ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Wisconsin | 39-0875718 | |
(State of other jurisdiction of incorporation) | (IRS Employer Identification No.) |
Large Accelerated Filer | ý | Accelerated Filer | ¨ | |||
Non-accelerated filer | o (Do not check if a smaller reporting company) | Smaller Reporting Company | ¨ |
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• | uncertainties regarding our ability to execute our restructuring plans within expected costs and timing; |
• | increases in our overall debt levels as a result of the acquisition of the Power Transmission Solutions business of Emerson Electric Co. ("PTS"), or otherwise and our ability to repay principal and interest on our outstanding debt; |
• | actions taken by our competitors and our ability to effectively compete in the increasingly competitive global electric motor, drives and controls, power generation and mechanical motion control industries; |
• | our ability to develop new products based on technological innovation and marketplace acceptance of new and existing products; |
• | fluctuations in commodity prices and raw material costs; |
• | our dependence on significant customers; |
• | issues and costs arising from the integration of acquired companies and businesses including PTS, and the timing and impact of purchase accounting adjustments; |
• | prolonged declines in oil and gas up stream capital spending; |
• | unanticipated costs or expenses we may incur related to product warranty issues; |
• | our dependence on key suppliers and the potential effects of supply disruptions; |
• | infringement of our intellectual property by third parties, challenges to our intellectual property and claims of infringement by us of third party technologies; |
• | product liability and other litigation, or the failure of our products to perform as anticipated, particularly in high volume applications; |
• | economic changes in global markets where we do business, such as reduced demand for the products we sell, currency exchange rates, inflation rates, interest rates, recession, foreign government policies and other external factors that we cannot control; |
• | unanticipated liabilities of acquired businesses, including PTS; |
• | effects on earnings of any significant impairment of goodwill or intangible assets; |
• | cyclical downturns affecting the global market for capital goods; |
• | difficulties associated with managing foreign operations; and |
• | other risks and uncertainties including but not limited to those described in “Risk Factors” in this Quarterly Report on Form 10-Q and from time to time in our reports filed with U.S. Securities and Exchange Commission. |
Three Months Ended | Six Months Ended | ||||||||||||||
July 2, 2016 | July 4, 2015 | July 2, 2016 | July 4, 2015 | ||||||||||||
Net Sales | $ | 838.6 | $ | 942.2 | $ | 1,656.8 | $ | 1,853.9 | |||||||
Cost of Sales | 615.7 | 690.8 | 1,216.5 | 1,381.6 | |||||||||||
Gross Profit | 222.9 | 251.4 | 440.3 | 472.3 | |||||||||||
Operating Expenses | 131.5 | 148.2 | 279.6 | 305.5 | |||||||||||
Income From Operations | 91.4 | 103.2 | 160.7 | 166.8 | |||||||||||
Interest Expense | 14.8 | 16.4 | 29.8 | 30.0 | |||||||||||
Interest Income | 1.2 | 0.9 | 2.3 | 2.1 | |||||||||||
Income Before Taxes | 77.8 | 87.7 | 133.2 | 138.9 | |||||||||||
Provision For Income Taxes | 19.4 | 22.8 | 32.1 | 36.1 | |||||||||||
Net Income | 58.4 | 64.9 | 101.1 | 102.8 | |||||||||||
Less: Net Income Attributable to Noncontrolling Interests | 1.8 | 2.1 | 2.9 | 3.6 | |||||||||||
Net Income Attributable to Regal Beloit Corporation | $ | 56.6 | $ | 62.8 | $ | 98.2 | $ | 99.2 | |||||||
Earnings Per Share Attributable to Regal Beloit Corporation: | |||||||||||||||
Basic | $ | 1.27 | $ | 1.40 | $ | 2.20 | $ | 2.22 | |||||||
Assuming Dilution | $ | 1.26 | $ | 1.39 | $ | 2.19 | $ | 2.20 | |||||||
Cash Dividends Declared Per Share | $ | 0.24 | $ | 0.23 | $ | 0.47 | $ | 0.45 | |||||||
Weighted Average Number of Shares Outstanding: | |||||||||||||||
Basic | 44.7 | 44.8 | 44.7 | 44.8 | |||||||||||
Assuming Dilution | 45.0 | 45.2 | 45.0 | 45.1 |
Three Months Ended | Six Months Ended | ||||||||||||||
July 2, 2016 | July 4, 2015 | July 2, 2016 | July 4, 2015 | ||||||||||||
Net Income | $ | 58.4 | $ | 64.9 | $ | 101.1 | $ | 102.8 | |||||||
Other comprehensive income (loss) net of tax: | |||||||||||||||
Foreign currency translation adjustments | (32.5 | ) | (7.8 | ) | (6.8 | ) | (30.5 | ) | |||||||
Hedging Activities: | |||||||||||||||
Decrease in fair value of hedging activities, net of tax effects of $(6.7) million and $(5.0) million for the three months ended July 2, 2016 and July 4, 2015 and $(5.4) million and $(7.4) million for the six months ended July 2, 2016 and July 4, 2015 respectively | (11.1 | ) | (8.2 | ) | (8.8 | ) | (12.1 | ) | |||||||
Reclassification of losses included in net income, net of tax effects of $4.7 million and $4.2 million for the three months ended July 2, 2016 and July 4, 2015 and $9.7 million and $6.5 million for the six months ended July 2, 2016 and July 4, 2015 respectively | 7.6 | 6.8 | 15.7 | 10.5 | |||||||||||
Pension and Post Retirement Plans: | |||||||||||||||
Reclassification adjustments for pension and post retirement benefits included in net income, net of tax effects of $0.4 million and $1.1 million for the three months ended July 2, 2016 and July 4, 2015 and $0.6 million and $1.5 million for the six months ended July 2, 2016 and July 4, 2015, respectively | 0.6 | (0.3 | ) | 1.3 | 0.5 | ||||||||||
Other comprehensive income (loss) | (35.4 | ) | (9.5 | ) | 1.4 | (31.6 | ) | ||||||||
Comprehensive income | 23.0 | 55.4 | 102.5 | 71.2 | |||||||||||
Less: Comprehensive income attributable to noncontrolling interests | 0.9 | 1.9 | 2.4 | 2.4 | |||||||||||
Comprehensive income attributable to Regal Beloit Corporation | $ | 22.1 | $ | 53.5 | $ | 100.1 | $ | 68.8 |
July 2, 2016 | January 2, 2016 | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and Cash Equivalents | $ | 271.5 | $ | 252.9 | |||
Trade Receivables, less allowances of $12.2 million in 2016 and $11.3 million in fiscal 2015 | 522.5 | 462.0 | |||||
Inventories | 711.4 | 775.0 | |||||
Prepaid Expenses and Other Current Assets | 131.4 | 145.3 | |||||
Total Current Assets | 1,636.8 | 1,635.2 | |||||
Net Property, Plant and Equipment | 654.3 | 678.5 | |||||
Goodwill | 1,466.0 | 1,465.6 | |||||
Intangible Assets, net of Amortization | 749.1 | 777.8 | |||||
Deferred Income Tax Benefits | 21.2 | 18.6 | |||||
Other Noncurrent Assets | 13.2 | 16.0 | |||||
Total Assets | $ | 4,540.6 | $ | 4,591.7 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities: | |||||||
Accounts Payable | $ | 341.4 | $ | 336.2 | |||
Dividends Payable | 10.7 | 10.3 | |||||
Hedging Obligations | 35.8 | 44.7 | |||||
Accrued Compensation and Employee Benefits | 69.9 | 80.6 | |||||
Other Accrued Expenses | 138.4 | 134.7 | |||||
Current Maturities of Long-Term Debt | 3.6 | 6.3 | |||||
Total Current Liabilities | 599.8 | 612.8 | |||||
Long-Term Debt | 1,610.5 | 1,715.6 | |||||
Deferred Income Taxes | 105.8 | 100.9 | |||||
Hedging Obligations | 22.2 | 27.6 | |||||
Pension and Other Post Retirement Benefits | 106.2 | 105.9 | |||||
Other Noncurrent Liabilities | 46.2 | 46.1 | |||||
Commitments and Contingencies (see Note 12) | |||||||
Equity: | |||||||
Regal Beloit Corporation Shareholders' Equity: | |||||||
Common Stock, $.01 par value, 100.0 million shares authorized, 44.8 million and 44.7 million shares issued and outstanding in 2016 and fiscal 2015, respectively | 0.4 | 0.4 | |||||
Additional Paid-In Capital | 899.0 | 900.8 | |||||
Retained Earnings | 1,368.4 | 1,291.1 | |||||
Accumulated Other Comprehensive Loss | (255.8 | ) | (255.0 | ) | |||
Total Regal Beloit Corporation Shareholders' Equity | 2,012.0 | 1,937.3 | |||||
Noncontrolling Interests | 37.9 | 45.5 | |||||
Total Equity | 2,049.9 | 1,982.8 | |||||
Total Liabilities and Equity | $ | 4,540.6 | $ | 4,591.7 |
Common Stock $.01 Par Value | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non- controlling Interests | Total Equity | ||||||||||||||||||
Balance as of January 3, 2015 | $ | 0.4 | $ | 896.1 | $ | 1,188.9 | $ | (151.0 | ) | $ | 44.9 | $ | 1,979.3 | ||||||||||
Net Income | — | — | 99.2 | — | 3.6 | 102.8 | |||||||||||||||||
Other Comprehensive Loss | — | — | — | (30.4 | ) | (1.2 | ) | (31.6 | ) | ||||||||||||||
Dividends Declared ($0.45 per share) | — | — | (20.2 | ) | — | — | (20.2 | ) | |||||||||||||||
Stock Options Exercised, including income tax benefit and share cancellations | — | 1.9 | — | — | — | 1.9 | |||||||||||||||||
Dividends Declared to Non-controlling Interests | — | — | — | — | (0.3 | ) | (0.3 | ) | |||||||||||||||
Share-based Compensation | — | 7.1 | — | — | — | 7.1 | |||||||||||||||||
Purchase of Subsidiary Shares from Noncontrolling Interest | — | — | — | — | (1.2 | ) | $ | (1.2 | ) | ||||||||||||||
Balance as of July 4, 2015 | $ | 0.4 | $ | 905.1 | $ | 1,267.9 | $ | (181.4 | ) | $ | 45.8 | $ | 2,037.8 |
Common Stock $.01 Par Value | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non- controlling Interests | Total Equity | ||||||||||||||||||
Balance as of January 2, 2016 | $ | 0.4 | $ | 900.8 | $ | 1,291.1 | $ | (255.0 | ) | $ | 45.5 | $ | 1,982.8 | ||||||||||
Net Income | — | — | 98.2 | — | 2.9 | 101.1 | |||||||||||||||||
Other Comprehensive Income (Loss) | — | — | — | 1.9 | (0.5 | ) | 1.4 | ||||||||||||||||
Dividends Declared ($0.47 per share) | — | — | (20.9 | ) | — | — | (20.9 | ) | |||||||||||||||
Stock Options Exercised, including income tax benefit and share cancellations | — | (1.7 | ) | — | — | — | (1.7 | ) | |||||||||||||||
Dividends Declared to Non-controlling Interests | — | — | — | — | (0.3 | ) | (0.3 | ) | |||||||||||||||
Share-based Compensation | — | 7.1 | — | — | — | 7.1 | |||||||||||||||||
Purchase of Subsidiary Shares from Noncontrolling Interest | — | (7.2 | ) | — | (2.7 | ) | (9.7 | ) | (19.6 | ) | |||||||||||||
Balance as of July 2, 2016 | $ | 0.4 | $ | 899.0 | $ | 1,368.4 | $ | (255.8 | ) | $ | 37.9 | $ | 2,049.9 |
Six Months Ended | |||||||
July 2, 2016 | July 4, 2015 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 101.1 | $ | 102.8 | |||
Adjustments to reconcile net income to net cash provided by operating activities (net of acquisitions): | |||||||
Depreciation and amortization | 79.0 | 78.1 | |||||
Excess tax expense (benefits) from share-based compensation | 0.1 | (1.2 | ) | ||||
Loss on sale or disposition of assets, net | 1.0 | 0.7 | |||||
Share-based compensation expense | 7.1 | 7.1 | |||||
Loss on Venezuela currency devaluation | — | 1.5 | |||||
Gain on sale of business | (11.6 | ) | — | ||||
Change in operating assets and liabilities | (2.4 | ) | (53.3 | ) | |||
Net cash provided by operating activities | 174.3 | 135.7 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Additions to property, plant and equipment | (31.7 | ) | (44.7 | ) | |||
Sales of investment securities | 30.3 | 13.6 | |||||
Purchases of investment securities | (25.8 | ) | (21.4 | ) | |||
Business acquisitions, net of cash acquired | — | (1,400.5 | ) | ||||
Proceeds from sale of business | 25.0 | — | |||||
Proceeds from sale of assets | 0.1 | 7.8 | |||||
Net cash used in investing activities | (2.1 | ) | (1,445.2 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Proceeds from revolving credit facility | 360.0 | 326.0 | |||||
Repayments of the revolving credit facility | (338.0 | ) | (290.0 | ) | |||
Proceeds from short-term borrowings | 20.8 | 68.8 | |||||
Repayments of short-term borrowings | (27.5 | ) | (64.0 | ) | |||
Proceeds from long-term borrowings | — | 1,250.0 | |||||
Repayments of long-term borrowings | (125.2 | ) | (31.4 | ) | |||
Dividends paid to shareholders | (20.5 | ) | (19.7 | ) | |||
Proceeds from the exercise of stock options | 0.5 | 3.7 | |||||
Excess tax (expense) benefits from share-based compensation | (0.1 | ) | 1.2 | ||||
Distributions to noncontrolling interests | (0.3 | ) | (0.3 | ) | |||
Purchase of subsidiary shares from noncontrolling interest | (19.6 | ) | (1.2 | ) | |||
Financing fees paid | — | (17.8 | ) | ||||
Net cash provided by (used in) financing activities | (149.9 | ) | 1,225.3 | ||||
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | (3.7 | ) | (2.3 | ) | |||
Net increase (decrease) in cash and cash equivalents | 18.6 | (86.5 | ) | ||||
Cash and cash equivalents at beginning of period | 252.9 | 334.1 | |||||
Cash and cash equivalents at end of period | $ | 271.5 | $ | 247.6 | |||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |||||||
Cash paid for: | |||||||
Interest | $ | 27.3 | $ | 27.5 | |||
Income taxes | $ | 40.5 | $ | 44.1 |
July 2, 2016 | January 2, 2016 | ||
Raw Material and Work in Process | 46% | 45% | |
Finished Goods and Purchased Parts | 54% | 55% |
Useful Life in Years | July 2, 2016 | January 2, 2016 | |||||||
Land and Improvements | $ | 80.3 | $ | 80.7 | |||||
Buildings and Improvements | 3 - 50 | 274.4 | 276.9 | ||||||
Machinery and Equipment | 3 - 15 | 935.0 | 926.7 | ||||||
Property, Plant and Equipment | 1,289.7 | 1,284.3 | |||||||
Less: Accumulated Depreciation | (635.4 | ) | (605.8 | ) | |||||
Net Property, Plant and Equipment | $ | 654.3 | $ | 678.5 |
As of January 30, 2015 | |||
Current assets | $ | 22.5 | |
Trade receivables | 67.2 | ||
Inventories | 108.8 | ||
Property, plant and equipment | 184.4 | ||
Intangible assets | 648.2 | ||
Goodwill | 564.3 | ||
Total assets acquired | 1,595.4 | ||
Accounts payable | 57.2 | ||
Current liabilities assumed | 32.3 | ||
Long-term liabilities assumed | 97.0 | ||
Net assets acquired | $ | 1,408.9 |
Weighted Average Amortization Period (Years) | Gross Value | |||||
Amortizable intangible assets | ||||||
Customer Relationships | 17.0 | $ | 462.8 | |||
Technology | 14.5 | 63.5 | ||||
Intangible assets subject to amortization | 16.7 | 526.3 | ||||
Non-amortizable intangible assets | ||||||
Trade Names | - | 121.9 | ||||
Intangible assets | $ | 648.2 |
Six Months Ended | ||||
July 4, 2015 | ||||
Pro forma net sales | $ | 1,902.5 | ||
Pro forma net income attributable to the Company | 100.9 | |||
Basic earnings per share as reported | $ | 2.22 | ||
Pro forma basic earnings per share | 2.25 | |||
Diluted earnings per share as reported | $ | 2.20 | ||
Pro forma diluted earnings per share | 2.24 |
Three Months Ended | |||||||||||||||
July 2, 2016 | |||||||||||||||
