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 | ¨ | |||
Emerging growth 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; |
• | 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, government policies, including policy changes affecting taxation, trade, immigration and the like, and other external factors that we cannot control; |
• | product liability and other litigation, or claims by end users, government agencies or others that our products or our customers’ applications failed to perform as anticipated, particularly in high volume applications or where such failures are alleged to be the cause of property or casualty claims; |
• | unanticipated liabilities of acquired businesses; |
• | 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; |
• | effects on earnings of any significant impairment of goodwill or intangible assets; |
• | cyclical downturns affecting the global market for capital goods; and |
• | other risks and uncertainties including but not limited to those described in “Risk Factors” in our Annual Report on Form 10-K and from time to time in our reports filed with US Securities and Exchange Commission. |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | ||||||||||||
Net Sales | $ | 869.2 | $ | 838.6 | $ | 1,682.7 | $ | 1,656.8 | |||||||
Cost of Sales | 646.2 | 615.7 | 1,244.1 | 1,216.5 | |||||||||||
Gross Profit | 223.0 | 222.9 | 438.6 | 440.3 | |||||||||||
Operating Expenses | 140.0 | 131.5 | 280.8 | 279.6 | |||||||||||
Income From Operations | 83.0 | 91.4 | 157.8 | 160.7 | |||||||||||
Interest Expense | 14.7 | 14.8 | 29.1 | 29.8 | |||||||||||
Interest Income | 1.0 | 1.2 | 2.0 | 2.3 | |||||||||||
Income Before Taxes | 69.3 | 77.8 | 130.7 | 133.2 | |||||||||||
Provision For Income Taxes | 15.0 | 19.4 | 28.8 | 32.1 | |||||||||||
Net Income | 54.3 | 58.4 | 101.9 | 101.1 | |||||||||||
Less: Net Income Attributable to Noncontrolling Interests | 1.3 | 1.8 | 2.6 | 2.9 | |||||||||||
Net Income Attributable to Regal Beloit Corporation | $ | 53.0 | $ | 56.6 | $ | 99.3 | $ | 98.2 | |||||||
Earnings Per Share Attributable to Regal Beloit Corporation: | |||||||||||||||
Basic | $ | 1.19 | $ | 1.27 | $ | 2.22 | $ | 2.20 | |||||||
Assuming Dilution | $ | 1.18 | $ | 1.26 | $ | 2.20 | $ | 2.19 | |||||||
Cash Dividends Declared Per Share | $ | 0.26 | $ | 0.24 | $ | 0.50 | $ | 0.47 | |||||||
Weighted Average Number of Shares Outstanding: | |||||||||||||||
Basic | 44.7 | 44.7 | 44.8 | 44.7 | |||||||||||
Assuming Dilution | 45.1 | 45.0 | 45.1 | 45.0 |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | ||||||||||||
Net Income | $ | 54.3 | $ | 58.4 | $ | 101.9 | $ | 101.1 | |||||||
Other Comprehensive Income (Loss) Net of Tax: | |||||||||||||||
Foreign Currency Translation Adjustments | 39.1 | (32.5 | ) | 68.5 | (6.8 | ) | |||||||||
Hedging Activities: | |||||||||||||||
Increase (Decrease) in Fair Value of Hedging Activities, Net of Tax Effects of $ 6.1 Million and $(6.7) Million for the Three Months ended July 1, 2017 and July 2, 2016 and $18.0 Million and $(5.4) Million for the Six Months ended July 1, 2017 and July 2, 2016 Respectively | 10.0 | (11.1 | ) | 29.4 | (8.8 | ) | |||||||||
Reclassification of Losses included in Net Income, Net of Tax Effects of $1.8 Million and $4.7 Million for the Three Months ended July 1, 2017 and July 2, 2016 and $6.2 Million and $9.7 Million for the Six Months ended July 1, 2017 and July 2, 2016 Respectively | 2.7 | 7.6 | 10.0 | 15.7 | |||||||||||
Pension and Post Retirement Plans: | |||||||||||||||
Reclassification Adjustments for Pension and Post Retirement Benefits included in Net Income, Net of Tax Effects of $0.2 Million and $0.4 Million for the Three Months Ended July 1, 2017 and July 2, 2016 and $0.4 Million and $0.6 Million for the Six Months Ended July 1, 2017 and July 2, 2016, Respectively | 0.4 | 0.6 | 0.8 | 1.3 | |||||||||||
Other Comprehensive Income (Loss) | 52.2 | (35.4 | ) | 108.7 | 1.4 | ||||||||||
