2
Depreciation in selling and administrative expenses	7.3	6.1
Stock-based compensation expense	6.1	166.0
Foreign currency transaction (gains) losses, net	(0.6)	6.3
Net (gain) loss on asset dispositions	(1.1)	2.0
Loss on extinguishment of debt	1.0	84.5
Deferred income taxes	27.5	(68.1)
Changes in assets and liabilities:
Receivables	10.5	(65.9)
Inventories	(44.7)	(36.4)
Accounts payable	57.2	39.8
Accrued liabilities	(34.1)	(19.8)
Other assets and liabilities, net	(33.0)	(26.3)
Net cash provided by operating activities	298.3	83.9
Cash Flows From Investing Activities:
Capital expenditures	(32.1)	(36.4)
Net cash paid in business combinations	(113.6)	(18.8)
Proceeds from the termination of derivatives	0.0	6.2
Disposals of property, plant and equipment	3.1	5.9
Net cash used in investing activities	(142.6)	(43.1)
Cash Flows From Financing Activities:
Principal payments on long-term debt	(262.4)	(2,872.2)
Premium paid on extinguishment of senior notes	0.0	(29.7)
Proceeds from long-term debt	0.0	2,010.7
Proceeds from the issuance of common stock, net of share issuance costs	0.0	893.3
Purchase of treasury stock	(16.7)	(2.6)
Proceeds from stock option exercises	6.3	0.0
Purchase of shares from noncontrolling interests	0.0	(5.2)
Payments of debt issuance costs	0.0	(2.9)
Other	0.0	0.4
Net cash used in financing activities	(272.8)	(8.2)
Effect of exchange rate changes on cash and cash equivalents	(7.2)	14.6
Net (decrease) increase in cash and cash equivalents	(124.3)	47.2
Cash and cash equivalents, beginning of period	393.3	255.8
Cash and cash equivalents, end of period	269.0	303.0
Supplemental Cash Flow Information
Cash paid for income taxes	80.8	47.4
Cash paid for interest	75.2	118.1
Capital expenditures in accounts payable	4.1	3.0
Expenditures directly related to our initial public offering in accounts payable	$ 0.0	$ 0.2

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Condensed Consolidated Financial Statements

9 Months Ended

Sep. 30, 2018

Condensed Consolidated Financial Statements [Abstract]

Condensed Consolidated Financial Statements

Note 1. Condensed Consolidated Financial Statements

Basis of Presentation

Gardner Denver Holdings, Inc. is a holding company whose operating subsidiaries are Gardner Denver, Inc. (“GDI”) and certain of GDI’s subsidiaries.  GDI is a diversified, global manufacturer of highly engineered, application-critical flow control products and provider of related aftermarket parts and services.  The accompanying condensed consolidated financial statements include the accounts of Gardner Denver Holdings, Inc. and its majority-owned subsidiaries (collectively referred to herein as “Gardner Denver” or the “Company”).  The financial information presented as of any date other than December 31, 2017 has been prepared from the books and records of the Company without audit.  The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information.  Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.  In the opinion of management, the condensed consolidated financial statements include all adjustments, consisting of adjustments associated with acquisition accounting and normal recurring adjustments, necessary for the fair presentation of such financial statements.  All intercompany transactions and accounts have been eliminated in consolidation.

The Company’s unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed with the Securities and Exchange Commission (“SEC”).

The results of operations for the interim periods ended September 30, 2018 are not necessarily indicative of the results to be expected for the full year.  The balance sheet as of December 31, 2017 has been derived from the Company’s audited financial statements as of that date but does not include all of the information and notes required by GAAP for complete financial statements.

In May 2017, the Company sold a total of 47,495,000 shares of common stock in an initial public offering of shares of common stock.  On November 15, 2017 and May 2, 2018, the Company completed secondary offerings of 25,300,000 shares and 30,533,478 shares respectively, of common stock held by affiliates of Kohlberg Kravis Roberts & Co. L.P. (“KKR”).  As a result of the May 2018 secondary offering, the Company is no longer considered a “controlled company” within the meaning of the corporate governance standards of the New York Stock Exchange (“NYSE”).  KKR currently owns 90,721,409 shares of common stock, or approximately 46% of the total outstanding common stock based on the number of shares outstanding as of September 30, 2018.

Prior Year Reclassification

In the first quarter of fiscal year 2018, the Company adopted the provisions of ASU 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”).  The reclassification of certain prior year amounts as a result of the adoption of ASU 2017-07 is detailed below in the section “Adopted Accounting Standard Updates” within this Note 1 “Condensed Consolidated Financial Statements.”

Adopted Accounting Standard Updates (“ASU”)

ASU 2014-09, Revenue from Contracts with Customers (Topic 606)

On January 1, 2018, the Company adopted Financial Accounting Standards Board (“FASB”) ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”) using the modified retrospective approach.  Under the modified retrospective approach, the Company is required to recognize the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of retained earnings as of January 1, 2018, the date of initial application.  The cumulative effect of initially applying ASC 606 was immaterial to the Condensed Consolidated Financial Statements.  Therefore, the Company did not record a cumulative transition adjustment.

In conjunction with the adoption of ASC 606, the Company updated its significant accounting policy related to revenue recognition disclosed in Note 1 “Summary of Significant Accounting Policies” of the Consolidated Financial Statements in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2017.  An overview of the Company’s revenue recognition policy under ASC 606 is included in Note 12 “Revenue from Contracts with Customers.”

Results for the three month and nine month periods ended September 30, 2018 are presented under ASC 606.  Prior periods are not adjusted and will continue to be reported in accordance with ASC 605 Revenue Recognition (“ASC 605”).  However, during fiscal year 2018, the Company is required to provide additional disclosures presenting the amount by which each 2018 financial statement line item was affected as a result of applying ASC 606 and an explanation of significant changes in order to present 2018 on a comparative basis under ASC 605.

The following table summarizes the impacts of adopting ASC 606 on the Company’s Condensed Consolidated Statements of Operations for the three month period ended September 30, 2018.

Condensed Consolidated Statements of Operations

	As Reported		Adjustments			Balance Without Adoption of ASC 606
Revenues	$	689.3	$	(8.7	)	$	680.6
Cost of sales		426.9		(5.4	)		421.5
Provision (benefit) for income taxes		22.6		(0.8	)		21.8
Net Income (Loss)		72.2		(2.5	)		69.7

The following table summarizes the impacts of adopting ASC 606 on the Company’s Condensed Consolidated Statements of Operations for the nine month period ended September 30, 2018.

Condensed Consolidated Statements of Operations

	As Reported		Adjustments			Balance Without Adoption of ASC 606
Revenues	$	1,977.1	$	(18.1	)	$	1,959.0
Cost of sales		1,233.6		(11.2	)		1,222.4
Provision (benefit) for income taxes		63.2		(1.8	)		61.4
Net Income (Loss)		174.9		(5.1	)		169.8

The following table summarizes the impacts of adopting ASC 606 on the Company’s Condensed Consolidated Balance Sheets as of September 30, 2018.

Condensed Consolidated Balance Sheets

	As Reported			Adjustments			Balance Without Adoption of ASC 606
Assets
Inventories	$	550.1		$	11.2		$	561.3
Other current assets(1)		63.4			(11.2	)		52.2
Liabilities and Stockholders' Equity
Accrued liabilities		258.9			5.1			264.0
Accumulated deficit		(403.2	)		(5.1	)		(408.3	)

⁽¹⁾ Adjustment represents “Contract asset.”  See Note 12 “Revenue from Contracts with Customers” for an explanation of the Contract assets account included in “Other current assets” in the Condensed Consolidated Balance Sheets.

ASU 2017-07 Compensation – Retirement Benefits (Topic 715) – Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost

The Company adopted FASB ASU 2017-07 on January 1, 2018, the adoption date.  The Company applied ASU 2017-07 retrospectively for the presentation of the service cost component and the other components of net periodic benefit cost in the income statement and prospectively for the capitalization of the service cost component of net periodic benefit cost in assets.  ASU 2017-07 allows the Company to use the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements.  Applying the practical expedient, the Company reclassified $0.1 million and $0.2 million of expenses from “Selling and administrative expenses” to “Other income, net” within the Condensed Consolidated Statements of Operations for the three month and nine month periods ended September 30, 2017.

ASU 2017-12 Derivatives and Hedging (Topic 815) – Targeted Improvements to Accounting for Hedging Activities

The Company early adopted FASB ASU 2017-12, Derivatives and Hedging (Topic 815) – Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”) on January 1, 2018, the adoption date, using the modified retrospective approach.  As of the adoption date, the Company was the fixed rate payor on 12 interest rate swap contracts that fixed the LIBOR-based index used to determine the interest rates charged on a total of $1,125.0 million of the Company’s LIBOR-based variable rate borrowings.  The Company recorded a cumulative-effect adjustment on the adoption date increasing the opening balance of the “Accumulated deficit” line of the Condensed Consolidated Balance Sheets by $0.3 million and decreasing the “Accumulated Other Comprehensive Loss” line of the Condensed Consolidated Balance Sheets by $0.3 million.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842).  The amendments in this update will replace most of the existing GAAP lease accounting guidance in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements.  The ASU is effective for public companies beginning in the first quarter of 2019.  The ASU requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach.  During March 2018, the FASB approved amendments to create an optional transition method that will provide an option to use the effective date of Topic 842 as the date of initial application of the transition.

The Company established an implementation team and selected a third party lease accounting software solution which will serve as a central repository of active leases and assist in the compliance with the new reporting requirements.  The implementation team has been reassessing business processes, drafting an internal policy to address the new standard, extracting lease data for inclusion in the new lease software, determining a process to identify and update the Company’s incremental borrowing rate and understanding the impact on disclosures.  The team is also determining which practical expedients to elect.  The Company is still finalizing its evaluation of the impact of the new lease standard on its condensed consolidated financial statements and expects to record right of use assets and lease liabilities for its operating leases on its condensed consolidated balance sheets.  The Company will adopt the new standard utilizing the optional transition method.

In March 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220).  The amendments in this update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act.  Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act and will improve the usefulness of information reported to financial statement users.  However, because the amendments only related to the reclassification of the income tax effects of the Tax Cuts and Jobs Act, the underlying guidance that requires the effect of a change in tax laws or rates be included in income from continuing operations is not affected.  The ASU is effective for public companies beginning in the first quarter of 2019.  The Company is currently assessing the impact of this ASU on its condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.  The amendments in this update eliminate, add and modify certain disclosure requirements for fair value measurements as part of its disclosure framework project.  The guidance is effective for public companies beginning in the first quarter of 2020.  Early adoption is permitted.  The Company is currently assessing the impact of this ASU on its consolidated financial statements and evaluating the timing of adoption.

In August 2018, the FASB issued ASU 2018-14, Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans.  The amendments in this eliminate, add and modify certain disclosure requirements for defined benefit pension plans.  The guidance is effective for public companies beginning with its annual report for fiscal year 2020.  Early adoption is permitted.  The Company is currently assessing the impact of this ASU on its consolidated financial statements and evaluating the timing of adoption.

In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40); Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.  The amendments in this update require implementation costs incurred by customers in cloud computing arrangements (i.e., hosting arrangements) to be capitalized under the same premises of authoritative guidance for internal-use software, and deferred over the noncancellable term of the cloud computing arrangement plus any option renewal periods that are reasonably certain to be exercised by the customer or for which the exercise is controlled by the service provider.  The Company is required to adopt this new guidance in the first quarter of 2020.  Early adoption is permitted.  The Company is currently assessing the impact of this ASU on its consolidated financial statements and evaluating the timing of adoption.

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Business Combinations

9 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

Business Combinations

Note 2. Business Combinations

Acquisition of PMI Pump Parts

On May 29, 2018, the Company acquired PMI Pump Parts (“PMI”), a leading manufacturer of plungers and other well service pump consumable products.  The Company acquired all of the assets and assumed certain liabilities of PMI for total consideration of $21.0 million, which consisted of payments to shareholders of $16.5 million, the retirement of PMI third-party debt at closing of $2.2 million, $0.1 million of other debt-like items, a $2.0 million promissory note and a $0.2 million holdback.  The promissory note and holdback are each expected to be paid by the end of the second quarter of 2019 and recorded in “Accrued liabilities.”  The revenues and operating income of PMI are included in the Company’s condensed consolidated financial statements from the acquisition date and are included in the Energy segment.  Goodwill resulting from this acquisition is deductible for tax purposes.

Acquisition of Runtech Systems Oy

On February 8, 2018, the Company acquired 100% of the stock of Runtech Systems Oy (“Runtech”) a leading global manufacturer of turbo vacuum technology systems and optimization solutions for industrial applications.  The Company acquired all of the assets and assumed certain liabilities of Runtech for total cash consideration of $94.9 million, net of cash acquired.  The revenues and operating income of Runtech are included in the Company’s consolidated financial statements from the acquisition date and are included in the Industrials segment.  The preliminary purchase price allocation resulted in the recording of $63.6 million of goodwill and $31.3 million of amortizable intangible assets as of the acquisition date.  None of the goodwill resulting from this acquisition is deductible for tax purposes.

Acquisition of LeROI Compressors

On June 5, 2017, the Company acquired 100% of the stock of LeROI Compressors (“LeROI”), a leading North American manufacturer of gas compression equipment and solutions for vapor recovery, biogas and other process and industrial applications.  The Company acquired all of the assets and assumed certain liabilities of LeROI for total cash consideration of $20.4 million, net of cash acquired.  Included in the cash consideration is an indemnity holdback of $1.9 million recorded in “Accrued liabilities” and expected to be paid by the end of 2021.  The revenues and operating income of LeROI are included in the Company’s condensed consolidated financial statements from the acquisition date and are included in the Industrials segment.  None of the goodwill resulting from this acquisition is deductible for tax purposes.

Acquisition of the Non-Controlling Interest in Tamrotor Kompressorit Oy

On March 3, 2017, the Company acquired the remaining 49% non-controlling interest of Tamrotor Kompressorit Oy (“Tamrotor”), a distributor of the Company’s Industrials segment air compression products.  The Company acquired the remaining interest in Tamrotor for total cash consideration of $5.2 million, consisting entirely of payments to the former shareholders.  Included in the cash consideration was a holdback of $0.5 million that was paid in the third quarter of 2017.  This transaction resulted in an increase to “Capital in excess of par value” of $2.3 million and an increase to “Accumulated other comprehensive loss” of $1.5 million in the Condensed Consolidated Balance Sheets.

Acquisition Revenues and Operating Income

The following table summarizes the revenue and operating income of these acquisitions for the periods presented subsequent to their date of acquisition.

	Three Month Periods Ended September 30,				Nine Month Periods Ended September 30,
	2018		2017		2018		2017
Revenue	$	25.3	$	5.9	$	63.1	$	7.9
Operating income		2.0		0.5		3.2		0.6

Pro forma information regarding these acquisitions have not been provided as they did not have a material impact on the Company’s consolidated results of operations individually or in the aggregate.

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Restructuring

9 Months Ended

Sep. 30, 2018

Restructuring [Abstract]

Restructuring

Note 3. Restructuring

Restructuring Programs 2014 to 2016

The Company announced a restructuring program in the Industrials segment in the third quarter of 2014 and that program was revised and expanded during the second quarter of 2016.  In 2016, the Company also announced restructuring programs impacting the Energy and Medical segments.  These restructuring programs were substantially completed as of December 31, 2017.  Through December 31, 2017, $48.0 million had been charged to expense through “Other operating expense, net” in the Condensed Consolidated Statements of Operations ($38.5 million for Industrials, $6.3 million for Energy and $3.2 million for Medical).  The Company does not anticipate any material future expense related to these restructuring programs and any remaining liabilities will be paid as contractually obligated.  The activity associated with these restructuring programs for the nine month period ended September 30, 2018 was not material.

The following table summarizes the activity associated with these restructuring programs for the nine month period ended September 30, 2017.

Balance as of December 31, 2016	$	20.9
Charged to expense - termination benefits		1.9
Charged to expense - other		3.0
Payments		(17.3	)
Other, net		1.0
Balance as of September 30, 2017	$	9.5

As of September 30, 2018, restructuring reserves of $1.7 million related to these programs were included in “Accrued liabilities” and restructuring reserves of $0.2 million are included in “Other liabilities” in the Condensed Consolidated Balance Sheets.  As of December 31, 2017, restructuring reserves of $6.5 million related to these programs were included in “Accrued liabilities” and restructuring reserves of $0.2 million were included in “Other liabilities” in the Condensed Consolidated Balance Sheets.

Restructuring Program 2018

The Company announced a restructuring program primarily involving workforce reductions in the third quarter of 2018.  In the three month period ended September 30, 2018, $5.4 million was charged to expense through “Other operating expense, net” in the Condensed Consolidated Statements of Operations ($3.7 million for Industrials and $1.7 million for Energy).  The Company expects further expense charges in the fourth quarter of 2018 related to these programs impacting the Industrials, Energy and Medical segments.

The following table summarizes the activity associated with this restructuring program for the nine month period ended September 30, 2018.

Balance as of December 31, 2017	$	-
Charged to expense - termination benefits		4.9
Charged to expense - other		0.5
Payments		(1.0	)
Other, net		-
Balance as of September 30, 2018	$	4.4

As of September 30, 2018, restructuring reserves of $4.4 million are included in “Accrued liabilities” in the Condensed Consolidated Balance Sheets.

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Inventories

9 Months Ended

Sep. 30, 2018

Inventories [Abstract]

Inventories

Note 4. Inventories

Inventories as of September 30, 2018 and December 31, 2017 consisted of the following.

	September 30, 2018		December 31, 2017
Raw materials, including parts and subassemblies	$	368.1	$	362.6
Work-in-process		84.6		57.9
Finished goods		84.0		60.6
		536.7		481.1
Excess of LIFO costs over FIFO costs		13.4		13.4
Inventories	$	550.1	$	494.5

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Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2018

Goodwill and Other Intangible Assets [Abstract]

Goodwill and Other Intangible Assets

Note 5. Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill attributable to each reportable segment for the nine month period ended September 30, 2018 is presented in the table below.

	Industrials			Energy			Medical			Total
Balance as of December 31, 2017	$	561.6		$	460.2		$	205.8		$	1,227.6
Acquisition		63.6			8.7			-			72.3
Foreign currency translation and other(1)		(16.7	)		(12.4	)		(2.4	)		(31.5	)
Balance as of September 30, 2018	$	608.5		$	456.5		$	203.4		$	1,268.4

⁽¹⁾ During the nine month period ended September 30, 2018, the Company recorded a decrease in goodwill of $0.2 million as a result of measurement period adjustments in the Industrials segment.

On May 29, 2018, the Company acquired PMI Pump Parts which is included in the Energy segment.  The excess of the purchase price over the estimated fair values of intangible assets, identifiable assets and assumed liabilities was recorded as goodwill.  As of September 30, 2018, the preliminary purchase price allocation resulted in a total of $8.7 million of goodwill.  The allocation of the purchase price is preliminary and subject to refinement based on final fair values of the identified assets acquired and liabilities assumed.

On February 8, 2018, the Company acquired Runtech which is included in the Industrials segment.  The excess of the purchase price over the estimated fair values of intangible assets, identifiable assets and assumed liabilities was recorded as goodwill.  As of September 30, 2018, the preliminary purchase price allocation resulted in a total of $63.6 million of goodwill.  The allocation of the purchase price is preliminary and subject to refinement based on final fair values of the identified assets acquired and liabilities assumed.

As of September 30, 2018, goodwill included $563.9 million of accumulated impairment losses within the Energy segment since the date of the transaction in which the Company was acquired by an affiliate of Kohlberg Kravis Roberts & Co. L.P. on July 30, 2013 (the “KKR Transaction”).  There were no goodwill impairment charges recorded during the nine month period ended September 30, 2018.

Other intangible assets as of September 30, 2018 and December 31, 2017 consisted of the following.

	September 30, 2018					December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer lists and relationships	$	1,209.9	$	(542.6	)	$	1,226.8	$	(473.0	)
Technology		21.9		(4.6	)		8.1		(4.0	)
Trademarks		37.1		(12.4	)		30.3		(10.6	)
Backlog		69.1		(68.0	)		65.5		(65.5	)
Other		57.3		(28.8	)		53.6		(23.5	)
Unamortized intangible assets:
Trademarks		617.9		-			623.5		-
Total other intangible assets	$	2,013.2	$	(656.4	)	$	2,007.8	$	(576.6	)

Amortization of intangible assets for the three and nine month periods ended September 30, 2018 and 2017 were as follows.

	Three Month Period Ended September 30,				Nine Month Period Ended September 30,
	2018		2017		2018		2017
Intangible asset amortization expense	$	31.0	$	29.5	$	93.4	$	87.6

Amortization of intangible assets is anticipated to be approximately $124.2 million annually in 2019 through 2023 based upon exchange rates as of September 30, 2018.

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Accrued Liabilities

9 Months Ended

Sep. 30, 2018

Accrued Liabilities [Abstract]

Accrued Liabilities

Note 6. Accrued Liabilities

Accrued liabilities as of September 30, 2018 and December 31, 2017 consisted of the following.

	September 30, 2018		December 31, 2017
Salaries, wages and related fringe benefits	$	67.7	$	97.3
Restructuring		6.4		6.5
Taxes		15.5		34.5
Contract liabilities(1)		90.5		42.7
Product warranty		24.5		22.3
Accrued interest		0.7		0.8
Other		53.6		67.1
Total accrued liabilities	$	258.9	$	271.2

⁽¹⁾ For purposes of comparability, “Advance payments on sales contracts” as of December 31, 2017 was reclassified to “Contract liabilities.”  See Note 12 “Revenue from Contracts with Customers” for an explanation of the Contract liabilities account included in “Accrued liabilities” in the Condensed Consolidated Balance Sheets.

A reconciliation of the changes in the accrued product warranty liability for the three and nine month periods ended September 30, 2018 and 2017 are as follows.

	Three Month Period Ended September 30, 2018			Three Month Period Ended September 30, 2017			Nine Month Period Ended September 30, 2018			Nine Month Period Ended September 30, 2017
Balance at beginning of period	$	23.9		$	21.7		$	22.3		$	21.7
Product warranty accruals		6.9			6.7			18.5			17.8
Settlements		(6.2	)		(5.0	)		(16.8	)		(17.1	)
Charged to other accounts (1)		(0.1	)		0.2			0.5			1.2
Balance at end of period	$	24.5		$	23.6		$	24.5		$	23.6

⁽¹⁾ Includes primarily the effects of foreign currency translation adjustments for the Company’s subsidiaries with functional currencies other than the USD, and changes in the accrual related to acquisitions.

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Pension and Other Postretirement Benefits

9 Months Ended

Sep. 30, 2018

Pension and Other Postretirement Benefits [Abstract]

Pension and Other Postretirement Benefits

Note 7. Pension and Other Postretirement Benefits

The following table summarizes the components of net periodic benefit cost for the Company’s defined benefit pension plans and other postretirement benefit plans recognized for the three and nine month periods ended September 30, 2018 and 2017.

	Pension Benefits												Other Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
	Three Month Period Ended September 30, 2018			Nine Month Period Ended September 30, 2018			Three Month Period Ended September 30, 2018			Nine Month Period Ended September 30, 2018			Three Month Period Ended September 30, 2018		Nine Month Period Ended September 30, 2018
Service cost	$	-		$	-		$	0.4		$	1.4		$	-	$	-
Interest cost		0.5			1.5			1.8			5.7			-		0.1
Expected return on plan assets		(1.2	)		(3.5	)		(2.8	)		(8.8	)		-		-
Recognition of:
Unrecognized prior service cost		-			-			-			-			-		-
Unrecognized net actuarial loss		-			-			0.5			1.4			-		-
	$	(0.7	)	$	(2.0	)	$	(0.1	)	$	(0.3	)	$	-	$	0.1

	Pension Benefits												Other Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
	Three Month Period Ended September 30, 2017			Nine Month Period Ended September 30, 2017			Three Month Period Ended September 30, 2017			Nine Month Period Ended September 30, 2017			Three Month Period Ended September 30, 2017		Nine Month Period Ended September 30, 2017
Service cost	$	-		$	-		$	0.5		$	1.4		$	-	$	-
Interest cost		0.6			1.7			2.0			5.8			-		0.1
Expected return on plan assets		(1.1	)		(3.3	)		(2.7	)		(7.7	)		-		-
Recognition of:
Unrecognized prior service cost		-			-			-			-			-		-
Unrecognized net actuarial loss		-			-			1.3			3.7			-		-
	$	(0.5	)	$	(1.6	)	$	1.1		$	3.2		$	-	$	0.1

The components of net periodic benefit cost other than the service cost component are included in “Other income, net” in the Condensed Consolidated Statements of Operations.

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Debt

9 Months Ended

Sep. 30, 2018

Debt [Abstract]

Debt

Note 8. Debt

The Company’s debt as of September 30, 2018 and December 31, 2017 is summarized as follows.

	September 30, 2018			December 31, 2017
Short-term borrowings	$	-		$	-
Long-term debt
Revolving credit facility, due 2020	$	-		$	-
Receivables financing agreement, due 2020		-			-
Term loan denominated in U.S. dollars, due 2024 (1)		1,025.9			1,282.3
Term loan denominated in Euros, due 2024 (2)		706.7			735.9
Capitalized leases and other long-term debt		26.4			26.9
Unamortized debt issuance costs		(3.7	)		(4.9	)
Total long-term debt, net, including current maturities		1,755.3			2,040.2
Current maturities of long-term debt		7.9			20.9
Total long-term debt, net	$	1,747.4		$	2,019.3

⁽¹⁾ As of September 30, 2018, the applicable interest rate was 4.99% and the weighted-average rate was 4.78% for the nine month period ended September 30, 2018.