Hedging Activities | Pension and Post Retirement Benefit Adjustments | Foreign Currency Translation Adjustments | Total | ||||||||||||
Beginning balance | $ | (37.1 | ) | $ | (34.7 | ) | $ | (149.5 | ) | $ | (221.3 | ) | |||
Other comprehensive income (loss) before reclassifications | (17.8 | ) | 0.5 | (32.1 | ) | (49.4 | ) | ||||||||
Tax impact | 6.7 | — | — | 6.7 | |||||||||||
Amounts reclassified from accumulated other comprehensive loss | 12.3 | 1.0 | — | 13.3 | |||||||||||
Tax impact | (4.7 | ) | (0.4 | ) | — | (5.1 | ) | ||||||||
Net current period other comprehensive income (loss) | (3.5 | ) | 1.1 | (32.1 | ) | (34.5 | ) | ||||||||
Ending balance | $ | (40.6 | ) | $ | (33.6 | ) | $ | (181.6 | ) | $ | (255.8 | ) | |||
Three Months Ended | |||||||||||||||
July 4, 2015 | |||||||||||||||
Hedging Activities | Pension Benefit Adjustments | Foreign Currency Translation Adjustments | Total | ||||||||||||
Beginning balance | $ | (31.2 | ) | $ | (38.7 | ) | $ | (102.2 | ) | $ | (172.1 | ) | |||
Other comprehensive income (loss) before reclassifications | (13.2 | ) | — | (7.6 | ) | (20.8 | ) | ||||||||
Tax impact | 5.0 | — | — | 5.0 | |||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | 11.0 | 0.8 | — | 11.8 | |||||||||||
Tax impact | (4.2 | ) | (1.1 | ) | — | (5.3 | ) | ||||||||
Net current period other comprehensive income (loss) | (1.4 | ) | (0.3 | ) | (7.6 | ) | (9.3 | ) | |||||||
Ending balance | $ | (32.6 | ) | $ | (39.0 | ) | $ | (109.8 | ) | $ | (181.4 | ) |
Six Months Ended | |||||||||||||||
July 2, 2016 | |||||||||||||||
Hedging Activities | Pension and Post Retirement Benefit Adjustments | Foreign Currency Translation Adjustments | Total | ||||||||||||
Beginning balance | $ | (47.5 | ) | $ | (35.4 | ) | $ | (172.1 | ) | $ | (255.0 | ) | |||
Other comprehensive income (loss) before reclassifications | (14.2 | ) | 0.5 | (6.8 | ) | (20.5 | ) | ||||||||
Tax impact | 5.4 | — | — | 5.4 | |||||||||||
Amounts reclassified from accumulated other comprehensive loss | 25.4 | 1.9 | — | 27.3 | |||||||||||
Tax impact | (9.7 | ) | (0.6 | ) | — | (10.3 | ) | ||||||||
Net current period other comprehensive income (loss) | 6.9 | 1.8 | (6.8 | ) | 1.9 | ||||||||||
Purchase of subsidiary shares from noncontrolling interest | — | — | (2.7 | ) | (2.7 | ) | |||||||||
Ending balance | $ | (40.6 | ) | $ | (33.6 | ) | $ | (181.6 | ) | $ | (255.8 | ) | |||
Six Months Ended | |||||||||||||||
July 4, 2015 | |||||||||||||||
Hedging Activities | Pension Benefit Adjustments | Foreign Currency Translation Adjustments | Total | ||||||||||||
Beginning balance | $ | (31.0 | ) | $ | (39.5 | ) | $ | (80.5 | ) | $ | (151.0 | ) | |||
Other comprehensive income (loss) before reclassifications | (19.5 | ) | — | (29.3 | ) | (48.8 | ) | ||||||||
Tax impact | 7.4 | — | — | 7.4 | |||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | 17.0 | 2.0 | — | 19.0 | |||||||||||
Tax impact | (6.5 | ) | (1.5 | ) | — | (8.0 | ) | ||||||||
Net current period other comprehensive income (loss) | (1.6 | ) | 0.5 | (29.3 | ) | (30.4 | ) | ||||||||
Ending balance | $ | (32.6 | ) | $ | (39.0 | ) | $ | (109.8 | ) | $ | (181.4 | ) |
Total | Commercial and Industrial Systems | Climate Solutions | Power Transmission Solutions | ||||||||||||
Balance as of January 2, 2016 | $ | 1,465.6 | $ | 547.7 | $ | 342.8 | $ | 575.1 | |||||||
Acquisition and valuation adjustments | (0.3 | ) | — | — | (0.3 | ) | |||||||||
Translation adjustments | 0.7 | (0.7 | ) | (0.3 | ) | 1.7 | |||||||||
Balance as of July 2, 2016 | $ | 1,466.0 | $ | 547.0 | $ | 342.5 | $ | 576.5 | |||||||
Cumulative goodwill impairment charges | $ | 275.7 | $ | 244.8 | $ | 7.7 | $ | 23.2 |
July 2, 2016 | January 2, 2016 | |||||||||||||||||
Weighted Average Amortization Period (Years) | Gross Value | Accumulated Amortization | Gross Value | Accumulated Amortization | ||||||||||||||
Amortizable intangible assets: | ||||||||||||||||||
Customer relationships | 15 | $ | 711.6 | $ | 183.1 | $ | 709.0 | $ | 161.4 | |||||||||
Technology | 11 | 191.0 | 101.7 | 191.1 | 92.9 | |||||||||||||
Trademarks | 12 | 32.3 | 22.9 | 32.1 | 21.8 | |||||||||||||
Patent and engineering drawings | 5 | 16.6 | 16.6 | 16.6 | 16.6 | |||||||||||||
Non-compete agreements | 5 | 8.4 | 8.1 | 8.5 | 8.1 | |||||||||||||
959.9 | 332.4 | 957.3 | 300.8 | |||||||||||||||
Non-amortizable trade names | 121.6 | — | 121.3 | — | ||||||||||||||
$ | 1,081.5 | $ | 332.4 | $ | 1,078.6 | $ | 300.8 | |||||||||||
Year | Estimated Amortization | |||
2017 | $ | 55.3 | ||
2018 | 53.3 | |||
2019 | 52.8 | |||
2020 | 49.7 | |||
2021 | 42.1 |
Commercial and Industrial Systems | Climate Solutions | Power Transmission Solutions | Eliminations | Total | |||||||||||||||
As of and for Three Months Ended July 2, 2016 | |||||||||||||||||||
External sales | $ | 394.7 | $ | 254.5 | $ | 189.4 | $ | — | $ | 838.6 | |||||||||
Intersegment sales | 11.4 | 7.0 | 1.1 | (19.5 | ) | — | |||||||||||||
Total sales | 406.1 | 261.5 | 190.5 | (19.5 | ) | 838.6 | |||||||||||||
Gross profit | 96.2 | 64.7 | 62.0 | — | 222.9 | ||||||||||||||
Operating expenses | 71.1 | 28.6 | 31.8 | — | 131.5 | ||||||||||||||
Income from operations | 25.1 | 36.1 | 30.2 | — | 91.4 | ||||||||||||||
Depreciation and amortization | 19.2 | 6.5 | 13.2 | — | 38.9 | ||||||||||||||
Capital expenditures | 9.6 | 3.6 | 3.6 | — | 16.8 | ||||||||||||||
Identifiable assets | 1,937.1 | 947.4 | 1,656.1 | — | 4,540.6 | ||||||||||||||
As of and for Three Months Ended July 4, 2015 | |||||||||||||||||||
External sales | $ | 441.0 | $ | 286.1 | 215.1 | $ | — | $ | 942.2 | ||||||||||
Intersegment sales | 22.4 | 5.8 | 1.2 | (29.4 | ) | — | |||||||||||||
Total sales | 463.4 | 291.9 | 216.3 | (29.4 | ) | 942.2 | |||||||||||||
Gross profit | 113.6 | 73.0 | 64.8 | — | 251.4 | ||||||||||||||
Operating expenses | 72.1 | 29.3 | 46.8 | — | 148.2 | ||||||||||||||
Income from operations | 41.5 | 43.7 | 18.0 | — | 103.2 | ||||||||||||||
Depreciation and amortization | 19.3 | 7.6 | 15.3 | — | 42.2 | ||||||||||||||
Capital expenditures | 12.4 | 4.1 | 7.0 | — | 23.5 | ||||||||||||||
Identifiable assets | 2,424.8 | 900.8 | 1,639.4 | — | 4,965.0 |
Commercial and Industrial Systems | Climate Solutions | Power Transmission Solutions | Eliminations | Total | |||||||||||||||
As of and for Six Months Ended July 2, 2016 | |||||||||||||||||||
External sales | $ | 772.3 | $ | 494.3 | $ | 390.2 | $ | — | $ | 1,656.8 | |||||||||
Intersegment sales | 22.7 | 12.2 | 2.0 | (36.9 | ) | — | |||||||||||||
Total sales | 795.0 | 506.5 | 392.2 | (36.9 | ) | 1,656.8 | |||||||||||||
Gross profit | 189.8 | 120.9 | 129.6 | — | 440.3 | ||||||||||||||
Operating expenses | 143.0 | 60.2 | 76.4 | — | 279.6 | ||||||||||||||
Income from operations | 46.8 | 60.7 | 53.2 | — | 160.7 | ||||||||||||||
Depreciation and amortization | 38.9 | 12.7 | 27.4 | — | 79.0 | ||||||||||||||
Capital expenditures | 16.9 | 7.5 | 7.3 | — | 31.7 | ||||||||||||||
Identifiable assets | 1,937.1 | 947.4 | 1,656.1 | — | 4,540.6 | ||||||||||||||
As of and for Six Months Ended July 4, 2015 | |||||||||||||||||||
External sales | $ | 897.4 | $ | 566.5 | 390.0 | $ | — | $ | 1,853.9 | ||||||||||
Intersegment sales | 46.3 | 12.9 | 2.3 | (61.5 | ) | — | |||||||||||||
Total sales | 943.7 | 579.4 | 392.3 | (61.5 | ) | 1,853.9 | |||||||||||||
Gross profit | 226.5 | 136.7 | 109.1 | — | 472.3 | ||||||||||||||
Operating expenses | 151.7 | 59.6 | 94.2 | — | 305.5 | ||||||||||||||
Income from operations | 74.8 | 77.1 | 14.9 | — | 166.8 | ||||||||||||||
Depreciation and amortization | 38.8 | 14.6 | 24.7 | — | 78.1 | ||||||||||||||
Capital expenditures | 28.1 | 8.7 | 7.9 | — | 44.7 | ||||||||||||||
Identifiable assets | 2,424.8 | 900.8 | 1,639.4 | — | 4,965.0 |
July 2, 2016 | January 2, 2016 | ||||||
Term facility | $ | 993.1 | $ | 1,118.1 | |||
Senior notes | 600.0 | 600.0 | |||||
Multicurrency revolving facility | 25.0 | 3.0 | |||||
Other | 8.5 | 15.5 | |||||
Less: Debt issuance costs | (12.5 | ) | (14.7 | ) | |||
1,614.1 | 1,721.9 | ||||||
Less: Current maturities | 3.6 | 6.3 | |||||
Non-current portion | $ | 1,610.5 | $ | 1,715.6 |
Principal | Interest Rate | Maturity | ||||||
Floating Rate Series 2007A | 100.0 | Floating (1) | August 23, 2017 | |||||
Fixed Rate Series 2011A | 100.0 | 4.1% | July 14, 2018 | |||||
Fixed Rate Series 2011A | 230.0 | 4.8 to 5.0% | July 14, 2021 | |||||
Fixed Rate Series 2011A | 170.0 | 4.9 to 5.1% | July 14, 2023 | |||||
$ | 600.0 |
(1) Interest rates vary as LIBOR varies. At July 2, 2016, the interest rate was 1.4%. At January 2, 2016, the interest rate was 1.1% |
Three Months Ended | Six Months Ended | ||||||||||||||
July 2, 2016 | July 4, 2015 | July 2, 2016 | July 4, 2015 | ||||||||||||
Service cost | $ | 2.0 | $ | 4.0 | $ | 4.1 | $ | 4.7 | |||||||
Interest cost | 2.7 | 1.1 | 5.1 | 5.4 | |||||||||||
Expected return on plan assets | (2.9 | ) | (3.0 | ) | (5.9 | ) | (5.2 | ) | |||||||
Amortization of prior service cost and net actuarial loss | 1.0 | 0.8 | 1.9 | 2.0 | |||||||||||
Net periodic benefit cost | $ | 2.8 | $ | 2.9 | $ | 5.2 | $ | 6.9 |
July 2, 2016 | July 4, 2015 | |||||||
Total intrinsic value of share-based incentive awards exercised | $ | 0.3 | $ | 4.0 | ||||
Cash received from stock option exercises | 0.5 | 2.5 | ||||||
Income tax (expense) benefit from the exercise of stock options | (0.1 | ) | 1.5 | |||||
Total fair value of share-based incentive awards vested | 4.8 | 4.8 |
2016 | 2015 | ||||||
Per share weighted average fair value of grants | $ | 15.22 | $ | 27.16 | |||
Risk-free interest rate | 1.4 | % | 1.9 | % | |||
Expected life (years) | 7.0 | 7.0 | |||||
Expected volatility | 29.6 | % | 35.6 | % | |||
Expected dividend yield | 1.7 | % | 1.2 | % |
Number of Shares Under Options and SARs | Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (years) | Aggregate Intrinsic Value (in millions) | ||||||||
Outstanding at January 2, 2016 | 1,548,266 | $ | 63.09 | |||||||||
Granted | 293,400 | 57.43 | ||||||||||
Exercised | (22,856 | ) | 45.46 | |||||||||
Forfeited | (28,177 | ) | 73.24 | |||||||||
Expired | (2,250 | ) | 72.05 | |||||||||
Outstanding at July 2, 2016 | 1,788,383 | $ | 62.22 | 5.8 | $ | 4.4 | ||||||
Exercisable at July 2, 2016 | 1,117,928 | $ | 59.60 | 4.0 | $ | 4.3 |
Shares | Weighted Average Fair Value at Grant Date | Weighted Average Remaining Contractual Term (years) | |||||||
Unvested RSAs at January 2, 2016 | 14,400 | $ | 78.15 | 0.4 | |||||
Granted | 19,593 | 57.43 | |||||||
Vested | (14,400 | ) | 78.15 | ||||||
Unvested RSAs July 2, 2016 | 19,593 | $ | 57.43 | 0.9 |
Shares | Weighted Average Fair Value at Grant Date | Weighted Average Remaining Contractual Term (years) | |||||||||
Unvested RSUs at January 2, 2016 | 268,655 | $ | 72.91 | 1.8 | |||||||
Granted | 105,228 | 57.43 | |||||||||
Vested | (79,255 | ) | 65.06 | ||||||||
Forfeited | (13,135 | ) | 75.02 | ||||||||
Unvested RSUs at July 2, 2016 | 281,493 | $ | 69.24 | 2.1 |
July 2, 2016 | July 4, 2015 | ||||
Risk-free interest rate | 0.9 | % | 1.0 | % | |
Expected life (years) | 3.0 | 3.0 | |||
Expected volatility | 23.0 | % | 25.0 | % | |
Expected dividend yield | 1.7 | % | 1.2 | % |
Shares | Weighted Average Fair Value at Grant Date | Weighted Average Remaining Contractual Term (years) | |||||||||
Unvested PSUs at January 2, 2016 | 87,895 | $ | 75.81 | 1.9 | |||||||
Granted | 83,605 | 51.84 | |||||||||
Forfeited | (36,285 | ) | 59.76 | ||||||||
Unvested PSUs July 2, 2016 | 135,215 | $ | 65.30 | 2.4 |
Three Months Ended | Six Months Ended | ||||||||||
July 2, 2016 | July 4, 2015 | July 2, 2016 | July 4, 2015 | ||||||||
Denominator for basic EPS | 44.7 | 44.8 | 44.7 | 44.8 | |||||||
Effect of dilutive securities | 0.3 | 0.4 | 0.3 | 0.3 | |||||||
Denominator for diluted EPS | 45.0 | 45.2 | 45.0 | 45.1 |
Three Months Ended | Six Months Ended | ||||||||||||||
July 2, 2016 | July 4, 2015 | July 2, 2016 | July 4, 2015 | ||||||||||||
Beginning balance | $ | 17.5 | $ | 20.9 | $ | 19.1 | $ | 19.3 | |||||||
Less: Payments | (4.6 | ) | (4.4 | ) | (9.7 | ) | (9.1 | ) | |||||||
Provisions | 6.3 | 4.1 | 9.8 | 9.6 | |||||||||||
Acquisition | — | — | — | 0.8 | |||||||||||
Ending balance | $ | 19.2 | $ | 20.6 | $ | 19.2 | $ | 20.6 |
Notional Amount (in U.S. Dollars) | |||
Chinese Renminbi | $ | 163.3 | |
Mexican Peso | 266.1 | ||
Euro | 49.8 | ||
Indian Rupee | 42.2 | ||
Canadian Dollar | 30.3 | ||
Australian Dollar | 10.6 | ||
Japanese Yen | 3.2 | ||
Thai Baht | 4.5 | ||
Great Britain Pound | 1.9 |
Notional Amount | |||
Copper | $ | 44.9 | |
Aluminum | 2.3 |
July 2, 2016 | |||||||||||||||
Prepaid Expenses and Other Current Assets | Other Noncurrent Assets | Hedging Obligations (current) | Hedging Obligations (non-current) | ||||||||||||
Designated as hedging instruments: | |||||||||||||||
Interest rate swap contracts | $ | — | $ | — | $ | — | $ | 6.0 | |||||||
Currency contracts | 0.6 | 0.3 | 31.9 | 16.2 | |||||||||||
Commodity contracts | 1.4 | 0.2 | 1.8 | — | |||||||||||
Not designated as hedging instruments: | |||||||||||||||
Currency contracts | 1.2 | — | 0.4 | — | |||||||||||
Commodity contracts | 1.8 | — | 1.7 | — | |||||||||||
Total Derivatives | $ | 5.0 | $ | 0.5 | $ | 35.8 | $ | 22.2 |
January 2, 2016 | |||||||||||||||
Prepaid Expenses and Other Current Assets | Other Noncurrent Assets | Hedging Obligations (current) | Hedging Obligations (non-current) | ||||||||||||
Designated as hedging instruments: | |||||||||||||||
Interest rate swap contracts | $ | — | $ | — | $ | — | $ | 7.8 | |||||||
Currency contracts | 0.7 | 0.4 | 29.9 | 19.5 | |||||||||||
Commodity contracts | 0.1 | — | 8.7 | — | |||||||||||
Not designated as hedging instruments: | |||||||||||||||
Currency contracts | 0.5 | 0.6 | 0.9 | 0.3 | |||||||||||
Commodity contracts | 5.1 | — | 5.2 | — | |||||||||||
Total Derivatives | $ | 6.4 | $ | 1.0 | $ | 44.7 | $ | 27.6 |
Three Months Ended | |||||||||||||||||||||||||||||||
July 2, 2016 | July 4, 2015 | ||||||||||||||||||||||||||||||
Commodity Forwards | Currency Forwards | Interest Rate Swaps | Total | Commodity Forwards | Currency Forwards | Interest Rate Swaps | Total | ||||||||||||||||||||||||
Gain (Loss) recognized in Other Comprehensive Income (Loss) | $ | 0.7 | $ | (18.2 | ) | $ | (0.3 | ) | $ | (17.8 | ) | $ | (2.9 | ) | $ | (10.4 | ) | $ | 0.1 | $ | (13.2 | ) | |||||||||
Amounts reclassified from Other Comprehensive Income (Loss): | |||||||||||||||||||||||||||||||