Comprehensive Income | 106.5 | 23.0 | 210.6 | 102.5 | |||||||||||
Less: Comprehensive Income Attributable to Noncontrolling Interests | 1.8 | 0.9 | 3.6 | 2.4 | |||||||||||
Comprehensive Income Attributable to Regal Beloit Corporation | $ | 104.7 | $ | 22.1 | $ | 207.0 | $ | 100.1 |
July 1, 2017 | December 31, 2016 | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and Cash Equivalents | $ | 243.7 | $ | 284.5 | |||
Trade Receivables, Less Allowances of $10.4 Million in 2017 and $11.5 Million in 2016 | 544.5 | 462.2 | |||||
Inventories | 698.2 | 660.8 | |||||
Prepaid Expenses and Other Current Assets | 156.7 | 124.5 | |||||
Total Current Assets | 1,643.1 | 1,532.0 | |||||
Net Property, Plant and Equipment | 637.3 | 627.5 | |||||
Goodwill | 1,469.0 | 1,453.2 | |||||
Intangible Assets, Net of Amortization | 692.3 | 711.7 | |||||
Deferred Income Tax Benefits | 27.5 | 22.4 | |||||
Other Noncurrent Assets | 13.8 | 11.7 | |||||
Total Assets | $ | 4,483.0 | $ | 4,358.5 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities: | |||||||
Accounts Payable | $ | 406.5 | $ | 334.2 | |||
Dividends Payable | 11.6 | 10.7 | |||||
Current Hedging Obligations | 14.5 | 49.0 | |||||
Accrued Compensation and Employee Benefits | 75.7 | 70.1 | |||||
Other Accrued Expenses | 123.8 | 137.0 | |||||
Current Maturities of Long-Term Debt | 100.7 | 100.6 | |||||
Total Current Liabilities | 732.8 | 701.6 | |||||
Long-Term Debt | 1,199.5 | 1,310.9 | |||||
Deferred Income Taxes | 142.4 | 97.7 | |||||
Noncurrent Hedging Obligations | 1.1 | 17.6 | |||||
Pension and Other Post Retirement Benefits | 107.4 | 106.5 | |||||
Other Noncurrent Liabilities | 51.0 | 46.0 | |||||
Commitments and Contingencies (see Note 12) | |||||||
Equity: | |||||||
Regal Beloit Corporation Shareholders' Equity: | |||||||
Common Stock, $.01 par value, 100.0 Million Shares Authorized, 44.6 Million and 44.8 Million Shares Issued and Outstanding in 2017 and 2016, Respectively | 0.4 | 0.4 | |||||
Additional Paid-In Capital | 890.8 | 904.5 | |||||
Retained Earnings | 1,525.0 | 1,452.0 | |||||
Accumulated Other Comprehensive Loss | (210.4 | ) | (318.1 | ) | |||
Total Regal Beloit Corporation Shareholders' Equity | 2,205.8 | 2,038.8 | |||||
Noncontrolling Interests | 43.0 | 39.4 | |||||
Total Equity | 2,248.8 | 2,078.2 | |||||
Total Liabilities and Equity | $ | 4,483.0 | $ | 4,358.5 |
Common Stock $.01 Par Value | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive 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 Noncontrolling 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 |
Common Stock $.01 Par Value | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Non- controlling Interests | Total Equity | ||||||||||||||||||
Balance as of December 31, 2016 | $ | 0.4 | $ | 904.5 | $ | 1,452.0 | $ | (318.1 | ) | $ | 39.4 | $ | 2,078.2 | ||||||||||
Net Income | — | — | 99.3 | — | 2.6 | 101.9 | |||||||||||||||||
Other Comprehensive Income | — | — | — | 107.7 | 1.0 | 108.7 | |||||||||||||||||
Dividends Declared ($0.50 Per Share) | — | — | (22.3 | ) | — | — | (22.3 | ) | |||||||||||||||
Stock Options Exercised | — | (3.1 | ) | — | — | — | (3.1 | ) | |||||||||||||||
Stock Repurchase | — | (17.7 | ) | (4.0 | ) | — | — | (21.7 | ) | ||||||||||||||
Share-based Compensation | — | 7.1 | — | — | — | 7.1 | |||||||||||||||||
Balance as of July 1, 2017 | $ | 0.4 | $ | 890.8 | $ | 1,525.0 | $ | (210.4 | ) | $ | 43.0 | $ | 2,248.8 |
Six Months Ended | |||||||
July 1, 2017 | July 2, 2016 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net Income | $ | 101.9 | $ | 101.1 | |||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities (Net of Acquisitions and Divestitures): | |||||||
Depreciation and Amortization | 68.8 | 79.0 | |||||
(Gain) Loss on Sale or Disposition of Assets, Net | (0.3 | ) | 1.0 | ||||
Share-Based Compensation Expense | 7.1 | 7.1 | |||||
Exit of Business | 3.9 | — | |||||
Gain on Sale of Businesses | (0.1 | ) | (11.6 | ) | |||