⁽²⁾ As of September 30, 2018, the applicable interest rate was 3.00% and the weighted-average rate was 3.00% for the nine month period ended September 30, 2018.

Senior Secured Credit Facilities

In connection with the KKR Transaction, the Company entered into a senior secured credit agreement with UBS AG, Stamford Branch, as administrative agent, and other agents and lenders party thereto (the “Senior Secured Credit Facilities”) on July 30, 2013.

The Senior Secured Credit Facilities entered into on July 30, 2013 provided senior secured financing in the equivalent of approximately $2,825.0 million, consisting of: (i) a senior secured term loan facility (the “Original Dollar Term Loan Facility”) in an aggregate principal amount of $1,900.0 million; (ii) a senior secured term loan facility (the “Original Euro Term Loan Facility,” together with the Original Dollar Term Loan Facility, the “Term Loan Facilities”) in an aggregate principal amount of €400.0 million; and (iii) a senior secured revolving credit facility (the “Revolving Credit Facility”) in an aggregate principal amount of $400.0 million available to be drawn in U.S. dollars (“USD”), Euros (“EUR”), Great British Pounds (“GBP”) and other reasonably acceptable foreign currencies, subject to certain sublimits for the foreign currencies.

The Company entered into Amendment No. 1 to the Senior Secured Credit Facilities with UBS AG, Stamford Branch, as administrative agent, and the lenders and other parties thereto on March 4, 2016 (“Amendment No.1”) and Amendment No. 2 to the Senior Secured Credit Facilities with UBS AG, Stamford Branch, as administrative agent, and other agents, lenders and parties thereto on August 17, 2017 (“Amendment No. 2”).

Amendment No. 1 reduced the aggregate principal borrowing capacity of the Revolving Credit Facility by $40.0 million to $360.0 million, extended the term of the Revolving Credit Facility to April 30, 2020 with respect to consenting lenders and provided for customary bail-in provisions to address certain European regulatory requirements.

Amendment No. 2 refinanced the Original Dollar Term Loan Facility with a replacement $1,285.5 million senior secured U.S. dollar term loan facility (the ‘‘Dollar Term Loan Facility’’) and the Original Euro Term Loan Facility with a replacement €615.0 million senior secured euro term loan facility (the ‘‘Euro Term Loan Facility’’).  Further the maturity for both term loan facilities was extended to July 30, 2024 and LIBOR Floor was reduced from 1.0% to 0.0%.

On July 30, 2018, the Revolving Credit Facility principal borrowing capacity decreased to $269.9 million resulting from the maturity of the tranches of the Revolving Credit Facility which were owned by lenders that elected not to modify the original Revolving Credit Facility maturity date.

Any principal amounts outstanding as of April 30, 2020 will be due at that time and required to be paid in full.

The borrower of the Dollar Term Loan Facility and the Euro Term Loan Facility is Gardner Denver, Inc.  Prior to the Company entering into Amendment No. 1, GD German Holdings II GmbH became an additional borrower and successor in interest to Gardner Denver Holdings GmbH & Co. KG. GD German Holdings II GmbH, GD First (UK) Limited and Gardner Denver, Inc. are the listed borrowers under the Revolving Credit Facility. The Revolving Credit Facility includes borrowing capacity available for letters of credit up to $200.0 million and for borrowings on same-day notice, referred to as swingline loans. As of September 30, 2018, the Company had $6.3 million of outstanding letters of credit under the Revolving Credit Facility and unused availability of $263.6 million.

The Senior Secured Credit Facilities provide that the Company will have the right at any time to request incremental term loans and/or revolving commitments in an aggregate principal amount of up to (i) if as of the last day of the most recently ended test period the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (as defined in the Senior Secured Credit Facilities) is equal to or less than 5.50 to 1.00, $250.0 million plus (ii) voluntary prepayments and voluntary commitment reductions of the Senior Secured Credit Facilities prior to the date of any such incurrence plus (iii) an additional amount if, after giving effect to the incurrence of such additional amount, the Company does not exceed a Consolidated Senior Secured Debt to Consolidated EBITDA Ratio of 4.50 to 1.00. The lenders under the Senior Secured Credit Facilities are not under any obligation to provide any such incremental commitments or loans, and any such addition of, or increase in commitments or loans, will be subject to certain customary conditions.

Interest Rate and Fees

Borrowings under the Dollar Term Loan Facility, the Euro Term Loan Facility and the Revolving Credit Facility bear interest at a rate equal to, at the Company’s option, either (a) the greater of LIBOR for the relevant interest period or 0.00% per annum, in each case adjusted for statutory reserve requirements, plus an applicable margin or (b) a base rate (the ‘‘Base Rate’’) equal to the highest of (1) the rate of interest publicly announced by the administrative agent as its prime rate in effect at its principal office in Stamford, Connecticut, (2) the federal funds effective rate plus 0.50% and (3) LIBOR for an interest period of one month, adjusted for statutory reserve requirements, plus 1.00%, in each case, plus an applicable margin. The applicable margin for (i) the Dollar Term Loan Facility is 2.75% for LIBOR loans and 1.75% for Base Rate loans, (ii) the Revolving Credit Facility is 2.75% for LIBOR loans and 1.75% for Base Rate loans and (iii) the Euro Term Loan is 3.00% for LIBOR loans.

The applicable margins under the Revolving Credit Facility may decrease based upon the Company’s achievement of certain Consolidated Senior Secured Debt to Consolidated EBITDA Ratios. In addition to paying interest on outstanding principal under the Senior Secured Credit Facilities, the Company is required to pay a commitment fee of 0.50% per annum to the lenders under the Revolving Credit Facility in respect of the unutilized commitments thereunder. The commitment fee rate was reduced to 0.375% because the Company’s Consolidated Senior Secured Debt to Consolidated EBITDA Ratio is less than or equal to 3.0 to 1.0. The Company must also pay customary letter of credit fees.

Prepayments

The Senior Secured Credit Facilities require the Company to prepay outstanding term loans, subject to certain exceptions, with: (i) 50% of annual excess cash flow (as defined in the Senior Secured Credit Facilities) commencing with the fiscal year ended December 31, 2014 (which percentage will be reduced to 25% if the Company’s  Secured Debt to Consolidated EBITDA Ratio (as defined in the Senior Secured Credit Facilities) is less than or equal to 3.50 to 1.00 but greater than 3.00 to 1.00, and which prepayment will not be required if the Secured Debt to Consolidated EBITDA Ratio is less than or equal to 3.00 to 1.00); (ii) 100% of the net cash proceeds of non-ordinary course asset sales or other dispositions of property, subject to reinvestment rights; and (iii) 100% of the net cash proceeds of any incurrence of debt, other than proceeds from debt permitted under the Senior Secured Credit Facilities.

The foregoing mandatory prepayments will be applied to the scheduled installments of principal of the Term Loan Facilities in direct order of maturity.

Subject to the following sentence, the Company may voluntarily repay outstanding loans under the Senior Secured Credit Facilities at any time without premium or penalty, subject to certain customary conditions, including reimbursements of the lenders’ redeployment costs actually incurred in the case of a prepayment of LIBOR borrowings other than on the last day of the relevant interest period.

Amortization and Final Maturity

The Dollar Term Loan Facility amortizes in equal quarterly installments in aggregate annual amounts equal to 1.00% of the original principal amount of the Dollar Term Loan Facility, with the balance being payable on July 30, 2024.  In June 2018 and September 2018, the Company used excess cash to repay $100.0 million and $150.0 million, respectively, of principal on outstanding borrowings under the Dollar Term Loan Facility.  In June 2018, the principal prepayment was first applied to the quarterly installments with the remaining balance used to reduce the balance due on July 30, 2024.  As a result of the June 2018 prepayment, the Company is no longer subject to mandatory quarterly principal installment payments on the Dollar Term Loan Facility.  The prepayments resulted in the write-off of unamortized debt issuance costs of $0.3 million and $0.4 million for the three month and nine month periods ended September 30, 2018, included in the “Loss on Debt Extinguishment” line of the Condensed Consolidated Statements of Operations.

The Euro Term Loan Facility includes repayments in equal quarterly installments in aggregate annual amounts equal to 1.00% of the original principal amount of the Euro Term Loan Facility, with the balance being payable on July 30, 2024.

Amendment No. 1 reduced the minimum aggregate principal amount for extension amendments to the facilities from $50.0 million to $35.0 million.

Guarantee and Security

All obligations of the borrowers under the Senior Secured Credit Facilities are unconditionally guaranteed by the Company and all of its material, wholly-owned U.S. restricted subsidiaries, with customary exceptions including where providing such guarantees are not permitted by law, regulation or contract or would result in adverse tax consequences.

All obligations of the borrowers under the Senior Secured Credit Facilities, and the guarantees of such obligations, are secured, subject to permitted liens and other exceptions, by substantially all of the assets of the borrowers and each guarantor, including but not limited to: (i) a perfected pledge of the capital stock issued by the borrowers and each subsidiary guarantor and (ii) perfected security interests in substantially all other tangible and intangible assets of the borrowers and the guarantors (subject to certain exceptions and exclusions). The obligations of the non-U.S. borrowers are secured by certain assets in jurisdictions outside of the United States.

Certain Covenants and Events of Default

The Senior Secured Credit Facilities contain a number of covenants that, among other things, restrict, subject to certain exceptions, the Company’s ability to: incur additional indebtedness and guarantee indebtedness; create or incur liens; engage in mergers or consolidations; sell, transfer or otherwise dispose of assets; create limitations on subsidiary distributions; pay dividends and distributions or repurchase its own capital stock; and make investments, loans or advances, prepayments of junior financings, or other restricted payments. In addition, certain restricted payments constituting dividends or distributions (subject to certain exceptions) are subject to compliance with a Consolidated Total Debt to Consolidated EBITDA Ratio (as defined in the Senior Secured Credit Facilities) of 5.00 to 1.00. Investments in unrestricted subsidiaries are permitted up to an aggregate amount that does not exceed the greater of $100.0 million or 25% of Consolidated EBITDA.

The Revolving Credit Facility also requires the Company’s Consolidated Senior Secured Debt to Consolidated EBITDA Ratio to not exceed 7.50 to 1.00 for each fiscal quarter when outstanding revolving credit loans and swingline loans plus non-cash collateralized letters of credit under the Revolving Credit Facility (excluding (i) letters of credit in an aggregate amount not to exceed $80.0 million existing on the date of the closing of the Senior Secured Credit Facilities and any extensions thereof, replacement letters of credit or letters of credit issued in lieu thereof, in each case, to the extent the face amount of such letters of credit is not increased above the face amount of the letter of credit being extended, replaced or substituted and (ii) other non-cash collateralized letters of credit in an aggregate amount not to exceed $25.0 million, provided that the aggregate amount of non-cash collateralized letters of credit outstanding excluded pursuant to this provision shall not exceed $50.0 million) exceed $120.0 million.

The Senior Secured Credit Facilities also contain certain customary affirmative covenants and events of default, including a change of control.

Receivables Financing Agreement

In May 2016, the Company entered into the Receivables Financing Agreement, providing for aggregated borrowing of up to $75.0 million governed by a borrowing base. The Receivables Financing Agreement provides for a lower cost alternative in the issuance of letters of credit with the remaining unused capacity providing additional liquidity.  On June 30, 2017, the Company signed the first amendment of the Receivables Financing Agreement which increased the aggregated borrowing capacity by $50.0 million to $125.0 million governed by a borrowing base and extended the term to June 30, 2020.  The Receivables Financing Agreement terminates on June 30, 2020, unless terminated earlier pursuant to its terms.  As of September 30, 2018, the Company had no outstanding borrowings under the Receivables Financing Agreement and $27.3 million of letters of credit outstanding.  As of September 30, 2018 there was $81.4 million of capacity available under the Receivables Financing Agreement.

Borrowings under the Receivables Financing Agreement accrue interest at a reserve-adjusted LIBOR or a base rate, plus 1.6%. Letters of credit accrue interest at 1.6%.  The Company may prepay borrowings or letters of credit or draw on the Receivables Financing Agreement upon one business day prior written notice and may terminate the Receivables Financing Agreement with 15 days’ prior written notice.

As part of the Receivables Financing Agreement, eligible accounts receivable of certain of the Company’s subsidiaries are sold to a wholly owned “bankruptcy remote” special purpose vehicle (“SPV”). The SPV pledges the receivables as security for loans and letters of credit. The SPV is included in the Company’s consolidated financial statements and therefore, the accounts receivable owned by it are included in the Company’s Condensed Consolidated Balance Sheets. However, the accounts receivable owned by the SPV are separate and distinct from the Company’s other assets and are not available to the Company’s other creditors should we become insolvent.

The Receivables Financing Agreement contains various customary representations and warranties and covenants, and default provisions which provide for the termination and acceleration of the commitments and loans under the agreement in circumstances including, but not limited to, failure to make payments when due, breach of representations, warranties or covenants, certain insolvency events or failure to maintain the security interest in the trade receivables, a change in control and defaults under other material indebtedness.

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2018

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 9. Stock-Based Compensation

The Company has outstanding stock-based compensation awards granted under the 2013 Stock Incentive Plan (“2013 Plan”) and the 2017 Omnibus Incentive Plan (“2017 Plan”) as described in Note 15, “Stock-Based Compensation” of the Consolidated Financial Statements in its annual report on Form 10-K for the fiscal year ended December 31, 2017.

Prior to the Company’s initial public offering in May 2017, the Company had certain repurchase rights on stock acquired through the exercise of a stock option that created an implicit service period and created a condition in which an optionee may not receive the economic benefits of the option until the repurchase rights are eliminated.  The repurchase rights creating the implicit service period were eliminated at the earlier of an initial public offering or change of control event.  Before the elimination of the repurchase rights, because an initial public offering or change of control were not probable of occurring, no compensation expense was recorded for equity awards.  The Company recognized a liability for compensation expense measured at intrinsic value when it was probable that an employee would receive benefits under the terms of the plan due to the termination of employment.

Under the terms of the 2013 Plan, concurrent with the initial public offering, the Company no longer retains repurchase rights on stock acquired through the exercise of a stock option and the implicit service period was eliminated on outstanding stock options.

In the three and nine month periods ended September 30, 2017, the Company recognized stock-based compensation expense of approximately $7.8 million and $69.2 million, respectively.  The Company recognized stock-based compensation expense of approximately $0.9 million and $6.1 million for the three and nine month periods ended September 30, 2018, respectively.  These costs are included in “Other operating expense, net” in the Condensed Consolidated Statements of Operations.

The $6.1 million of stock-based compensation expense for the nine month period ended September 30, 2018 included expense for modifications of equity awards for certain former employees of $3.8 million and expense for equity awards granted under the 2013 Plan and 2017 Plan of $5.3 million reduced by a benefit for a reduction in the liability for stock appreciation rights (“SAR”) of $3.0 million.

The $3.8 million stock-based compensation expense for modifications for the nine month period ended September 30, 2018 provided continued vesting through scheduled vesting dates and extended expiration dates for certain former employees.  The incremental stock-based compensation was determined using the Black-Scholes option pricing model based on assumptions which included expected lives of 1.0 to 1.3 years, a risk-free rate of 2.0%, assumed volatility of 26.8% to 27.3% and an expected dividend rate of 0.0%.

As of September 30, 2018, there was $22.8 million of total unrecognized compensation expense related to outstanding stock options and restricted stock awards.

SARs, granted under the 2013 Plan are expected to be settled in cash and are accounted for as liability awards.  As of September 30, 2018, a liability of approximately $13.8 million for SARs was included in “Accrued liabilities” in the Condensed Consolidated Balance Sheets.

Stock Option Awards

The following assumptions were used to estimate the fair value of options granted (excluding previously disclosed modified awards) during the nine month periods ended September 30, 2018 and 2017 using the Black-Scholes option-pricing model.

	Nine Month Period Ended September 30, 2018			Nine Month Period Ended September 30, 2017
Assumptions:
Expected life of options (in years)		7.0 - 7.5			5.0 - 6.3
Risk-free interest rate		2.9% - 3.0	%		1.9% - 2.1	%
Assumed volatility		34.4 - 35.4			41.2 - 45.8	%
Expected dividend rate		0.0	%		0.0	%

A summary of the Company’s stock option (including SARs) activity for the nine month period ended September 30, 2018 is presented in the following table (underlying shares in thousands).

	Shares			Weighted-Average Exercise Price (per share)
Outstanding at December 31, 2017		12,834		$	9.54
Granted		848		$	31.74
Exercised or settled		(752	)	$	8.36
Forfeited		(433	)	$	16.21
Outstanding at September 30, 2018		12,497		$	10.88
Vested at September 30, 2018		8,612		$	9.03

Restricted Stock Unit Awards

A summary of the Company’s restricted stock unit activity for the nine month period ended September 30, 2018 is presented in the following table (underlying shares in thousands).

	Shares			Weighted-Average Grant-Date Fair Value
Non-vested as of December 31, 2017		-		$	-
Granted		365		$	31.84
Vested		-		$	-
Forfeited		(10	)	$	32.06
Non-vested as of September 30, 2018		355		$	31.83

Deferred Stock Units

Concurrent with the Company’s initial public offering in May of 2017, the Company’s Board authorized the grant of 5.5 million deferred stock units (“DSU”) to all permanent employees that had not previously received stock-based awards under the 2013 Plan.  The DSUs vested immediately upon grant, however contained restrictions such that the employee may not sell or otherwise realize the economic benefits of the award until certain dates through April 2019.  $2.0 million and $96.8 million of compensation expense for the DSU awards was recognized in the three month and nine month periods ended September 30, 2017, respectively, and included in “Other operating expense, net” in the Condensed Consolidated Statements of Operations.

As of the date of the grant, the fair value of a DSU was determined to be $17.20 assuming a share price at the pricing date of the initial public offering of $20.00 and a discount for lack of marketability commensurate with the period of the sale restrictions.  The Company estimated the fair value of DSUs at the time of grant using the Finnerty discount for lack of marketability pricing model.  The model assumed a holding restriction period of 1.42 years and volatility of 51.5%.

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Accumulated Other Comprehensive (Loss) Income

9 Months Ended

Sep. 30, 2018

Accumulated Other Comprehensive (Loss) Income [Abstract]

Accumulated Other Comprehensive (Loss) Income

Note 10. Accumulated Other Comprehensive (Loss) Income

The Company’s other comprehensive (loss) income consists of (i) unrealized foreign currency net gains and losses on the translation of the assets and liabilities of its foreign operations; (ii) realized and unrealized foreign currency gains and losses on intercompany notes of a long-term nature and certain hedges of net investments in foreign operations, net of income taxes; (iii) unrealized gains and losses on cash flow hedges (consisting of interest rate swaps), net of income taxes; and (iv) pension and other postretirement prior service cost and actuarial gains or losses, net of income taxes.  The before tax income (loss) and related income tax effect are as follows.

	For the Three Month Period Ended September 30, 2018									For the Nine Month Period Ended September 30, 2018
	Before-Tax Amount			Tax (Expense) or Benefit			Net of Tax Amount			Before-Tax Amount			Tax (Expense) or Benefit			Net of Tax Amount
Foreign currency translation adjustments, net	$	(21.9	)	$	-		$	(21.9	)	$	(70.0	)	$	-		$	(70.0	)
Foreign currency gains, net		4.7			(1.1	)		3.6			24.4			(5.7	)		18.7
Unrecognized gains on cash flow hedges, net		5.8			(1.4	)		4.4			27.1			(6.6	)		20.5
Pension and other postretirement benefit prior service cost and gain or loss, net		1.0			(0.1	)		0.9			3.0			0.9			3.9
Other comprehensive loss	$	(10.4	)	$	(2.6	)	$	(13.0	)	$	(15.5	)	$	(11.4	)	$	(26.9	)

	For the Three Month Period Ended September 30, 2017									For the Nine Month Period Ended September 30, 2017
	Before-Tax Amount			Tax (Expense) or Benefit			Net of Tax Amount			Before-Tax Amount			Tax (Expense) or Benefit			Net of Tax Amount
Foreign currency translation adjustments, net	$	41.5		$	-		$	41.5		$	131.4		$	-		$	131.4
Foreign currency losses, net		(23.5	)		8.7			(14.8	)		(71.2	)		26.9			(44.3	)
Unrecognized gains (losses) on cash flow hedges, net		5.5			(1.5	)		4.0			8.9			(3.4	)		5.5
Pension and other postretirement benefit prior service cost and gain or loss, net		(1.1	)		0.5			(0.6	)		(3.4	)		1.5			(1.9	)
Other comprehensive income	$	22.4		$	7.7		$	30.1		$	65.7		$	25.0		$	90.7

Changes in accumulated other comprehensive (loss) income by component for the nine month periods ended September 30, 2018 and 2017 are presented in the following tables⁽¹⁾:

	Cumulative Currency Translation Adjustment			Foreign Currency Gains and (Losses)		Unrealized (Losses) Gains on Cash Flow Hedges			Pension and Postretirement Benefit Plans			Total
Balance as of December 31, 2017	$	(166.6	)	$	37.0	$	(29.8	)	$	(40.4	)	$	(199.8	)
Other comprehensive (loss) income before reclassifications		(70.0	)		18.7		11.5			2.8			(37.0	)
Amounts reclassified from accumulated other comprehensive (loss) income		-			-		9.0			1.1			10.1
Other comprehensive (loss) income		(70.0	)		18.7		20.5			3.9			(26.9	)
Cumulative effect adjustment upon adoption of new accounting standard (ASU 2017-12)		-			-		0.3			-			0.3
Balance as of September 30, 2018	$	(236.6	)	$	55.7	$	(9.0	)	$	(36.5	)	$	(226.4	)

	Cumulative Currency Translation Adjustment			Foreign Currency Gains and (Losses)			Unrealized (Losses) Gains on Cash Flow Hedges			Pension and Postretirement Benefit Plans			Total
Balance as of December 31, 2016	$	(324.2	)	$	88.6		$	(42.2	)	$	(64.6	)	$	(342.4	)
Other comprehensive income (loss) before reclassifications		131.4			(44.3	)		(3.1	)		(4.2	)		79.8
Amounts reclassified from accumulated other comprehensive (loss) income		-			-			8.6			2.3			10.9
Other comprehensive income (loss)		131.4			(44.3	)		5.5			(1.9	)		90.7
Balance as of September 30, 2017	$	(192.8	)	$	44.3		$	(36.7	)	$	(66.5	)	$	(251.7	)

⁽¹⁾ All amounts are net of tax.  Amounts in parentheses indicate debits.

Reclassifications out of accumulated other comprehensive (loss) income for the nine month periods ended September 30, 2018 and 2017 are presented in the following table.

Amount Reclassified from Accumulated Other Comprehensive (Loss) Income
Details about Accumulated Other Comprehensive (Loss) Income Components	For the Nine Month Period Ended September 30, 2018			For the Nine Month Period Ended September 30, 2017			Affected Line in the Statement Where Net Income is Presented
Loss on cash flow hedges
Interest rate swaps	$	11.8		$	13.9		Interest expense
		11.8			13.9		Total before tax
		(2.8	)		(5.3	)	Benefit for income taxes
	$	9.0		$	8.6		Net of tax
Amortization of defined benefit pension and other postretirement benefit items	$	1.4		$	3.7		(1)
		1.4			3.7		Total before tax
		(0.3	)		(1.4	)	Benefit for income taxes
	$	1.1		$	2.3		Net of tax
Total reclassifications for the period	$	10.1		$	10.9		Net of tax

⁽¹⁾ These components are included in the computation of net periodic benefit cost.  See Note 7 “Pension and Other Postretirement Benefits” for additional details.

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Hedging Activities and Fair Value Measurements

9 Months Ended

Sep. 30, 2018

Hedging Activities and Fair Value Measurements [Abstract]

Hedging Activities and Fair Value Measurements

Note 11. Hedging Activities and Fair Value Measurements

Hedging Activities

The Company is exposed to certain market risks during the normal course of its business arising from adverse changes in interest rates and foreign currency exchange rates.  The Company selectively uses derivative financial instruments (“derivatives”), including foreign currency forward contracts and interest rate swaps, to manage the risks from fluctuations in foreign currency exchange rates and interest rates, respectively.  The Company does not purchase or hold derivatives for trading or speculative purposes.  Fluctuations in interest rates and foreign currency exchange rates can be volatile, and the Company’s risk management activities do not totally eliminate these risks.  Consequently, these fluctuations could have a significant effect on the Company’s financial results.

The Company’s exposure to interest rate risk results primarily from its variable-rate borrowings.  The Company manages its debt centrally, considering tax consequences and its overall financing strategies.  The Company manages its exposure to interest rate risk by maintaining a mixture of fixed and variable rate debt and, from time to time, using pay-fixed interest rate swaps as cash flow hedges of variable rate debt in order to adjust the relative fixed and variable proportions.

A substantial portion of the Company’s operations is conducted by its subsidiaries outside of the United States in currencies other than the USD.  Almost all of the Company’s non-U.S. subsidiaries conduct their business primarily in their local currencies, which are also their functional currencies. Other than the USD, the EUR, GBP, and Chinese Yuan are the principal currencies in which the Company and its subsidiaries enter into transactions.  The Company is exposed to the impacts of changes in foreign currency exchange rates on the translation of its non-U.S. subsidiaries’ assets, liabilities and earnings into USD.  The Company has certain U.S. subsidiaries borrow in currencies other than the USD.

The Company and its subsidiaries are also subject to the risk that arises when they, from time to time, enter into transactions in currencies other than their functional currency.  To mitigate this risk, the Company and its subsidiaries typically settle intercompany trading balances monthly. The Company also selectively uses forward currency contracts to manage this risk. These contracts for the sale or purchase of European and other currencies generally mature within one year.