Gain recognized in Net Sales | — | — | — | — | — | 0.1 | — | 0.1 | |||||||||||||||||||||||
Loss recognized in Cost of Sales | (4.3 | ) | (6.7 | ) | — | (11.0 | ) | (6.6 | ) | (3.2 | ) | — | (9.8 | ) | |||||||||||||||||
Loss recognized in Interest Expense | — | — | (1.3 | ) | (1.3 | ) | — | — | (1.3 | ) | (1.3 | ) |
Six Months Ended | |||||||||||||||||||||||||||||||
July 2, 2016 | July 4, 2015 | ||||||||||||||||||||||||||||||
Commodity Forwards | Currency Forwards | Interest Rate Swaps | Total | Commodity Forwards | Currency Forwards | Interest Rate Swaps | Total | ||||||||||||||||||||||||
Gain (Loss) recognized in Other Comprehensive Income (Loss) | $ | 2.1 | $ | (15.6 | ) | $ | (0.7 | ) | $ | (14.2 | ) | $ | (7.5 | ) | $ | (11.1 | ) | $ | (0.9 | ) | $ | (19.5 | ) | ||||||||
Amounts reclassified from Other Comprehensive Income (Loss): | |||||||||||||||||||||||||||||||
Gain recognized in Net Sales | — | — | — | — | — | 0.1 | — | 0.1 | |||||||||||||||||||||||
Loss recognized in Cost of Sales | (9.7 | ) | (13.2 | ) | — | (22.9 | ) | (9.7 | ) | (4.8 | ) | — | (14.5 | ) | |||||||||||||||||
Loss recognized in Interest Expense | — | — | (2.5 | ) | (2.5 | ) | — | — | (2.6 | ) | (2.6 | ) |
Three Months Ended | |||||||||||||||
July 2, 2016 | July 4, 2015 | ||||||||||||||
Commodity Forwards | Currency Forwards | Commodity Forwards | Currency Forwards | ||||||||||||
Gain recognized in Cost of Sales | $ | 0.1 | $ | — | $ | — | $ | 1.7 | |||||||
Loss recognized in Operating Expenses | — | (1.6 | ) | — | — |
Six Months Ended | |||||||||||||||
July 2, 2016 | July 4, 2015 | ||||||||||||||
Commodity Forwards | Currency Forwards | Commodity Forwards | Currency Forwards | ||||||||||||
Gain (Loss) recognized in Cost of Sales | $ | 0.2 | $ | — | $ | — | $ | (0.5 | ) | ||||||
Loss recognized in Operating Expenses | — | (0.7 | ) | — | — |
July 2, 2016 | |||||||||||
Gross Amounts as Presented in the Condensed Consolidated Balance Sheet | Derivative Contract Amounts Subject to Right of Offset | Derivative Contracts as Presented on a Net Basis | |||||||||
Prepaid Expenses and Other Current Assets: | |||||||||||
Derivative Currency Contracts | $ | 1.8 | $ | (1.4 | ) | $ | 0.4 | ||||
Derivative Commodity Contracts | 3.2 | (3.0 | ) | 0.2 | |||||||
Other Noncurrent Assets: | |||||||||||
Derivative Currency Contracts | 0.3 | (0.2 | ) | 0.1 | |||||||
Derivative Commodity Contracts | 0.2 | — | 0.2 | ||||||||
Hedging Obligations (Current): | |||||||||||
Derivative Currency Contracts | 32.3 | (1.4 | ) | 30.9 | |||||||
Derivative Commodity Contracts | 3.5 | (3.0 | ) | 0.5 | |||||||
Hedging Obligations: | |||||||||||
Derivative Currency Contracts | 16.2 | (0.2 | ) | 16.0 |
January 2, 2016 | |||||||||||
Gross Amounts as Presented in the Condensed Consolidated Balance Sheet | Derivative Contract Amounts Subject to Right of Offset | Derivative Contracts as Presented on a Net Basis | |||||||||
Prepaid Expenses and Other Current Assets: | |||||||||||
Derivative Currency Contracts | $ | 1.2 | $ | (1.2 | ) | $ | — | ||||
Derivative Commodity Contracts | 5.2 | (5.2 | ) | — | |||||||
Other Noncurrent Assets: | |||||||||||
Derivative Currency Contracts | 1.0 | (1.0 | ) | — | |||||||
Hedging Obligations (Current): | |||||||||||
Derivative Currency Contracts | 30.8 | (1.2 | ) | 29.6 | |||||||
Derivative Commodity Contracts | 13.9 | (5.2 | ) | 8.7 | |||||||
Hedging Obligations: | |||||||||||
Derivative Currency Contracts | 19.8 | (1.0 | ) | 18.8 |
Level 1 | Unadjusted quoted prices in active markets for identical assets or liabilities |
Level 2 | Unadjusted quoted prices in active markets for similar assets or liabilities, or |
Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or | |
Inputs other than quoted prices that are observable for the asset or liability | |
Level 3 | Unobservable inputs for the asset or liability |
July 2, 2016 | January 2, 2016 | Classification | |||||||
Assets: | |||||||||
Prepaid Expenses and Other Current Assets: | |||||||||
Derivative Currency Contracts | $ | 1.8 | $ | 1.2 | Level 2 | ||||
Derivative Commodity Contracts | 3.2 | 5.2 | Level 2 | ||||||
Other Noncurrent Assets: | |||||||||
Assets Held in Rabbi Trust | 5.3 | 5.2 | Level 1 | ||||||
Derivative Currency Contracts | 0.3 | 1.0 | Level 2 | ||||||
Derivative Commodity Contracts | 0.2 | — | Level 2 | ||||||
Liabilities: | |||||||||
Hedging Obligations (current): | |||||||||
Derivative Currency Contracts | 32.3 | 30.8 | Level 2 | ||||||
Derivative Commodity Contracts | 3.5 | 13.9 | Level 2 | ||||||
Hedging Obligations: | |||||||||
Interest Rate Swap | 6.0 | 7.8 | Level 2 | ||||||
Derivative Currency Contracts | 16.2 | 19.8 | Level 2 |
Three Months Ended | Six Months Ended | ||||||||||||||
July 2, 2016 | July 4, 2015 | July 2, 2016 | July 4, 2015 | ||||||||||||
Beginning balance | $ | 1.0 | $ | 4.0 | $ | 1.3 | $ | 6.1 | |||||||
Provision | 1.7 | 2.2 | 3.1 | 3.4 | |||||||||||
Less: Payments | 1.3 | 3.0 | 3.0 | 6.3 | |||||||||||
Ending Balance | $ | 1.4 | $ | 3.2 | $ | 1.4 | $ | 3.2 |
Three Months Ended | |||||||||||||||||||
July 2, 2016 | July 4, 2015 | ||||||||||||||||||
Restructuring Costs: | Cost of Sales | Operating Expenses | Total | Cost of Sales | Operating Expenses | Total | |||||||||||||
Employee termination expenses | $ | 0.2 | $ | 0.1 | $ | 0.3 | $ | (0.1 | ) | $ | — | $ | (0.1 | ) | |||||
Facility related costs | 0.4 | 0.4 | 0.8 | 0.3 | — | 0.3 | |||||||||||||
Other expenses | 0.6 | — | 0.6 | 1.8 | 0.2 | 2.0 | |||||||||||||
Total restructuring costs | $ | 1.2 | $ | 0.5 | $ | 1.7 | $ | 2.0 | $ | 0.2 | $ | 2.2 |
Six Months Ended | |||||||||||||||||||
July 2, 2016 | July 4, 2015 | ||||||||||||||||||
Restructuring Costs: | Cost of Sales | Operating Expenses | Total | Cost of Sales | Operating Expenses | Total | |||||||||||||
Employee termination expenses | $ | 0.4 | $ | 0.1 | $ | 0.5 | $ | 0.1 | $ | — | $ | 0.1 | |||||||
Facility related costs | 0.5 | 0.4 | 0.9 | 0.4 | 0.1 | 0.5 | |||||||||||||
Other expenses | 0.6 | — | 0.6 | 1.8 | 1.0 | 2.8 | |||||||||||||
Total restructuring costs | $ | 1.5 | $ | 0.5 | $ | 2.0 | $ | 2.3 | $ | 1.1 | $ | 3.4 | |||||||
Restructuring-related costs: | |||||||||||||||||||
Other employment benefit expenses | $ | 0.5 | $ | 0.6 | $ | 1.1 | $ | — | $ | — | $ | — | |||||||
Total restructuring-related costs | $ | 0.5 | $ | 0.6 | $ | 1.1 | $ | — | $ | — | $ | — | |||||||
Total restructuring and restructuring-related costs | $ | 2.0 | $ | 1.1 | $ | 3.1 | $ | 2.3 | $ | 1.1 | $ | 3.4 |
• | The Commercial and Industrial Systems segment produces medium and large electric motors, power generation products, high-performance drives and controls, and starters. Applications include general commercial and industrial equipment, commercial HVAC, power generation, and oil and gas. |
• | The Climate Solutions segment produces small motors, controls and air moving solutions. Applications include residential and light commercial HVAC, commercial refrigeration and water heaters. |
• | The Power Transmission Solutions segment produces power transmission gearing, hydraulic pump drives, large open gearing and specialty mechanical products. Applications include material handling, industrial equipment, energy and off-road equipment. |
Three Months Ended | Six Months Ended | ||||||||||||||
July 2, 2016 | July 4, 2015 | July 2, 2016 | July 4, 2015 | ||||||||||||
(Dollars in Millions) | |||||||||||||||
Net Sales: | |||||||||||||||
Commercial and Industrial Systems | $ | 394.7 | $ | 441.0 | $ | 772.3 | $ | 897.4 | |||||||
Climate Solutions | 254.5 | 286.1 | 494.3 | 566.5 | |||||||||||
Power Transmission Solutions | 189.4 | 215.1 | 390.2 | 390.0 | |||||||||||
Consolidated | $ | 838.6 | $ | 942.2 | $ | 1,656.8 | $ | 1,853.9 | |||||||
Gross Profit as a Percent of Net Sales: | |||||||||||||||
Commercial and Industrial Systems | 24.4 | % | 25.8 | % | 24.6 | % | 25.2 | % | |||||||
Climate Solutions | 25.4 | % | 25.5 | % | 24.5 | % | 24.1 | % | |||||||
Power Transmission Solutions | 32.7 | % | 30.1 | % | 33.2 | % | 28.0 | % | |||||||
Consolidated | 26.6 | % | 26.7 | % | 26.6 | % | 25.5 | % | |||||||
Operating Expenses as a Percent of Net Sales: | |||||||||||||||
Commercial and Industrial Systems | 18.0 | % | 16.4 | % | 18.5 | % | 16.9 | % | |||||||
Climate Solutions | 11.2 | % | 10.2 | % | 12.2 | % | 10.5 | % | |||||||
Power Transmission Solutions | 16.8 | % | 21.8 | % | 19.6 | % | 24.2 | % | |||||||
Consolidated | 15.7 | % | 15.7 | % | 16.9 | % | 16.5 | % | |||||||
Income from Operations as a Percent of Net Sales: | |||||||||||||||
Commercial and Industrial Systems | 6.4 | % | 9.4 | % | 6.1 | % | 8.3 | % | |||||||
Climate Solutions | 14.2 | % | 15.3 | % | 12.3 | % | 13.6 | % | |||||||
Power Transmission Solutions | 16.0 | % | 8.4 | % | 13.6 | % | 3.8 | % | |||||||
Consolidated | 10.9 | % | 11.0 | % | 9.7 | % | 9.0 | % | |||||||
Income from Operations | $ | 91.4 | $ | 103.2 | $ | 160.7 | $ | 166.8 | |||||||
Interest Expense | 14.8 | 16.4 | 29.8 | 30.0 | |||||||||||
Interest Income | 1.2 | 0.9 | 2.3 | 2.1 | |||||||||||
Income before Taxes | 77.8 | 87.7 | 133.2 | 138.9 | |||||||||||
Provision for Income Taxes | 19.4 | 22.8 | 32.1 | 36.1 | |||||||||||
Net Income | 58.4 | 64.9 | 101.1 | 102.8 | |||||||||||
Less: Net Income Attributable to Noncontrolling Interests | 1.8 | 2.1 | 2.9 | 3.6 | |||||||||||
Net Income Attributable to Regal Beloit Corporation | $ | 56.6 | $ | 62.8 | $ | 98.2 | $ | 99.2 |
July 2, | January 2, | ||||||||
2016 | 2016 | ||||||||
Cash and Cash Equivalents | $ | 271.5 | $ | 252.9 | |||||
Trade Receivables, Net | 522.5 | 462.0 | |||||||
Inventories | 711.4 | 775.0 | |||||||
Working Capital | 1,037.0 | 1,022.4 | |||||||
Current Ratio | 2.7:1 | 2.7:1 |
Principal | Interest Rate | Maturity | ||||||
Floating Rate Series 2007A | 100.0 | Floating (1) | August 23, 2017 | |||||
Fixed Rate Series 2011A | 100.0 | 4.1% | July 14, 2018 | |||||
Fixed Rate Series 2011A | 230.0 | 4.8 to 5.0% | July 14, 2021 | |||||
Fixed Rate Series 2011A | 170.0 | 4.9 to 5.1% | July 14, 2023 | |||||
$ | 600.0 |
(1) Interest rates vary as LIBOR varies. At July 2, 2016, the interest rate was 1.4%. At January 2, 2016, the interest rate was 1.1% |
Instrument | Notional Amount | Maturity | Rate Paid | Rate Received | Fair Value Loss | |||||||||
Swap | $ | 100.0 | August 23, 2017 | 5.4 | % | LIBOR (3 month) | $ | (6.0 | ) |
Gain (Loss) From | ||||||||||||||||
Currency | Notional Amount | Fair Value | 10% Appreciation of Counter Currency | 10% Depreciation of Counter Currency | ||||||||||||
Chinese Renminbi | $ | 163.3 | $ | (4.5 | ) | $ | 16.3 | $ | (16.3 | ) | ||||||
Mexican Peso | 266.1 | (42.0 | ) | 26.6 | (26.6 | ) | ||||||||||
Euro | 49.8 | — | 5.0 | (5.0 | ) | |||||||||||
Indian Rupee | 42.2 | 0.5 | 4.2 | (4.2 | ) | |||||||||||
Canadian Dollar | 30.3 | 0.1 | 3.0 | (3.0 | ) | |||||||||||
Australian Dollar | 10.6 | (0.3 | ) | 1.1 | (1.1 | ) | ||||||||||
Japanese Yen | 3.2 | (0.1 | ) | 0.3 | (0.3 | ) | ||||||||||
Thai Baht | 4.5 | (0.1 | ) | 0.5 | (0.5 | ) | ||||||||||
Great Britain Pound | 1.9 | — | 0.2 | (0.2 | ) |
Gain (Loss) From | ||||||||||||||||
Commodity | Notional Amount | Fair Value | 10% Appreciation of Commodity Prices | 10% Depreciation of Commodity Prices | ||||||||||||
Copper | $ | 44.9 | $ | (0.1 | ) | $ | 4.5 | $ | (4.5 | ) | ||||||
Aluminum | 2.3 | — | 0.2 | (0.2 | ) |
2016 Fiscal Month | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as a Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May be Purchased Under the Plans or Programs | |||||||||
April 3 to May 7 | 28,160 | $ | 65.03 | — | 2,320,000 | ||||||||
May 8 to June 4 | 439 | 56.49 | — | 2,320,000 | |||||||||
June 5 to July 2 | 94 | 59.02 | — | 2,320,000 | |||||||||
28,693 | — |
Exhibit Number | Exhibit Description | |
12 | Computation of Ratio of Earnings to Fixed Charges. | |
31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certifications of the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350. | |
101 | The following materials from Regal Beloit Corporation’s Quarterly Report on Form 10-Q for the quarter ended July 2, 2016, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements. | |
REGAL BELOIT CORPORATION (Registrant) | |
/s/ Charles A. Hinrichs | |
Charles A. Hinrichs Vice President Chief Financial Officer (Principal Financial Officer) | |
/s/ Robert J. Rehard | |
Robert J. Rehard Vice President Corporate Controller (Principal Accounting Officer) | |
Date: August 11, 2016 |
Exhibit Number | Exhibit Description | |
12 | Computation of Ratio of Earnings to Fixed Charges. | |
31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certifications of the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350. | |
101 | The following materials from Regal Beloit Corporation’s Quarterly Report on Form 10-Q for the quarter ended July 2, 2016, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements. | |
Six Months Ended | Years Ended | ||||||||||||||||||||||
July 2, | January 2, | January 3, | December 28, | December 29, | December 31, | ||||||||||||||||||
2016 | 2016 | 2015 | 2013 | 2012 | 2011 | ||||||||||||||||||
Earnings available for fixed charges: | |||||||||||||||||||||||
Income before taxes | $ | 133.2 | $ | 196.9 | $ | 90.3 | $ | 170.5 | $ | 269.9 | $ | 226.3 | |||||||||||
Interest expense | 29.8 | 60.2 | 39.1 | 42.4 | 44.5 | 31.1 | |||||||||||||||||
Estimated interest component of rental expense | 7.8 | 15.0 | 12.8 | 13.1 | 12.2 | 10.7 | |||||||||||||||||
Total earnings available for fixed charges | $ | 170.8 | $ | 272.1 | $ | 142.2 | $ | 226.0 | $ | 326.6 | $ | 268.1 | |||||||||||
Fixed charges: | |||||||||||||||||||||||
Interest expense | $ | 29.8 | $ | 60.2 | $ | 39.1 | $ | 42.4 | $ | 44.5 | $ | 31.1 | |||||||||||
Estimated interest component of rental expense | 7.8 | 15.0 | 12.8 | 13.1 | 12.2 | 10.7 | |||||||||||||||||
Total fixed charges | $ | 37.6 | $ | 75.2 | $ | 51.9 | $ | 55.5 | $ | 56.7 | $ | 41.8 | |||||||||||
Ratio of earnings to fixed charges | 4.6 | 3.6 | 2.7 | 4.1 | 5.6 | 6.4 |
1 | I have reviewed this quarterly report on Form 10-Q of Regal Beloit Corporation; |
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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | 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 |
(d) | 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. |
/s/ Mark J. Gliebe |
Mark J. Gliebe Chief Executive Officer |
1 | I have reviewed this quarterly report on Form 10-Q of Regal Beloit Corporation; |