Change in Operating Assets and Liabilities, Net of Acquisitions and Divestitures | (32.4 | ) | (0.5 | ) | |||
Net Cash Provided By Operating Activities | 148.9 | 176.1 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Additions to Property, Plant and Equipment | (33.7 | ) | (31.7 | ) | |||
Sales of Investment Securities | 0.5 | 30.3 | |||||
Purchases of Investment Securities | (0.5 | ) | (25.8 | ) | |||
Proceeds from Sale of Businesses | 0.5 | 25.0 | |||||
Proceeds from Sale of Assets | 1.3 | 0.1 | |||||
Net Cash Used In Investing Activities | (31.9 | ) | (2.1 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Borrowings Under Revolving Credit Facility | 492.2 | 360.0 | |||||
Repayments Under Revolving Credit Facility | (494.3 | ) | (338.0 | ) | |||
Proceeds from Short-Term Borrowings | 15.1 | 20.8 | |||||
Repayments of Short-Term Borrowings | (15.0 | ) | (27.5 | ) | |||
Proceeds from Long-Term Borrowings | 0.3 | — | |||||
Repayments of Long-Term Borrowings | (112.1 | ) | (125.2 | ) | |||
Dividends Paid to Shareholders | (21.4 | ) | (20.5 | ) | |||
Shares Surrendered for Taxes | (3.4 | ) | (1.9 | ) | |||
Proceeds from the Exercise of Stock Options | 0.4 | 0.5 | |||||
Payments of Contingent Consideration | (5.3 | ) | — | ||||
Repurchase of Common Stock | (21.0 | ) | — | ||||
Distributions to Noncontrolling Interests | — | (0.3 | ) | ||||
Purchase of Subsidiary Shares from Noncontrolling Interest | — | (19.6 | ) | ||||
Net Cash Used In Financing Activities | (164.5 | ) | (151.7 | ) | |||
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | 6.7 | (3.7 | ) | ||||
Net Increase (Decrease) in Cash and Cash Equivalents | (40.8 | ) | 18.6 | ||||
Cash and Cash Equivalents at Beginning of Period | 284.5 | 252.9 | |||||
Cash and Cash Equivalents at End of Period | $ | 243.7 | $ | 271.5 | |||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |||||||
Cash Paid For: | |||||||
Interest | $ | 26.8 | $ | 27.3 | |||
Income taxes | $ | 30.6 | $ | 40.5 |
a. | recording all tax effects associated with stock-based compensation through the income statement, as opposed to recording certain amounts in other paid-in capital, which eliminates the requirement to calculate a "windfall pool"; |
b. | allowing entities to withhold shares to satisfy the employer's statutory tax withholding requirement up to the highest marginal tax rate applicable to employees rather than the employer's minimum statutory rate, without requiring liability classification for the award; |
c. | modifying the requirement to estimate the number of awards that will ultimately vest by providing an accounting policy election to either estimate the number of forfeitures or recognize forfeitures as they occur; |
d. | changing certain presentation requirements in the statement of cash flows, including removing the requirement to present excess tax benefits as an inflow from financing activities and an outflow from operating activities, and requiring the cash paid to taxing authorities arising from withheld shares to be classified as a financing activity; and |
e. | the assumed proceeds from applying the treasury stock method when computing earnings per share is amended to exclude the amount of excess tax benefits that previously would have been recognized in additional paid-in capital. |
July 1, 2017 | December 31, 2016 | ||
Raw Material and Work in Process | 48% | 45% | |
Finished Goods and Purchased Parts | 52% | 55% |
Useful Life in Years | July 1, 2017 | December 31, 2016 | |||||||
Land and Improvements | $ | 79.6 | $ | 76.7 | |||||
Buildings and Improvements | 3 - 50 | 292.2 | 280.4 | ||||||
Machinery and Equipment | 3 - 15 | 970.8 | 929.9 | ||||||
Property, Plant and Equipment | 1,342.6 | 1,287.0 | |||||||
Less: Accumulated Depreciation | (705.3 | ) | (659.5 | ) | |||||
Net Property, Plant and Equipment | $ | 637.3 | $ | 627.5 |
Three Months Ended | |||||||||||||||
July 1, 2017 | |||||||||||||||
Hedging Activities | Pension and Post Retirement Benefit Adjustments | Foreign Currency Translation Adjustments | Total | ||||||||||||