Derivative Instruments

The following table summarizes the notional amounts, fair values and classification of the Company’s outstanding derivatives by risk category and instrument type within the Condensed Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017.

	September 30, 2018
	Derivative Classification	Notional Amount (1)		Fair Value (1) Other Current Assets		Fair Value (1) Other Assets		Fair Value (1) Accrued Liabilities		Fair Value (1) Other Liabilities
Derivatives Designated as Hedging Instruments
Interest rate swap contracts	Cash Flow	$	1,025.0	$	-	$	-	$	3.4	$	14.2
Derivatives Not Designated as Hedging Instruments
Foreign currency forwards	Fair Value	$	26.5	$	-	$	-	$	0.3	$	-
	December 31, 2017
	Derivative Classification	Notional Amount (1)		Fair Value (1) Other Current Assets		Fair Value (1) Other Assets		Fair Value (1) Accrued Liabilities		Fair Value (1) Other Liabilities
Derivatives Designated as Hedging Instruments
Interest rate swap contracts	Cash Flow	$	1,125.0	$	-	$	-	$	16.1	$	30.6
Derivatives Not Designated as Hedging Instruments
Foreign currency forwards	Fair Value	$	94.4	$	-	$	-	$	1.2	$	-

⁽¹⁾ Notional amounts represent the gross contract amounts of the outstanding derivatives excluding the total notional amount of positions that have been effectively closed through offsetting positions.  The net gains and net losses associated with positions that have been effectively closed through offsetting positions but not yet settled are included in the asset and liability derivatives fair value columns, respectively.

Gains and losses on derivatives designated as cash flow hedges included in the Condensed Consolidated Statements of Comprehensive (Loss) Income for the three and nine month periods ended September 30, 2018 and 2017, are as presented in the table below.  See Note 1 “Condensed Consolidated Financial Statements” for a discussion of the adoption of ASU 2017-12.

	For the Three Month Periods Ended September 30,						For the Nine Month Periods Ended September 30,
	2018			2017			2018			2017
Interest rate swap contracts
Gain (loss) recognized in AOCI on derivatives	$	1.8		$	1.4		$	15.2		$	(4.9	)
Loss reclassified from AOCI into income (effective portion)(1)		(3.3	)		(4.1	)		(11.2	)		(13.9	)
Loss reclassified from AOCI into income (missed forecast)(2)		(0.6	)		-			(0.6	)		-

⁽¹⁾ Losses on derivatives reclassified from accumulated other comprehensive income (“AOCI”) into income (effective portion) were included in “Interest expense” in the Condensed Consolidated Statements of Operations, the same income statement line item as the earnings effect of the hedged item.

⁽²⁾ During the three month period ended September 30, 2018, the Company used excess cash to pay down $150.0 million of its Dollar Term Loan Facility.  Due to this unforecasted pay down of debt, the Company paid $2.7 million in the amendment of the interest rate swap contracts to reflect the updated forecasted cash flows.  The updated forecasts caused certain hedged items to be deemed probable of not occurring in the future and thus, the Company accelerated the release of AOCI related to those hedged items.  Losses reclassified from AOCI into income (missed forecast) were included in “Loss on extinguishment of debt” in the Condensed Consolidated Statements of Operations.

As of September 30, 2018, the Company is the fixed rate payor on 11 interest rate swap contracts that effectively fix the LIBOR-based index used to determine the interest rates charged on a total of $1,025.0 million of the Company’s LIBOR-based variable rate borrowings.  These contracts carry fixed rates ranging from 3.3% to 4.3% and have expiration dates ranging from 2018 to 2020.  These swap agreements qualify as hedging instruments and have been designated as cash flow hedges of forecasted LIBOR-based interest payments.  Based on LIBOR-based swap yield curves as of September 30, 2018, the Company expects to reclassify losses of $13.3 million out of AOCI into earnings during the next 12 months.  The Company’s LIBOR-based variable rate borrowings outstanding as of September 30, 2018 were $1,025.9 million and €608.9 million.

The Company had two foreign currency forward contracts outstanding as of September 30, 2018 with notional amounts of $9.3 million and $17.2 million. These contracts are used to hedge the change in fair value of recognized foreign currency denominated assets or liabilities caused by changes in currency exchange rates.  The changes in the fair value of these contracts generally offset the changes in the fair value of a corresponding amount of the hedged items, both of which are included in the “Other operating expense, net” line on the face of the Condensed Consolidated Statements of Operations.  The Company’s foreign currency forward contracts are subject to master netting arrangements or agreements between the Company and each counterparty for the net settlement of all contracts through a single payment in a single currency in the event of default on or termination of any one contract with that certain counterparty.  It is the Company’s practice to recognize the gross amounts in the Condensed Consolidated Balance Sheets.  The amount available to be netted is not material.

The Company’s (losses) gains on derivative instruments not designated as accounting hedges and total net foreign currency (losses) gains for the three and nine month periods ended September 30, 2018 and 2017 were as follows.

	For the Three Month Periods Ended September 30,						For the Nine Month Periods Ended September 30,
	2018			2017			2018		2017
Foreign currency forward contracts (losses) gains	$	(0.4	)	$	(1.8	)	$	5.8	$	(6.7	)
Total foreign currency transaction gains (losses), net		0.8			(1.7	)		0.6		(6.3	)

The Company has a significant investment in consolidated subsidiaries with functional currencies other than the USD, particularly the EUR.  The Company designated its Original Euro Term Loan as a hedge of the Company’s net investment in subsidiaries with EUR functional currencies in 2017 until it was extinguished and replaced on August 17, 2017 by a €615.0 million Euro Term Loan, further described in Note 8 “Debt.”  On August 17, 2017, the Company designated the €615.0 million Euro Term Loan as a hedge of the Company’s net investment in subsidiaries with EUR functional currencies.  As of September 30, 2018, the Euro Term Loan of €608.9 million remained designated.

For the period from January 1, 2017 to August 16, 2017, the Company designated two cross currency interest rate swaps, each with a USD notional amount of $100.0 million as hedges of its net investment in EUR functional subsidiaries.  Both cross currency interest rate swaps were terminated on August 16, 2017.  The losses and gains from the change in the fair value of the designated net investment hedges were recorded through other comprehensive income.  The recorded Accumulated Other Comprehensive (Loss) Income at the termination of the cross currency interest rate swaps will remain in Accumulated Other Comprehensive (Loss) Income until there is a substantial liquidation of the Company’s net investment in subsidiaries with EUR functional currencies.

The Company’s gains and (losses), net of income tax, associated with changes in the value of debt and designated cross currency interest rate swaps for the three and nine month periods ended September 30, 2018 and 2017 and the net balance of such gains and (losses) included in accumulated other comprehensive (loss) income as of September 30, 2018 and 2017 were as follows.

	For the Three Month Periods Ended September 30,					For the Nine Month Periods Ended September 30,
	2018		2017			2018		2017
Gain (loss), net of income tax, recorded through other comprehensive income	$	3.5	$	(13.6	)	$	18.0	$	(43.2	)
Balance included in accumulated other comprehensive (loss) income as of September 30, 2018 and 2017, respectively						$	50.1	$	39.2

For the periods presented, all cash flows associated with derivatives are classified as operating cash flows in the Condensed Consolidated Statements of Cash Flows.

Fair Value Measurements

A financial instrument is defined as cash or cash equivalents, evidence of an ownership interest in an entity, or a contract that creates a contractual obligation or right to deliver or receive cash or another financial instruments from another party.  The Company’s financial instruments consist primarily of cash and cash equivalents, trade accounts receivables, trade accounts payables, deferred compensation assets and obligations, derivatives and debt instruments.  The carrying values of cash and cash equivalents, trade accounts receivables, trade accounts payables, and variable rate debt instruments are a reasonable estimate of their respective fair values.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or more advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.  The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure the fair value as follows.

Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities as of the reporting date.

Level 2 Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities as of the reporting date.

Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2018.

	Level 1		Level 2		Level 3		Total
Financial Assets
Trading securities held in deferred compensation plan(1)	$	6.3	$	-	$	-	$	6.3
Total	$	6.3	$	-	$	-	$	6.3
Financial Liabilities
Foreign currency forwards(2)	$	-	$	0.3	$	-	$	0.3
Interest rate swaps(3)		-		17.6		-		17.6
Deferred compensation plan(1)		6.3		-		-		6.3
Total	$	6.3	$	17.9	$	-	$	24.2

⁽¹⁾ Based on the quoted price of publicly traded mutual funds which are classified as trading securities and accounted for using the mark-to-market method.

⁽²⁾ Based on calculations that use readily observable market parameters as their basis, such as spot and forward rates.

⁽³⁾ Measured as the present value of all expected future cash flows based on the LIBOR-based swap yield curves as of September 30, 2018.  The present value calculation uses discount rates that have been adjusted to reflect the credit quality of the Company and its counterparties.

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Revenue from Contracts with Customers

9 Months Ended

Sep. 30, 2018

Revenue from Contracts with Customers [Abstract]

Revenue from Contracts with Customers

Note 12. Revenue from Contracts with Customers

Overview

The Company adopted ASC 606 on January 1, 2018 using the modified retrospective method.  See Note 1 “Condensed Consolidated Financial Systems” for further discussion of the adoption.

The Company recognizes revenue when control is transferred to the customer.  The amount of revenue recognized includes adjustments for any variable consideration, such as rebates, sales discounts, liquidated damages, etc., which are included in the transaction price, and allocated to each performance obligation.  The variable consideration is estimated throughout the course of the contract using the Company’s best estimates.  Judgments impacting variable consideration related to material rebate and sales discount programs, and significant contracts containing liquidated damage clauses are governed by robust management review processes.

The majority of the Company’s revenues are derived from short duration contracts and revenue is recognized at a single point in time when control is transferred to the customer, generally at shipment or when delivery has occurred or services have been rendered.

The Company has certain long duration engineered to order (“ETO”) contracts that require highly engineered solutions designed to customer specific applications.  For contracts where the contractual deliverables have no alternative use and the contract termination clauses provide for the recovery of cost plus a reasonable margin, revenue is recognized over time based on the Company’s progress in satisfying the contractual performance obligations, generally measured as the ratio of actual costs incurred to date to the estimated total costs to complete the contract.  For contracts with termination provisions that do not provide for recovery of cost and a reasonable margin, revenue is recognized at a point in time, generally at shipment or delivery to the customer.  Identification of performance obligations, determination of alternative use, assessment of contractual language regarding termination provisions, and estimation of total project costs are all significant judgments required in the application of ASC 606.

Contractual specifications and requirements may be modified.  The Company considers contract modifications to exist when the modification either creates new or changes the existing enforceable rights and obligations.  In the event a contract modification is for goods or services that are not distinct in the contract, and therefore, form part of a single performance obligation that is partially satisfied as of the modification date, the effect of the contract modification on the transaction price and the Company’s measure of progress for the performance obligation to which it relates, is recognized on a cumulative catch-up basis.

Taxes assessed by a government authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.  Sales commissions are due at the earlier of collection of payment from customers or recognition of revenue.  Applying the practical expedient from ASC 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less.  These costs are included in the “Selling and administrative expenses” line of the Condensed Consolidated Statements of Operations.

Disaggregation of Revenue

The following table provides disaggregated revenue by reportable segment for the three month period ended September 30, 2018.

	Industrials		Energy		Medical		Total
Primary Geographic Markets
United States	$	96.7	$	200.1	$	31.1	$	327.9
Other Americas		19.9		29.4		0.7		50.0
Total Americas	$	116.6	$	229.5	$	31.8	$	377.9
EMEA		156.2		44.9		27.7		228.8
Asia Pacific		47.2		24.4		11.0		82.6
Total	$	320.0	$	298.8	$	70.5	$	689.3
Product Categories
Original equipment(1)	$	221.2	$	127.8	$	68.3	$	417.3
Aftermarket(2)		98.8		171.0		2.2		272.0
Total	$	320.0	$	298.8	$	70.5	$	689.3
Pattern of Revenue Recognition
Revenue recognized at point in time(3)	$	309.4	$	278.5	$	70.5	$	658.4
Revenue recognized over time(4)		10.6		20.3		-		30.9
Total	$	320.0	$	298.8	$	70.5	$	689.3

⁽¹⁾ Revenues from sales of capital equipment within the Industrials and Energy Segments and sales of components to original equipment manufacturers in the Medical Segment.

⁽²⁾ Revenues from sales of spare parts, accessories, other components and services in support of maintaining customer owned, installed base of the Company’s original equipment.

⁽³⁾ Revenues from short and long duration product and service contracts recognized at a point in time when control is transferred to the customer generally when products delivery has occurred and services have been rendered.

⁽⁴⁾ Revenues primarily from long duration ETO product contracts and certain contracts for the delivery of a significant volume of substantially similar products recognized over time as contractual performance obligations are completed.

The following table provides disaggregated revenue by reportable segment for the nine month period ended September 30, 2018.

	Industrials		Energy		Medical		Total
Primary Geographic Markets
United States	$	278.2	$	538.6	$	77.2	$	894.0
Other Americas		58.1		85.0		2.1		145.2
Total Americas	$	336.3	$	623.6	$	79.3	$	1,039.2
EMEA		481.8		115.3		82.4		679.5
Asia Pacific		147.6		75.2		35.6		258.4
Total	$	965.7	$	814.1	$	197.3	$	1,977.1
Product Categories
Original equipment(1)	$	662.5	$	337.7	$	190.5	$	1,190.7
Aftermarket(2)		303.2		476.4		6.8		786.4
Total	$	965.7	$	814.1	$	197.3	$	1,977.1
Pattern of Revenue Recognition
Revenue recognized at point in time(3)	$	931.2	$	776.3	$	197.3	$	1,904.8
Revenue recognized over time(4)		34.5		37.8		-		72.3
Total	$	965.7	$	814.1	$	197.3	$	1,977.1

⁽¹⁾ Revenues from sales of capital equipment within the Industrials and Energy Segments and sales of components to original equipment manufacturers in the Medical Segment.

⁽²⁾ Revenues from sales of spare parts, accessories, other components and services in support of maintaining customer owned, installed base of the Company’s original equipment.

⁽³⁾ Revenues from short and long duration product and service contracts recognized at a point in time when control is transferred to the customer generally when products delivery has occurred and services have been rendered.

⁽⁴⁾ Revenues primarily from long duration ETO product contracts and certain contracts for the delivery of a significant volume of substantially similar products recognized over time as contractual performance obligations are completed.

Performance Obligations

The majority of the Company’s contracts have a single performance obligation as the promise to transfer goods and/or services.  For contracts with multiple performance obligations, the Company utilizes observable prices to determine standalone selling price or cost plus margin if a standalone price is not available.  The Company has elected to expense shipping and handling costs as incurred.

The Company’s primary performance obligations include delivering standard or configured to order (“CTO”) goods to customers, designing and manufacturing a broad range of equipment customized to a customer’s specifications in ETO arrangements, rendering of services (maintenance and repair contracts) and certain extended or service type warranties.  For incidental items that are immaterial in the context of the contract, costs are expensed as incurred or accrued at delivery.

As of September 30, 2018, for contracts with an original duration greater than one year, the Company expects to recognize revenue in the future related to unsatisfied (or partially satisfied) performance obligations of $168.0 million in the next twelve months and $72.9 million in periods thereafter.  The performance obligations that are unsatisfied (or partially satisfied) are primarily related to orders for goods or services that were placed prior to the end of the reporting period and have not been delivered to the customer, on-going work on ETO contracts where revenue is recognized over time, and service contracts with an original duration greater than one year.

Contract Balances

The following table provides the contract balances as of September 30, 2018 and December 31, 2017 presented in the Condensed Consolidated Balance Sheets.

	September 30, 2018		December 31, 2017
Accounts receivable, net of allowance for doubtful accounts of $19.1 and $18.7, respectively	$	525.0	$	536.3
Contract assets		13.9		-
Contract liabilities		90.5		42.7

Accounts receivable – Amounts due where the Company's right to receive cash is unconditional.

Contract assets – The Company's rights to consideration for the satisfaction of performance obligations subject to constraints apart from timing.  Contract assets are transferred to receivables when the right to collect consideration becomes unconditional.  Contract assets are presented net of progress billings and related advances from customers.

Contract liabilities – Advance payments received from customers for contracts for which revenue is not yet recognized.  The increase in the contract liabilities account as of September 30, 2018 and December 31, 2017 was due primarily to the acquisition of Runtech of $29.6 million.  The remaining change is due to the timing of milestone payments received related to projects for production later this year, partially offset by contract liability balances converted to revenue in the period.  Contract liability balances are generally recognized in revenue within twelve months.

Contract assets and liabilities are reported on the Condensed Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period.  Contract assets and liabilities are presented net on a contract level, where required.

Payments from customers are generally due 30-60 days after invoicing.  Invoicing for sales of standard products generally coincides with shipment or delivery of goods.  Invoicing for CTO and ETO contracts typically follows a schedule for billing at contractual milestones.  Payments milestones normally include down payments upon the contract signing, completion of product design, completion of customer's preliminary inspection, shipment or delivery, completion of installation, and customer's on-site inspection.  The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets) and customer advances and deposits (contract liabilities) on the Condensed Consolidated Balance Sheets.

The Company has elected the practical expedient from ASC 606-10-32-18 and does not adjust the transaction price for the effects of a financing component if, at contract inception, the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

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Income Taxes

9 Months Ended

Sep. 30, 2018

Income Taxes [Abstract]

Income Taxes

Note 13. Income Taxes

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act ("Tax Act"). The Tax Act makes broad and complex changes to the U.S. tax code that affected 2017, including, but not limited to, (1) requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries that is payable over eight years and (2) bonus depreciation that will allow for full expensing of qualified property.

The Tax Act also establishes new tax laws that affected 2018, including, but not limited to (1) the reduction of the U.S. federal corporate tax rate from 35% to 21%; (2) the elimination of the corporate alternative minimum tax ("AMT"); (3) the creation of the base erosion anti-abuse tax ("BEAT"), a new minimum tax; (4) a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries; (5) a new provision designed to tax global intangible low-taxed income ("GILTI"), which allows for the possibility of using foreign tax credits ("FTC") and a deduction of up to 50% to offset the income tax liability (subject to some limitations); (6) a new limitation on deductible interest expense; (7) the repeal of the domestic production activity deduction; (8) limitations on the deductibility of certain executive compensation; (9) limitations on the use of FTCs to reduce the U.S. income tax liability; and (10) limitations on net operating losses ("NOL") generated after December 31, 2017, to 80% of taxable income.

The SEC staff issued SAB 118, which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company's accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, a company must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, a company should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act.

The Company has not completed the accounting for the income tax effects of certain elements of the Tax Act. If the Company was able to make reasonable estimates of the effects of elements for which an analysis is not yet complete, the Company recorded provisional adjustments, as described above. If the Company was not yet able to make reasonable estimates of the impact of certain elements, the Company has not recorded any adjustments related to those elements and have continued accounting for them in accordance with ASC 740 on the basis of the tax laws in effect before the Tax Act. As the Company completes the accounting of the income tax effects of the Tax Act, the Company anticipates that additional charges or benefits may be recorded at such time as prescribed by ASC 740 and SAB 118, and as further information becomes available regarding the Tax Act, the Company may make further adjustments to the provisions that have been recorded in the financial statements. The Company also continues to examine the impact of this tax reform legislation.

The Tax Act reduces the corporate tax rate to 21%, effective January 1, 2018. While the Company was able to make a reasonable estimate of the impact of the reduction in the corporate rate, that estimate may be affected by other analyses related to the Tax Act, including, but not limited to, a calculation of deemed repatriation of deferred foreign income and the state tax effect of adjustments made to federal temporary differences.  In the nine month period ended September 30, 2018, the benefit recognized of $89.6 million in 2017 was increased by $8.2 million to $97.8 million in the three month period ended September 30, 2018.  No additional changes were made to the $69.0 million benefit related to the reduction of the ASC 740-30 liability.  These both remain estimates as of September 30, 2018.

The Deemed Repatriation Transition Tax ("Transition Tax") is a tax on previously untaxed accumulated and current earnings and profits ("E&P") of certain of the Company's foreign subsidiaries. To determine the amount of the Transition Tax, we must determine, in addition to other factors, the amount of post-1986 E&P of the relevant subsidiaries, the amount of non-U.S. income taxes paid on such earnings, and the impact of the accumulated overall foreign source loss on the Company's ability to utilize foreign tax credits.  As of the nine month period ended September 30, 2018, the Company revised its estimate for the Transition Tax obligation to $51.7 million from the $63.3 million expensed in 2017.  The Company continues to gather additional information to more precisely compute the amount of the Transition Tax obligation.  The Transition Tax obligation remains an estimate as of September 30, 2018.

The Company's accounting for the following elements of the Tax Act is incomplete, and no provisional adjustments, other than the adjustment related to the effects of the transitional tax, were recorded related to ASC 740-30.

Due to complexities, the Company has not yet determined if a change to the policy concerning permanent reinvestment will be made as a result of the Tax Act. No additional adjustments relating to ASC 740-30 have been recorded in accordance with SAB 118.

For 2018, the Tax Act creates a new requirement that certain income (i.e., GILTI) earned by controlled foreign corporations ("CFC") must be included currently in the gross income of the CFCs' U.S. shareholder. GILTI is the excess of the shareholder's "net CFC tested income" over the net deemed tangible income return, which is currently defined as the excess of (1) 10% of the aggregate of the U.S. shareholder's pro rata share of the qualified business asset investment of each CFC with respect to which it is a U.S. shareholder over (2) the amount of certain interest expense taken into account in the determination of net CFC-tested income.

Under U.S. GAAP, the Company is allowed to make an accounting policy choice of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the "period cost method") or (2) factoring such amounts into a company's measurement of its deferred taxes (the "deferred method").   The Company has determined that it will follow the period costs method (option 1 above) going forward.  The tax provision for the nine month period ended September 30, 2018 reflects this decision.  All of the additional calculations and rule changes found in the Tax Act have been considered in the tax provision for the three and nine month periods ended September 30, 2018.

The following table summarizes the Company's provision (benefit) for income taxes and effective income tax provision rate for the three and nine month periods ended September 30, 2018 and 2017.

	For the Three Month Periods Ended September 30,						For the Nine Month Periods Ended September 30,
	2018			2017			2018			2017
Income (loss) before income taxes	$	94.8		$	32.4		$	238.1		$	(166.3	)
Provision (benefit) for income taxes	$	22.6		$	4.4		$	63.2		$	(41.2	)
Effective income tax rate		23.8	%		13.6	%		26.5	%		24.8	%

The increase in the provision for income taxes for the three month period ended September 30, 2018 when compared to the same three month period in 2017 is primarily due to the overall increase in global earnings when compared to the prior year.  The effective income tax provision rate was impacted by the increase in global earnings and reduced by the windfall tax benefit to result in an overall increase in the rate for the three month period ended September 30, 2018 when compared to the same three month period of 2017.

The increase in the provision for income taxes and increase in the effective income tax provision rate for the nine month period ended September 30, 2018 when compared to the same nine month period of 2017 is primarily due to the overall increase in global earnings when compared to the prior year.

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Supplemental Information

9 Months Ended

Sep. 30, 2018

Supplemental Information [Abstract]

Supplemental Information

Note 14. Supplemental Information

The components of "Other operating expense, net" for the three month and nine month periods ended September 30, 2018 and 2017 are as follows.

	For the Three Month Periods Ended September 30,						For the Nine Month Periods Ended September 30,
	2018			2017			2018			2017
Other Operating Expense, Net
Foreign currency transaction (gains) losses, net	$	(0.8	)	$	1.7		$	(0.6	)	$	6.3
Restructuring charges, net (1)		5.4			2.8			5.4			4.9
Environmental remediation expenses (2)		-			-			-			0.9
Stock-based compensation expense (3)		1.1			9.8			2.9			166.0
Shareholder litigation settlement recoveries(4)		-			-			(4.5	)		-
Acquisition related expenses and non-cash charges(5)		0.5			0.7			6.3			2.4
Losses (gains) on asset and business disposals		0.1			(0.6	)		(1.1	)		2.0
Other, net		(0.3	)		3.0			2.4			4.2
Total other operating expense, net	$	6.0		$	17.4		$	10.8		$	186.7

⁽¹⁾ See Note 3 "Restructuring."

⁽²⁾ Estimated environmental remediation costs recorded on an undiscounted basis for a former production facility.

⁽³⁾ Represents stock-based compensation expense recognized for the three month period ended September 30, 2018 of $0.9 million and employer taxes related to stock option exercises of $0.2 million.  Represents stock-based compensation expense recognized for the nine month period ended September 30, 2018 of $6.1 million, reduced by $3.2 million primarily due to a decrease in the estimated accrual for employer taxes related to DSUs as a result of the achievement of employer tax caps in counties outside of the United States.

Represents stock-based compensation expense recognized for stock options outstanding of $7.8 million and $69.2 million for the three month and nine month periods ended September 30, 2017 and DSUs granted to employees at the date of the initial public offering of $2.0 million and $96.8 million under the 2013 Stock Incentive Plan for the three and nine month periods ended September 30, 2017.

⁽⁴⁾ Represents an insurance recovery of the Company's shareholder litigation settlement in 2014.

⁽⁵⁾ Represents costs associated with successful and/or abandoned acquisitions, including third-party expenses, post-closure integration costs and non-cash charges and credits arising from fair value purchase accounting adjustments.

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Contingencies

9 Months Ended

Sep. 30, 2018

Contingencies [Abstract]

Contingencies

Note 15. Contingencies

The Company is a party to various legal proceedings, lawsuits and administrative actions, which are of an ordinary or routine nature for a company of its size and sector. The Company believes that such proceedings, lawsuits and administrative actions will not materially adversely affect its operations, financial condition, liquidity or competitive position. A more detailed discussion of certain of these proceedings, lawsuits and administrative actions is set forth below.