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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | 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 |
(d) | 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. |
/s/ Charles A. Hinrichs |
Charles A. Hinrichs Vice President Chief Financial Officer |
/s/ Mark J. Gliebe |
Mark J. Gliebe |
Chief Executive Officer |
/s/ Charles A. Hinrichs |
Charles A. Hinrichs |
Vice President Chief Financial Officer |
Document And Entity Information - shares |
6 Months Ended | |
---|---|---|
Jul. 02, 2016 |
Aug. 08, 2016 |
|
Document And Entity Information [Abstract] | ||
Entity Registrant Name | REGAL BELOIT CORP | |
Entity Central Index Key | 0000082811 | |
Document Type | 10-Q | |
Document Period End Date | Jul. 02, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 44,752,755 |
Condensed Consolidated Statements Of Income (Unaudited) - USD ($) shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2016 |
Jul. 04, 2015 |
Jul. 02, 2016 |
Jul. 04, 2015 |
|
Income Statement [Abstract] | ||||
Net Sales | $ 838.6 | $ 942.2 | $ 1,656.8 | $ 1,853.9 |
Cost of Sales | 615.7 | 690.8 | 1,216.5 | 1,381.6 |
Gross Profit | 222.9 | 251.4 | 440.3 | 472.3 |
Operating Expenses | 131.5 | 148.2 | 279.6 | 305.5 |
Income From Operations | 91.4 | 103.2 | 160.7 | 166.8 |
Interest Expense | 14.8 | 16.4 | 29.8 | 30.0 |
Interest Income | 1.2 | 0.9 | 2.3 | 2.1 |
Income Before Taxes | 77.8 | 87.7 | 133.2 | 138.9 |
Provision For Income Taxes | 19.4 | 22.8 | 32.1 | 36.1 |
Net Income | 58.4 | 64.9 | 101.1 | 102.8 |
Less: Net Income Attributable to Noncontrolling Interests | 1.8 | 2.1 | 2.9 | 3.6 |
Net Income Attributable to Regal Beloit Corporation | $ 56.6 | $ 62.8 | $ 98.2 | $ 99.2 |
Earnings Per Share Attributable to Regal Beloit Corporation: | ||||
Basic (in dollars per share) | $ 1.27 | $ 1.40 | $ 2.20 | $ 2.22 |
Assuming Dilution (in dollars per share) | 1.26 | 1.39 | 2.19 | 2.20 |
Cash Dividends Declared Per Share (in dollars per share) | $ 0.24 | $ 0.23 | $ 0.47 | $ 0.45 |
Weighted Average Number of Shares Outstanding: | ||||
Basic (in shares) | 44.7 | 44.8 | 44.7 | 44.8 |
Assuming Dilution (in shares) | 45.0 | 45.2 | 45.0 | 45.1 |
Condensed Consolidated Statements Of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2016 |
Jul. 04, 2015 |
Jul. 02, 2016 |
Jul. 04, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Tax effect of fair value hedging activities | $ (6.7) | $ (5.0) | $ (5.4) | $ (7.4) |
Tax effect of hedging activities reclassified into net income | 4.7 | 4.2 | 9.7 | 6.5 |
Tax effect of pension benefits | $ (0.4) | $ (1.1) | $ (0.6) | $ (1.5) |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Millions, $ in Millions |
Jul. 02, 2016 |
Jan. 02, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowances for Trade Receivables | $ 12.2 | $ 11.3 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100.0 | 100.0 |
Common stock, shares issued (in shares) | 44.8 | 44.7 |
Common stock, shares outstanding (in shares) | 44.8 | 44.7 |
Condensed Consolidated Statements Of Equity (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jul. 02, 2016 |
Jul. 04, 2015 |
Jul. 02, 2016 |
Jul. 04, 2015 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Statement of Stockholders' Equity [Abstract] | ||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 |
Dividends declared, per share (in dollars per share) | $ 0.24 | $ 0.23 | $ 0.47 | $ 0.45 |
Basis Of Presentation |
6 Months Ended |
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Jul. 02, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis Of Presentation | BASIS OF PRESENTATION The accompanying (a) condensed consolidated balance sheet of Regal Beloit Corporation (the “Company”) as of January 2, 2016, which has been derived from audited consolidated financial statements, and (b) unaudited interim condensed consolidated financial statements as of July 2, 2016 and for the three and six months ended July 2, 2016 and July 4, 2015, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States ("GAAP"), have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s 2015 Annual Report on Form 10-K filed on March 2, 2016. In the opinion of management, all adjustments considered necessary for a fair presentation of financial results have been made. Except as otherwise discussed, such adjustments consist of only those of a normal recurring nature. Operating results for the three and six months ended July 2, 2016 are not necessarily indicative of the results that may be expected for the entire fiscal year ending December 31, 2016. The condensed consolidated financial statements have been prepared in accordance with GAAP, which require the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and revenues and expenses during the periods reported. Actual results could differ from those estimates. The Company uses estimates in accounting for, among other items, allowance for doubtful accounts; excess and obsolete inventory; share-based compensation; acquisitions; product warranty obligations; pension and post retirement assets and liabilities; derivative fair values; goodwill and other asset impairments; health care reserves; retirement benefits; rebates and incentives; litigation claims and contingencies, including environmental matters; and income taxes. The Company accounts for changes to estimates and assumptions when warranted by factually based experience. The Company operates on a 52/53 week fiscal year ending on the Saturday closest to December 31. Change in Accounting Principles As of the beginning of its fiscal year 2016, the Company changed its inventory valuation method for the U.S. inventory of the recently acquired Power Transmission Solutions (“PTS”) business to the last-in, first-out ("LIFO") method from the first-in, first-out ("FIFO") method. This change affected approximately 9% of the Company’s inventory. The Company believed this change in accounting principle is preferable under the circumstances because LIFO would better match current costs with current revenues since the cost of raw materials has been volatile in recent years, resulting in greater consistency in inventory costing across the organization since LIFO is the method used for the majority of the Company's other U.S. inventory, and better aligns with how management assesses the performance of the business. Because this change in accounting principle was immaterial in all annual or interim prior periods, it was not applied retrospectively. The change did not have a material impact on the condensed consolidated financial statements for the three and six months ended July 2, 2016. Also, as of the beginning of its fiscal year 2016, the Company changed its method of calculating LIFO inventories, which represented approximately 51% of the Company’s inventory. The Company reduced the number of LIFO inventory pools to three to align with the Company’s reportable segments. Previously, the Company had 10 LIFO inventory pools, some of which crossed reportable segments. The Company believed this change in accounting principle is preferable under the circumstances because fewer pools will simplify the LIFO calculations, combine inventory items with similarities within a reportable segment, and better align with how management assesses the performance of the businesses. The Company determined that it had the data needed to apply this change in accounting principle prospectively as of the beginning of its fiscal year 2014, but that full retrospective application is impracticable because the data is not available to determine the cumulative effect of the change. Because the effect of applying the change prospectively as of the beginning of fiscal 2014 is immaterial in any annual or interim period in fiscal years 2014 or 2015, the Company applied this change in accounting principle prospectively from the first day of fiscal year 2016. New Accounting Standards In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (Topic 326), to require the measurement of expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable forecasts. The main objective of this ASU is to replace the current incurred loss impairment methodology for financial assets measured at amortized cost with a methodology that reflects expected credit losses. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years through a cumulative effect of adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The ASU allows for early adoption as of the beginning of an interim or annual reporting period beginning after December 15, 2018. The Company is currently assessing the impact that this standard will have on its consolidated financial statements. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606) – Narrow-Scope Improvements and Practical Expedients, which clarifies the guidance in Topic 606 on assessing collectability, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. The amendments in ASU No. 2016-12 do not change the core principles of the guidance in Topic 606. The Company is required to adopt the new requirements in the first quarter of fiscal 2018. The Company is currently evaluating the impact of the new requirements on its consolidated financial statements. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606) – Identifying Performance Obligations and Licensing, which clarifies the identification of performance obligations and the licensing implementation guidance in Topic 606. The amendments in ASU No. 2016-10 do not change the core principles of the guidance in Topic 606. The Company is required to adopt the new requirements in the first quarter of fiscal 2018. The Company is currently evaluating the impact of the new requirements on its consolidated financial statements. In March, 2016 the FASB issued Accounting ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The ASU includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. Implementation and administration may present challenges for companies with significant share-based payment activities and there are various transition methods. The Company is required to adopt the new requirements in the first quarter of fiscal 2017. The Company is currently evaluating the impact of the new requirements on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606) – Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which amends the principal-versus-agent implementation guidance in ASU No. 2014-09 (Topic 606), Revenue from Contracts with Customers, issued by the FASB in May 2014. ASU No. 2016-08 clarifies the principal-versus-agent guidance in Topic 606 and requires an entity to determine whether the nature of its promise to provide goods or services to a customer is performed in a principal or agent capacity and to recognize revenue in a gross or net manner based on its principal/agent designation. ASU 2014-09 is a comprehensive new revenue recognition standard that will supersede nearly all existing revenue recognition guidance under GAAP. This update requires the Company to recognize revenue at amounts that reflect the consideration to which the Company expects to be entitled in exchange for those goods or services at the time of transfer. In doing so, the Company will need to use more judgment and make more estimates than under today’s guidance. Such estimates include identifying performance obligations in the contracts, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The Company can either apply a full retrospective adoption or a modified retrospective adoption. The Company is required to adopt the new requirements in the first quarter of fiscal 2018. The Company is currently evaluating the impact of the new requirements on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases. The core principle of ASU 2016-02 is that an entity should recognize on its balance sheet assets and liabilities arising from a lease. In accordance with that principle, ASU 2016-02 requires that a lessee recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying leased asset for the lease term. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend on the lease classification as a finance or operating lease. This new accounting guidance is effective for public companies for fiscal years beginning after December 15, 2018 under a modified retrospective approach and early adoption is permitted. The Company is currently evaluating the impact the adoption of ASU 2016-02 will have on its consolidated financial statements. |
Other Financial Information |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Financial Information | OTHER FINANCIAL INFORMATION Inventories The approximate percentage distribution between major classes of inventories was as follows:
Inventories are stated at cost, which is not in excess of market. Cost for approximately 55% of the Company's inventory at July 2, 2016, and 42% at January 2, 2016 was determined using the LIFO method. Property, Plant and Equipment Property, plant, and equipment by major classification was as follows (dollars in millions):