Beginning Balance | $ | (14.4 | ) | $ | (35.8 | ) | $ | (211.9 | ) | $ | (262.1 | ) | |||
Other Comprehensive Income (Loss) before Reclassifications | 16.1 | (0.1 | ) | 38.7 | 54.7 | ||||||||||
Tax Impact | (6.1 | ) | — | — | (6.1 | ) | |||||||||
Amounts Reclassified from Accumulated Other Comprehensive Loss | 4.5 | 0.6 | — | 5.1 | |||||||||||
Tax Impact | (1.8 | ) | (0.2 | ) | — | (2.0 | ) | ||||||||
Net Current Period Other Comprehensive Income | 12.7 | 0.3 | 38.7 | 51.7 | |||||||||||
Ending Balance | $ | (1.7 | ) | $ | (35.5 | ) | $ | (173.2 | ) | $ | (210.4 | ) | |||
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 | ) |
Six Months Ended | |||||||||||||||
July 1, 2017 | |||||||||||||||
Hedging Activities | Pension and Post Retirement Benefit Adjustments | Foreign Currency Translation Adjustments | Total | ||||||||||||
Beginning Balance | $ | (41.1 | ) | $ | (36.0 | ) | $ | (241.0 | ) | $ | (318.1 | ) | |||
Other Comprehensive Income (Loss) before Reclassifications | 47.4 | (0.3 | ) | 67.8 | 114.9 | ||||||||||
Tax Impact | (18.0 | ) | — | — | (18.0 | ) | |||||||||
Amounts Reclassified from Accumulated Other Comprehensive Loss | 16.2 | 1.2 | — | 17.4 | |||||||||||
Tax Impact | (6.2 | ) | (0.4 | ) | — | (6.6 | ) | ||||||||
Net Current Period Other Comprehensive Income | 39.4 | 0.5 | 67.8 | 107.7 | |||||||||||
Ending Balance | $ | (1.7 | ) | $ | (35.5 | ) | $ | (173.2 | ) | $ | (210.4 | ) | |||
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 | ) |
Total | Commercial and Industrial Systems | Climate Solutions | Power Transmission Solutions | ||||||||||||
Balance as of December 31, 2016 | $ | 1,453.2 | $ | 540.6 | $ | 341.8 | $ | 570.8 | |||||||
Translation Adjustments | 15.8 | 6.6 | 1.2 | 8.0 | |||||||||||
Balance as of July 1, 2017 | $ | 1,469.0 | $ | 547.2 | $ | 343.0 | $ | 578.8 | |||||||
Cumulative Goodwill Impairment Charges | $ | 275.7 | $ | 244.8 | $ | 7.7 | $ | 23.2 |
July 1, 2017 | December 31, 2016 | |||||||||||||||||
Weighted Average Amortization Period (Years) | Gross Value | Accumulated Amortization | Gross Value | Accumulated Amortization | ||||||||||||||
Amortizable Intangible Assets: | ||||||||||||||||||
Customer Relationships | 15 | $ | 714.0 | $ | 226.1 | $ | 703.6 | $ | 201.6 | |||||||||
Technology | 11 | 191.1 | 116.5 | 189.7 | 109.5 | |||||||||||||
Trademarks | 12 | 32.4 | 24.7 | 31.8 | 23.3 | |||||||||||||
Patent and Engineering Drawings | 5 | 16.6 | 16.6 | 16.6 | 16.6 | |||||||||||||
Non-Compete Agreements | 5 | 8.4 | 8.2 | 8.3 | 8.1 | |||||||||||||
962.5 | 392.1 | 950.0 | 359.1 | |||||||||||||||
Non-Amortizable Trade Names | 121.9 | — | 120.8 | — | ||||||||||||||
$ | 1,084.4 | $ | 392.1 | $ | 1,070.8 | $ | 359.1 | |||||||||||
Year | Estimated Amortization | |||
2018 | $ | 53.3 | ||
2019 | 52.9 | |||
2020 | 49.8 | |||
2021 | 42.1 | |||
2022 | 40.4 |
Commercial and Industrial Systems | Climate Solutions | Power Transmission Solutions | Eliminations | Total | |||||||||||||||
As of and for Three Months Ended July 1, 2017 | |||||||||||||||||||
External Sales | $ | 407.4 | $ | 270.5 | $ | 191.3 | $ | — | $ | 869.2 | |||||||||
Intersegment Sales | 19.9 | 6.0 | 2.2 | (28.1 | ) | — | |||||||||||||
Total Sales | 427.3 | 276.5 | 193.5 | (28.1 | ) | 869.2 | |||||||||||||
Gross Profit | 91.9 | 68.3 | 62.8 | — | 223.0 | ||||||||||||||
Operating Expenses | 71.3 | 28.1 | 40.6 | — | 140.0 | ||||||||||||||
Income from Operations | 20.6 | 40.2 | 22.2 | — | 83.0 | ||||||||||||||
Depreciation and Amortization | 14.8 | 5.6 | 14.0 | — | 34.4 | ||||||||||||||
Capital Expenditures | 11.1 | 2.3 | 3.3 | — | 16.7 | ||||||||||||||
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 |
Commercial and Industrial Systems | Climate Solutions | Power Transmission Solutions | Eliminations | Total | |||||||||||||||
As of and for Six Months Ended July 1, 2017 | |||||||||||||||||||
External Sales | $ | 788.6 | $ | 518.2 | $ | 375.9 | $ | — | $ | 1,682.7 | |||||||||