Asbestos and Silica Related Litigation

The Company has also been named as a defendant in a number of asbestos-related and silica-related personal injury lawsuits. The plaintiffs in these suits allege exposure to asbestos or silica from multiple sources and typically the Company is one of approximately 25 or more named defendants.

Predecessors to the Company sometimes manufactured, distributed and/or sold products allegedly at issue in the pending asbestos and silica-related lawsuits (the "Products"). However, neither the Company nor its predecessors ever mined, manufactured, mixed, produced or distributed asbestos fiber or silica sand, the materials that allegedly caused the injury underlying the lawsuits. Moreover, the asbestos-containing components of the Products, if any, were enclosed within the subject Products.

Although the Company has never mined, manufactured, mixed, produced or distributed asbestos fiber or silica sand nor sold products that could result in a direct asbestos or silica exposure, many of the companies that did engage in such activities or produced such products are no longer in operation. This has led to law firms seeking potential alternative companies to name in lawsuits where there has been an asbestos or silica related injury.

The Company believes that the pending and future asbestos and silica-related lawsuits are not likely to, in the aggregate, have a material adverse effect on its consolidated financial position, results of operations or liquidity, based on: the Company's anticipated insurance and indemnification rights to address the risks of such matters; the limited potential asbestos exposure from the Products described above; the Company's experience that the vast majority of plaintiffs are not impaired with a disease attributable to alleged exposure to asbestos or silica from or relating to the Products or for which the Company otherwise bears responsibility; various potential defenses available to the Company with respect to such matters; and the Company's prior disposition of comparable matters. However, inherent uncertainties of litigation and future developments, including, without limitation, potential insolvencies of insurance companies or other defendants, an adverse determination in the Adams County Case (discussed below), or other inability to collect from the Company's historical insurers or indemnitors, could cause a different outcome. While the outcome of legal proceedings is inherently uncertain, based on presently known facts, experience, and circumstances, the Company believes that the amounts accrued on its balance sheet are adequate and that the liabilities arising from the asbestos and silica-related personal injury lawsuits will not have a material adverse effect on the Company's consolidated financial position, results of operations or liquidity. "Accrued liabilities" and "Other liabilities" on the Condensed Consolidated Balance Sheet include a total litigation reserve of $98.3 million and $105.6 million as of September 30, 2018 and December 31, 2017, with respect to potential liability arising from the Company's asbestos-related litigation. Asbestos related defense costs are excluded from the asbestos claims liability and are recorded separately as services are incurred. In the event of unexpected future developments, it is possible that the ultimate resolution of these matters may be material to the Company's consolidated financial position, results of operation or liquidity.

The Company has entered into a series of agreements with certain of its or its predecessors' legacy insurers and certain potential indemnitors to secure insurance coverage and/or reimbursement for the costs associated with the asbestos and silica-related lawsuits filed against the Company. The Company has also pursued litigation against certain insurers or indemnitors, where necessary. The Company has an insurance recovery receivable for probable asbestos related recoveries of approximately $95.9 million and $100.4 million as of September 30, 2018 and December 31, 2017, respectively, which was included in "Other assets" on the Consolidated Balance Sheets. During the nine month period ended September 30, 2018 the Company received asbestos related insurance recoveries of $10.1 million, of which $4.5 million related to the recovery of indemnity payments, and was recorded as a reduction of the insurance recovery receivable in "Other assets" on the Condensed Consolidated Balance Sheets, and $5.6 million related to reimbursement of previously expensed legal defense costs, and was recorded as a reduction of "Selling and administrative expenses" in the Condensed Consolidated Statements of Operations.

The largest such recent action, Gardner Denver, Inc. v. Certain Underwriters at Lloyd's, London, et al., was filed on July 9, 2010, in the Eighth Judicial Circuit, Adams County, Illinois, as case number 10-L-48 (the "Adams County Case"). In the lawsuit, the Company seeks, among other things, to require certain excess insurer defendants to honor their insurance policy obligations to the Company, including payment in whole or in part of the costs associated with the asbestos-related lawsuits filed against the Company. In October 2011, the Company reached a settlement with one of the insurer defendants, which had issued both primary and excess policies, for approximately the amount of such defendant's policies that were subject to the lawsuit. Since then, the case has been proceeding through the discovery and motions process with the remaining insurer defendants. On January 29, 2016, the Company prevailed on the first phase of that discovery and motions process ("Phase I"). Specifically, the Court in the Adams County Case ruled that the Company has rights under all of the policies in the case, subject to their terms and conditions, even though the policies were sold to the Company's former owners rather than to the Company itself. On June 9, 2016, the Court denied a motion by several of the insurers who sought permission to appeal the Phase I ruling immediately rather than waiting until the end of the whole case as is normally required. The case is now proceeding through the discovery process regarding the remaining issues in dispute ("Phase II").

A majority of the Company's expected future recoveries of the costs associated with the asbestos-related lawsuits are the subject of the Adams County Case.

The amounts recorded by the Company for asbestos-related liabilities and insurance recoveries are based on currently available information and assumptions that the Company believes are reasonable based on an evaluation of relevant factors. The actual liabilities or insurance recoveries could be higher or lower than those recorded if actual results vary significantly from the assumptions. There are a number of key variables and assumptions including the number and type of new claims to be filed each year, the resolution or outcome of these claims, the average cost of resolution of each new claim, the amount of insurance available, allocation methodologies, the contractual terms with each insurer with whom the Company has reached settlements, the resolution of coverage issues with other excess insurance carriers with whom the Company has not yet achieved settlements, and the solvency risk with respect to the Company's insurance carriers. Other factors that may affect the future liability include uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, legal rulings that may be made by state and federal courts, and the passage of state or federal legislation. The Company makes the necessary adjustments for the asbestos liability and corresponding insurance recoveries on an annual basis unless facts or circumstances warrant assessment as of an interim date.

Environmental Matters

The Company has been identified as a potentially responsible party ("PRP") with respect to several sites designated for cleanup under U.S. federal "Superfund" or similar state laws that impose liability for cleanup of certain waste sites and for related natural resource damages. Persons potentially liable for such costs and damages generally include the site owner or operator and persons that disposed or arranged for the disposal of hazardous substances found at those sites. Although these laws impose joint and several liability on PRPs, in application the PRPs typically allocate the investigation and cleanup costs based upon the volume of waste contributed by each PRP. Based on currently available information, the Company was only a small contributor to these waste sites, and the Company has, or is attempting to negotiate, de minimis settlements for their cleanup. The cleanup of the remaining sites is substantially complete and the Company's future obligations entail a share of the sites' ongoing operating and maintenance expense. The Company is also addressing four on-site cleanups for which it is the primary responsible party. Three of these cleanup sites are in the operation and maintenance stage and one is in the implementation stage.

The Company has undiscounted accrued liabilities of $7.0 million and $7.5 million as of September 30, 2018 and December 31, 2017, respectively, on its Condensed Consolidated Balance Sheet to the extent costs are known or can be reasonably estimated for its remaining financial obligations for the environmental matters discussed above and does not anticipate that any of these matters will result in material additional costs beyond amounts accrued. Based upon consideration of currently available information, the Company does not anticipate any material adverse effect on its results of operations, financial condition, liquidity or competitive position as a result of compliance with federal, state, local or foreign environmental laws or regulations, or cleanup costs relating to these matters.

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Segment Results

9 Months Ended

Sep. 30, 2018

Segment Results [Abstract]

Segment Results

Note 16. Segment Results

A description of the Company's three reportable segments, including the specific products manufactured and sold follows below.

In the Industrials segment, the Company designs, manufactures, markets and services a broad range of air compression, vacuum and blower products across a wide array of technologies and applications. Almost every manufacturing and industrial facility, and many service and process industries, use air compression and vacuum products in a variety of applications such as operation of pneumatic air tools, vacuum packaging of food products and aeration of waste water. The Company maintains a leading position in its markets and serves customers globally. The Company offers comprehensive aftermarket parts and an experienced direct and distributor-based service network world-wide to complement all of its products.

In the Energy segment, the Company designs, manufactures, markets and services a diverse range of positive displacement pumps, liquid ring vacuum pumps and compressors, and engineered loading systems and fluid transfer equipment, consumables, and associated aftermarket parts and services. It serves customers in the upstream, midstream, and downstream oil and gas markets, and various other markets including petrochemical processing, power generation, transportation, and general industrial. The Company is one of the largest suppliers in these markets and has long-standing customer relationships. Its positive displacement pumps are used in the oilfield for drilling, hydraulic fracturing, completion and well servicing. Its liquid ring vacuum pumps and compressors are used in many power generation, mining, oil and gas refining and processing, chemical processing and general industrial applications including flare gas and vapor recovery, geothermal gas removal, vacuum de-aeration, enhanced oil recovery, water extraction in mining and paper and chlorine compression in petrochemical operations. Its engineered loading systems and fluid transfer equipment ensure the safe handling and transfer of crude oil, liquefied natural gas, compressed natural gas, chemicals, and bulk materials.

In the Medical segment, the Company designs, manufactures and markets a broad range of highly specialized gas, liquid and precision syringe pumps and compressors primarily for use in the medical, laboratory and biotechnology end markets. The Company's customers are mainly medium and large durable medical equipment suppliers that integrate the Company's products into their final equipment for use in applications such as oxygen therapy, blood dialysis, patient monitoring, wound treatment, and others. Further, with the recent acquisitions, the Company has expanded into liquid handling components and systems used in biotechnology applications including clinical analysis instrumentation. The Company also has a broad range of end use deep vacuum products for laboratory science applications.

The Chief Operating Decision Maker ("CODM") evaluates the performance of the Company's reportable segments based on, among other measures, Segment Adjusted EBITDA. Management closely monitors the Segment Adjusted EBITDA of each reportable segment to evaluate past performance and actions required to improve profitability. Inter-segment sales and transfers are not significant. Administrative expenses related to the Company's corporate offices and shared service centers in the United States and Europe, which includes transaction processing, accounting and other business support functions, are allocated to the business segments. Certain administrative expenses, including senior management compensation, treasury, internal audit, tax compliance, certain information technology, and other corporate functions, are not allocated to the business segments.

The following table provides summarized information about the Company's operations by reportable segment and reconciles Segment Adjusted EBITDA to Income (Loss) Before Income Taxes for the three month and nine month periods ended September 30, 2018 and 2017.

	For the Three Month Period Ended September 30,					For the Nine Month Period Ended September 30,
	2018			2017		2018			2017
Revenue
Industrials	$	320.0		$	288.2	$	965.7		$	819.0
Energy		298.8			301.6		814.1			719.4
Medical		70.5			59.8		197.3			172.0
Total Revenue	$	689.3		$	649.6	$	1,977.1		$	1,710.4
Segment Adjusted EBITDA
Industrials	$	72.1		$	63.1	$	210.0		$	173.7
Energy		94.9			98.6		242.5			199.2
Medical		20.5			16.8		54.4			46.9
Total Segment Adjusted EBITDA	$	187.5		$	178.5	$	506.9		$	419.8
Less items to reconcile Segment Adjusted EBITDA to Income (Loss) Before Income Taxes(1):
Corporate expenses not allocated to segments(a)	$	5.3		$	13.8	$	14.8		$	30.9
Interest expense		24.4			30.1		76.5			115.4
Depreciation and amortization expense		44.4			43.5		134.6			126.9
Sponsor fees and expenses(b)		-			-		-			17.3
Restructuring and related business transformation costs(c)		12.3			6.3		25.2			20.5
Acquisition related expenses and non-cash charges(d)		2.8			1.2		13.1			3.1
Environmental remediation loss reserve(e)		-			-		-			0.9
Expenses related to public stock offerings(f)		0.3			0.5		2.2			3.6
Establish public company financial reporting compliance(g)		1.3			3.8		3.2			7.2
Stock-based compensation(h)		1.1			9.8		2.9			166.0
Foreign currency transaction (gains) losses, net		(0.8	)		1.7		(0.6	)		6.3
Loss on extinguishment of debt(i)		0.9			34.1		1.0			84.5
Shareholder litigation settlement recoveries(j)		-			-		(4.5	)		-
Other adjustments(k)		0.7			1.3		0.4			3.5
Income (Loss) Before Income Taxes	$	94.8		$	32.4	$	238.1		$	(166.3	)

⁽¹⁾ The reconciling items for the three month and nine month periods ended September 30, 2017 have been reclassified to conform to the methodology used in the three and nine month periods ended September 30, 2018, and include the following.

^(a) Includes insurance recoveries of asbestos legal fees of $5.6 million in the nine month period ended September 30, 2018.

^(b) Represents management fees and expenses paid to the Company's Sponsor.

 ^(c) Restructuring and related business transformation costs consist of the following.

	For the Three Month Period Ended September 30,						For the Nine Month Period Ended September 30,
	2018			2017			2018			2017
Restructuring charges	$	5.4		$	2.8		$	5.4		$	4.9
Severance, sign-on, relocation and executive search costs		(0.1	)		0.6			3.8			2.2
Facility reorganization, relocation and other costs		1.1			1.0			2.4			3.9
Information technology infrastructure transformation		0.3			0.8			0.5			3.4
Losses (gains) on asset and business disposals		0.1			(0.6	)		(1.1	)		2.0
Consultant and other advisor fees		3.4			0.5			10.0			1.7
Other, net		2.1			1.2			4.2			2.4
Total restructuring and related business transformation costs	$	12.3		$	6.3		$	25.2		$	20.5

^(d) Represents costs associated with successful and/or abandoned acquisitions, including third-party expenses, post-closure integration costs and non-cash charges and credits arising from fair value purchase accounting adjustments.

^(e) Represents estimated environmental remediation costs and losses relating to a former production facility.

^(f) Represents expenses related to the Company's initial public offering and subsequent secondary offerings.

^(g) Represents third party expenses to comply with the requirements of Sarbanes-Oxley in 2018 and the accelerated adoption of new accounting standards (ASC 606 – Revenue from Contracts with Customers and ASC 842 - Leases) in the first quarter of 2018 and 2019 respectively, one year ahead of the required adoption dates for a private company.  These expenses were previously included in "Expenses related to initial stock offering" and prior periods have been restated to conform to current period presentation.

^(h) Represents stock-based compensation expense recognized for the three month period ended September 30, 2018 of $0.9 million and employer taxes related to stock option exercises of $0.2 million.  Represents stock-based compensation expense recognized for the nine month period ended September 30, 2018 of $6.1 million, reduced by $3.2 million primarily due to a decrease in the estimated accrual for employer taxes related to DSUs as a result of the achievement of employer tax caps in countries outside of the United States.

Represents stock-based compensation expense recognized for stock options outstanding of $7.8 million and $69.2 million for the three month and nine month periods ended September 30, 2017 and DSUs granted to employees at the date of the initial public offering of $2.0 million and $96.8 million under the 2013 Stock Incentive Plan for the three and nine month periods ended September 30, 2017.

⁽ⁱ⁾ Represents losses on extinguishment of the senior notes and a portion of the U.S. Term Loan and losses reclassified from AOCI into income related to the amendment of the interest rate swaps in conjunction with the debt repayment.

^(j) Represents an insurance recovery of the Company's shareholder litigation settlement in 2014.

^(k) Includes (i) the effects of the amortization of prior service costs and the amortization of gains in pension and other postretirement benefits (OPEB) expense, (ii) certain legal and compliance costs and (iii) other miscellaneous adjustments.

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Related Party Transactions

9 Months Ended

Sep. 30, 2018

Related Party Transactions [Abstract]

Related Party Transactions

Note 17. Related Party Transactions

Affiliates of KKR participated as (i) a lender in the Company's Senior Secured Credit Facilities discussed in Note 8, "Debt," (ii) an underwriter in the Company's initial public offering, and (iii) a provider of services for the fiscal year 2017 debt refinancing transaction.  KKR held a position in the Euro Term Loan Facility of €38.6 million as of September 30, 2018.

The Company entered into a monitoring agreement, dated July 30, 2013, with KKR pursuant to which KKR provided management, consulting and financial advisory services to the Company and its divisions, subsidiaries, parent entities and controlled affiliates.  Under the terms of the monitoring agreement the Company was, among other things, obligated to pay KKR (or such affiliate(s) as KKR designates) an aggregate annual management fee in the initial annual amount of $3.5 million, payable in arrears at the end of each fiscal quarter, plus upon request all reasonable out of pocket expenses incurred in connection with the provision of services under the agreement.  The management fee increased at a rate of 5% per year effective on January 1, 2014.  In May 2017, in connection with the Company's initial public offering, the monitoring agreement was terminated and the Company paid a termination fee of $16.2 million during the nine month period ended September 30, 2017 which was included in the "Selling and administrative expenses" line of the Condensed Consolidated Statements of Operations.  The Company incurred management fees, excluding the termination fee, to KKR of $1.1 million and no out of pocket expenses for the nine month period ended September 30, 2017.

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Earnings (Loss) Per Share

9 Months Ended

Sep. 30, 2018

Earnings (Loss) Per Share [Abstract]

Earnings (Loss) Per Share

Note 18. Earnings (Loss) Per Share

The computations of basic and diluted loss per share are as follows.

	For the Three Month Period Ended September 30,				For the Nine Month Period Ended September 30,
	2018		2017		2018		2017
Net income (loss)	$	72.2	$	28.0	$	174.9	$	(125.1	)
Less: Net income attributable to noncontrolling interests		-		-		-		0.1
Net income (loss) attributable to Gardner Denver Holdings, Inc.	$	72.2	$	28.0	$	174.9	$	(125.2	)
Average shares outstanding:
Basic		201.9		201.3		201.8		175.7
Diluted		209.1		208.1		209.6		175.7
Income (loss) per share:
Basic	$	0.36	$	0.14	$	0.87	$	(0.71	)
Diluted	$	0.35	$	0.13	$	0.83	$	(0.71	)

The DSUs described in Note 15, "Stock-Based Compensation" of the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2017 are considered outstanding shares for the purpose of computing basic earnings (loss) per share because they will become issued solely upon the passage of time.

As of September 30, 2018, there was 0.8 million anti-dilutive shares that were not included in the computation of diluted earnings per share.  For the nine month period ended September 30, 2017, there was 12.3 million of potentially dilutive stock-based awards that were not included in the computation of diluted loss per share because their inclusion would be anti-dilutive.

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Share Repurchase Program

9 Months Ended

Sep. 30, 2018

Share Repurchase Program [Abstract]

Share Repurchase Program

Note 19. Share Repurchase Program

On August 1, 2018, the Board of Directors of Gardner Denver authorized a share repurchase program pursuant to which the Company may repurchase up to $250.0 million of its common stock over the next two years, effective immediately and through July 31, 2020, the date on which the repurchase program will expire.  Under the repurchase program, Gardner Denver is authorized to repurchase shares through open market purchases, privately-negotiated transactions or otherwise in accordance with all applicable securities laws and regulations, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Securities Act of 1934.  The share repurchase program does not obligate Gardner Denver to acquire any particular amount of common stock, and it may be suspended or terminated at any time at the Company's discretion.  The timing and amount of any purchases of common stock will be based on Gardner Denver's liquidity, general business and market conditions, debt covenant restrictions and other factors, including alternative investment opportunities and Gardner Denver's desire to repay indebtedness.

During the three and nine month period ended September 30, 2018, the Company repurchased 223,911 shares under the August 1, 2018 program at a weighted average price of $24.86 per share for an aggregate value of $5.6 million.

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Condensed Consolidated Financial Statements (Policies)

9 Months Ended

Sep. 30, 2018

Condensed Consolidated Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

Gardner Denver Holdings, Inc. is a holding company whose operating subsidiaries are Gardner Denver, Inc. (“GDI”) and certain of GDI’s subsidiaries.  GDI is a diversified, global manufacturer of highly engineered, application-critical flow control products and provider of related aftermarket parts and services.  The accompanying condensed consolidated financial statements include the accounts of Gardner Denver Holdings, Inc. and its majority-owned subsidiaries (collectively referred to herein as “Gardner Denver” or the “Company”).  The financial information presented as of any date other than December 31, 2017 has been prepared from the books and records of the Company without audit.  The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information.  Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.  In the opinion of management, the condensed consolidated financial statements include all adjustments, consisting of adjustments associated with acquisition accounting and normal recurring adjustments, necessary for the fair presentation of such financial statements.  All intercompany transactions and accounts have been eliminated in consolidation.

The Company’s unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed with the Securities and Exchange Commission (“SEC”).

The results of operations for the interim periods ended September 30, 2018 are not necessarily indicative of the results to be expected for the full year.  The balance sheet as of December 31, 2017 has been derived from the Company’s audited financial statements as of that date but does not include all of the information and notes required by GAAP for complete financial statements.

In May 2017, the Company sold a total of 47,495,000 shares of common stock in an initial public offering of shares of common stock.  On November 15, 2017 and May 2, 2018, the Company completed secondary offerings of 25,300,000 shares and 30,533,478 shares respectively, of common stock held by affiliates of Kohlberg Kravis Roberts & Co. L.P. (“KKR”).  As a result of the May 2018 secondary offering, the Company is no longer considered a “controlled company” within the meaning of the corporate governance standards of the New York Stock Exchange (“NYSE”).  KKR currently owns 90,721,409 shares of common stock, or approximately 46% of the total outstanding common stock based on the number of shares outstanding as of September 30, 2018.

Prior Year Reclassification

Prior Year Reclassification

In the first quarter of fiscal year 2018, the Company adopted the provisions of ASU 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”).  The reclassification of certain prior year amounts as a result of the adoption of ASU 2017-07 is detailed below in the section “Adopted Accounting Standard Updates” within this Note 1 “Condensed Consolidated Financial Statements.”

Adopted Accounting Standard Updates ("ASU")

Adopted Accounting Standard Updates (“ASU”)

ASU 2014-09, Revenue from Contracts with Customers (Topic 606)

On January 1, 2018, the Company adopted Financial Accounting Standards Board (“FASB”) ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”) using the modified retrospective approach.  Under the modified retrospective approach, the Company is required to recognize the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of retained earnings as of January 1, 2018, the date of initial application.  The cumulative effect of initially applying ASC 606 was immaterial to the Condensed Consolidated Financial Statements.  Therefore, the Company did not record a cumulative transition adjustment.

In conjunction with the adoption of ASC 606, the Company updated its significant accounting policy related to revenue recognition disclosed in Note 1 “Summary of Significant Accounting Policies” of the Consolidated Financial Statements in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2017.  An overview of the Company’s revenue recognition policy under ASC 606 is included in Note 12 “Revenue from Contracts with Customers.”

Results for the three month and nine month periods ended September 30, 2018 are presented under ASC 606.  Prior periods are not adjusted and will continue to be reported in accordance with ASC 605 Revenue Recognition (“ASC 605”).  However, during fiscal year 2018, the Company is required to provide additional disclosures presenting the amount by which each 2018 financial statement line item was affected as a result of applying ASC 606 and an explanation of significant changes in order to present 2018 on a comparative basis under ASC 605.

The following table summarizes the impacts of adopting ASC 606 on the Company’s Condensed Consolidated Statements of Operations for the three month period ended September 30, 2018.

Condensed Consolidated Statements of Operations

	As Reported		Adjustments			Balance Without Adoption of ASC 606
Revenues	$	689.3	$	(8.7	)	$	680.6
Cost of sales		426.9		(5.4	)		421.5
Provision (benefit) for income taxes		22.6		(0.8	)		21.8
Net Income (Loss)		72.2		(2.5	)		69.7

The following table summarizes the impacts of adopting ASC 606 on the Company’s Condensed Consolidated Statements of Operations for the nine month period ended September 30, 2018.

Condensed Consolidated Statements of Operations

	As Reported		Adjustments			Balance Without Adoption of ASC 606
Revenues	$	1,977.1	$	(18.1	)	$	1,959.0
Cost of sales		1,233.6		(11.2	)		1,222.4
Provision (benefit) for income taxes		63.2		(1.8	)		61.4
Net Income (Loss)		174.9		(5.1	)		169.8

The following table summarizes the impacts of adopting ASC 606 on the Company’s Condensed Consolidated Balance Sheets as of September 30, 2018.

Condensed Consolidated Balance Sheets

	As Reported			Adjustments			Balance Without Adoption of ASC 606
Assets
Inventories	$	550.1		$	11.2		$	561.3
Other current assets(1)		63.4			(11.2	)		52.2
Liabilities and Stockholders' Equity
Accrued liabilities		258.9			5.1			264.0
Accumulated deficit		(403.2	)		(5.1	)		(408.3	)

⁽¹⁾ Adjustment represents “Contract asset.”  See Note 12 “Revenue from Contracts with Customers” for an explanation of the Contract assets account included in “Other current assets” in the Condensed Consolidated Balance Sheets.

ASU 2017-07 Compensation – Retirement Benefits (Topic 715) – Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost

The Company adopted FASB ASU 2017-07 on January 1, 2018, the adoption date.  The Company applied ASU 2017-07 retrospectively for the presentation of the service cost component and the other components of net periodic benefit cost in the income statement and prospectively for the capitalization of the service cost component of net periodic benefit cost in assets.  ASU 2017-07 allows the Company to use the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements.  Applying the practical expedient, the Company reclassified $0.1 million and $0.2 million of expenses from “Selling and administrative expenses” to “Other income, net” within the Condensed Consolidated Statements of Operations for the three month and nine month periods ended September 30, 2017.