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Acquisitions and Divestitures |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions and Divestitures | ACQUISITIONS AND DIVESTITURES The results of operations for acquired businesses are included in the Condensed Consolidated Financial Statements from the dates of acquisition. There were no acquisition-related expenses for the three months ended July 2, 2016 or July 4, 2015. There were no acquisition-related expenses for the six months ended July 2, 2016. Acquisition-related expenses for the six months ended July 4, 2015 were $9.2 million. Acquisition-related expenses are recorded in operating expenses as incurred. 2016 Acquisitions Elco Purchase On January 18, 2016, the Company purchased the remaining shares owned by the joint venture partner in its Elco Group B.V. (“Elco”) joint venture, increasing the Company’s ownership from 55.0% to 100.0%, for a purchase price of $19.6 million. The Company consolidated the results of Elco into the Company's consolidated financial statements in the Climate Solutions segment. 2016 Divestitures Mastergear Worldwide On June 1, 2016, the Company sold its Mastergear Worldwide ("Mastergear") business to Rotork PLC for a purchase price of $25.0 million, subject to customary finalization. Mastergear was included in the Company's Power Transmission Solutions segment. A gain of approximately $11.6 million was recorded in the Condensed Consolidated Statements of Income during the three and six months ended July 2, 2016. 2015 Acquisitions PTS On January 30, 2015, the Company acquired PTS for $1,408.9 million in cash through a combination of stock and asset purchases. PTS is a global leader in highly engineered power transmission products and solutions. The business manufactures, sells and services bearings, couplings, gearing, drive components and conveyor systems. PTS is included in the Power Transmission Solutions segment. The Company acquired PTS because management believes it diversifies the Company's end market exposure, provides complementary products, expands and balances the Company's product portfolio, and enhances its margin profile. The acquisition of PTS was accounted for as a purchase in accordance with FASB Accounting Standards Codification ("ASC") Topic 805, Business Combinations. Assets acquired and liabilities assumed were recorded at their fair values as of the acquisition date. The fair values of identifiable intangible assets, which were primarily customer relationships, trade names and technology, were based on valuations using the income approach. The excess of the purchase price over the estimated fair values of tangible assets, identifiable intangible assets and assumed liabilities was recorded as goodwill. The goodwill is attributable to expected synergies and expected growth opportunities. Approximately 65% of goodwill will be deductible for United States income tax purposes. The purchase price allocation for PTS was as follows (in millions):
The valuation of the net assets acquired of $1,408.9 million was classified as Level 3 in the valuation hierarchy (see also Note 14 of the Notes to the Condensed Consolidated Financial Statements for the definition of Level 3 inputs). The Company valued property, plant and equipment using both a market approach and a cost approach depending on the asset. Intangible assets were valued using the present value of projected future cash flows and significant assumptions included royalty rates, discount rates, customer attrition and obsolescence factors. The components of Intangible Assets included as part of the PTS acquisition was as follows (in millions):
Net sales from PTS were $130.2 million and $262.8 million for the three and six months ended July 2, 2016, respectively. Net sales from PTS were $149.0 million and $255.8 million for the three and six months ended July 4, 2015, respectively. Operating income from PTS was $7.7 million and $20.0 million for the three and six months ended July 2, 2016, respectively. Operating income (loss) from PTS was $8.9 million and $(3.0) million for the three and six months ended July 4, 2015, respectively. Purchase accounting inventory adjustments and transaction costs of $7.1 million and $29.8 million were included in the PTS operating income for the three and six months ended July 4, 2015, respectively. Pro Forma Consolidated Results for PTS Acquisition The following supplemental pro forma financial information presents the financial results for the six months ended July 4, 2015, as if the acquisition of PTS had occurred at the beginning of fiscal year 2015. The pro forma financial information includes, where applicable, adjustments for: (i) the estimated amortization of acquired intangible assets, (ii) estimated additional interest expense on acquisition related borrowings, and (iii) the income tax effect on the pro forma adjustments using an estimated effective tax rate. The pro forma financial information excludes, where applicable, adjustments for: (i) the estimated impact of inventory purchase accounting adjustments, (ii) the estimated closing costs on the acquisition and (iii) any estimated cost synergies or other effects of the integration of the acquisition. The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved had the acquisition been completed as of the date indicated or the results that may be obtained in the future (in millions, except per share amounts):
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Accumulated Other Comprehensive Loss |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | ACCUMULATED OTHER COMPREHENSIVE LOSS Foreign currency translation adjustments, hedging activities and pension and post retirement benefit adjustments are included in Equity in Accumulated Other Comprehensive Loss ("AOCI"). The changes in AOCI by component for the three and six months ended July 2, 2016 and July 4, 2015 were as follows (in millions):
The Condensed Consolidated Statements of Income line items affected by the hedging activities reclassified from accumulated other comprehensive loss in the tables above are disclosed in Note 13 of Notes to Condensed Consolidated Financial Statements. The reclassification amounts for pension and post retirement benefit adjustments in the tables above are part of net periodic benefit costs recorded in Operating Expenses (see also Note 8 of Notes to Condensed Consolidated Financial Statements). |
Goodwill And Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill And Intangible Assets | GOODWILL AND INTANGIBLE ASSETS Goodwill As required, the Company performs an annual impairment test of goodwill as of the end of the October fiscal month or more frequently if events or circumstances change that would more likely than not reduce the fair value of its reporting units below their carrying value. The following information presents changes to goodwill during the six months ended July 2, 2016 (in millions):
Intangible Assets Intangible assets consisted of the following (in millions):
Estimated expected future annual amortization for intangible assets is as follows (in millions):
Amortization expense recorded for the three and six months ended July 2, 2016 was $15.8 million and $31.4 million, respectively. Amortization expense recorded for the three and six months ended July 4, 2015 was $16.7 million and $31.0 million, respectively. Amortization expense for 2016 is estimated to be $61.8 million. |
Business Segments |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segments | BUSINESS SEGMENTS The following sets forth certain financial information attributable to the Company's reporting segments as of and for the three and six months ended July 2, 2016 and July 4, 2015 (in millions):
The Commercial and Industrial Systems segment produces medium and large electric motors, power generation products, high-performance drives and controls, and starters. Applications include general commercial and industrial equipment, commercial HVAC, power generation, and oil and gas. The Climate Solutions segment produces small motors, controls and air moving solutions. Applications include residential and light commercial HVAC, commercial refrigeration and water heaters. The Power Transmission Solutions segment produces power transmission gearing, hydraulic pump drives, large open gearing and specialty mechanical products. Applications include material handling, industrial equipment, energy and off-road equipment. The Company evaluates performance based on each segment's income from operations. Corporate costs have been allocated to each segment based on the net sales of each segment. The reported external net sales of each segment are from external customers. |
Debt And Bank Credit Facilities |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt And Bank Credit Facilities | DEBT AND BANK CREDIT FACILITIES The Company’s indebtedness as of July 2, 2016 and January 2, 2016 was as follows (in millions):
The Credit Agreement In connection with the PTS Acquisition, on January 30, 2015, the Company entered into a new Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as Administrative Agent and the lenders named therein, providing for a (i) 5-year unsecured term loan facility in the principal amount of $1.25 billion (the “Term Facility”) and (ii) a 5-year unsecured multicurrency revolving facility in the principal amount of $500.0 million (the “Multicurrency Revolving Facility”) available for general corporate purposes. The Term Facility was drawn in full on January 30, 2015 in connection with the closing of the PTS Acquisition. The loans under the Term Facility require quarterly amortization at a rate starting at 5.0% per annum, increasing to 7.5% per annum after two years and further increasing to 10.0% per annum for the last two years of the Term Facility. At July 2, 2016 the Company had borrowings under the Multicurrency Revolving Facility in the amount of $25.0 million, $32.2 million of standby letters of credit issued under the facility, and $442.8 million of available borrowing capacity. Borrowings under the Credit Agreement bear interest at floating rates based upon indices determined by the currency of the borrowing, plus an applicable margin determined by reference to the Company's consolidated funded debt to consolidated EBITDA ratio or at an alternative base rate. The weighted average interest rate on the Multicurrency Revolving Facility was 1.9% for the three and six months ended July 2, 2016 and July 4, 2015. The weighted average interest rate on the Term Facility was 1.9% for the three and six months ended July 2, 2016 and July 4, 2015. The Company pays a non-use fee on the aggregate unused amount of the Multicurrency Revolving Facility at a rate determined by reference to its consolidated funded debt to consolidated EBITDA ratio. The Credit Agreement requires the Company to prepay the loans under the Term Facility with 100% of the net cash proceeds received from specified asset sales and borrowed money indebtedness, subject to certain exceptions. Senior Notes At July 2, 2016, the Company had $600.0 million of senior notes (the “Notes”) outstanding. The Notes consist of (i) $500.0 million in senior notes (the “2011 Notes”) as issued in a private placement consisting of seven tranches with maturities from seven to twelve years that carry fixed interest rates and (ii) $100.0 million in senior notes (the “2007 Notes”) issued in 2007 with a floating interest rate based on a margin over the London Inter-Bank Offered Rate (“LIBOR”). Details on the Notes at July 2, 2016 were (in millions):
The Company has interest rate swap agreements to manage fluctuations in cash flows resulting from interest rate risk (see also Note 13 of Notes to the Condensed Consolidated Financial Statements). Financial Covenants The Credit Agreement and the Notes require the Company to meet specified financial ratios and to satisfy certain financial condition tests. Other Notes Payable At July 2, 2016, other notes payable of approximately $8.5 million were outstanding with a weighted average interest rate of 3.8%. At January 2, 2016, other notes payable of approximately $15.5 million were outstanding with a weighted average rate of 2.5%. Based on rates for instruments with comparable maturities and credit quality, which are classified as Level 2 inputs (see also Note 14 of Notes to the Condensed Consolidated Financial Statements), the approximate fair value of the Company's total debt was $1,660.3 million and $1,758.2 million as of July 2, 2016 and January 2, 2016, respectively. |
Post Retirement Plans |
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Pension and Other Postretirement Benefit Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Post Retirement Plans | POST RETIREMENT PLANS The Company’s net periodic benefit cost was comprised of the following components (in millions):
The estimated net actuarial loss and prior service cost for post retirement plans that will be amortized from AOCI into net periodic benefit cost during the 2016 fiscal year is $3.1 million and $0.2 million, respectively. For the three months ended July 2, 2016 and July 4, 2015, the Company contributed $1.1 million and $0.7 million, respectively, to post retirement plans. For the six months ended July 2, 2016 and July 4, 2015, the Company contributed $2.2 million and $1.5 million, respectively, to post retirement plans. The Company expects to make total contributions of $4.6 million in 2016. The Company contributed a total of $4.7 million in fiscal 2015. The assumptions used in the valuation of the Company’s post retirement plans and in the target investment allocation have remained the same as those disclosed in the Company’s 2015 Annual Report on Form 10-K filed on March 2, 2016. Beginning in 2016, the Company changed the method used to estimate the service and interest cost components of the net periodic pension and other post retirement benefit costs. The new method uses the spot yield curve approach to estimate the service and interest costs by applying the specific spot rates along the yield curve used to determine the benefit obligations to relevant projected cash outflows. The change will not affect the measurement of the total benefit obligations as the change in service and interest costs is offset in the actuarial gains and losses recorded in other comprehensive income. The methodology of selecting a discount rate that matches each plan's cash flows to that of a theoretical bond portfolio yield curve will continue to be used to value the benefit obligation at the end of each year. The Company changed to the new method to provide a more precise measure of interest and service costs by improving the correlation between the projected benefit cash flows and the discrete spot yield curve rates. The Company has accounted for this change as a change in estimate prospectively and it is expected to result in a $2.9 million reduction in expense for fiscal 2016 as compared to the previous method. |
Shareholders' Equity |