Intersegment Sales | 35.8 | 14.2 | 2.9 | (52.9 | ) | — | |||||||||||||
Total Sales | 824.4 | 532.4 | 378.8 | (52.9 | ) | 1,682.7 | |||||||||||||
Gross Profit | 187.5 | 129.0 | 122.1 | — | 438.6 | ||||||||||||||
Operating Expenses | 141.1 | 57.6 | 82.1 | — | 280.8 | ||||||||||||||
Income from Operations | 46.4 | 71.4 | 40.0 | — | 157.8 | ||||||||||||||
Depreciation and Amortization | 30.0 | 11.1 | 27.7 | — | 68.8 | ||||||||||||||
Capital Expenditures | 21.7 | 6.6 | 5.4 | — | 33.7 | ||||||||||||||
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 |
Commercial and Industrial Systems | Climate Solutions | Power Transmission Solutions | Total | ||||||||||||
Identifiable Assets as of July 1, 2017 | $ | 1,926.2 | $ | 946.1 | $ | 1,610.7 | $ | 4,483.0 | |||||||
Identifiable Assets as of December 31, 2016 | $ | 1,872.7 | $ | 881.8 | $ | 1,604.0 | $ | 4,358.5 |
July 1, 2017 | December 31, 2016 | ||||||
Term Facility | $ | 686.1 | $ | 798.1 | |||
Senior Notes | 600.0 | 600.0 | |||||
Multicurrency Revolving Facility | 15.9 | 18.0 | |||||
Other | 5.3 | 5.1 | |||||
Less: Debt Issuance costs | (7.1 | ) | (9.7 | ) | |||
1,300.2 | 1,411.5 | ||||||
Less: Current Maturities | 100.7 | 100.6 | |||||
Non-Current Portion | $ | 1,199.5 | $ | 1,310.9 |
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 1, 2017, the interest rate was 1.9%. At December 31, 2016, the interest rate was 1.6% |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | ||||||||||||
Service Cost | $ | 1.8 | $ | 2.0 | $ | 3.6 | $ | 4.1 | |||||||
Interest Cost | 2.4 | 2.7 | 4.8 | 5.1 | |||||||||||
Expected Return on Plan Assets | (2.8 | ) | (2.9 | ) | (5.6 | ) | (5.9 | ) | |||||||
Amortization of Prior Service Cost and Net Actuarial Loss | 0.6 | 1.0 | 1.2 | 1.9 | |||||||||||
Net Periodic Benefit Cost | $ | 2.0 | $ | 2.8 | $ | 4.0 | $ | 5.2 |
July 1, 2017 | July 2, 2016 | |||||||
Total intrinsic value of share-based incentive awards exercised | $ | 3.1 | $ | 0.3 | ||||
Cash received from stock option exercises | 0.4 | 0.5 | ||||||
Income tax benefit (expense) from the exercise of stock options | 0.7 | (0.1 | ) | |||||
Total fair value of share-based incentive awards vested | 4.3 | 4.8 |
2017 | 2016 | ||||||
Per share weighted average fair value of grants | $ | 23.31 | $ | 15.22 | |||
Risk-free interest rate | 2.1 | % | 1.4 | % | |||
Expected life (years) | 7.0 | 7.0 | |||||
Expected volatility | 28.6 | % | 29.6 | % | |||
Expected dividend yield | 1.3 | % | 1.7 | % |
Number of Shares Under Options and SARs | Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (years) | Aggregate Intrinsic Value (in millions) | ||||||||
Exercisable at December 31, 2016 | 1,610,499 | $ | 63.16 | |||||||||
Granted | 194,142 | 80.70 | ||||||||||
Exercised | (134,991 | ) | 52.67 | |||||||||
Forfeited | (1,180 | ) | 54.61 | |||||||||
Expired | (9,485 | ) | 64.21 | |||||||||
Outstanding at July 1, 2017 | 1,658,985 | $ | 66.07 | 6.1 | $ | 25.4 | ||||||
Exercisable at July 1, 2017 | 989,761 | $ | 63.93 | 4.3 | $ | 17.4 |
Shares | Weighted Average Fair Value at Grant Date | Weighted Average Remaining Contractual Term (years) | |||||||
Unvested RSAs at December 31, 2016 | 19,593 | $ | 57.43 | 0.4 | |||||
Granted | 13,941 | 80.70 | |||||||
Vested | (19,593 | ) | 57.43 | ||||||
Unvested RSAs at July 1, 2017 | 13,941 | $ | 80.70 | 0.9 |
Shares | Weighted Average Fair Value at Grant Date | Weighted Average Remaining Contractual Term (years) | |||||||||
Unvested RSUs at December 31, 2016 | 277,863 | $ | 69.23 | 1.7 | |||||||
Granted | 75,614 | 80.46 | |||||||||
Vested | (78,625 | ) | 75.15 | ||||||||
Forfeited | (1,634 | ) | 67.90 | ||||||||
Unvested RSUs at July 1, 2017 | 273,218 | $ | 70.64 | 2.1 |
July 1, 2017 | July 2, 2016 | ||||
Risk-free interest rate | 1.6 | % | 0.9 | % | |
Expected life (years) | 3.0 | 3.0 | |||
Expected volatility | 24.0 | % | 23.0 | % | |
Expected dividend yield | 1.3 | % | 1.7 | % |
Shares | Weighted Average Fair Value at Grant Date | Weighted Average Remaining Contractual Term (years) | |||||||||