ASU 2017-12 Derivatives and Hedging (Topic 815) – Targeted Improvements to Accounting for Hedging Activities

The Company early adopted FASB ASU 2017-12, Derivatives and Hedging (Topic 815) – Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”) on January 1, 2018, the adoption date, using the modified retrospective approach.  As of the adoption date, the Company was the fixed rate payor on 12 interest rate swap contracts that fixed the LIBOR-based index used to determine the interest rates charged on a total of $1,125.0 million of the Company’s LIBOR-based variable rate borrowings.  The Company recorded a cumulative-effect adjustment on the adoption date increasing the opening balance of the “Accumulated deficit” line of the Condensed Consolidated Balance Sheets by $0.3 million and decreasing the “Accumulated Other Comprehensive Loss” line of the Condensed Consolidated Balance Sheets by $0.3 million.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842).  The amendments in this update will replace most of the existing GAAP lease accounting guidance in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements.  The ASU is effective for public companies beginning in the first quarter of 2019.  The ASU requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach.  During March 2018, the FASB approved amendments to create an optional transition method that will provide an option to use the effective date of Topic 842 as the date of initial application of the transition.

The Company established an implementation team and selected a third party lease accounting software solution which will serve as a central repository of active leases and assist in the compliance with the new reporting requirements.  The implementation team has been reassessing business processes, drafting an internal policy to address the new standard, extracting lease data for inclusion in the new lease software, determining a process to identify and update the Company’s incremental borrowing rate and understanding the impact on disclosures.  The team is also determining which practical expedients to elect.  The Company is still finalizing its evaluation of the impact of the new lease standard on its condensed consolidated financial statements and expects to record right of use assets and lease liabilities for its operating leases on its condensed consolidated balance sheets.  The Company will adopt the new standard utilizing the optional transition method.

In March 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220).  The amendments in this update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act.  Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act and will improve the usefulness of information reported to financial statement users.  However, because the amendments only related to the reclassification of the income tax effects of the Tax Cuts and Jobs Act, the underlying guidance that requires the effect of a change in tax laws or rates be included in income from continuing operations is not affected.  The ASU is effective for public companies beginning in the first quarter of 2019.  The Company is currently assessing the impact of this ASU on its condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.  The amendments in this update eliminate, add and modify certain disclosure requirements for fair value measurements as part of its disclosure framework project.  The guidance is effective for public companies beginning in the first quarter of 2020.  Early adoption is permitted.  The Company is currently assessing the impact of this ASU on its consolidated financial statements and evaluating the timing of adoption.

In August 2018, the FASB issued ASU 2018-14, Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans.  The amendments in this eliminate, add and modify certain disclosure requirements for defined benefit pension plans.  The guidance is effective for public companies beginning with its annual report for fiscal year 2020.  Early adoption is permitted.  The Company is currently assessing the impact of this ASU on its consolidated financial statements and evaluating the timing of adoption.

In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40); Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.  The amendments in this update require implementation costs incurred by customers in cloud computing arrangements (i.e., hosting arrangements) to be capitalized under the same premises of authoritative guidance for internal-use software, and deferred over the noncancellable term of the cloud computing arrangement plus any option renewal periods that are reasonably certain to be exercised by the customer or for which the exercise is controlled by the service provider.  The Company is required to adopt this new guidance in the first quarter of 2020.  Early adoption is permitted.  The Company is currently assessing the impact of this ASU on its consolidated financial statements and evaluating the timing of adoption.

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Condensed Consolidated Financial Statements (Tables)

9 Months Ended

Sep. 30, 2018

Condensed Consolidated Financial Statements [Abstract]

Impacts of Adopting ASC 606 on the Company's Condensed Consolidated Financial Statements

The following table summarizes the impacts of adopting ASC 606 on the Company’s Condensed Consolidated Statements of Operations for the three month period ended September 30, 2018.

Condensed Consolidated Statements of Operations

	As Reported		Adjustments			Balance Without Adoption of ASC 606
Revenues	$	689.3	$	(8.7	)	$	680.6
Cost of sales		426.9		(5.4	)		421.5
Provision (benefit) for income taxes		22.6		(0.8	)		21.8
Net Income (Loss)		72.2		(2.5	)		69.7

The following table summarizes the impacts of adopting ASC 606 on the Company’s Condensed Consolidated Statements of Operations for the nine month period ended September 30, 2018.

Condensed Consolidated Statements of Operations

	As Reported		Adjustments			Balance Without Adoption of ASC 606
Revenues	$	1,977.1	$	(18.1	)	$	1,959.0
Cost of sales		1,233.6		(11.2	)		1,222.4
Provision (benefit) for income taxes		63.2		(1.8	)		61.4
Net Income (Loss)		174.9		(5.1	)		169.8

The following table summarizes the impacts of adopting ASC 606 on the Company’s Condensed Consolidated Balance Sheets as of September 30, 2018.

Condensed Consolidated Balance Sheets

	As Reported			Adjustments			Balance Without Adoption of ASC 606
Assets
Inventories	$	550.1		$	11.2		$	561.3
Other current assets(1)		63.4			(11.2	)		52.2
Liabilities and Stockholders' Equity
Accrued liabilities		258.9			5.1			264.0
Accumulated deficit		(403.2	)		(5.1	)		(408.3	)

⁽¹⁾ Adjustment represents “Contract asset.”  See Note 12 “Revenue from Contracts with Customers” for an explanation of the Contract assets account included in “Other current assets” in the Condensed Consolidated Balance Sheets.

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Business Combinations (Tables)

9 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

Revenues and Operating Income

The following table summarizes the revenue and operating income of these acquisitions for the periods presented subsequent to their date of acquisition.

	Three Month Periods Ended September 30,				Nine Month Periods Ended September 30,
	2018		2017		2018		2017
Revenue	$	25.3	$	5.9	$	63.1	$	7.9
Operating income		2.0		0.5		3.2		0.6

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Restructuring (Tables)

9 Months Ended

Sep. 30, 2018

Restructuring [Abstract]

Activity Associated With Restructuring Programs

The following table summarizes the activity associated with these restructuring programs for the nine month period ended September 30, 2017.

Balance as of December 31, 2016	$	20.9
Charged to expense - termination benefits		1.9
Charged to expense - other		3.0
Payments		(17.3	)
Other, net		1.0
Balance as of September 30, 2017	$	9.5

The following table summarizes the activity associated with this restructuring program for the nine month period ended September 30, 2018.

Balance as of December 31, 2017	$	-
Charged to expense - termination benefits		4.9
Charged to expense - other		0.5
Payments		(1.0	)
Other, net		-
Balance as of September 30, 2018	$	4.4

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Inventories (Tables)

9 Months Ended

Sep. 30, 2018

Inventories [Abstract]

Inventories

Inventories as of September 30, 2018 and December 31, 2017 consisted of the following.

	September 30, 2018		December 31, 2017
Raw materials, including parts and subassemblies	$	368.1	$	362.6
Work-in-process		84.6		57.9
Finished goods		84.0		60.6
		536.7		481.1
Excess of LIFO costs over FIFO costs		13.4		13.4
Inventories	$	550.1	$	494.5

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2018

Goodwill and Other Intangible Assets [Abstract]

Goodwill Attributable to Each Reportable Segment

The changes in the carrying amount of goodwill attributable to each reportable segment for the nine month period ended September 30, 2018 is presented in the table below.

	Industrials			Energy			Medical			Total
Balance as of December 31, 2017	$	561.6		$	460.2		$	205.8		$	1,227.6
Acquisition		63.6			8.7			-			72.3
Foreign currency translation and other(1)		(16.7	)		(12.4	)		(2.4	)		(31.5	)
Balance as of September 30, 2018	$	608.5		$	456.5		$	203.4		$	1,268.4

⁽¹⁾ During the nine month period ended September 30, 2018, the Company recorded a decrease in goodwill of $0.2 million as a result of measurement period adjustments in the Industrials segment.

Intangible Assets

Other intangible assets as of September 30, 2018 and December 31, 2017 consisted of the following.

	September 30, 2018					December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer lists and relationships	$	1,209.9	$	(542.6	)	$	1,226.8	$	(473.0	)
Technology		21.9		(4.6	)		8.1		(4.0	)
Trademarks		37.1		(12.4	)		30.3		(10.6	)
Backlog		69.1		(68.0	)		65.5		(65.5	)
Other		57.3		(28.8	)		53.6		(23.5	)
Unamortized intangible assets:
Trademarks		617.9		-			623.5		-
Total other intangible assets	$	2,013.2	$	(656.4	)	$	2,007.8	$	(576.6	)

Amortization of Intangible Assets

Amortization of intangible assets for the three and nine month periods ended September 30, 2018 and 2017 were as follows.

	Three Month Period Ended September 30,				Nine Month Period Ended September 30,
	2018		2017		2018		2017
Intangible asset amortization expense	$	31.0	$	29.5	$	93.4	$	87.6

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Accrued Liabilities (Tables)

9 Months Ended

Sep. 30, 2018

Accrued Liabilities [Abstract]

Accrued Liabilities

Accrued liabilities as of September 30, 2018 and December 31, 2017 consisted of the following.

	September 30, 2018		December 31, 2017
Salaries, wages and related fringe benefits	$	67.7	$	97.3
Restructuring		6.4		6.5
Taxes		15.5		34.5
Contract liabilities(1)		90.5		42.7
Product warranty		24.5		22.3
Accrued interest		0.7		0.8
Other		53.6		67.1
Total accrued liabilities	$	258.9	$	271.2

⁽¹⁾ For purposes of comparability, “Advance payments on sales contracts” as of December 31, 2017 was reclassified to “Contract liabilities.”  See Note 12 “Revenue from Contracts with Customers” for an explanation of the Contract liabilities account included in “Accrued liabilities” in the Condensed Consolidated Balance Sheets.

Accrued Product Warranty Liability

A reconciliation of the changes in the accrued product warranty liability for the three and nine month periods ended September 30, 2018 and 2017 are as follows.

	Three Month Period Ended September 30, 2018			Three Month Period Ended September 30, 2017			Nine Month Period Ended September 30, 2018			Nine Month Period Ended September 30, 2017
Balance at beginning of period	$	23.9		$	21.7		$	22.3		$	21.7
Product warranty accruals		6.9			6.7			18.5			17.8
Settlements		(6.2	)		(5.0	)		(16.8	)		(17.1	)
Charged to other accounts (1)		(0.1	)		0.2			0.5			1.2
Balance at end of period	$	24.5		$	23.6		$	24.5		$	23.6

⁽¹⁾ Includes primarily the effects of foreign currency translation adjustments for the Company’s subsidiaries with functional currencies other than the USD, and changes in the accrual related to acquisitions.

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Pension and Other Postretirement Benefits (Tables)

9 Months Ended

Sep. 30, 2018

Pension and Other Postretirement Benefits [Abstract]

Net Periodic Benefit Cost

The following table summarizes the components of net periodic benefit cost for the Company’s defined benefit pension plans and other postretirement benefit plans recognized for the three and nine month periods ended September 30, 2018 and 2017.

	Pension Benefits												Other Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
	Three Month Period Ended September 30, 2018			Nine Month Period Ended September 30, 2018			Three Month Period Ended September 30, 2018			Nine Month Period Ended September 30, 2018			Three Month Period Ended September 30, 2018		Nine Month Period Ended September 30, 2018
Service cost	$	-		$	-		$	0.4		$	1.4		$	-	$	-
Interest cost		0.5			1.5			1.8			5.7			-		0.1
Expected return on plan assets		(1.2	)		(3.5	)		(2.8	)		(8.8	)		-		-
Recognition of:
Unrecognized prior service cost		-			-			-			-			-		-
Unrecognized net actuarial loss		-			-			0.5			1.4			-		-
	$	(0.7	)	$	(2.0	)	$	(0.1	)	$	(0.3	)	$	-	$	0.1

	Pension Benefits												Other Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
	Three Month Period Ended September 30, 2017			Nine Month Period Ended September 30, 2017			Three Month Period Ended September 30, 2017			Nine Month Period Ended September 30, 2017			Three Month Period Ended September 30, 2017		Nine Month Period Ended September 30, 2017
Service cost	$	-		$	-		$	0.5		$	1.4		$	-	$	-
Interest cost		0.6			1.7			2.0			5.8			-		0.1
Expected return on plan assets		(1.1	)		(3.3	)		(2.7	)		(7.7	)		-		-
Recognition of:
Unrecognized prior service cost		-			-			-			-			-		-
Unrecognized net actuarial loss		-			-			1.3			3.7			-		-
	$	(0.5	)	$	(1.6	)	$	1.1		$	3.2		$	-	$	0.1

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Debt (Tables)

9 Months Ended

Sep. 30, 2018

Debt [Abstract]

Debt

The Company’s debt as of September 30, 2018 and December 31, 2017 is summarized as follows.

	September 30, 2018			December 31, 2017
Short-term borrowings	$	-		$	-
Long-term debt
Revolving credit facility, due 2020	$	-		$	-
Receivables financing agreement, due 2020		-			-
Term loan denominated in U.S. dollars, due 2024 (1)		1,025.9			1,282.3
Term loan denominated in Euros, due 2024 (2)		706.7			735.9
Capitalized leases and other long-term debt		26.4			26.9
Unamortized debt issuance costs		(3.7	)		(4.9	)
Total long-term debt, net, including current maturities		1,755.3			2,040.2
Current maturities of long-term debt		7.9			20.9
Total long-term debt, net	$	1,747.4		$	2,019.3

⁽¹⁾ As of September 30, 2018, the applicable interest rate was 4.99% and the weighted-average rate was 4.78% for the nine month period ended September 30, 2018.

⁽²⁾ As of September 30, 2018, the applicable interest rate was 3.00% and the weighted-average rate was 3.00% for the nine month period ended September 30, 2018.

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2018

Stock-Based Compensation [Abstract]

Assumptions Used to Estimate Fair Value of Options Granted

The following assumptions were used to estimate the fair value of options granted (excluding previously disclosed modified awards) during the nine month periods ended September 30, 2018 and 2017 using the Black-Scholes option-pricing model.

	Nine Month Period Ended September 30, 2018			Nine Month Period Ended September 30, 2017
Assumptions:
Expected life of options (in years)		7.0 - 7.5			5.0 - 6.3
Risk-free interest rate		2.9% - 3.0	%		1.9% - 2.1	%
Assumed volatility		34.4 - 35.4			41.2 - 45.8	%
Expected dividend rate		0.0	%		0.0	%

Stock-Based Award Plan Activity

A summary of the Company’s stock option (including SARs) activity for the nine month period ended September 30, 2018 is presented in the following table (underlying shares in thousands).

	Shares			Weighted-Average Exercise Price (per share)
Outstanding at December 31, 2017		12,834		$	9.54
Granted		848		$	31.74
Exercised or settled		(752	)	$	8.36
Forfeited		(433	)	$	16.21
Outstanding at September 30, 2018		12,497		$	10.88
Vested at September 30, 2018		8,612		$	9.03

Restricted Stock Unit Activity

A summary of the Company’s restricted stock unit activity for the nine month period ended September 30, 2018 is presented in the following table (underlying shares in thousands).

	Shares			Weighted-Average Grant-Date Fair Value
Non-vested as of December 31, 2017		-		$	-
Granted		365		$	31.84
Vested		-		$	-
Forfeited		(10	)	$	32.06
Non-vested as of September 30, 2018		355		$	31.83

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Accumulated Other Comprehensive (Loss) Income (Tables)

9 Months Ended

Sep. 30, 2018

Accumulated Other Comprehensive (Loss) Income [Abstract]

Other Comprehensive (Loss) Income

The before tax income (loss) and related income tax effect are as follows.

	For the Three Month Period Ended September 30, 2018									For the Nine Month Period Ended September 30, 2018
	Before-Tax Amount			Tax (Expense) or Benefit			Net of Tax Amount			Before-Tax Amount			Tax (Expense) or Benefit			Net of Tax Amount
Foreign currency translation adjustments, net	$	(21.9	)	$	-		$	(21.9	)	$	(70.0	)	$	-		$	(70.0	)
Foreign currency gains, net		4.7			(1.1	)		3.6			24.4			(5.7	)		18.7
Unrecognized gains on cash flow hedges, net		5.8			(1.4	)		4.4			27.1			(6.6	)		20.5
Pension and other postretirement benefit prior service cost and gain or loss, net		1.0			(0.1	)		0.9			3.0			0.9			3.9
Other comprehensive loss	$	(10.4	)	$	(2.6	)	$	(13.0	)	$	(15.5	)	$	(11.4	)	$	(26.9	)

	For the Three Month Period Ended September 30, 2017									For the Nine Month Period Ended September 30, 2017
	Before-Tax Amount			Tax (Expense) or Benefit			Net of Tax Amount			Before-Tax Amount			Tax (Expense) or Benefit			Net of Tax Amount
Foreign currency translation adjustments, net	$	41.5		$	-		$	41.5		$	131.4		$	-		$	131.4
Foreign currency losses, net		(23.5	)		8.7			(14.8	)		(71.2	)		26.9			(44.3	)
Unrecognized gains (losses) on cash flow hedges, net		5.5			(1.5	)		4.0			8.9			(3.4	)		5.5
Pension and other postretirement benefit prior service cost and gain or loss, net		(1.1	)		0.5			(0.6	)		(3.4	)		1.5			(1.9	)
Other comprehensive income	$	22.4		$	7.7		$	30.1		$	65.7		$	25.0		$	90.7

Changes in Accumulated Other Comprehensive (Loss) Income

Changes in accumulated other comprehensive (loss) income by component for the nine month periods ended September 30, 2018 and 2017 are presented in the following tables⁽¹⁾:

	Cumulative Currency Translation Adjustment			Foreign Currency Gains and (Losses)		Unrealized (Losses) Gains on Cash Flow Hedges			Pension and Postretirement Benefit Plans			Total
Balance as of December 31, 2017	$	(166.6	)	$	37.0	$	(29.8	)	$	(40.4	)	$	(199.8	)
Other comprehensive (loss) income before reclassifications		(70.0	)		18.7		11.5			2.8			(37.0	)
Amounts reclassified from accumulated other comprehensive (loss) income		-			-		9.0			1.1			10.1
Other comprehensive (loss) income		(70.0	)		18.7		20.5			3.9			(26.9	)
Cumulative effect adjustment upon adoption of new accounting standard (ASU 2017-12)		-			-		0.3			-			0.3
Balance as of September 30, 2018	$	(236.6	)	$	55.7	$	(9.0	)	$	(36.5	)	$	(226.4	)

	Cumulative Currency Translation Adjustment			Foreign Currency Gains and (Losses)			Unrealized (Losses) Gains on Cash Flow Hedges			Pension and Postretirement Benefit Plans			Total
Balance as of December 31, 2016	$	(324.2	)	$	88.6		$	(42.2	)	$	(64.6	)	$	(342.4	)
Other comprehensive income (loss) before reclassifications		131.4			(44.3	)		(3.1	)		(4.2	)		79.8
Amounts reclassified from accumulated other comprehensive (loss) income		-			-			8.6			2.3			10.9
Other comprehensive income (loss)		131.4			(44.3	)		5.5			(1.9	)		90.7
Balance as of September 30, 2017	$	(192.8	)	$	44.3		$	(36.7	)	$	(66.5	)	$	(251.7	)

⁽¹⁾ All amounts are net of tax.  Amounts in parentheses indicate debits.

Reclassifications out of Accumulated Other Comprehensive (Loss) Income

Reclassifications out of accumulated other comprehensive (loss) income for the nine month periods ended September 30, 2018 and 2017 are presented in the following table.

Amount Reclassified from Accumulated Other Comprehensive (Loss) Income
Details about Accumulated Other Comprehensive (Loss) Income Components	For the Nine Month Period Ended September 30, 2018			For the Nine Month Period Ended September 30, 2017			Affected Line in the Statement Where Net Income is Presented
Loss on cash flow hedges
Interest rate swaps	$	11.8		$	13.9		Interest expense
		11.8			13.9		Total before tax
		(2.8	)		(5.3	)	Benefit for income taxes
	$	9.0		$	8.6		Net of tax
Amortization of defined benefit pension and other postretirement benefit items	$	1.4		$	3.7		(1)
		1.4			3.7		Total before tax
		(0.3	)		(1.4	)	Benefit for income taxes
	$	1.1		$	2.3		Net of tax
Total reclassifications for the period	$	10.1		$	10.9		Net of tax

⁽¹⁾ These components are included in the computation of net periodic benefit cost.  See Note 7 “Pension and Other Postretirement Benefits” for additional details.

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Hedging Activities and Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2018

Hedging Activities and Fair Value Measurements [Abstract]

Notional Amounts, Fair Values and Classification of Outstanding Derivatives by Risk Category and Instrument Type

The following table summarizes the notional amounts, fair values and classification of the Company’s outstanding derivatives by risk category and instrument type within the Condensed Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017.

	September 30, 2018
	Derivative Classification	Notional Amount (1)		Fair Value (1) Other Current Assets		Fair Value (1) Other Assets		Fair Value (1) Accrued Liabilities		Fair Value (1) Other Liabilities
Derivatives Designated as Hedging Instruments
Interest rate swap contracts	Cash Flow	$	1,025.0	$	-	$	-	$	3.4	$	14.2
Derivatives Not Designated as Hedging Instruments
Foreign currency forwards	Fair Value	$	26.5	$	-	$	-	$	0.3	$	-
	December 31, 2017
	Derivative Classification	Notional Amount (1)		Fair Value (1) Other Current Assets		Fair Value (1) Other Assets		Fair Value (1) Accrued Liabilities		Fair Value (1) Other Liabilities
Derivatives Designated as Hedging Instruments
Interest rate swap contracts	Cash Flow	$	1,125.0	$	-	$	-	$	16.1	$	30.6
Derivatives Not Designated as Hedging Instruments
Foreign currency forwards	Fair Value	$	94.4	$	-	$	-	$	1.2	$	-

⁽¹⁾ Notional amounts represent the gross contract amounts of the outstanding derivatives excluding the total notional amount of positions that have been effectively closed through offsetting positions.  The net gains and net losses associated with positions that have been effectively closed through offsetting positions but not yet settled are included in the asset and liability derivatives fair value columns, respectively.

Gains and Losses on Derivatives Designated as Cash Flow Hedges

Gains and losses on derivatives designated as cash flow hedges included in the Condensed Consolidated Statements of Comprehensive (Loss) Income for the three and nine month periods ended September 30, 2018 and 2017, are as presented in the table below.  See Note 1 “Condensed Consolidated Financial Statements” for a discussion of the adoption of ASU 2017-12.

	For the Three Month Periods Ended September 30,						For the Nine Month Periods Ended September 30,
	2018			2017			2018			2017
Interest rate swap contracts
Gain (loss) recognized in AOCI on derivatives	$	1.8		$	1.4		$	15.2		$	(4.9	)
Loss reclassified from AOCI into income (effective portion)(1)		(3.3	)		(4.1	)		(11.2	)		(13.9	)
Loss reclassified from AOCI into income (missed forecast)(2)		(0.6	)		-			(0.6	)		-

⁽¹⁾ Losses on derivatives reclassified from accumulated other comprehensive income (“AOCI”) into income (effective portion) were included in “Interest expense” in the Condensed Consolidated Statements of Operations, the same income statement line item as the earnings effect of the hedged item.

⁽²⁾ During the three month period ended September 30, 2018, the Company used excess cash to pay down $150.0 million of its Dollar Term Loan Facility.  Due to this unforecasted pay down of debt, the Company paid $2.7 million in the amendment of the interest rate swap contracts to reflect the updated forecasted cash flows.  The updated forecasts caused certain hedged items to be deemed probable of not occurring in the future and thus, the Company accelerated the release of AOCI related to those hedged items.  Losses reclassified from AOCI into income (missed forecast) were included in “Loss on extinguishment of debt” in the Condensed Consolidated Statements of Operations.

(Losses) Gains on Derivative Instruments Not Designated as Accounting Hedges and Total Net Foreign Currency (Losses) Gains

The Company’s (losses) gains on derivative instruments not designated as accounting hedges and total net foreign currency (losses) gains for the three and nine month periods ended September 30, 2018 and 2017 were as follows.

	For the Three Month Periods Ended September 30,						For the Nine Month Periods Ended September 30,
	2018			2017			2018		2017
Foreign currency forward contracts (losses) gains	$	(0.4	)	$	(1.8	)	$	5.8	$	(6.7	)
Total foreign currency transaction gains (losses), net		0.8			(1.7	)		0.6		(6.3	)

Changes in Value of Debt and Designated Interest Rate Swaps

The Company’s gains and (losses), net of income tax, associated with changes in the value of debt and designated cross currency interest rate swaps for the three and nine month periods ended September 30, 2018 and 2017 and the net balance of such gains and (losses) included in accumulated other comprehensive (loss) income as of September 30, 2018 and 2017 were as follows.

	For the Three Month Periods Ended September 30,					For the Nine Month Periods Ended September 30,
	2018		2017			2018		2017
Gain (loss), net of income tax, recorded through other comprehensive income	$	3.5	$	(13.6	)	$	18.0	$	(43.2	)
Balance included in accumulated other comprehensive (loss) income as of September 30, 2018 and 2017, respectively						$	50.1	$	39.2

Assets and Liabilities Measured at Fair Value

The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2018.

	Level 1		Level 2		Level 3		Total
Financial Assets
Trading securities held in deferred compensation plan(1)	$	6.3	$	-	$	-	$	6.3
Total	$	6.3	$	-	$	-	$	6.3
Financial Liabilities
Foreign currency forwards(2)	$	-	$	0.3	$	-	$	0.3
Interest rate swaps(3)		-		17.6		-		17.6
Deferred compensation plan(1)		6.3		-		-		6.3
Total	$	6.3	$	17.9	$	-	$	24.2

⁽¹⁾ Based on the quoted price of publicly traded mutual funds which are classified as trading securities and accounted for using the mark-to-market method.

⁽²⁾ Based on calculations that use readily observable market parameters as their basis, such as spot and forward rates.

