Segment information (Tables)

6 Months Ended

Jun. 27, 2020

Schedule of net sales by operating segment

Sales between reporting segments and the impact of such sales on Adjusted EBITDA for each segment are not included in internal reports presented to the CEO and have therefore not been included below.


	Net sales
	Three months ended						Six months ended
(dollars in millions)	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Power Transmission	$	370.0	$	501.5	$	811.2	$	1,001.0
Fluid Power	206.5		308.4		475.4		613.8
Continuing operations	$	576.5	$	809.9	$	1,286.6	$	1,614.8

Adjusted EBITDA by segment was as follows:


	Adjusted EBITDA
	Three months ended						Six months ended
(dollars in millions)	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Power Transmission	$	57.7	$	105.6	$	137.2	$	215.5
Fluid Power	25.5		59.8		66.8		115.4
Continuing operations	$	83.2	$	165.4	$	204.0	$	330.9

Schedule of net sales by key geographic regions and markets

The following table summarizes our net sales by key geographic region of origin:


	Net sales
	Three months ended June 27, 2020						Three months ended June 29, 2019
(dollars in millions)	Power Transmission		Fluid Power		Power Transmission		Fluid Power
U.S.	$	121.5	$	112.5	$	153.5	$	161.8
North America, excluding U.S.	23.8		27.2		42.5		47.1
United Kingdom (“U.K.”)	6.0		3.4		11.8		9.6
EMEA⁽¹⁾, excluding U.K.	92.6		31.7		131.3		45.8
East Asia and India	48.1		9.7		73.6		18.6
Greater China	69.3		17.5		71.6		17.2
South America	8.7		4.5		17.2		8.3
Net sales	$	370.0	$	206.5	$	501.5	$	308.4


	Net sales
	Six months ended June 27, 2020						Six months ended June 29, 2019
(dollars in millions)	Power Transmission		Fluid Power		Power Transmission		Fluid Power
U.S.	$	259.2	$	252.2	$	306.4	$	318.9
North America, excluding U.S.	64.1		68.9		84.5		93.7
United Kingdom (“U.K.”)	17.4		10.3		23.5		20.4
EMEA⁽¹⁾, excluding U.K.	221.8		75.7		264.6		93.0
East Asia and India	113.3		27.1		147.2		39.1
Greater China	113.6		30.5		140.5		32.3
South America	21.8		10.7		34.3		16.4
Net sales	$	811.2	$	475.4	$	1,001.0	$	613.8

⁽¹⁾Europe, Middle East and Africa (“EMEA”).

The following table summarizes our net sales into emerging and developed markets:


	Net sales
	Three months ended						Six months ended
(dollars in millions)	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Developed	$	372.6	$	534.1	$	848.4	$	1,077.8
Emerging	203.9		275.8		438.2		537.0
Net sales	$	576.5	$	809.9	$	1,286.6	$	1,614.8

Reconciliation of Adjusted EBITDA to net income from continuing operations

Reconciliation of net (loss) income from continuing operations to Adjusted EBITDA:


	Three months ended						Six months ended
(dollars in millions)	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Net (loss) income from continuing operations	$	(27.8)	$	26.7	$	12.1	$	631.8
Income tax expense (benefit)	0.6		37.5		(15.5)		(502.2)
(Loss) income from continuing operations before taxes	(27.2)		64.2		(3.4)		129.6
Interest expense	34.3		39.2		71.0		77.3
Other income	(3.7)		(1.5)		(5.8)		(4.8)
Operating income from continuing operations	3.4		101.9		61.8		202.1
Depreciation and amortization	54.7		56.2		109.6		112.3
Transaction-related income ⁽¹⁾	—		(0.7)		(0.2)		(0.3)
Asset impairments	3.7		—		3.7		—
Restructuring expenses	17.2		0.3		19.1		3.6

Share-based compensation expense	5.7		3.8		8.6		6.4
Sponsor fees (included in other operating expenses)	—		2.0		1.7		3.8

Inventory impairments (included in cost of sales)	1.4		0.3		1.4		0.3

Severance expenses (included in cost of sales)	0.5		0.5		0.6		0.5
Severance expenses (included in SG&A)	0.3		1.4		0.8		1.2
Other items not directly related to current operations	(3.7)		(0.3)		(3.1)		1.0
Adjusted EBITDA	$	83.2	$	165.4	$	204.0	$	330.9

⁽¹⁾Transaction-related income relates primarily to advisory fees and other costs recognized in respect of major corporate transactions, including the acquisition of businesses and debt refinancings.