Unvested PSUs at December 31, 2016 | 133,340 | $ | 65.28 | 2.0 | |||||||
Granted | 48,403 | 90.80 | |||||||||
Vested | (110 | ) | 83.74 | ||||||||
Forfeited | (24,705 | ) | 83.21 | ||||||||
Unvested PSUs at July 1, 2017 | 156,928 | $ | 70.31 | 2.4 |
Three Months Ended | Six Months Ended | ||||||||||
July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | ||||||||
Denominator for Basic Earnings Per Share | 44.7 | 44.7 | 44.8 | 44.7 | |||||||
Effect of Dilutive Securities | 0.4 | 0.3 | 0.3 | 0.3 | |||||||
Denominator for Diluted Earnings Per Share | 45.1 | 45.0 | 45.1 | 45.0 |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | ||||||||||||
Beginning Balance | $ | 18.2 | $ | 17.5 | $ | 20.3 | $ | 19.1 | |||||||
Less: Payments | (4.5 | ) | (4.6 | ) | (12.8 | ) | (9.7 | ) | |||||||
Provisions | 4.4 | 6.3 | 10.5 | 9.8 | |||||||||||
Translation Adjustments | — | — | 0.1 | — | |||||||||||
Ending Balance | $ | 18.1 | $ | 19.2 | $ | 18.1 | $ | 19.2 |
Notional Amount (in US Dollars) | |||
Chinese Renminbi | $ | 324.2 | |
Mexican Peso | 229.8 | ||
Euro | 59.8 | ||
Indian Rupee | 40.7 | ||
Canadian Dollar | 37.1 | ||
Australian Dollar | 13.7 | ||
Thai Baht | 6.2 | ||
British Pound | 7.8 |
Notional Amount | |||
Copper | $ | 62.9 | |
Aluminum | 5.3 |
July 1, 2017 | |||||||||||||||
Prepaid Expenses and Other Current Assets | Other Noncurrent Assets | Current Hedging Obligations | Noncurrent Hedging Obligations | ||||||||||||
Designated as hedging instruments: | |||||||||||||||
Interest rate swap contracts | $ | — | $ | — | $ | 1.1 | $ | — | |||||||
Currency contracts | 6.9 | 5.1 | 12.8 | 1.1 | |||||||||||
Commodity contracts | 5.1 | 0.2 | 0.2 | — | |||||||||||
Not designated as hedging instruments: | |||||||||||||||
Currency contracts | 3.2 | — | 0.4 | — | |||||||||||
Commodity contracts | 0.1 | — | — | — | |||||||||||
Total Derivatives | $ | 15.3 | $ | 5.3 | $ | 14.5 | $ | 1.1 |
December 31, 2016 | |||||||||||||||
Prepaid Expenses and Other Current Assets | Other Noncurrent Assets | Current Hedging Obligations | Noncurrent Hedging Obligations | ||||||||||||
Designated as hedging instruments: | |||||||||||||||
Interest rate swap contracts | $ | — | $ | — | $ | 3.3 | $ | — | |||||||
Currency contracts | 1.3 | 0.4 | 39.7 | 17.6 | |||||||||||
Commodity contracts | 4.7 | — | — | — | |||||||||||
Not designated as hedging instruments: | |||||||||||||||
Currency contracts | 1.5 | — | 6.0 | — | |||||||||||
Commodity contracts | 2.6 | — | — | — | |||||||||||
Total Derivatives | $ | 10.1 | $ | 0.4 | $ | 49.0 | $ | 17.6 |
Three Months Ended | |||||||||||||||||||||||||||||||
July 1, 2017 | July 2, 2016 | ||||||||||||||||||||||||||||||
Commodity Forwards | Currency Forwards | Interest Rate Swaps | Total | Commodity Forwards | Currency Forwards | Interest Rate Swaps | Total | ||||||||||||||||||||||||
Gain (Loss) recognized in Other Comprehensive Income (Loss) | $ | 2.2 | $ | 13.9 | $ | — | $ | 16.1 | $ | 0.7 | $ | (18.2 | ) | $ | (0.3 | ) | $ | (17.8 | ) | ||||||||||||
Amounts reclassified from Other Comprehensive Income (Loss): | |||||||||||||||||||||||||||||||
Gain recognized in Net Sales | — | 0.3 | — | 0.3 | — | — | — | — | |||||||||||||||||||||||
Gain (Loss) recognized in Cost of Sales | 3.8 | (7.5 | ) | — | (3.7 | ) | (4.3 | ) | (6.7 | ) | — | (11.0 | ) | ||||||||||||||||||
Loss recognized in Interest Expense | — | — | (1.1 | ) | (1.1 | ) | — | — | (1.3 | ) | (1.3 | ) |
Six Months Ended | |||||||||||||||||||||||||||||||
July 1, 2017 | July 2, 2016 | ||||||||||||||||||||||||||||||
Commodity Forwards | Currency Forwards | Interest Rate Swaps | Total | Commodity Forwards | Currency Forwards | Interest Rate Swaps | Total | ||||||||||||||||||||||||
Gain (Loss) recognized in Other Comprehensive Income (Loss) | $ | 4.5 | $ | 42.9 | $ | — | $ | 47.4 | $ | 2.1 | $ | (15.6 | ) | $ | (0.7 | ) | $ | (14.2 | ) | ||||||||||||
Amounts reclassified from Other Comprehensive Income (Loss): | |||||||||||||||||||||||||||||||