⁽³⁾ Measured as the present value of all expected future cash flows based on the LIBOR-based swap yield curves as of September 30, 2018.  The present value calculation uses discount rates that have been adjusted to reflect the credit quality of the Company and its counterparties.

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Revenue from Contracts with Customers (Tables)

9 Months Ended

Sep. 30, 2018

Revenue from Contracts with Customers [Abstract]

Disaggregation of Revenue

The following table provides disaggregated revenue by reportable segment for the three month period ended September 30, 2018.

	Industrials		Energy		Medical		Total
Primary Geographic Markets
United States	$	96.7	$	200.1	$	31.1	$	327.9
Other Americas		19.9		29.4		0.7		50.0
Total Americas	$	116.6	$	229.5	$	31.8	$	377.9
EMEA		156.2		44.9		27.7		228.8
Asia Pacific		47.2		24.4		11.0		82.6
Total	$	320.0	$	298.8	$	70.5	$	689.3
Product Categories
Original equipment(1)	$	221.2	$	127.8	$	68.3	$	417.3
Aftermarket(2)		98.8		171.0		2.2		272.0
Total	$	320.0	$	298.8	$	70.5	$	689.3
Pattern of Revenue Recognition
Revenue recognized at point in time(3)	$	309.4	$	278.5	$	70.5	$	658.4
Revenue recognized over time(4)		10.6		20.3		-		30.9
Total	$	320.0	$	298.8	$	70.5	$	689.3

⁽¹⁾ Revenues from sales of capital equipment within the Industrials and Energy Segments and sales of components to original equipment manufacturers in the Medical Segment.

⁽²⁾ Revenues from sales of spare parts, accessories, other components and services in support of maintaining customer owned, installed base of the Company’s original equipment.

⁽³⁾ Revenues from short and long duration product and service contracts recognized at a point in time when control is transferred to the customer generally when products delivery has occurred and services have been rendered.

⁽⁴⁾ Revenues primarily from long duration ETO product contracts and certain contracts for the delivery of a significant volume of substantially similar products recognized over time as contractual performance obligations are completed.

The following table provides disaggregated revenue by reportable segment for the nine month period ended September 30, 2018.

	Industrials		Energy		Medical		Total
Primary Geographic Markets
United States	$	278.2	$	538.6	$	77.2	$	894.0
Other Americas		58.1		85.0		2.1		145.2
Total Americas	$	336.3	$	623.6	$	79.3	$	1,039.2
EMEA		481.8		115.3		82.4		679.5
Asia Pacific		147.6		75.2		35.6		258.4
Total	$	965.7	$	814.1	$	197.3	$	1,977.1
Product Categories
Original equipment(1)	$	662.5	$	337.7	$	190.5	$	1,190.7
Aftermarket(2)		303.2		476.4		6.8		786.4
Total	$	965.7	$	814.1	$	197.3	$	1,977.1
Pattern of Revenue Recognition
Revenue recognized at point in time(3)	$	931.2	$	776.3	$	197.3	$	1,904.8
Revenue recognized over time(4)		34.5		37.8		-		72.3
Total	$	965.7	$	814.1	$	197.3	$	1,977.1

⁽¹⁾ Revenues from sales of capital equipment within the Industrials and Energy Segments and sales of components to original equipment manufacturers in the Medical Segment.

⁽²⁾ Revenues from sales of spare parts, accessories, other components and services in support of maintaining customer owned, installed base of the Company’s original equipment.

⁽³⁾ Revenues from short and long duration product and service contracts recognized at a point in time when control is transferred to the customer generally when products delivery has occurred and services have been rendered.

⁽⁴⁾ Revenues primarily from long duration ETO product contracts and certain contracts for the delivery of a significant volume of substantially similar products recognized over time as contractual performance obligations are completed.

Contract Balances

The following table provides the contract balances as of September 30, 2018 and December 31, 2017 presented in the Condensed Consolidated Balance Sheets.

	September 30, 2018		December 31, 2017
Accounts receivable, net of allowance for doubtful accounts of $19.1 and $18.7, respectively	$	525.0	$	536.3
Contract assets		13.9		-
Contract liabilities		90.5		42.7

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Income Taxes (Tables)

9 Months Ended

Sep. 30, 2018

Income Taxes [Abstract]

Benefit for Income Taxes and Effective Income Tax Rate

The following table summarizes the Company's provision (benefit) for income taxes and effective income tax provision rate for the three and nine month periods ended September 30, 2018 and 2017.

	For the Three Month Periods Ended September 30,						For the Nine Month Periods Ended September 30,
	2018			2017			2018			2017
Income (loss) before income taxes	$	94.8		$	32.4		$	238.1		$	(166.3	)
Provision (benefit) for income taxes	$	22.6		$	4.4		$	63.2		$	(41.2	)
Effective income tax rate		23.8	%		13.6	%		26.5	%		24.8	%

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Supplemental Information (Tables)

9 Months Ended

Sep. 30, 2018

Supplemental Information [Abstract]

Other Operating Expense, Net

The components of "Other operating expense, net" for the three month and nine month periods ended September 30, 2018 and 2017 are as follows.

	For the Three Month Periods Ended September 30,						For the Nine Month Periods Ended September 30,
	2018			2017			2018			2017
Other Operating Expense, Net
Foreign currency transaction (gains) losses, net	$	(0.8	)	$	1.7		$	(0.6	)	$	6.3
Restructuring charges, net (1)		5.4			2.8			5.4			4.9
Environmental remediation expenses (2)		-			-			-			0.9
Stock-based compensation expense (3)		1.1			9.8			2.9			166.0
Shareholder litigation settlement recoveries(4)		-			-			(4.5	)		-
Acquisition related expenses and non-cash charges(5)		0.5			0.7			6.3			2.4
Losses (gains) on asset and business disposals		0.1			(0.6	)		(1.1	)		2.0
Other, net		(0.3	)		3.0			2.4			4.2
Total other operating expense, net	$	6.0		$	17.4		$	10.8		$	186.7

⁽¹⁾ See Note 3 "Restructuring."

⁽²⁾ Estimated environmental remediation costs recorded on an undiscounted basis for a former production facility.

⁽³⁾ Represents stock-based compensation expense recognized for the three month period ended September 30, 2018 of $0.9 million and employer taxes related to stock option exercises of $0.2 million.  Represents stock-based compensation expense recognized for the nine month period ended September 30, 2018 of $6.1 million, reduced by $3.2 million primarily due to a decrease in the estimated accrual for employer taxes related to DSUs as a result of the achievement of employer tax caps in counties outside of the United States.

Represents stock-based compensation expense recognized for stock options outstanding of $7.8 million and $69.2 million for the three month and nine month periods ended September 30, 2017 and DSUs granted to employees at the date of the initial public offering of $2.0 million and $96.8 million under the 2013 Stock Incentive Plan for the three and nine month periods ended September 30, 2017.

⁽⁴⁾ Represents an insurance recovery of the Company's shareholder litigation settlement in 2014.

⁽⁵⁾ Represents costs associated with successful and/or abandoned acquisitions, including third-party expenses, post-closure integration costs and non-cash charges and credits arising from fair value purchase accounting adjustments.

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Segment Results (Tables)

9 Months Ended

Sep. 30, 2018

Segment Results [Abstract]

Summarized Financial Information on Operations by Reportable Segment

The following table provides summarized information about the Company's operations by reportable segment and reconciles Segment Adjusted EBITDA to Income (Loss) Before Income Taxes for the three month and nine month periods ended September 30, 2018 and 2017.

	For the Three Month Period Ended September 30,					For the Nine Month Period Ended September 30,
	2018			2017		2018			2017
Revenue
Industrials	$	320.0		$	288.2	$	965.7		$	819.0
Energy		298.8			301.6		814.1			719.4
Medical		70.5			59.8		197.3			172.0
Total Revenue	$	689.3		$	649.6	$	1,977.1		$	1,710.4
Segment Adjusted EBITDA
Industrials	$	72.1		$	63.1	$	210.0		$	173.7
Energy		94.9			98.6		242.5			199.2
Medical		20.5			16.8		54.4			46.9
Total Segment Adjusted EBITDA	$	187.5		$	178.5	$	506.9		$	419.8
Less items to reconcile Segment Adjusted EBITDA to Income (Loss) Before Income Taxes(1):
Corporate expenses not allocated to segments(a)	$	5.3		$	13.8	$	14.8		$	30.9
Interest expense		24.4			30.1		76.5			115.4
Depreciation and amortization expense		44.4			43.5		134.6			126.9
Sponsor fees and expenses(b)		-			-		-			17.3
Restructuring and related business transformation costs(c)		12.3			6.3		25.2			20.5
Acquisition related expenses and non-cash charges(d)		2.8			1.2		13.1			3.1
Environmental remediation loss reserve(e)		-			-		-			0.9
Expenses related to public stock offerings(f)		0.3			0.5		2.2			3.6
Establish public company financial reporting compliance(g)		1.3			3.8		3.2			7.2
Stock-based compensation(h)		1.1			9.8		2.9			166.0
Foreign currency transaction (gains) losses, net		(0.8	)		1.7		(0.6	)		6.3
Loss on extinguishment of debt(i)		0.9			34.1		1.0			84.5
Shareholder litigation settlement recoveries(j)		-			-		(4.5	)		-
Other adjustments(k)		0.7			1.3		0.4			3.5
Income (Loss) Before Income Taxes	$	94.8		$	32.4	$	238.1		$	(166.3	)

⁽¹⁾ The reconciling items for the three month and nine month periods ended September 30, 2017 have been reclassified to conform to the methodology used in the three and nine month periods ended September 30, 2018, and include the following.

^(a) Includes insurance recoveries of asbestos legal fees of $5.6 million in the nine month period ended September 30, 2018.

^(b) Represents management fees and expenses paid to the Company's Sponsor.

 ^(c) Restructuring and related business transformation costs consist of the following.

	For the Three Month Period Ended September 30,						For the Nine Month Period Ended September 30,
	2018			2017			2018			2017
Restructuring charges	$	5.4		$	2.8		$	5.4		$	4.9
Severance, sign-on, relocation and executive search costs		(0.1	)		0.6			3.8			2.2
Facility reorganization, relocation and other costs		1.1			1.0			2.4			3.9
Information technology infrastructure transformation		0.3			0.8			0.5			3.4
Losses (gains) on asset and business disposals		0.1			(0.6	)		(1.1	)		2.0
Consultant and other advisor fees		3.4			0.5			10.0			1.7
Other, net		2.1			1.2			4.2			2.4
Total restructuring and related business transformation costs	$	12.3		$	6.3		$	25.2		$	20.5

^(d) Represents costs associated with successful and/or abandoned acquisitions, including third-party expenses, post-closure integration costs and non-cash charges and credits arising from fair value purchase accounting adjustments.

^(e) Represents estimated environmental remediation costs and losses relating to a former production facility.

^(f) Represents expenses related to the Company's initial public offering and subsequent secondary offerings.

^(g) Represents third party expenses to comply with the requirements of Sarbanes-Oxley in 2018 and the accelerated adoption of new accounting standards (ASC 606 – Revenue from Contracts with Customers and ASC 842 - Leases) in the first quarter of 2018 and 2019 respectively, one year ahead of the required adoption dates for a private company.  These expenses were previously included in "Expenses related to initial stock offering" and prior periods have been restated to conform to current period presentation.

^(h) Represents stock-based compensation expense recognized for the three month period ended September 30, 2018 of $0.9 million and employer taxes related to stock option exercises of $0.2 million.  Represents stock-based compensation expense recognized for the nine month period ended September 30, 2018 of $6.1 million, reduced by $3.2 million primarily due to a decrease in the estimated accrual for employer taxes related to DSUs as a result of the achievement of employer tax caps in countries outside of the United States.

Represents stock-based compensation expense recognized for stock options outstanding of $7.8 million and $69.2 million for the three month and nine month periods ended September 30, 2017 and DSUs granted to employees at the date of the initial public offering of $2.0 million and $96.8 million under the 2013 Stock Incentive Plan for the three and nine month periods ended September 30, 2017.

⁽ⁱ⁾ Represents losses on extinguishment of the senior notes and a portion of the U.S. Term Loan and losses reclassified from AOCI into income related to the amendment of the interest rate swaps in conjunction with the debt repayment.

^(j) Represents an insurance recovery of the Company's shareholder litigation settlement in 2014.

^(k) Includes (i) the effects of the amortization of prior service costs and the amortization of gains in pension and other postretirement benefits (OPEB) expense, (ii) certain legal and compliance costs and (iii) other miscellaneous adjustments.

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Earnings (Loss) Per Share (Tables)

9 Months Ended

Sep. 30, 2018

Earnings (Loss) Per Share [Abstract]

Basic and Diluted Income (Loss) per Share

The computations of basic and diluted loss per share are as follows.

	For the Three Month Period Ended September 30,				For the Nine Month Period Ended September 30,
	2018		2017		2018		2017
Net income (loss)	$	72.2	$	28.0	$	174.9	$	(125.1	)
Less: Net income attributable to noncontrolling interests		-		-		-		0.1
Net income (loss) attributable to Gardner Denver Holdings, Inc.	$	72.2	$	28.0	$	174.9	$	(125.2	)
Average shares outstanding:
Basic		201.9		201.3		201.8		175.7
Diluted		209.1		208.1		209.6		175.7
Income (loss) per share:
Basic	$	0.36	$	0.14	$	0.87	$	(0.71	)
Diluted	$	0.35	$	0.13	$	0.83	$	(0.71	)

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Condensed Consolidated Financial Statements, Basis of Presentation (Details) - Common Stock [Member] - shares	May 02, 2018	Nov. 15, 2017	May 31, 2017	Sep. 30, 2018
Stock Issued or Granted During Period [Abstract]
Stock sold in initial public offering (in shares)			47,495,000
Kohlberg Kravis Roberts & Co. L.P [Member]
Stock Issued or Granted During Period [Abstract]
Stock sold in initial public offering (in shares)	30,533,478	25,300,000
Number of shares owned by non-controlling owners (in shares)				90,721,409
Ownership percentage by non-controlling owners				46.00%

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Condensed Consolidated Financial Statements, Impacts of Adopting ASC 606 (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Condensed Consolidated Statements of Operations [Abstract]
Revenues		$ 689.3	$ 649.6	$ 1,977.1	$ 1,710.4
Cost of sales		426.9	395.7	1,233.6	1,066.0
Provision (benefit) for income taxes		22.6	4.4	63.2	(41.2)
Net income (loss)		72.2	$ 28.0	174.9	$ (125.1)
Assets [Abstract]
Inventories		550.1		550.1		$ 494.5
Other current assets		63.4		63.4		39.5
Liabilities and Stockholders' Equity [Abstract]
Accrued liabilities		258.9		258.9		271.2
Accumulated deficit		(403.2)		(403.2)		$ (577.8)
Adjustments [Member] | ASC 606 [Member]
Condensed Consolidated Statements of Operations [Abstract]
Revenues		(8.7)		(18.1)
Cost of sales		(5.4)		(11.2)
Provision (benefit) for income taxes		(0.8)		(1.8)
Net income (loss)		(2.5)		(5.1)
Assets [Abstract]
Inventories		11.2		11.2
Other current assets	[1]	(11.2)		(11.2)
Liabilities and Stockholders' Equity [Abstract]
Accrued liabilities		5.1		5.1
Accumulated deficit		(5.1)		(5.1)
Balance Without Adoption of ASC 606 [Member] | ASC 606 [Member]
Condensed Consolidated Statements of Operations [Abstract]
Revenues		680.6		1,959.0
Cost of sales		421.5		1,222.4
Provision (benefit) for income taxes		21.8		61.4
Net income (loss)		69.7		169.8
Assets [Abstract]
Inventories		561.3		561.3
Other current assets		52.2		52.2
Liabilities and Stockholders' Equity [Abstract]
Accrued liabilities		264.0		264.0
Accumulated deficit		$ (408.3)		$ (408.3)

[1] Adjustment represents "Contract asset." See Note 12 "Revenue from Contracts with Customers" for an explanation of the Contract assets account included in "Other current assets" in the Condensed Consolidated Balance Sheets.

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Condensed Consolidated Financial Statements, Accounting Standards Updates (Details) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018 USD ($) Contract	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) Contract	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
New Accounting Pronouncements [Abstract]
Selling and administrative expenses		$ 107.7	$ 111.0	$ 330.4	$ 338.9
Number of contracts | Contract		2		2
Interest Rate Swap [Member]
New Accounting Pronouncements [Abstract]
Number of contracts | Contract		11		11
Interest Rate Swap [Member] | LIBOR [Member]
New Accounting Pronouncements [Abstract]
Long-term debt hedged		$ 1,025.0		$ 1,025.0
ASU 2017-07 [Member]
New Accounting Pronouncements [Abstract]
Selling and administrative expenses			(0.1)		(0.2)
Other income, net			$ 0.1		$ 0.2
ASU 2017-12 [Member] | Interest Rate Swap [Member]
New Accounting Pronouncements [Abstract]
Number of contracts | Contract		12		12
ASU 2017-12 [Member] | Interest Rate Swap [Member] | LIBOR [Member]
New Accounting Pronouncements [Abstract]
Long-term debt hedged		$ 1,125.0		$ 1,125.0
ASU 2017-12 [Member] | Accumulated Deficit [Member]
New Accounting Pronouncements [Abstract]
Cumulative effect adjustment						$ (0.3)
ASU 2017-12 [Member] | Accumulated Other Comprehensive Loss [Member]
New Accounting Pronouncements [Abstract]
Cumulative effect adjustment	[1]					$ 0.3

[1] All amounts are net of tax. Amounts in parentheses indicate debits.

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Business Combinations (Details) - USD ($) $ in Millions					3 Months Ended		9 Months Ended
	May 29, 2018	Feb. 08, 2018	Jun. 05, 2017	Mar. 03, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Business Combinations [Abstract]
Net cash paid to acquire business							$ 113.6	$ 18.8
Goodwill					$ 1,268.4		1,268.4		$ 1,227.6
Revenues and Operating Income [Abstract]
Revenue					25.3	$ 5.9	63.1	7.9
Operating income					$ 2.0	$ 0.5	$ 3.2	$ 0.6
PMI Pump Parts [Member]
Business Combinations [Abstract]
Total consideration	$ 21.0
Cash consideration	16.5
Third-party debt	2.2
Other debt	0.1
Promissory note	2.0
Holdback recorded in accrued liabilities	$ 0.2
Runtech Systems Oy [Member]
Business Combinations [Abstract]
Percentage interest acquired		100.00%
Net cash paid to acquire business		$ 94.9
Goodwill		63.6
Amortizable intangible assets		31.3
Goodwill deductible for tax purposes		$ 0.0
LeROI Compressors [Member]
Business Combinations [Abstract]
Holdback recorded in accrued liabilities			$ 1.9
Percentage interest acquired			100.00%
Net cash paid to acquire business			$ 20.4
Goodwill deductible for tax purposes			$ 0.0
Tamrotor Kompressorit Oy [Member]
Business Combinations [Abstract]
Cash consideration				$ 5.2
Holdback recorded in accrued liabilities				$ 0.5
Non-controlling ownership interest acquired				49.00%
Tamrotor Kompressorit Oy [Member] | Capital in Excess of Par Value [Member]
Business Combinations [Abstract]
Acquisition of non-controlling interest				$ 2.3
Tamrotor Kompressorit Oy [Member] | Accumulated Other Comprehensive Loss [Member]
Business Combinations [Abstract]
Acquisition of non-controlling interest				$ 1.5

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Restructuring (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Restructuring Reserves [Abstract]
Restructuring reserves included in accrued liabilities	$ 6.4		$ 6.5
Restructuring Programs 2014 to 2016 [Member]
Restructuring Program [Roll Forward]
Balance at beginning of period		$ 20.9
Charged to expense - termination benefits		1.9
Charged to expense - other		3.0
Payments		(17.3)
Other, net		1.0
Balance at end of period		$ 9.5
Restructuring Reserves [Abstract]
Restructuring reserves included in accrued liabilities	1.7		6.5
Restructuring reserves included in other liabilities	0.2		0.2
Restructuring Programs 2014 to 2016 [Member] | Other Operating Expense, Net [Member]
Restructuring Costs [Abstract]
Restructuring costs incurred to date			48.0
Restructuring Programs 2014 to 2016 [Member] | Industrials [Member] | Other Operating Expense, Net [Member]
Restructuring Costs [Abstract]
Restructuring costs incurred to date			38.5
Restructuring Programs 2014 to 2016 [Member] | Energy [Member] | Other Operating Expense, Net [Member]
Restructuring Costs [Abstract]
Restructuring costs incurred to date			6.3
Restructuring Programs 2014 to 2016 [Member] | Medical [Member] | Other Operating Expense, Net [Member]
Restructuring Costs [Abstract]
Restructuring costs incurred to date			$ 3.2
Restructuring Programs 2018 [Member]
Restructuring Program [Roll Forward]
Balance at beginning of period	0.0
Charged to expense - termination benefits	4.9
Charged to expense - other	0.5
Payments	(1.0)
Other, net	0.0
Balance at end of period	4.4
Restructuring Reserves [Abstract]
Restructuring reserves included in accrued liabilities	4.4
Restructuring Programs 2018 [Member] | Other Operating Expense, Net [Member]
Restructuring Costs [Abstract]
Restructuring costs incurred to date	5.4
Restructuring Programs 2018 [Member] | Industrials [Member] | Other Operating Expense, Net [Member]
Restructuring Costs [Abstract]
Restructuring costs incurred to date	3.7
Restructuring Programs 2018 [Member] | Energy [Member] | Other Operating Expense, Net [Member]
Restructuring Costs [Abstract]
Restructuring costs incurred to date	$ 1.7

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Inventories (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Inventory, Net [Abstract]
Raw materials, including parts and subassemblies	$ 368.1	$ 362.6
Work-in-process	84.6	57.9
Finished goods	84.0	60.6
Total inventories	536.7	481.1
Excess of LIFO costs over FIFO costs	13.4	13.4
Inventories	$ 550.1	$ 494.5

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Goodwill and Other Intangible Assets (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Goodwill [Roll Forward]
Balance at beginning of period				$ 1,227.6
Acquisition				72.3
Foreign currency translation and other				(31.5)
Balance at end of period		$ 1,268.4		1,268.4
Goodwill impairment charges				0.0
Amortized intangible assets [Abstract]
Accumulated amortization		(656.4)		(656.4)		$ (576.6)
Unamortized intangible assets [Abstract]
Total other intangible assets		2,013.2		2,013.2		2,007.8
Amortization of Intangible Assets [Abstract]
Intangible asset amortization expense		31.0	$ 29.5	93.4	$ 87.6
Future Amortization of Intangible Assets [Abstract]
2019		124.2		124.2
2020		124.2		124.2
2021		124.2		124.2
2022		124.2		124.2
2023		124.2		124.2
Industrials [Member]
Goodwill [Roll Forward]
Balance at beginning of period				561.6
Acquisition				63.6
Foreign currency translation and other	[1]			(16.7)
Balance at end of period		608.5		608.5
Correction of purchase accounting allocation				(0.2)
Energy [Member]
Goodwill [Roll Forward]
Balance at beginning of period				460.2
Acquisition				8.7
Foreign currency translation and other				(12.4)
Balance at end of period		456.5		456.5
Accumulated goodwill impairment losses		563.9		563.9
Medical [Member]
Goodwill [Roll Forward]
Balance at beginning of period				205.8
Acquisition				0.0
Foreign currency translation and other				(2.4)
Balance at end of period		203.4		203.4
Trademarks [Member]
Unamortized intangible assets [Abstract]
Gross carrying amount		617.9		617.9		623.5
Customer Lists and Relationships [Member]
Amortized intangible assets [Abstract]
Gross carrying amount		1,209.9		1,209.9		1,226.8
Accumulated amortization		(542.6)		(542.6)		(473.0)
Technology [Member]
Amortized intangible assets [Abstract]
Gross carrying amount		21.9		21.9		8.1
Accumulated amortization		(4.6)		(4.6)		(4.0)
Trademarks [Member]
Amortized intangible assets [Abstract]
Gross carrying amount		37.1		37.1		30.3
Accumulated amortization		(12.4)		(12.4)		(10.6)
Backlog [Member]
Amortized intangible assets [Abstract]
Gross carrying amount		69.1		69.1		65.5
Accumulated amortization		(68.0)		(68.0)		(65.5)
Other [Member]
Amortized intangible assets [Abstract]
Gross carrying amount		57.3		57.3		53.6
Accumulated amortization		$ (28.8)		$ (28.8)		$ (23.5)

[1] During the nine month period ended September 30, 2018, the Company recorded a decrease in goodwill of $0.2 million as a result of measurement period adjustments in the Industrials segment.

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Accrued Liabilities (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Accrued Liabilities [Abstract]
Salaries, wages and related fringe benefits		$ 67.7		$ 67.7		$ 97.3
Restructuring		6.4		6.4		6.5
Taxes		15.5		15.5		34.5
Contract liabilities		90.5		90.5		42.7	[1]
Product warranty		24.5		24.5		22.3
Accrued interest		0.7		0.7		0.8
Other		53.6		53.6		67.1
Total accrued liabilities		258.9		258.9		$ 271.2
Accrued Product Warranty Liability [Roll Forward]
Balance at beginning of period		23.9	$ 21.7	22.3	$ 21.7
Product warranty accruals		6.9	6.7	18.5	17.8
Settlements		(6.2)	(5.0)	(16.8)	(17.1)
Charged to other accounts	[2]	(0.1)	0.2	0.5	1.2
Balance at end of period		$ 24.5	$ 23.6	$ 24.5	$ 23.6

[1] For purposes of comparability, "Advance payments on sales contracts" as of December 31, 2017 was reclassified to "Contract liabilities." See Note 12 "Revenue from Contracts with Customers" for an explanation of the Contract liabilities account included in "Accrued liabilities" in the Condensed Consolidated Balance Sheets.