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | SHAREHOLDERS’ EQUITY Common Stock The Board of Directors has approved a repurchase program of up to 3.0 million common shares of Company stock. Management is authorized to effect purchases from time to time in the open market or through privately negotiated transactions. There were no purchases under this program during the six months ended July 2, 2016. There are approximately 2.3 million shares of our common stock available for repurchase under this program. Share-Based Compensation The majority of the Company’s annual share-based incentive awards are made in the fiscal second quarter. The Company recognized approximately $3.8 million and $4.1 million in share-based compensation expense for the three months ended July 2, 2016 and July 4, 2015, respectively. Share-based compensation expense was $7.1 million for the six months ended July 2, 2016 and July 4, 2015. The Company recognizes compensation expense on grants of share-based compensation awards on a straight-line basis over the vesting period of each award. The total excess income tax (expense) benefit recognized relating to share-based compensation was $(0.1) million for the six months ended July 2, 2016 and $1.2 million for the six months ended July 4, 2015. As of July 2, 2016, total unrecognized compensation cost related to share-based compensation awards was approximately $30.9 million, net of estimated forfeitures, which the Company expects to recognize over a weighted average period of approximately 2.3 years. Approximately 1.3 million shares were available for future grant under the 2013 Equity Incentive Plan at July 2, 2016. Options and Stock Appreciation Rights The Company uses several forms of share-based incentive awards, including non-qualified stock options, incentive stock options, and stock settled stock appreciation rights (“SARs”). Options and SARs generally vest over 5 years and expire 10 years from the grant date. All grants are made at prices equal to the fair market value of the stock on the grant date. For the six months ended July 2, 2016 and July 4, 2015, expired and canceled shares were immaterial. The table below presents share-based compensation activity for the six months ended July 2, 2016 and July 4, 2015 (in millions):
The assumptions used in the Company's Black-Scholes valuation related to grants for options and SAR's were as follows:
The average risk-free interest rate is based on U.S. Treasury security rates in effect as of the grant date. The expected dividend yield is based on the projected annual dividend as a percentage of the estimated market value of the Company's common stock as of the grant date. The Company estimated the expected volatility using a weighted average of daily historical volatility of the Company's stock price over the expected term of the award. The Company estimated the expected term using historical data adjusted for the estimated exercise dates of unexercised awards. Following is a summary of share-based incentive plan grant activity (options and SARs) for the six months ended July 2, 2016.
Compensation expense recognized related to options and SARs was $2.5 million for the six months ended July 2, 2016. As of July 2, 2016, there was $12.0 million of unrecognized compensation cost related to non-vested options and SARs that is expected to be recognized as a charge to earnings over a weighted average period of 3.6 years. The amount of options expected to vest is materially consistent with those outstanding and not yet exercisable. Restricted Stock Awards and Restricted Stock Units Restricted stock awards ("RSA") and restricted stock units ("RSU") consist of shares or the rights to shares of the Company's stock. The awards are restricted such that they are subject to substantial risk of forfeiture and to restrictions on their sale or other transfer. As defined in the individual grant agreements, acceleration of vesting may occur under a change in control, or death, disability or normal retirement of the grantee. Following is a summary of RSA award activity for the six months ended July 2, 2016:
RSAs vest on either the first (for RSAs granted in 2013 and later) or the third (for RSAs granted prior to 2013) anniversary of the grant date, provided the holder of the shares is continuously employed by or in the service of the Company until the vesting date. Compensation expense recognized related to the RSAs was $0.6 million for the six months ended July 2, 2016. As of July 2, 2016, there was $1.0 million of unrecognized compensation cost related to non-vested RSAs that is expected to be recognized as a charge to earnings over a weighted average period of 0.9 years. Following is a summary of RSU award activity for the six months ended July 2, 2016:
RSUs vest on the third anniversary of the grant date, provided the holder of the RSUs is continuously employed by the Company until the vesting date. Compensation expense recognized related to the RSUs was $3.0 million for the six months ended July 2, 2016. As of July 2, 2016, there was $11.9 million of unrecognized compensation cost related to non-vested RSUs that is expected to be recognized as a charge to earnings over a weighted average period of 2.1 years. Performance Share Units Performance share unit ("PSU") awards consist of shares or the rights to shares of the Company's stock which are awarded to employees of the Company. These shares are payable upon the determination that the Company achieved certain established performance targets and can range from 0% to 200% of the targeted payout based on the actual results. PSUs have a performance period of 3 years. As set forth in the individual grant agreements, acceleration of vesting may occur under a change in control, death or disability. There are no voting rights with these instruments until vesting occurs and a share of stock is issued. Some of the PSU awards are valued using a Monte Carlo simulation method as of the grant date while others are valued using the closing market price as of the grant date depending on the performance criteria for the award. The assumptions used in the Company's Monte Carlo simulation related to grants for performance share units were as follows:
Following is a summary of PSU award activity for the six months ended July 2, 2016:
Compensation expense for awards granted are recognized based on the targeted payout of 100.0%, net of estimated forfeitures. Compensation expense recognized related to PSUs was $1.0 million for the six months ended July 2, 2016. Total unrecognized compensation expense for all PSUs granted as of July 2, 2016 is estimated to be $6.0 million recognized as a charge to earnings over a weighted average period of 2.4 years. |
Income Taxes |
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Jul. 02, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The effective tax rate for the three months ended July 2, 2016 was 24.9% versus 26.0% for the three months ended July 4, 2015. The effective tax rate for the six months ended July 2, 2016 was 24.1% versus 26.0% for the six months ended July 4, 2015. The change in the effective tax rate for the three months and six months ended July 2, 2016 was primarily driven by the mix of earnings, partially offset by the gain derived from the sale of the Mastergear business. The lower effective rate as compared to the 35.0% statutory Federal income tax rate is driven by lower foreign tax rates. As of July 2, 2016 and January 2, 2016, the Company had approximately $8.6 million and $8.3 million, respectively, of unrecognized tax benefits, all of which would impact the effective income tax rate if recognized. Potential interest and penalties related to unrecognized tax benefits are recorded in income tax expense. With few exceptions, the Company is no longer subject to U.S. Federal and state/local income tax examinations by tax authorities for years prior to 2011, and the Company is no longer subject to non-U.S. income tax examinations by tax authorities for years prior to 2009. |
Earnings Per Share ("EPS") |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share (EPS) | EARNINGS PER SHARE ("EPS") Diluted earnings per share is computed based upon earnings applicable to common shares divided by the weighted-average number of common shares outstanding during the period adjusted for the effect of other dilutive securities. Options for common shares where the exercise price was above the market price have been excluded from the calculation of effect of dilutive securities shown below; the amount of the anti-dilutive shares were 1.3 million and 0.3 million for the three months ended July 2, 2016 and July 4, 2015, respectively, and 1.2 million and 0.2 million for the six months ended July 2, 2016 and July 4, 2015, respectively. The following table reconciles the basic and diluted shares used in EPS calculations for the three and six months ended July 2, 2016 and July 4, 2015 (in millions):
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Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contingencies | CONTINGENCIES One of the Company’s subsidiaries that it acquired in 2008 is subject to numerous claims filed in various jurisdictions relating to certain sub-fractional motors that were primarily manufactured through 2005 and that were included as components of residential and commercial ventilation units marketed by a third party. These claims generally allege that the ventilation units were the cause of fires. Based on the current facts, the Company does not believe these claims, individually or in the aggregate, will have a material effect on its interim condensed consolidated financial statements as a whole. The Company is, from time to time, party to litigation that arises in the normal course of its business operations, including product warranty and liability claims, contract disputes and environmental, asbestos, employment and other litigation matters. The Company’s products are used in a variety of industrial, commercial and residential applications that subject the Company to claims that the use of its products is alleged to have resulted in injury or other damage. The Company accrues for exposures in amounts that it believes are adequate, and the Company does not believe that the outcome of any such lawsuit individually or collectively will have a material effect on the Company's financial position, its results of operations or its cash flows. The Company recognizes the cost associated with its standard warranty on its products at the time of sale. The amount recognized is based on historical experience. The following is a reconciliation of the changes in accrued warranty costs for the three and six months ended July 2, 2016 and July 4, 2015 (in millions):
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Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | DERIVATIVE INSTRUMENTS The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed by using derivative instruments are commodity price, currency exchange and interest rate risk. Forward contracts on certain commodities are entered into to manage the price risk associated with forecasted purchases of materials used in the Company’s manufacturing process. Forward contracts on certain currencies are entered into to manage forecasted cash flows in certain foreign currencies. Interest rate swaps are entered into to manage interest rate risk associated with the Company’s floating rate borrowings. The Company recognizes all derivative instruments as either assets or liabilities at fair value in the Condensed Consolidated Balance Sheets.The Company designates commodity forward contracts as cash flow hedges of forecasted purchases of commodities, currency forward contracts as cash flow hedges of forecasted foreign currency cash flows and interest rate swaps as cash flow hedges of forecasted LIBOR-based interest payments. There were no significant collateral deposits on derivative financial instruments as of July 2, 2016. Cash flow hedges For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive loss and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or changes in market value of derivatives not designated as hedges are recognized in current earnings. All derivative instruments used by the Company impact operating cash flows. At July 2, 2016, the Company had $(7.5) million, net of tax, of derivative losses on closed hedge instruments in AOCI that will be realized in earnings when the hedged items impact earnings. At January 2, 2016, the Company had $(7.4) million, net of tax, of derivative losses on closed hedge instruments in AOCI that was realized in earnings when the hedged items impacted earnings. As of July 2, 2016, the Company had the following currency forward contracts outstanding (with maturities extending through April 2019) to hedge forecasted foreign currency cash flows (in millions):
As of July 2, 2016, the Company had the following commodity forward contracts outstanding (with maturities extending through September 2017) to hedge forecasted purchases of commodities (notional amounts expressed in terms of the dollar value of the hedged item (in millions):
As of July 2, 2016, the total notional amount of the Company’s receive-variable/pay-fixed interest rate swap was $100.0 million (with maturity in August 2017). Fair values of derivative instruments as of July 2, 2016 and January 2, 2016 were (in millions):
The effect of derivative instruments on the Condensed Consolidated Statements of Income and Comprehensive Income (pre-tax) was as follows (in millions): Derivatives Designated as Cash Flow Hedging Instruments
The ineffective portion of hedging instruments recognized during the three and six months ended July 2, 2016 and July 4, 2015, respectively, was immaterial. Derivatives Not Designated as Cash Flow Hedging Instruments (in millions):
The net AOCI hedging component balance of $(40.6) million loss at July 2, 2016 includes $(22.1) million of net current deferred losses expected to be realized in the next twelve months. The Company's commodity and currency derivative contracts are subject to master netting agreements with the respective counterparties which allow the Company to net settle transactions with a single net amount payable by one party to another party. The Company has elected to present the derivative assets and derivative liabilities on the Condensed Consolidated Balance Sheets on a gross basis for the periods ended July 2, 2016 and January 2, 2016. The following table presents the derivative assets and derivative liabilities presented on a net basis under enforceable master netting agreements (in millions):
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Fair Value |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | FAIR VALUE The Company uses a three-tier hierarchy to assess the inputs used to measure the fair value of financial assets and liabilities.