Gain recognized in Net Sales | — | 0.4 | — | 0.4 | — | — | — | — | |||||||||||||||||||||||
Gain (Loss) recognized in Cost of Sales | 4.7 | (19.1 | ) | — | (14.4 | ) | (9.7 | ) | (13.2 | ) | — | (22.9 | ) | ||||||||||||||||||
Loss recognized in Interest Expense | — | — | (2.2 | ) | (2.2 | ) | — | — | (2.5 | ) | (2.5 | ) |
Three Months Ended | |||||||||||||||
July 1, 2017 | July 2, 2016 | ||||||||||||||
Commodity Forwards | Currency Forwards | Commodity Forwards | Currency Forwards | ||||||||||||
Gain (Loss) recognized in Cost of Sales | $ | (1.4 | ) | $ | — | $ | 0.1 | $ | — | ||||||
Gain (Loss) recognized in Operating Expenses | — | 3.3 | — | (1.6 | ) |
Six Months Ended | |||||||||||||||
July 1, 2017 | July 2, 2016 | ||||||||||||||
Commodity Forwards | Currency Forwards | Commodity Forwards | Currency Forwards | ||||||||||||
Gain recognized in Cost of Sales | $ | 0.2 | $ | — | $ | 0.2 | $ | — | |||||||
Gain (Loss) recognized in Operating Expenses | — | 7.7 | — | (0.7 | ) |
July 1, 2017 | |||||||||||
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 | $ | 10.1 | $ | (5.6 | ) | $ | 4.5 | ||||
Derivative Commodity Contracts | 5.2 | (0.2 | ) | 5.0 | |||||||
Other Noncurrent Assets: | |||||||||||
Derivative Currency Contracts | 5.1 | (0.9 | ) | 4.2 | |||||||
Derivative Commodity Contracts | 0.2 | — | 0.2 | ||||||||
Current Hedging Obligations: | |||||||||||
Derivative Currency Contracts | 13.2 | (5.6 | ) | 7.6 | |||||||
Derivative Commodity Contracts | 0.2 | (0.2 | ) | — | |||||||
Noncurrent Hedging Obligations: | |||||||||||
Derivative Currency Contracts | 1.1 | (0.9 | ) | 0.2 |
December 31, 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 | $ | 2.8 | $ | (1.7 | ) | $ | 1.1 | ||||
Derivative Commodity Contracts | 7.3 | — | 7.3 | ||||||||
Other Noncurrent Assets: | |||||||||||
Derivative Currency Contracts | 0.4 | (0.2 | ) | 0.2 | |||||||
Current Hedging Obligations: | |||||||||||
Derivative Currency Contracts | 45.7 | (1.7 | ) | 44.0 | |||||||
Noncurrent Hedging Obligations: | |||||||||||
Derivative Currency Contracts | 17.6 | (0.2 | ) | 17.4 |
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 1, 2017 | December 31, 2016 | Classification | |||||||
Assets: | |||||||||
Prepaid Expenses and Other Current Assets: | |||||||||
Derivative Currency Contracts | $ | 10.1 | $ | 2.8 | Level 2 | ||||
Derivative Commodity Contracts | 5.2 | 7.3 | Level 2 | ||||||
Other Noncurrent Assets: | |||||||||
Assets Held in Rabbi Trust | 5.5 | 5.4 | Level 1 | ||||||
Derivative Currency Contracts | 5.1 | 0.4 | Level 2 | ||||||
Derivative Commodity Contracts | 0.2 | — | Level 2 | ||||||
Liabilities: | |||||||||
Current Hedging Obligations: | |||||||||
Interest Rate Swap | 1.1 | 3.3 | Level 2 | ||||||
Derivative Currency Contracts | 13.2 | 45.7 | Level 2 | ||||||
Derivative Commodity Contracts | 0.2 | — | Level 2 | ||||||
Noncurrent Hedging Obligations: | |||||||||
Derivative Currency Contracts | 1.1 | 17.6 | Level 2 |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | ||||||||||||
Beginning Balance | $ | 1.0 | $ | 1.0 | $ | 0.6 | $ | 1.3 | |||||||
Provision | 7.7 | 1.7 | 10.9 | 3.1 | |||||||||||
Less: Payments | 7.4 | 1.3 | 10.2 | 3.0 | |||||||||||
Ending Balance | $ | 1.3 | $ | 1.4 | $ | 1.3 | $ | 1.4 |
Three Months Ended | |||||||||||||||||||
July 1, 2017 | July 2, 2016 | ||||||||||||||||||
Restructuring Costs: | Cost of Sales | Operating Expenses | Total | Cost of Sales | Operating Expenses | Total | |||||||||||||
Employee Termination Expenses | $ | 1.2 | $ | 0.7 | $ | 1.9 | $ | 0.2 | $ | 0.1 | $ | 0.3 | |||||||
Facility Related Costs | 1.6 | 0.1 | 1.7 | 0.4 | 0.4 | 0.8 | |||||||||||||
Other Expenses | 3.9 | — | 3.9 | 0.6 | — | 0.6 | |||||||||||||
Total Restructuring Costs | $ | 6.7 | $ | 0.8 | $ | 7.5 | $ | 1.2 | $ | 0.5 | $ | 1.7 | |||||||
Restructuring Related Costs: | |||||||||||||||||||
Other Employment Benefit Expenses | $ | 0.2 | $ | — | $ | 0.2 | $ | — | $ | — | $ | — | |||||||