[2] Includes primarily the effects of foreign currency translation adjustments for the Company's subsidiaries with functional currencies other than the USD, and changes in the accrual related to acquisitions.

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Pension and Other Postretirement Benefits (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Pension Benefits [Member] | U.S. Plans [Member]
Net Periodic Benefit Cost [Abstract]
Service cost	$ 0.0	$ 0.0	$ 0.0	$ 0.0
Interest cost	0.5	0.6	1.5	1.7
Expected return on plan assets	(1.2)	(1.1)	(3.5)	(3.3)
Recognition of [Abstract]
Unrecognized prior service cost	0.0	0.0	0.0	0.0
Unrecognized net actuarial loss	0.0	0.0	0.0	0.0
Net periodic benefit cost	(0.7)	(0.5)	(2.0)	(1.6)
Pension Benefits [Member] | Non-U.S. Plans [Member]
Net Periodic Benefit Cost [Abstract]
Service cost	0.4	0.5	1.4	1.4
Interest cost	1.8	2.0	5.7	5.8
Expected return on plan assets	(2.8)	(2.7)	(8.8)	(7.7)
Recognition of [Abstract]
Unrecognized prior service cost	0.0	0.0	0.0	0.0
Unrecognized net actuarial loss	0.5	1.3	1.4	3.7
Net periodic benefit cost	(0.1)	1.1	(0.3)	3.2
Other Postretirement Benefits [Member]
Net Periodic Benefit Cost [Abstract]
Service cost	0.0	0.0	0.0	0.0
Interest cost	0.0	0.0	0.1	0.1
Expected return on plan assets	0.0	0.0	0.0	0.0
Recognition of [Abstract]
Unrecognized prior service cost	0.0	0.0	0.0	0.0
Unrecognized net actuarial loss	0.0	0.0	0.0	0.0
Net periodic benefit cost	$ 0.0	$ 0.0	$ 0.1	$ 0.1

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Debt, Summary of Debt (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018		Dec. 31, 2017
Debt [Abstract]
Short-term borrowings	$ 0.0		$ 0.0
Long-term debt [Abstract]
Unamortized debt issuance costs	(3.7)		(4.9)
Total long-term debt, net, including current maturities	1,755.3		2,040.2
Current maturities of long-term debt	7.9		20.9
Total long-term debt, net	1,747.4		2,019.3
Revolving Credit Facility, Due 2020 [Member]
Long-term debt [Abstract]
Long-term debt	$ 0.0		0.0
Debt instrument maturity date	Apr. 30, 2020
Receivables Financing Agreement, Due 2020 [Member]
Long-term debt [Abstract]
Long-term debt	$ 0.0		0.0
Debt instrument maturity date	Jun. 30, 2020
Term Loan Denominated in U.S. Dollars, Due 2024 [Member]
Long-term debt [Abstract]
Long-term debt	$ 1,025.9	[1]	1,282.3
Debt instrument maturity date	Dec. 31, 2024
Interest rate	4.99%
Weighted-average interest rate	4.78%
Term Loan Denominated in Euros, Due 2024 [Member]
Long-term debt [Abstract]
Long-term debt	$ 706.7	[2]	735.9
Debt instrument maturity date	Dec. 31, 2024
Interest rate	3.00%
Weighted-average interest rate	3.00%
Capitalized Leases and Other Long-Term Debt [Member]
Long-term debt [Abstract]
Long-term debt	$ 26.4		$ 26.9

[1] As of September 30, 2018, the applicable interest rate was 4.99% and the weighted-average rate was 4.78% for the nine month period ended September 30, 2018.

[2] As of September 30, 2018, the applicable interest rate was 3.00% and the weighted-average rate was 3.00% for the nine month period ended September 30, 2018.

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Debt, Senior Secured Credit Facilities (Details) € in Millions, $ in Millions			3 Months Ended	6 Months Ended	9 Months Ended		12 Months Ended
	Aug. 17, 2017 USD ($)	Jun. 30, 2017	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Dec. 31, 2014	Jul. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)	Aug. 17, 2017 EUR (€)	Mar. 04, 2016 USD ($)	Jul. 30, 2013 USD ($)	Jul. 30, 2013 EUR (€)
Amortization and Final Maturity [Abstract]
Principal payment of outstanding borrowings					$ 262.4	$ 2,872.2
LIBOR [Member]
Interest Rate and Fees [Abstract]
Basis spread on variable rate					1.00%
Term of variable rate					1 month
Federal Funds Effective Rate [Member]
Interest Rate and Fees [Abstract]
Basis spread on variable rate					0.50%
Senior Secured Credit Facility [Member]
Debt Instrument, Senior Secured Credit Facilities [Abstract]
Aggregate principal amount												$ 2,825.0
Prepayments [Abstract]
Percentage of annual excess cash flow for prepayment of outstanding loan							50.00%
Percentage of annual excess cash flow for prepayment of outstanding loan under restrictive covenants					25.00%
Percentage of the net cash proceeds of all non-ordinary course asset sales for prepayment of outstanding term loan					100.00%
Percentage of net cash proceeds of any incurrence of debt for prepayment of outstanding term loan					100.00%
Certain Covenants and Events of Default [Abstract]
Consolidated Total Debt to Consolidated EBITDA ratio					5.00
Investments in unrestricted subsidiaries			$ 100.0		$ 100.0
Percentage of consolidated EBITDA					25.00%
Senior Secured Credit Facility [Member] | Maximum [Member]
Prepayments [Abstract]
Consolidated secured debt to consolidated EBITDA ratio considered for prepayment of outstanding term loan under covenant one					3.50
Certain Covenants and Events of Default [Abstract]
Letters of credit under restrictive covenant			80.0		$ 80.0
Other non-cash collateralized letters of credit maximum amount under restrictive covenant			25.0		25.0
Provision of non-cash collateralized letters of credit outstanding					50.0
Aggregate amount of non-cash collateralized letters of credit outstanding			120.0		$ 120.0
Senior Secured Credit Facility [Member] | Minimum [Member]
Prepayments [Abstract]
Consolidated secured debt to consolidated EBITDA ratio considered for prepayment of outstanding term loan under covenant two					3.00
Senior Secured Credit Facility [Member] | Condition One [Member]
Debt Instrument, Senior Secured Credit Facilities [Abstract]
EBITDA amount					$ 250.0
Consolidated senior secured debt to consolidated EBITDA ratio					5.50
Senior Secured Credit Facility [Member] | Condition Two [Member]
Debt Instrument, Senior Secured Credit Facilities [Abstract]
Consolidated senior secured debt to consolidated EBITDA ratio					4.50
Original Dollar Term Loan Facility [Member]
Debt Instrument, Senior Secured Credit Facilities [Abstract]
Aggregate principal amount			35.0		$ 35.0				$ 50.0			1,900.0
Maximum borrowing capacity	$ 1,285.5
Amortization and Final Maturity [Abstract]
Percentage of original principal amount for quarterly installment payment of debt amortization					1.00%
Principal payment of outstanding borrowings				$ 100.0	$ 150.0
Write-off of unamortized debt issuance costs			0.3		$ 0.4
Original Dollar Term Loan Facility [Member] | LIBOR [Member]
Interest Rate and Fees [Abstract]
Basis spread on variable rate	0.00%	1.00%			2.75%
Original Dollar Term Loan Facility [Member] | Base Rate [Member]
Interest Rate and Fees [Abstract]
Basis spread on variable rate					1.75%
Euro Term Loan Due in 2020 [Member]
Debt Instrument, Senior Secured Credit Facilities [Abstract]
Aggregate principal amount | €													€ 400.0
Maximum borrowing capacity | €										€ 615.0
Amortization and Final Maturity [Abstract]
Percentage of original principal amount for quarterly installment payment of debt amortization					1.00%
Euro Term Loan Due in 2020 [Member] | LIBOR [Member]
Interest Rate and Fees [Abstract]
Basis spread on variable rate	0.00%	1.00%			3.00%
Revolving Credit Facility [Member]
Debt Instrument, Senior Secured Credit Facilities [Abstract]
Maximum borrowing capacity											$ 360.0	$ 400.0
Decrease in borrowing capacity											$ 40.0
Expected decrease in borrowing capacity next year								$ 269.9
Letters of credit outstanding			6.3		$ 6.3
Unused availability			263.6		$ 263.6
Consolidated senior secured debt to consolidated EBITDA ratio					7.00
Interest Rate and Fees [Abstract]
Commitment fee					0.50%
Revolving Credit Facility [Member] | LIBOR [Member]
Interest Rate and Fees [Abstract]
Basis spread on variable rate	0.00%				2.75%
Revolving Credit Facility [Member] | Base Rate [Member]
Interest Rate and Fees [Abstract]
Basis spread on variable rate					1.75%
Revolving Credit Facility [Member] | Maximum [Member]
Debt Instrument, Senior Secured Credit Facilities [Abstract]
Consolidated senior secured debt to consolidated EBITDA ratio					7.50
Revolving Credit Facility [Member] | Condition Three [Member]
Interest Rate and Fees [Abstract]
Commitment fee					0.375%
Revolving Credit Facility [Member] | Condition Three [Member] | Maximum [Member]
Debt Instrument, Senior Secured Credit Facilities [Abstract]
Consolidated senior secured debt to consolidated EBITDA ratio					3.0
Revolving Credit Facility [Member] | Letter of Credit [Member]
Debt Instrument, Senior Secured Credit Facilities [Abstract]
Maximum borrowing capacity			$ 200.0		$ 200.0

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Debt, Receivables Financing Agreement (Details) € in Millions, $ in Millions	9 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2018 EUR (€)	May 31, 2016 USD ($)
LIBOR [Member]
Debt Instrument, Receivables Financing Agreement [Abstract]
Outstanding borrowing	$ 1,025.9	€ 608.9
Receivables Financing Agreement [Member]
Debt Instrument, Receivables Financing Agreement [Abstract]
Increase in aggregate borrowing capacity	50.0
Aggregate borrowing capacity	125.0
Outstanding borrowing	0.0
Letters of credit outstanding	27.3
Remaining borrowing capacity	$ 81.4
Letters of credit interest rate	1.60%
Prior notice period for prepayment of borrowings or letters of credit	1 day
Prior notice period for termination of agreement	15 days
Receivables Financing Agreement [Member] | LIBOR [Member]
Debt Instrument, Receivables Financing Agreement [Abstract]
Interest rate	1.60%	1.60%
Receivables Financing Agreement [Member] | Base Rate [Member]
Debt Instrument, Receivables Financing Agreement [Abstract]
Interest rate	1.60%	1.60%
Receivables Financing Agreement [Member] | Maximum [Member]
Debt Instrument, Receivables Financing Agreement [Abstract]
Aggregate borrowing			$ 75.0

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Stock-Based Compensation, Stock-Based Award Plan Activity (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Share-based Compensation Arrangement [Abstract]
Stock-based compensation expense	$ 0.9	$ 7.8	$ 6.1	$ 69.2
Accrued liabilities	258.9		$ 258.9		$ 271.2
Risk-free interest rate			2.00%
Expected dividend rate			0.00%
Unrecognized compensation expense	22.8		$ 22.8
Minimum [Member]
Share-based Compensation Arrangement [Abstract]
Expected life of options			1 year
Assumed volatility			26.80%
Maximum [Member]
Share-based Compensation Arrangement [Abstract]
Expected life of options			1 year 3 months 18 days
Assumed volatility			27.30%
2013 Stock Incentive Plan [Member] | Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement [Abstract]
Accrued liabilities	$ 13.8		$ 13.8
2013 and 2017 Plan [Member] | Former Employee [Member]
Share-based Compensation Arrangement [Abstract]
Stock-based compensation expense			3.8
2013 and 2017 Plan [Member] | Equity Awards [Member]
Share-based Compensation Arrangement [Abstract]
Stock-based compensation expense			5.3
2013 and 2017 Plan [Member] | Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement [Abstract]
Reduction in liability			$ 3.0

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Stock-Based Compensation, Assumptions Used to Estimate Fair Value of Options Granted (Details)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Assumptions [Abstract]
Risk-free interest rate	2.00%
Expected dividend rate	0.00%
Minimum [Member]
Assumptions [Abstract]
Expected life of options	1 year
Assumed volatility	26.80%
Maximum [Member]
Assumptions [Abstract]
Expected life of options	1 year 3 months 18 days
Assumed volatility	27.30%
Stock Options [Member]
Assumptions [Abstract]
Expected dividend rate	0.00%	0.00%
Stock Options [Member] | Minimum [Member]
Assumptions [Abstract]
Expected life of options	7 years	5 years
Risk-free interest rate	2.90%	1.90%
Assumed volatility	34.40%	41.20%
Stock Options [Member] | Maximum [Member]
Assumptions [Abstract]
Expected life of options	7 years 6 months	6 years 3 months 18 days
Risk-free interest rate	3.00%	2.10%
Assumed volatility	35.40%	45.80%

XML

Stock-Based Compensation, Summary of Stock Option Activity (Details) - Stock Options and Stock Appreciation Rights [Member] shares in Thousands	9 Months Ended
	Sep. 30, 2018 $ / shares shares
Shares [Roll Forward]
Outstanding, beginning balance (in shares) | shares	12,834
Granted (in shares) | shares	848
Exercised or settled (in shares) | shares	(752)
Forfeited (in shares) | shares	(433)
Outstanding, ending balance (in shares) | shares	12,497
Vested (in shares) | shares	8,612
Outstanding Weighted-Average Exercise Price [Abstract]
Outstanding, beginning balance (in dollars per share) | $ / shares	$ 9.54
Granted (in dollars per share) | $ / shares	31.74
Exercised or settled (in dollars per share) | $ / shares	8.36
Forfeited (in dollars per share) | $ / shares	16.21
Outstanding, ending balance (in dollars per share) | $ / shares	10.88
Vested (in dollars per share) | $ / shares	$ 9.03

XML

Stock-Based Compensation, Restricted Stock Unit Awards and Deferred Stock Units (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended		9 Months Ended
	May 31, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Weighted-Average Grant-Date Fair Value [Abstract]
Stock-based compensation expense		$ 0.9	$ 7.8	$ 6.1	$ 69.2
Restricted Stock Unit [Member]
Shares [Roll Forward]
Non-vested, beginning balance (in shares)				0
Granted (in shares)				365,000
Vested (in shares)				0
Forfeited (in shares)				(10,000)
Non-vested, ending balance (in shares)		355,000		355,000
Weighted-Average Grant-Date Fair Value [Abstract]
Non-vested, beginning balance (in dollars per share)				$ 0
Granted (in dollars per share)				31.84
Vested (in dollars per share)				0
Forfeited (in dollars per share)				32.06
Non-vested, ending balance (in dollars per share)		$ 31.83		$ 31.83
Deferred Stock Units [Member]
Weighted-Average Grant-Date Fair Value [Abstract]
Deferred stock units authorized (in shares)	5.5
Stock-based compensation expense			$ 2.0		$ 96.8
Fair value of deferred stock units (in dollars per share)	$ 17.20
Initial public offering share price (in dollars per share)	$ 20.00
Holding period restriction	1 year 5 months 1 day
Assumed volatility	51.50%

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Accumulated Other Comprehensive (Loss) Income, Accumulated Other Comprehensive (Loss) Income Balances (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018		Sep. 30, 2017
Before-Tax Amount [Abstract]
Foreign currency translation adjustments, net	$ (21.9)	$ 41.5	$ (70.0)		$ 131.4
Foreign currency gains (losses), net	4.7	(23.5)	24.4		(71.2)
Unrecognized (losses) gains on cash flow hedges, net	5.8	5.5	27.1		8.9
Pension and other postretirement benefit prior service cost and gain or loss, net	1.0	(1.1)	3.0		(3.4)
Other comprehensive (loss) income	(10.4)	22.4	(15.5)		65.7
Tax (Expense) or Benefit [Abstract]
Foreign currency translation adjustments, net	0.0	0.0	0.0		0.0
Foreign currency gains (losses), net	(1.1)	8.7	(5.7)		26.9
Unrecognized (losses) gains on cash flow hedges, net	(1.4)	(1.5)	(6.6)		(3.4)
Pension and other postretirement benefit prior service cost and gain or loss, net	(0.1)	0.5	0.9		1.5
Other comprehensive (loss) income	(2.6)	7.7	(11.4)		25.0
Net of Tax Amount [Abstract]
Foreign currency translation adjustments, net	(21.9)	41.5	(70.0)		131.4
Foreign currency gains (losses), net	3.6	(14.8)	18.7		(44.3)
Unrecognized (losses) gains on cash flow hedges, net	4.4	4.0	20.5		5.5
Pension and other postretirement benefit prior service cost and gain or loss, net	0.9	(0.6)	3.9		(1.9)
Total other comprehensive (loss) income, net of tax	$ (13.0)	$ 30.1	$ (26.9)	[1]	$ 90.7	[1]

[1] All amounts are net of tax. Amounts in parentheses indicate debits.

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Accumulated Other Comprehensive (Loss) Income, Changes in Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018		Sep. 30, 2017		Dec. 31, 2017
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Other comprehensive (loss) income before reclassifications	[1]			$ (37.0)		$ 79.8
Amounts reclassified from accumulated other comprehensive (loss) income	[1]			10.1		10.9
Total other comprehensive (loss) income, net of tax		$ (13.0)	$ 30.1	(26.9)	[1]	90.7	[1]
Accumulated Other Comprehensive Income (Loss) [Member]
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	[1]			(199.8)		(342.4)
Balance at end of period	[1]	(226.4)	(251.7)	(226.4)		(251.7)
Accumulated Other Comprehensive Income (Loss) [Member] | ASU 2017-12 [Member]
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Cumulative effect adjustment upon adoption of new accounting standard (ASU 2017-12)	[1]							$ 0.3
Cumulative Currency Translation Adjustment [Member]
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	[1]			(166.6)		(324.2)
Other comprehensive (loss) income before reclassifications	[1]			(70.0)		131.4
Amounts reclassified from accumulated other comprehensive (loss) income	[1]			0.0		0.0
Total other comprehensive (loss) income, net of tax	[1]			(70.0)		131.4
Balance at end of period	[1]	(236.6)	(192.8)	(236.6)		(192.8)
Cumulative Currency Translation Adjustment [Member] | ASU 2017-12 [Member]
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Cumulative effect adjustment upon adoption of new accounting standard (ASU 2017-12)	[1]							0.0
Foreign Currency Gains and (Losses) [Member]
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	[1]			37.0		88.6
Other comprehensive (loss) income before reclassifications	[1]			18.7		(44.3)
Amounts reclassified from accumulated other comprehensive (loss) income	[1]			0.0		0.0
Total other comprehensive (loss) income, net of tax	[1]			18.7		(44.3)
Balance at end of period	[1]	55.7	44.3	55.7		44.3
Foreign Currency Gains and (Losses) [Member] | ASU 2017-12 [Member]
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Cumulative effect adjustment upon adoption of new accounting standard (ASU 2017-12)	[1]							0.0
Unrealized (Losses) Gains on Cash Flow Hedges [Member]
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	[1]			(29.8)		(42.2)
Other comprehensive (loss) income before reclassifications	[1]			11.5		(3.1)
Amounts reclassified from accumulated other comprehensive (loss) income	[1]			9.0		8.6
Total other comprehensive (loss) income, net of tax	[1]			20.5		5.5
Balance at end of period	[1]	(9.0)	(36.7)	(9.0)		(36.7)
Unrealized (Losses) Gains on Cash Flow Hedges [Member] | ASU 2017-12 [Member]
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Cumulative effect adjustment upon adoption of new accounting standard (ASU 2017-12)	[1]							0.3
Pension and Postretirement Benefit Plans [Member]
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	[1]			(40.4)		(64.6)
Other comprehensive (loss) income before reclassifications	[1]			2.8		(4.2)
Amounts reclassified from accumulated other comprehensive (loss) income	[1]			1.1		2.3
Total other comprehensive (loss) income, net of tax	[1]			3.9		(1.9)
Balance at end of period	[1]	$ (36.5)	$ (66.5)	$ (36.5)		$ (66.5)
Pension and Postretirement Benefit Plans [Member] | ASU 2017-12 [Member]
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Cumulative effect adjustment upon adoption of new accounting standard (ASU 2017-12)	[1]							$ 0.0

[1] All amounts are net of tax. Amounts in parentheses indicate debits.

XML

Accumulated Other Comprehensive (Loss) Income, Reclassifications out of Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Statement [Abstract]
Interest expense		$ 24.4	$ 30.1	$ 76.5	$ 115.4
Total before tax		94.8	32.4	238.1	(166.3)
Benefit for income taxes		(22.6)	(4.4)	(63.2)	41.2
Net of tax		$ 72.2	$ 28.0	174.9	(125.1)
Reclassification out of Accumulated Other Comprehensive (Loss) Income [Member]
Income Statement [Abstract]
Net of tax				10.1	10.9
Loss on Cash Flow Hedges - Interest Rate Swaps [Member] | Reclassification out of Accumulated Other Comprehensive (Loss) Income [Member]
Income Statement [Abstract]
Interest expense				11.8	13.9
Total before tax				11.8	13.9
Benefit for income taxes				(2.8)	(5.3)
Net of tax				9.0	8.6
Amortization of Defined Benefit Pension and Other Postretirement Benefit Items [Member] | Reclassification out of Accumulated Other Comprehensive (Loss) Income [Member]
Income Statement [Abstract]
Net periodic benefit cost	[1]			1.4	3.7
Total before tax				1.4	3.7
Benefit for income taxes				(0.3)	(1.4)
Net of tax				$ 1.1	$ 2.3

[1] These components are included in the computation of net periodic benefit cost. See Note 7 "Pension and Other Postretirement Benefits" for additional details.

XML

Hedging Activities and Fair Value Measurements, Hedging Activities and Derivative Instruments within the Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Millions		9 Months Ended
		Sep. 30, 2018	Dec. 31, 2017
Maximum [Member]
Derivative, Fair Value, Net [Abstract]
Maturity period of foreign currency contracts		1 year
Interest Rate Swap Contracts [Member] | Derivatives Designated as Hedging Instruments [Member] | Cash Flow [Member]
Notional Amounts, Fair Values and Classification of Outstanding Derivatives by Risk Category and Instrument Type [Abstract]
Notional amount	[1]	$ 1,025.0	$ 1,125.0
Interest Rate Swap Contracts [Member] | Other Current Assets [Member] | Derivatives Designated as Hedging Instruments [Member] | Cash Flow [Member]
Notional Amounts, Fair Values and Classification of Outstanding Derivatives by Risk Category and Instrument Type [Abstract]
Assets fair value	[1]	0.0	0.0
Interest Rate Swap Contracts [Member] | Other Assets [Member] | Derivatives Designated as Hedging Instruments [Member] | Cash Flow [Member]
Notional Amounts, Fair Values and Classification of Outstanding Derivatives by Risk Category and Instrument Type [Abstract]
Assets fair value	[1]	0.0	0.0
Interest Rate Swap Contracts [Member] | Accrued Liabilities [Member] | Derivatives Designated as Hedging Instruments [Member] | Cash Flow [Member]
Notional Amounts, Fair Values and Classification of Outstanding Derivatives by Risk Category and Instrument Type [Abstract]
Liabilities fair value	[1]	3.4	16.1
Interest Rate Swap Contracts [Member] | Other Liabilities [Member] | Derivatives Designated as Hedging Instruments [Member] | Cash Flow [Member]
Notional Amounts, Fair Values and Classification of Outstanding Derivatives by Risk Category and Instrument Type [Abstract]
Liabilities fair value	[1]	14.2	30.6
Foreign Currency Forwards [Member]
Notional Amounts, Fair Values and Classification of Outstanding Derivatives by Risk Category and Instrument Type [Abstract]
Notional amount		9.3
Foreign Currency Forwards [Member] | Derivatives Not Designated as Hedging Instruments [Member] | Fair Value [Member]
Notional Amounts, Fair Values and Classification of Outstanding Derivatives by Risk Category and Instrument Type [Abstract]
Notional amount	[1]	26.5	94.4
Foreign Currency Forwards [Member] | Other Current Assets [Member] | Derivatives Not Designated as Hedging Instruments [Member] | Fair Value [Member]
Notional Amounts, Fair Values and Classification of Outstanding Derivatives by Risk Category and Instrument Type [Abstract]
Assets fair value	[1]	0.0	0.0
Foreign Currency Forwards [Member] | Other Assets [Member] | Derivatives Not Designated as Hedging Instruments [Member] | Fair Value [Member]
Notional Amounts, Fair Values and Classification of Outstanding Derivatives by Risk Category and Instrument Type [Abstract]
Assets fair value	[1]	0.0	0.0
Foreign Currency Forwards [Member] | Accrued Liabilities [Member] | Derivatives Not Designated as Hedging Instruments [Member] | Fair Value [Member]
Notional Amounts, Fair Values and Classification of Outstanding Derivatives by Risk Category and Instrument Type [Abstract]
Liabilities fair value	[1]	0.3	1.2
Foreign Currency Forwards [Member] | Other Liabilities [Member] | Derivatives Not Designated as Hedging Instruments [Member] | Fair Value [Member]
Notional Amounts, Fair Values and Classification of Outstanding Derivatives by Risk Category and Instrument Type [Abstract]
Liabilities fair value	[1]	$ 0.0	$ 0.0

[1] Notional amounts represent the gross contract amounts of the outstanding derivatives excluding the total notional amount of positions that have been effectively closed through offsetting positions. The net gains and net losses associated with positions that have been effectively closed through offsetting positions but not yet settled are included in the asset and liability derivatives fair value columns, respectively.