The Company uses the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The fair values of cash equivalents and term deposits approximate their carrying values as of July 2, 2016 and January 2, 2016, due to the short period of time to maturity and are classified using Level 1 inputs. The fair values of trade receivables and accounts payable approximate the carrying values due to the short period of time to maturity. See Note 7 of Notes to Condensed Consolidated Financial Statements for disclosure of the approximate fair value of the Company's debt at July 2, 2016 and January 2, 2016. The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of July 2, 2016 and January 2, 2016 (in millions):
The Company’s derivative contracts are valued at fair value using the market or income approaches. The Company measures the fair value of foreign currency exchange contracts using Level 2 inputs based on observable spot and forward rates in active markets. The Company measures the fair value of commodity contracts using Level 2 inputs through observable market transactions in active markets provided by financial institutions. The Company measures the fair value of investments using Level 1 inputs based on quoted market prices for identical instruments in active markets. The Company measures the fair value of interest rate swaps using Level 2 inputs in an income approach for valuation based on expected interest rate yield curves over the remaining duration of the interest rate swaps. During the six months ended July 2, 2016, there were no transfers between classification Levels 1, 2 or 3. |
Restructuring and Related Costs |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | RESTRUCTURING AND RELATED COSTS Beginning in 2014, the Company announced the closure of several of its manufacturing and warehouse facilities and consolidation into existing facilities to simplify manufacturing operations in its Commercial and Industrial Systems, Climate Solutions and Power Transmission Solutions segments. As a result of these closures, the Company incurred restructuring and restructuring-related costs. Restructuring costs includes employee termination and plant relocation costs. Restructuring-related costs includes costs directly associated with actions resulting from our simplification initiatives, such as asset write-downs or accelerated depreciation due to shortened useful lives in connection with site closures, discretionary employment benefit costs and other facility rationalization costs. Restructuring costs for employee termination expenses are generally required to be accrued over the employees remaining service period while restructuring costs for plant relocation costs and restructuring-related costs are generally required to be expensed as incurred. The following is a reconciliation of provisions and payments for the restructuring projects for the three and six months ended July 2, 2016 and July 4, 2015, respectively (in millions):
The following is a reconciliation of restructuring and restructuring-related costs for the restructuring projects for the three and six months ended July 2, 2016 and July 4, 2015, respectively (in millions):
The Company's current restructuring activities are expected to conclude by the end of the first quarter of fiscal 2017. The Company expects to record aggregate future charges relating to previously announced restructuring activities of approximately $6.1 million which includes $1.5 million of employee termination expenses and $4.6 million of facility related and other costs. |
Subsequent Event |
6 Months Ended |
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Jul. 02, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Event | SUBSEQUENT EVENT On July 7, 2016, the Company sold the assets of its Venezuelan subsidiary, which had been included in the Company's Commercial and Industrial Systems segment, to a private company for $3.0 million. Of this amount, $1.0 million was received on the transaction closing date and $2.0 million will be received in 24 monthly installments. The Company may receive additional amounts in the future related to certain accounts receivable of this business. These gains will be recognized as the cash is received. The Company wrote down its investment and ceased operations of this subsidiary in 2015. |
Basis Of Presentation (Policies) |
6 Months Ended |
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Jul. 02, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
New Accounting Standards | New Accounting Standards In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (Topic 326), to require the measurement of expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable forecasts. The main objective of this ASU is to replace the current incurred loss impairment methodology for financial assets measured at amortized cost with a methodology that reflects expected credit losses. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years through a cumulative effect of adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The ASU allows for early adoption as of the beginning of an interim or annual reporting period beginning after December 15, 2018. The Company is currently assessing the impact that this standard will have on its consolidated financial statements. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606) – Narrow-Scope Improvements and Practical Expedients, which clarifies the guidance in Topic 606 on assessing collectability, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. The amendments in ASU No. 2016-12 do not change the core principles of the guidance in Topic 606. The Company is required to adopt the new requirements in the first quarter of fiscal 2018. The Company is currently evaluating the impact of the new requirements on its consolidated financial statements. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606) – Identifying Performance Obligations and Licensing, which clarifies the identification of performance obligations and the licensing implementation guidance in Topic 606. The amendments in ASU No. 2016-10 do not change the core principles of the guidance in Topic 606. The Company is required to adopt the new requirements in the first quarter of fiscal 2018. The Company is currently evaluating the impact of the new requirements on its consolidated financial statements. In March, 2016 the FASB issued Accounting ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The ASU includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. Implementation and administration may present challenges for companies with significant share-based payment activities and there are various transition methods. The Company is required to adopt the new requirements in the first quarter of fiscal 2017. The Company is currently evaluating the impact of the new requirements on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606) – Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which amends the principal-versus-agent implementation guidance in ASU No. 2014-09 (Topic 606), Revenue from Contracts with Customers, issued by the FASB in May 2014. ASU No. 2016-08 clarifies the principal-versus-agent guidance in Topic 606 and requires an entity to determine whether the nature of its promise to provide goods or services to a customer is performed in a principal or agent capacity and to recognize revenue in a gross or net manner based on its principal/agent designation. ASU 2014-09 is a comprehensive new revenue recognition standard that will supersede nearly all existing revenue recognition guidance under GAAP. This update requires the Company to recognize revenue at amounts that reflect the consideration to which the Company expects to be entitled in exchange for those goods or services at the time of transfer. In doing so, the Company will need to use more judgment and make more estimates than under today’s guidance. Such estimates include identifying performance obligations in the contracts, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The Company can either apply a full retrospective adoption or a modified retrospective adoption. The Company is required to adopt the new requirements in the first quarter of fiscal 2018. The Company is currently evaluating the impact of the new requirements on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases. The core principle of ASU 2016-02 is that an entity should recognize on its balance sheet assets and liabilities arising from a lease. In accordance with that principle, ASU 2016-02 requires that a lessee recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying leased asset for the lease term. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend on the lease classification as a finance or operating lease. This new accounting guidance is effective for public companies for fiscal years beginning after December 15, 2018 under a modified retrospective approach and early adoption is permitted. The Company is currently evaluating the impact the adoption of ASU 2016-02 will have on its consolidated financial statements. |
Other Financial Information (Tables) |
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Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Percentage Distribution Between Major Classes of Inventory | The approximate percentage distribution between major classes of inventories was as follows:
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Property, Plant, And Equipment By Major Classification | Property, plant, and equipment by major classification was as follows (dollars in millions):
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Acquisitions and Divestitures (Tables) |
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Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components Of Intangible Assets Included As Part Of The PTS Acquisition | The components of Intangible Assets included as part of the PTS acquisition was as follows (in millions):
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Power Transmission Solutions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Purchase Price Allocation | The purchase price allocation for PTS was as follows (in millions):
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Pro Forma Financial Information | The following supplemental pro forma financial information presents the financial results for the six months ended July 4, 2015, as if the acquisition of PTS had occurred at the beginning of fiscal year 2015. The pro forma financial information includes, where applicable, adjustments for: (i) the estimated amortization of acquired intangible assets, (ii) estimated additional interest expense on acquisition related borrowings, and (iii) the income tax effect on the pro forma adjustments using an estimated effective tax rate. The pro forma financial information excludes, where applicable, adjustments for: (i) the estimated impact of inventory purchase accounting adjustments, (ii) the estimated closing costs on the acquisition and (iii) any estimated cost synergies or other effects of the integration of the acquisition. The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved had the acquisition been completed as of the date indicated or the results that may be obtained in the future (in millions, except per share amounts):
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Accumulated Other Comprehensive Loss (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes In Accumulated Other Comprehensive Loss By Component, Net Of Tax | The changes in AOCI by component for the three and six months ended July 2, 2016 and July 4, 2015 were as follows (in millions):
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Goodwill And Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Changes To Goodwill | The following information presents changes to goodwill during the six months ended July 2, 2016 (in millions):
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Schedule Of Finite-Lived Intangible Assets | Intangible assets consisted of the following (in millions):
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Schedule Of Indefinite-Lived Intangible Assets | Intangible assets consisted of the following (in millions):
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated expected future annual amortization for intangible assets is as follows (in millions):
|
Business Segments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Reportable Segments | The following sets forth certain financial information attributable to the Company's reporting segments as of and for the three and six months ended July 2, 2016 and July 4, 2015 (in millions):
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Debt And Bank Credit Facilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Indebtedness | The Company’s indebtedness as of July 2, 2016 and January 2, 2016 was as follows (in millions):
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Details On The Senior Notes | Details on the Notes at July 2, 2016 were (in millions):
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Post Retirement Plans (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Other Postretirement Benefit Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Net Periodic Defined Benefit Pension Cost | The Company’s net periodic benefit cost was comprised of the following components (in millions):
|
Shareholders' Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Share-Based Compensation Activity | The table below presents share-based compensation activity for the six months ended July 2, 2016 and July 4, 2015 (in millions):
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The assumptions used in the Company's Black-Scholes valuation related to grants for options and SAR's were as follows:
The assumptions used in the Company's Monte Carlo simulation related to grants for performance share units were as follows:
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Summary Of Share-Based Incentive Plan Grant Activity For Options and SAR's | Following is a summary of share-based incentive plan grant activity (options and SARs) for the six months ended July 2, 2016.