XML

Hedging Activities and Fair Value Measurements, Derivative Instruments included in the Condensed Consolidated Statements of Comprehensive (Loss) Income (Details) - USD ($) $ in Millions		3 Months Ended			6 Months Ended	9 Months Ended
		Sep. 30, 2018		Sep. 30, 2017	Jun. 30, 2018	Sep. 30, 2018	Sep. 30, 2017
Gains and Losses on Derivatives Designated as Cash Flow Hedges [Abstract]
Excess cash paid to pay down debt						$ 262.4	$ 2,872.2
Original Dollar Term Loan Facility [Member]
Gains and Losses on Derivatives Designated as Cash Flow Hedges [Abstract]
Excess cash paid to pay down debt					$ 100.0	150.0
Interest Rate Swap Contracts [Member]
Gains and Losses on Derivatives Designated as Cash Flow Hedges [Abstract]
Gain (loss) recognized in AOCI on derivatives		$ 1.8		$ 1.4		15.2	(4.9)
Loss reclassified from AOCI into income (effective portion)	[1]	(3.3)		(4.1)		(11.2)	(13.9)
Loss reclassified from AOCI into income (missed forecast)		(0.6)	[2]	$ 0.0		$ (0.6)	$ 0.0
Interest Rate Swap Contracts [Member] | Original Dollar Term Loan Facility [Member]
Gains and Losses on Derivatives Designated as Cash Flow Hedges [Abstract]
Excess cash paid to pay down debt		150.0
Payments in amendment of interest rate swap contracts		$ 2.7

[1] Losses on derivatives reclassified from accumulated other comprehensive income ("AOCI") into income (effective portion) were included in "Interest expense" in the Condensed Consolidated Statements of Operations, the same income statement line item as the earnings effect of the hedged item.

[2] During the three month period ended September 30, 2018, the Company used excess cash to pay down $150.0 million of its Dollar Term Loan Facility. Due to this unforecasted pay down of debt, the Company paid $2.7 million in the amendment of the interest rate swap contracts to reflect the updated forecasted cash flows. The updated forecasts caused certain hedged items to be deemed probable of not occurring in the future and thus, the Company accelerated the release of AOCI related to those hedged items. Losses reclassified from AOCI into income (missed forecast) were included in "Loss on extinguishment of debt" in the Condensed Consolidated Statements of Operations.

XML

Hedging Activities and Fair Value Measurements, Interest Rate Swap Contracts (Details) - 9 months ended Sep. 30, 2018 € in Millions, $ in Millions	USD ($) Contract	EUR (€) Contract
Derivative, Fair Value, Net [Abstract]
Number of contracts | Contract	2	2
LIBOR [Member]
Derivative, Fair Value, Net [Abstract]
Expected losses to be reclassified out of AOCI into earnings during next 12 months | $	$ 13.3
Long-term debt outstanding	$ 1,025.9	€ 608.9
Interest Rate Swap Contracts [Member]
Derivative, Fair Value, Net [Abstract]
Number of contracts | Contract	11	11
Interest Rate Swap Contracts [Member] | LIBOR [Member]
Derivative, Fair Value, Net [Abstract]
Long-term debt hedged | $	$ 1,025.0
Interest Rate Swap Contracts [Member] | LIBOR [Member] | Minimum [Member]
Derivative, Fair Value, Net [Abstract]
Fixed interest rate	3.30%	3.30%
Interest Rate Swap Contracts [Member] | LIBOR [Member] | Maximum [Member]
Derivative, Fair Value, Net [Abstract]
Fixed interest rate	4.30%	4.30%

XML

Hedging Activities and Fair Value Measurements, Foreign Currency Forward Contracts (Details) $ in Millions	Sep. 30, 2018 USD ($) Contract
Derivative, Fair Value, Net [Abstract]
Number of contracts | Contract	2
Foreign Currency Forward One [Member]
Derivative, Fair Value, Net [Abstract]
Notional amount	$ 9.3
Foreign Currency Forward Two [Member]
Derivative, Fair Value, Net [Abstract]
Notional amount	$ 17.2

XML

Hedging Activities and Fair Value Measurements, Derivative Instruments not Designated as Accounting Hedges (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Derivative instruments not designated as accounting hedges [Abstract]
Total foreign currency transaction gains (losses), net	$ 0.8	$ (1.7)	$ 0.6	$ (6.3)
Foreign Currency Forward Contracts (Losses) Gains [Member]
Derivative instruments not designated as accounting hedges [Abstract]
Total foreign currency transaction gains (losses), net	$ (0.4)	$ (1.8)	$ 5.8	$ (6.7)

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Hedging Activities and Fair Value Measurements, Investment in Consolidated Subsidiaries with Functional Currencies Other than USD (Details) € in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($) Contract	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) Contract	Sep. 30, 2017 USD ($)	Sep. 30, 2018 EUR (€) Contract	Aug. 17, 2017 EUR (€)	Aug. 16, 2017 USD ($) Contract
Derivative, Fair Value, Net [Abstract]
Number of contracts | Contract	2		2		2
Euro Term Loan Due in 2020 [Member]
Derivative, Fair Value, Net [Abstract]
Long-term debt hedged | €					€ 608.9	€ 615.0
Cross Currency Interest Rate Swap Contracts [Member]
Derivative, Fair Value, Net [Abstract]
Number of contracts | Contract							2
Notional amount | $							$ 100.0
Interest Rate Swap Contracts [Member]
Derivative, Fair Value, Net [Abstract]
Number of contracts | Contract	11		11		11
Changes in the value of debt and designated interest rate swaps [Abstract]
Gain (loss), net of income tax, recorded through other comprehensive income | $	$ 3.5	$ (13.6)	$ 18.0	$ (43.2)
Balance included in accumulated other comprehensive (loss) income as of September 30, 2018 and 2017, respectively | $	$ 50.1	$ 39.2	$ 50.1	$ 39.2

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Hedging Activities and Fair Value Measurements, Fair Value Measurements (Details) - Recurring [Member] $ in Millions	Sep. 30, 2018 USD ($)
Financial Assets [Abstract]
Trading securities held in deferred compensation plan	$ 6.3	[1]
Total	6.3
Financial Liabilities [Abstract]
Foreign currency forwards	0.3	[2]
Interest rate swaps	17.6	[3]
Deferred compensation plan	6.3	[1]
Total	24.2
Level 1 [Member]
Financial Assets [Abstract]
Trading securities held in deferred compensation plan	6.3	[1]
Total	6.3
Financial Liabilities [Abstract]
Foreign currency forwards	0.0	[2]
Interest rate swaps	0.0	[3]
Deferred compensation plan	6.3	[1]
Total	6.3
Level 2 [Member]
Financial Assets [Abstract]
Trading securities held in deferred compensation plan	0.0	[1]
Total	0.0
Financial Liabilities [Abstract]
Foreign currency forwards	0.3	[2]
Interest rate swaps	17.6	[3]
Deferred compensation plan	0.0	[1]
Total	17.9
Level 3 [Member]
Financial Assets [Abstract]
Trading securities held in deferred compensation plan	0.0	[1]
Total	0.0
Financial Liabilities [Abstract]
Foreign currency forwards	0.0	[2]
Interest rate swaps	0.0	[3]
Deferred compensation plan	0.0	[1]
Total	$ 0.0

[1] Based on the quoted price of publicly traded mutual funds which are classified as trading securities and accounted for using the mark-to-market method.

[2] Based on calculations that use readily observable market parameters as their basis, such as spot and forward rates.

[3] Measured as the present value of all expected future cash flows based on the LIBOR-based swap yield curves as of September 30, 2018. The present value calculation uses discount rates that have been adjusted to reflect the credit quality of the Company and its counterparties.

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Revenue from Contracts with Customers, Disaggregation of Revenue (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Disaggregation of Revenue [Abstract]
Disaggregated revenue		$ 689.3	$ 649.6	$ 1,977.1	$ 1,710.4
Revenue Recognized at Point in Time [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue	[1]	658.4		1,904.8
Revenue Recognized over Time [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue	[2]	30.9		72.3
Original Equipment [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue	[3]	417.3		1,190.7
Aftermarket [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue	[4]	272.0		786.4
Total Americas [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue		377.9		1,039.2
United States [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue		327.9		894.0
Other Americas [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue		50.0		145.2
EMEA [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue		228.8		679.5
Asia Pacific [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue		82.6		258.4
Industrials [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue		320.0		965.7
Industrials [Member] | Revenue Recognized at Point in Time [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue	[1]	309.4		931.2
Industrials [Member] | Revenue Recognized over Time [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue	[2]	10.6		34.5
Industrials [Member] | Original Equipment [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue	[3]	221.2		662.5
Industrials [Member] | Aftermarket [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue	[4]	98.8		303.2
Industrials [Member] | Total Americas [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue		116.6		336.3
Industrials [Member] | United States [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue		96.7		278.2
Industrials [Member] | Other Americas [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue		19.9		58.1
Industrials [Member] | EMEA [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue		156.2		481.8
Industrials [Member] | Asia Pacific [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue		47.2		147.6
Energy [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue		298.8		814.1
Energy [Member] | Revenue Recognized at Point in Time [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue	[1]	278.5		776.3
Energy [Member] | Revenue Recognized over Time [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue	[2]	20.3		37.8
Energy [Member] | Original Equipment [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue	[3]	127.8		337.7
Energy [Member] | Aftermarket [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue	[4]	171.0		476.4
Energy [Member] | Total Americas [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue		229.5		623.6
Energy [Member] | United States [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue		200.1		538.6
Energy [Member] | Other Americas [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue		29.4		85.0
Energy [Member] | EMEA [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue		44.9		115.3
Energy [Member] | Asia Pacific [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue		24.4		75.2
Medical [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue		70.5		197.3
Medical [Member] | Revenue Recognized at Point in Time [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue	[1]	70.5		197.3
Medical [Member] | Revenue Recognized over Time [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue	[2]	0.0		0.0
Medical [Member] | Original Equipment [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue	[3]	68.3		190.5
Medical [Member] | Aftermarket [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue	[4]	2.2		6.8
Medical [Member] | Total Americas [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue		31.8		79.3
Medical [Member] | United States [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue		31.1		77.2
Medical [Member] | Other Americas [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue		0.7		2.1
Medical [Member] | EMEA [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue		27.7		82.4
Medical [Member] | Asia Pacific [Member]
Disaggregation of Revenue [Abstract]
Disaggregated revenue		$ 11.0		$ 35.6

[1] Revenues from short and long duration product and service contracts recognized at a point in time when control is transferred to the customer generally when products delivery has occurred and services have been rendered.

[2] Revenues primarily from long duration ETO product contracts and certain contracts for the delivery of a significant volume of substantially similar products recognized over time as contractual performance obligations are completed.

[3] Revenues from sales of capital equipment within the Industrials and Energy Segments and sales of components to original equipment manufacturers in the Medical Segment.

[4] Revenues from sales of spare parts, accessories, other components and services in support of maintaining customer owned, installed base of the Company's original equipment.

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Revenue from Contracts with Customers, Performance Obligations (Details) $ in Millions	Sep. 30, 2018 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-01
Revenue, Performance Obligation [Abstract]
Remaining performance obligation amount	$ 168.0
Remaining performance obligation, expected timing of satisfaction, period	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01
Revenue, Performance Obligation [Abstract]
Remaining performance obligation amount	$ 72.9
Remaining performance obligation, expected timing of satisfaction, period

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Revenue from Contracts with Customers, Contract Balances (Details) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Contract with Customer, Asset and Liability [Abstract]
Accounts receivable, net of allowance for doubtful accounts of $19.1 and $18.7, respectively	$ 525.0	$ 536.3
Contract assets	13.9	0.0
Contract liabilities	90.5	42.7	[1]
Accounts receivable, allowance for doubtful accounts	19.1	18.7
Increase (decrease) for contract due to acquisition	$ 29.6	$ 29.6

[1] For purposes of comparability, "Advance payments on sales contracts" as of December 31, 2017 was reclassified to "Contract liabilities." See Note 12 "Revenue from Contracts with Customers" for an explanation of the Contract liabilities account included in "Accrued liabilities" in the Condensed Consolidated Balance Sheets.

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Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Income Taxes [Abstract]
Foreign subsidiaries tax payable period			8 years
U.S. federal corporate tax rate			21.00%		35.00%
Change in tax rate, income tax benefit	$ (97.8)				$ (89.6)
Increase in tax rate, income tax benefit			$ 8.2
Benefit relating to the reduction of the ASC 740-30 liability			69.0
Recorded provisional transition tax obligation			51.7		$ 63.3
Income (loss) before income taxes	94.8	$ 32.4	238.1	$ (166.3)
Provision (benefit) for income taxes	$ 22.6	$ 4.4	$ 63.2	$ (41.2)
Effective income tax rate	23.80%	13.60%	26.50%	24.80%

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Supplemental Information (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Other Operating Expense, Net [Abstract]
Foreign currency transaction (gains) losses, net		$ (0.8)	$ 1.7	$ (0.6)	$ 6.3
Restructuring charges, net	[1]	5.4	2.8	5.4	4.9
Environmental remediation expenses	[2]	0.0	0.0	0.0	0.9
Stock-based compensation expense	[3]	1.1	9.8	2.9	166.0
Shareholder litigation settlement recoveries	[4]	0.0	0.0	(4.5)	0.0
Acquisition related expenses and non-cash charges	[5]	0.5	0.7	6.3	2.4
Losses (gains) on asset and business disposals		0.1	(0.6)	(1.1)	2.0
Other, net		(0.3)	3.0	2.4	4.2
Total other operating expense, net		6.0	17.4	10.8	186.7
Share-based Compensation [Abstract]
Stock-based compensation expense recognized		0.9	7.8	6.1	69.2
Stock-based compensation expense related to stock option exercise		$ 0.2
Decrease in stock-based compensation expense to DSU's				$ 3.2
Stock Options [Member]
Share-based Compensation [Abstract]
Stock-based compensation expense recognized			7.8		69.2
Deferred Stock Units [Member]
Share-based Compensation [Abstract]
Stock-based compensation expense recognized			2.0		96.8
2013 Stock Incentive Plan [Member] | Stock Options [Member]
Share-based Compensation [Abstract]
Stock-based compensation expense recognized			7.8		69.2
2013 Stock Incentive Plan [Member] | Deferred Stock Units [Member]
Share-based Compensation [Abstract]
Stock-based compensation expense recognized			$ 2.0		$ 96.8

[1] See Note 3 "Restructuring."

[2] Estimated environmental remediation costs recorded on an undiscounted basis for a former production facility.

[3] Represents stock-based compensation expense recognized for the three month period ended September 30, 2018 of $0.9 million and employer taxes related to stock option exercises of $0.2 million. Represents stock-based compensation expense recognized for the nine month period ended September 30, 2018 of $6.1 million, reduced by $3.2 million primarily due to a decrease in the estimated accrual for employer taxes related to DSUs as a result of the achievement of employer tax caps in counties outside of the United States. Represents stock-based compensation expense recognized for stock options outstanding of $7.8 million and $69.2 million for the three month and nine month periods ended September 30, 2017 and DSUs granted to employees at the date of the initial public offering of $2.0 million and $96.8 million under the 2013 Stock Incentive Plan for the three and nine month periods ended September 30, 2017.

[4] Represents an insurance recovery of the Company' shareholder litigation settlement in 2014.

[5] Represents costs associated with successful and/or abandoned acquisitions, including third-party expenses, post-closure integration costs and non-cash charges and credits arising from fair value purchase accounting adjustments.

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Contingencies (Details) $ in Millions	9 Months Ended
	Sep. 30, 2018 USD ($) Defendant Site	Dec. 31, 2017 USD ($)
Asbestos and Silica Related Litigation [Abstract]
Insurance recoveries of legal defense costs	$ 5.6
Environmental Matters [Abstract]
Number of on-site cleanups | Site	4
Number of on-site cleanups in operation and maintenance stage | Site	3
Number of on-site cleanups in implementation stage | Site	1
Undiscounted accrued liabilities	$ 7.0	$ 7.5
Asbestos and Silica Related Litigation [Member]
Asbestos and Silica Related Litigation [Abstract]
Litigation reserve	98.3	105.6
Insurance recovery receivable amount	95.9	$ 100.4
Asbestos related insurance recoveries	10.1
Recovery of indemnity payments	4.5
Insurance recoveries of legal defense costs	$ 5.6
Asbestos and Silica Related Litigation [Member] | Minimum [Member]
Asbestos and Silica Related Litigation [Abstract]
Number of defendants | Defendant	25

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Segment Results (Details) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) Segment	Sep. 30, 2017 USD ($)
Segment Results [Abstract]
Number of reportable segments | Segment				3
Segment Reporting [Abstract]
Revenue		$ 689.3	$ 649.6	$ 1,977.1	$ 1,710.4
Less items to reconcile Segment Adjusted EBITDA to Income (Loss) Before Income Taxes [Abstract]
Interest expense		24.4	30.1	76.5	115.4
Restructuring and related business transformation costs		12.3	6.3	25.2	20.5
Acquisition related expenses and non-cash charges	[1]	0.5	0.7	6.3	2.4
Stock-based compensation				6.1	166.0
Foreign currency transaction (gains) losses, net		0.8	(1.7)	0.6	(6.3)
Loss on extinguishment of debt		0.9	34.1	1.0	84.5
Shareholder litigation settlement recoveries	[2]	0.0	0.0	(4.5)	0.0
Income (Loss) Before Income Taxes		94.8	32.4	238.1	(166.3)
Insurance recoveries of legal defense costs				5.6
Restructuring and Related Business Transformation Costs [Abstract]
Restructuring charges	[3]	5.4	2.8	5.4	4.9
Severance, sign-on, relocation and executive search costs		(0.1)	0.6	3.8	2.2
Facility reorganization, relocation and other costs		1.1	1.0	2.4	3.9
Information technology infrastructure transformation		0.3	0.8	0.5	3.4
Losses (gains) on asset and business disposals		0.1	(0.6)	(1.1)	2.0
Consultant and other advisor fees		3.4	0.5	10.0	1.7
Other, net		2.1	1.2	4.2	2.4
Total restructuring and related business transformation costs		12.3	6.3	25.2	20.5
Stock-based compensation expense recognized		0.9	7.8	6.1	69.2
Stock-based compensation expense related to stock option exercise		0.2
Decrease in stock-based compensation expense to DSU's				3.2
Stock Options [Member]
Restructuring and Related Business Transformation Costs [Abstract]
Stock-based compensation expense recognized			7.8		69.2
Deferred Stock Units [Member]
Restructuring and Related Business Transformation Costs [Abstract]
Stock-based compensation expense recognized			2.0		96.8
Industrials [Member]
Segment Reporting [Abstract]
Revenue		320.0		965.7
Energy [Member]
Segment Reporting [Abstract]
Revenue		298.8		814.1
Medical [Member]
Segment Reporting [Abstract]
Revenue		70.5		197.3
Operating Segments [Member]
Segment Reporting [Abstract]
Adjusted EBITDA		187.5	178.5	506.9	419.8
Operating Segments [Member] | Industrials [Member]
Segment Reporting [Abstract]
Revenue		320.0	288.2	965.7	819.0
Adjusted EBITDA		72.1	63.1	210.0	173.7
Operating Segments [Member] | Energy [Member]
Segment Reporting [Abstract]
Revenue		298.8	301.6	814.1	719.4
Adjusted EBITDA		94.9	98.6	242.5	199.2
Operating Segments [Member] | Medical [Member]
Segment Reporting [Abstract]
Revenue		70.5	59.8	197.3	172.0
Adjusted EBITDA		20.5	16.8	54.4	46.9
Corporate [Member]
Less items to reconcile Segment Adjusted EBITDA to Income (Loss) Before Income Taxes [Abstract]
Corporate expenses not allocated to segments	[4],[5]	5.3	13.8	14.8	30.9
Segment Reconciling Items [Member]
Less items to reconcile Segment Adjusted EBITDA to Income (Loss) Before Income Taxes [Abstract]
Interest expense	[5]	24.4	30.1	76.5	115.4
Depreciation and amortization expenses	[5]	44.4	43.5	134.6	126.9
Sponsor fees and expenses	[5],[6]	0.0	0.0	0.0	17.3
Restructuring and related business transformation costs	[5],[7]	12.3	6.3	25.2	20.5
Acquisition related expenses and non-cash charges	[1],[5]	2.8	1.2	13.1	3.1
Environmental remediation loss reserve	[5],[8]	0.0	0.0	0.0	0.9
Expenses related to public stock offerings	[5],[9]	0.3	0.5	2.2	3.6
Establish public company financial reporting compliance	[5],[10]	1.3	3.8	3.2	7.2
Stock-based compensation	[5],[11]	1.1	9.8	2.9	166.0
Foreign currency transaction (gains) losses, net	[5]	(0.8)	1.7	(0.6)	6.3	[12]
Loss on extinguishment of debt	[5],[13]	0.9	34.1	1.0	84.5
Shareholder litigation settlement recoveries	[5],[12]	0.0	0.0	(4.5)	0.0
Other adjustments	[5],[14]	0.7	1.3	0.4	3.5
Restructuring and Related Business Transformation Costs [Abstract]
Total restructuring and related business transformation costs	[5],[7]	$ 12.3	$ 6.3	$ 25.2	$ 20.5

[1] Represents costs associated with successful and/or abandoned acquisitions, including third-party expenses, post-closure integration costs and non-cash charges and credits arising from fair value purchase accounting adjustments.

[2] Represents an insurance recovery of the Company' shareholder litigation settlement in 2014.

[3] See Note 3 "Restructuring."

[4] Includes insurance recoveries of asbestos legal fees of $5.6 million in the nine month period ended September 30, 2018.

[5] The reconciling items for the three month and nine month periods ended September 30, 2017 have been reclassified to conform to the methodology used in the three and nine month periods ended September 30, 2018, and include the following.

[6] Represents management fees and expenses paid to the Company's Sponsor.

[7] Restructuring and related business transformation costs consist of the following.

[8] Represents estimated environmental remediation costs and losses relating to a former production facility.

[9] Represents expenses related to the Company's initial public offering and subsequent secondary offerings.

[10] Represents third party expenses to comply with the requirements of Sarbanes-Oxley in 2018 and the accelerated adoption of new accounting standards (ASC 606 - Revenue from Contracts with Customers and ASC 842 - Leases) in the first quarter of 2018 and 2019, respectively, one year ahead of the required adoption dates for a private company. These expenses were previously included in "Expenses related to initial stock offering" and prior periods have been restated to conform to current period presentation.

[11] Represents stock-based compensation expense recognized for the three month period ended September 30, 2018 of $0.9 million and employer taxes related to stock option exercises of $0.2 million. Represents stock-based compensation expense recognized for the nine month period ended September 30, 2018 of $6.1 million, reduced by $3.2 million primarily due to a decrease in the estimated accrual for employer taxes related to DSUs as a result of the achievement of employer tax caps in countries outside of the United States. Represents stock-based compensation expense recognized for stock options outstanding of $7.8 million and $69.2 million for the three month and nine month periods ended September 30, 2017 and DSUs granted to employees at the date of the initial public offering of $2.0 million and $96.8 million under the 2013 Stock Incentive Plan for the three and nine month periods ended September 30, 2017.

[12] Represents an insurance recovery of the Company's shareholder litigation settlement in 2014.

[13] Represents losses on extinguishment of the senior notes and a portion of the U.S. Term Loan and losses reclassified from AOCI into income related to the amendment of the interest rate swaps in conjunction with the debt repayment.

[14] Includes (i) the effects of the amortization of prior service costs and the amortization of gains in pension and other postretirement benefits (OPEB) expense, (ii) certain legal and compliance costs and (iii) other miscellaneous adjustments.

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Related Party Transactions (Details) - KKR [Member] € in Millions, $ in Millions	9 Months Ended
	Sep. 30, 2018 EUR (€)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($)
Lender in Senior Secured Credit Facilities [Member] | Euro Term Loan Facility [Member]
Related Party Transaction, Due to Related Party [Abstract]
Related party transaction amount | €	€ 38.6
Monitoring Agreement [Member]
Related Party Transaction, Due to Related Party [Abstract]
Annual management fee due to related party			$ 3.5
Annual percentage increase in fee	5.00%
Monitoring agreement termination fee		$ 16.2
Management Fees [Member]
Related Party Transaction, Due to Related Party [Abstract]
Expenses with related party		$ 1.1

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Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Earnings (Loss) Per Share [Abstract]
Net income (loss)	$ 72.2	$ 28.0	$ 174.9	$ (125.1)
Less: Net income attributable to noncontrolling interests	0.0	0.0	0.0	0.1
Net Income (Loss) Attributable to Gardner Denver Holdings, Inc.	$ 72.2	$ 28.0	$ 174.9	$ (125.2)
Average shares outstanding [Abstract]
Basic (in shares)	201.9	201.3	201.8	175.7
Diluted (in shares)	209.1	208.1	209.6	175.7
Income (loss) per share: [Abstract]
Basic (in dollars per share)	$ 0.36	$ 0.14	$ 0.87	$ (0.71)
Diluted (in dollars per share)	$ 0.35	$ 0.13	$ 0.83	$ (0.71)
Stock Options [Member]
Loss Per Share [Abstract]
Antidilutive securities excluded from computation of diluted loss per share (in shares)			0.8	12.3

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Share Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2018	Aug. 01, 2018
Share repurchase program [Abstract]
Stock repurchase program, authorized amount			$ 250.0
Stock repurchase program period		2 years
August 1, 2018 Program [Member]
Share repurchase program [Abstract]
Stock repurchased (in shares)	223,911	223,911
Weighted average price (in dollars per share)	$ 24.86	$ 24.86
Stock repurchased aggregate value	$ 5.6	$ 5.6