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Summary Of RSA Award Activity | Following is a summary of RSA award activity for the six months ended July 2, 2016:
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Summary Of RSU Award Activity | Following is a summary of RSU award activity for the six months ended July 2, 2016:
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Summary Of PSU Award Activity | Following is a summary of PSU award activity for the six months ended July 2, 2016:
|
Earnings Per Share ("EPS") (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Reconciliation Of Basic And Diluted Shares Used in EPS | The following table reconciles the basic and diluted shares used in EPS calculations for the three and six months ended July 2, 2016 and July 4, 2015 (in millions):
|
Contingencies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Accrued Warranty Costs | The following is a reconciliation of the changes in accrued warranty costs for the three and six months ended July 2, 2016 and July 4, 2015 (in millions):
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Derivative Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Fair Values Of Derivative Instruments | Fair values of derivative instruments as of July 2, 2016 and January 2, 2016 were (in millions):
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Schedule Of Derivatives Under Enforceable Master Netting Agreements | The following table presents the derivative assets and derivative liabilities presented on a net basis under enforceable master netting agreements (in millions):
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Designated as hedging instruments: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Cash Flow Hedging Instruments | The effect of derivative instruments on the Condensed Consolidated Statements of Income and Comprehensive Income (pre-tax) was as follows (in millions): Derivatives Designated as Cash Flow Hedging Instruments
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Not designated as hedging instruments: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Cash Flow Hedging Instruments | The ineffective portion of hedging instruments recognized during the three and six months ended July 2, 2016 and July 4, 2015, respectively, was immaterial. Derivatives Not Designated as Cash Flow Hedging Instruments (in millions):
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Currency Forward Contracts | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Notional Amounts Of Forward Contracts | As of July 2, 2016, the Company had the following currency forward contracts outstanding (with maturities extending through April 2019) to hedge forecasted foreign currency cash flows (in millions):
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Commodity Forward Contracts | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Notional Amounts Of Forward Contracts | As of July 2, 2016, the Company had the following commodity forward contracts outstanding (with maturities extending through September 2017) to hedge forecasted purchases of commodities (notional amounts expressed in terms of the dollar value of the hedged item (in millions):
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Fair Value (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Financial Assets And Liabilities At Fair Value | The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of July 2, 2016 and January 2, 2016 (in millions):
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Restructuring and Related Costs (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Restructuring Reserve | The following is a reconciliation of provisions and payments for the restructuring projects for the three and six months ended July 2, 2016 and July 4, 2015, respectively (in millions):
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Reconciliation Of Expenses By Type | The following is a reconciliation of restructuring and restructuring-related costs for the restructuring projects for the three and six months ended July 2, 2016 and July 4, 2015, respectively (in millions):
|
Basis Of Presentation (Details) - inventory_pool |
Jul. 02, 2016 |
Jan. 03, 2016 |
Jan. 02, 2016 |
---|---|---|---|
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | |||
Percentage of inventory cost using the LIFO method | 55.00% | 51.00% | 42.00% |
Number of LIFO Inventory Pools | 3 | 10 | |
Power Transmission Solutions | |||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | |||
Percentage of inventory cost using the LIFO method | 9.00% |
Other Financial Information (Percentage Distribution Between Major Classes of Inventory) (Details) |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jul. 02, 2016 |
Jan. 02, 2016 |
Jan. 03, 2016 |
|
Inventory [Line Items] | |||
Percentage of inventory cost using the LIFO method | 55.00% | 42.00% | 51.00% |
Inventory Concentration Risk | Inventories | Raw Material and Work in Process | |||
Inventory [Line Items] | |||
Percentage of total Inventory | 46.00% | 45.00% | |
Inventory Concentration Risk | Inventories | Finished Goods and Purchased Parts | |||
Inventory [Line Items] | |||
Percentage of total Inventory | 54.00% | 55.00% |
Acquisitions and Divestitures (Narrative) (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jan. 18, 2016 |
Jul. 02, 2016 |
Jul. 04, 2015 |
Jul. 02, 2016 |
Jul. 04, 2015 |
|
Operating Expense | |||||
Business Acquisition [Line Items] | |||||
Acquisition-related expenses | $ 0 | $ 0 | $ 0 | $ 9,200,000 | |
Elco Group B.V. | |||||
Business Acquisition [Line Items] | |||||
Equity interest in acquiree before acquisition | 55.00% | ||||
Equity interest acquired | 100.00% | ||||
Consideration transferred | $ 19,600,000.0 |
Acquisitions and Divestitures Acquisitions and Divestitures (Divestitures) (Details) - Mastergear [Member] - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jul. 02, 2016 |
Jul. 02, 2016 |
Jun. 01, 2016 |
|
Operating Expense | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain on divestiture | $ 11.6 | $ 11.6 | |
Power Transmission Solutions | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Sale of business, consideration | $ 25.0 |
Goodwill And Intangible Assets (Schedule Of Changes To Goodwill) (Details) $ in Millions |
6 Months Ended |
---|---|
Jul. 02, 2016
USD ($)
| |
Goodwill [Roll Forward] | |
Beginning balance | $ 1,465.6 |
Acquisition and valuation adjustments | (0.3) |
Translation adjustments | 0.7 |
Ending balance | 1,466.0 |
Cumulative goodwill impairment charges | 275.7 |
Commercial and Industrial Systems | |
Goodwill [Roll Forward] | |
Beginning balance | 547.7 |
Acquisition and valuation adjustments | 0.0 |
Translation adjustments | (0.7) |
Ending balance | 547.0 |
Cumulative goodwill impairment charges | 244.8 |
Climate Solutions | |
Goodwill [Roll Forward] | |
Beginning balance | 342.8 |
Acquisition and valuation adjustments | 0.0 |
Translation adjustments | (0.3) |
Ending balance | 342.5 |
Cumulative goodwill impairment charges | 7.7 |
Power Transmission Solutions | |
Goodwill [Roll Forward] | |
Beginning balance | 575.1 |
Acquisition and valuation adjustments | (0.3) |
Translation adjustments | 1.7 |
Ending balance | 576.5 |
Cumulative goodwill impairment charges | $ 23.2 |
Goodwill And Intangible Assets (Schedule Of Estimated Amortization) (Details) $ in Millions |
Jul. 02, 2016
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
Estimated annual amortization, 2017 | $ 55.3 |
Estimated annual amortization, 2018 | 53.3 |
Estimated annual amortization, 2019 | 52.8 |
Estimated annual amortization, 2020 | 49.7 |
Estimated annual amortization, 2021 | $ 42.1 |
Goodwill And Intangible Assets (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2016 |
Jul. 04, 2015 |
Jul. 02, 2016 |
Jul. 04, 2015 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible assets | $ 15.8 | $ 16.7 | $ 31.4 | $ 31.0 |
Estimated amortization expense in 2016 | $ 61.8 | $ 61.8 |
Debt And Bank Credit Facilities (Schedule Of Indebtedness) (Details) - USD ($) $ in Millions |
Jul. 02, 2016 |
Jan. 02, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Less: Debt issuance costs | $ (12.5) | $ (14.7) |
Long-term debt | 1,614.1 | 1,721.9 |
Less: Current maturities | 3.6 | 6.3 |
Non-current portion | 1,610.5 | 1,715.6 |
Term Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 993.1 | 1,118.1 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 600.0 | 600.0 |
Other payables | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 8.5 | 15.5 |
Multicurrency Revolving Facility | Line of Credit | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 25.0 | $ 3.0 |
Debt And Bank Credit Facilities (Details On The Senior Notes) (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jul. 02, 2016 |
Jan. 02, 2016 |
|
Debt Instrument [Line Items] | ||
Senior Notes | $ 600.0 | |
Fixed Rate Series 2011A | ||
Debt Instrument [Line Items] | ||
Stated rate, minimum | 4.80% | |
Stated rate, maximum | 5.00% | |
Fixed Rate Series 2011A | ||
Debt Instrument [Line Items] | ||
Stated rate, minimum | 4.90% | |
Stated rate, maximum | 5.10% | |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Senior Notes | $ 600.0 | |
Senior Notes | Floating Rate Series 2007A | ||
Debt Instrument [Line Items] | ||
Senior Notes | $ 100.0 | |
Effective interest rate | 1.40% | 1.10% |
Senior Notes | Fixed Rate Series 2011A | ||
Debt Instrument [Line Items] | ||
Senior Notes | $ 100.0 | |
Debt instrument interest rate | 4.10% | |
Senior Notes | Fixed Rate Series 2011A | ||
Debt Instrument [Line Items] | ||
Senior Notes | $ 230.0 | |
Senior Notes | Fixed Rate Series 2011A | ||
Debt Instrument [Line Items] | ||
Senior Notes | $ 170.0 |
Post Retirement Plans (Schedule Of Net Periodic Defined Benefit Pension Cost) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2016 |
Jul. 04, 2015 |
Jul. 02, 2016 |
Jul. 04, 2015 |
|
Pension and Other Postretirement Benefit Expense [Abstract] | ||||
Service cost | $ 2.0 | $ 4.0 | $ 4.1 | $ 4.7 |
Interest cost | 2.7 | 1.1 | 5.1 | 5.4 |
Expected return on plan assets | (2.9) | (3.0) | (5.9) | (5.2) |
Amortization of prior service cost and net actuarial loss | 1.0 | 0.8 | 1.9 | 2.0 |
Net periodic benefit cost | $ 2.8 | $ 2.9 | $ 5.2 | $ 6.9 |
Post Retirement Plans (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jul. 02, 2016 |
Jul. 04, 2015 |
Jul. 02, 2016 |
Jul. 04, 2015 |
Jan. 02, 2016 |
|
Pension and Other Postretirement Benefit Expense [Abstract] | |||||
Estimated net actuarial loss to be amortized from accumulated other comprehensive loss | $ 3.1 | ||||
Estimated prior service cost to be amortized from accumulated other comprehensive loss | 0.2 | ||||
Contribution to defined benefit pension plans | $ 1.1 | $ 0.7 | 2.2 | $ 1.5 | $ 4.7 |
Expected total contribution to defined benefit pension plans | 4.6 | ||||
Effect of plan amendment on net periodic benefit costs | $ 2.9 | $ 2.9 |
Shareholders' Equity (Schedule Of Share-Based Compensation Activity) (Details) - Options and SAR's - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jul. 02, 2016 |
Jul. 04, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total intrinsic value of share-based incentive awards exercised | $ 0.3 | $ 4.0 |
Cash received from stock option exercises | 0.5 | 2.5 |
Income tax (expense) benefit from the exercise of stock options | (0.1) | 1.5 |
Total fair value of share-based incentive awards vested | $ 4.8 | $ 4.8 |
Shareholders' Equity (Schedule Of Assumptions Used In Black-Scholes Valuation For Options and SAR's) (Details) - Options and SAR's - $ / shares |
6 Months Ended | 12 Months Ended |
---|---|---|
Jul. 02, 2016 |
Jan. 02, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Per share weighted average fair value of grants (in dollars per share) | $ 15.22 | $ 27.16 |
Risk-free interest rate | 1.40% | 1.90% |
Expected life (years) | 7 years | 7 years |
Expected volatility | 29.60% | 35.60% |
Expected dividend yield | 1.70% | 1.20% |
Shareholders' Equity (Schedule Of Assumptions Used In Monte Carlo Simulation For Performance Share Units) (Details) - Performance Share Units (PSUs) |
6 Months Ended | |
---|---|---|
Jul. 02, 2016 |
Jul. 04, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 0.90% | 1.00% |
Expected life (years) | 3 years | 3 years |
Expected volatility | 23.00% | 25.00% |
Expected dividend yield | 1.70% | 1.20% |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jul. 02, 2016 |
Jul. 04, 2015 |
Jul. 02, 2016 |
Jul. 04, 2015 |
Jan. 02, 2016 |
|
Income Tax Disclosure [Abstract] | |||||
Effective tax rate | 24.90% | 26.00% | 24.10% | 26.00% | |
Federal statutory income tax rate | 35.00% | 35.00% | |||
Unrecognized tax benefits | $ 8.6 | $ 8.6 | $ 8.3 |
Earnings Per Share ("EPS") (Details) - shares shares in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2016 |
Jul. 04, 2015 |
Jul. 02, 2016 |
Jul. 04, 2015 |
|
Earnings Per Share [Abstract] | ||||
Shares excluded from the calculation of the effect of dilutive securities | 1.3 | 0.3 | 1.2 | 0.2 |
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | ||||
Denominator for basic EPS (in shares) | 44.7 | 44.8 | 44.7 | 44.8 |
Effect of dilutive securities (in shares) | 0.3 | 0.4 | 0.3 | 0.3 |
Denominator for diluted EPS (in shares) | 45.0 | 45.2 | 45.0 | 45.1 |
Contingencies (Details) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2016
USD ($)
|
Jul. 04, 2015
USD ($)
|
Jul. 02, 2016
USD ($)
subsidiary
|
Jul. 04, 2015
USD ($)
|
|
Commitments and Contingencies Disclosure [Abstract] | ||||
Number of subsidiaries involved in litigation | subsidiary | 1 | |||
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Beginning balance | $ 17.5 | $ 20.9 | $ 19.1 | $ 19.3 |
Less: Payments | (4.6) | (4.4) | (9.7) | (9.1) |
Provisions | 6.3 | 4.1 | 9.8 | 9.6 |
Acquisition | 0.0 | 0.0 | 0.0 | 0.8 |
Ending balance | $ 19.2 | $ 20.6 | $ 19.2 | $ 20.6 |
Derivative Instruments (Narrative) (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended |
---|---|---|
Jul. 02, 2016 |
Jan. 02, 2016 |
|
Derivative [Line Items] | ||
Net derivative losses on closed hedge instruments in AOCI that will be realized in earnings when the hedged items impact earnings | $ 7.5 | $ 7.4 |
Net AOCI hedging component | (40.6) | |
Net current deferred losses expected to be realized in the next twelve months | (22.1) | |
Receive-Variable/Pay-Fixed Interest Rate Swap | ||
Derivative [Line Items] | ||
Notional Amount (in U.S. Dollars) | $ 100.0 |
Restructuring and Related Costs (Schedule Of Restructuring Reserve) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2016 |
Jul. 04, 2015 |
Jul. 02, 2016 |
Jul. 04, 2015 |
|
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | $ 1.0 | $ 4.0 | $ 1.3 | $ 6.1 |
Provision | 1.7 | 2.2 | 3.1 | 3.4 |
Less: Payments | 1.3 | 3.0 | 3.0 | 6.3 |
Ending Balance | $ 1.4 | $ 3.2 | $ 1.4 | $ 3.2 |
Restructuring and Related Costs (Narrative) (Details) $ in Millions |
Jul. 02, 2016
USD ($)
|
---|---|
Restructuring Cost and Reserve [Line Items] | |
Expected future restructuring charges | $ 6.1 |
Employee termination expenses | |
Restructuring Cost and Reserve [Line Items] | |
Expected future restructuring charges | 1.5 |
Facility and other related costs | |
Restructuring Cost and Reserve [Line Items] | |
Expected future restructuring charges | $ 4.6 |
Subsequent Event (Details) - USD ($) $ in Millions |
6 Months Ended | |||
---|---|---|---|---|
Jul. 08, 2016 |
Jul. 02, 2016 |
Jul. 04, 2015 |
Jul. 07, 2016 |
|
Subsequent Event [Line Items] | ||||
Proceeds from sale of business | $ 25.0 | $ 0.0 | ||
UNICOVEN, C.A. [Member] | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Sale of business, consideration | $ 3.0 | |||
Proceeds from sale of business | $ 1.0 | |||
Consideration receivable, next 24 months | $ 2.0 |
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