Total Restructuring Related Costs | $ | 0.2 | $ | — | $ | 0.2 | $ | — | $ | — | $ | — | |||||||
Total Restructuring and Restructuring Related Costs | $ | 6.9 | $ | 0.8 | $ | 7.7 | $ | 1.2 | $ | 0.5 | $ | 1.7 |
Six Months Ended | |||||||||||||||||||
July 1, 2017 | July 2, 2016 | ||||||||||||||||||
Restructuring Costs: | Cost of Sales | Operating Expenses | Total | Cost of Sales | Operating Expenses | Total | |||||||||||||
Employee Termination Expenses | $ | 2.4 | $ | 1.3 | $ | 3.7 | $ | 0.4 | $ | 0.1 | $ | 0.5 | |||||||
Facility Related Costs | 2.3 | 0.3 | 2.6 | 0.5 | 0.4 | 0.9 | |||||||||||||
Other Expenses | 3.9 | — | 3.9 | 0.6 | — | 0.6 | |||||||||||||
Total Restructuring Costs | $ | 8.6 | $ | 1.6 | $ | 10.2 | $ | 1.5 | $ | 0.5 | $ | 2.0 | |||||||
Restructuring Related Costs: | |||||||||||||||||||
Other Employment Benefit Expenses | $ | 0.7 | $ | — | $ | 0.7 | $ | 0.5 | $ | 0.6 | $ | 1.1 | |||||||
Total Restructuring Related Costs | $ | 0.7 | $ | — | $ | 0.7 | $ | 0.5 | $ | 0.6 | $ | 1.1 | |||||||
Total Restructuring and Restructuring Related Costs | $ | 9.3 | $ | 1.6 | $ | 10.9 | $ | 2.0 | $ | 1.1 | $ | 3.1 |
Total | Commercial and Industrial Systems | Climate Solutions | Power Transmission Solutions | ||||||||||||
Restructuring Costs - Three Months Ended July 1, 2017 | $ | 7.7 | $ | 6.9 | $ | 0.6 | $ | 0.2 | |||||||
Restructuring Costs - Three Months Ended July 2, 2016 | $ | 1.7 | $ | 0.7 | $ | 0.5 | $ | 0.5 |
Total | Commercial and Industrial Systems | Climate Solutions | Power Transmission Solutions | ||||||||||||
Restructuring Costs - Six Months Ended July 1, 2017 | $ | 10.9 | $ | 8.6 | $ | 1.7 | $ | 0.6 | |||||||
Restructuring Costs - Six Months Ended July 2, 2016 | $ | 3.1 | $ | 0.8 | $ | 1.8 | $ | 0.5 |
• | Commercial and Industrial Systems produces medium and large motors, commercial and industrial equipment, generator and custom drives and systems. These products serve markets including commercial Heating, Ventilation, and Air Conditioning ("HVAC"), pool and spa, standby and critical power and oil and gas systems. |
• | Climate Solutions produces small motors, controls and air moving solutions serving markets including residential and light commercial HVAC, water heaters and commercial refrigeration. |
• | Power Transmission Solutions manufactures, sells and services belt and chain drives, helical and worm gearing, mounted and unmounted bearings, couplings, modular plastic belts, conveying chains and components, hydraulic pump drives, large open gearing and specialty mechanical products serving markets including beverage, bulk handling, metals, special machinery, energy, aerospace and general industrial. |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | ||||||||||||
(Dollars in Millions) | |||||||||||||||
Net Sales: | |||||||||||||||
Commercial and Industrial Systems | $ | 407.4 | $ | 394.7 | $ | 788.6 | $ | 772.3 | |||||||
Climate Solutions | 270.5 | 254.5 | 518.2 | 494.3 | |||||||||||
Power Transmission Solutions | 191.3 | 189.4 | 375.9 | 390.2 | |||||||||||
Consolidated | $ | 869.2 | $ | 838.6 | $ | 1,682.7 | $ | 1,656.8 | |||||||
Gross Profit as a Percent of Net Sales: | |||||||||||||||
Commercial and Industrial Systems | 22.6 | % | 24.4 | % | 23.8 | % | 24.6 | % | |||||||
Climate Solutions | 25.3 | % | 25.4 | % | 24.9 | % | 24.5 | % | |||||||
Power Transmission Solutions | 32.8 | % | 32.7 | % | 32.5 | % | 33.2 | % | |||||||
Consolidated | 25.7 | % | 26.6 | % | 26.1 | % | 26.6 | % | |||||||
Operating Expenses as a Percent of Net Sales: | |||||||||||||||
Commercial and Industrial Systems | 17.5 | % | 18.0 | % | 17.9 | % | 18.5 | % | |||||||
Climate Solutions | 10.4 | % | 11.2 | % | 11.1 | % | 12.2 | % | |||||||
Power Transmission Solutions | 21.2 | % | 16.8 | % | 21.8 | % | 19.6 | % | |||||||
Consolidated | 16.1 | % | 15.7 | % | 16.7 | % | 16.9 | % | |||||||
Income from Operations as a Percent of Net Sales: | |||||||||||||||
Commercial and Industrial Systems | 5.1 | % | 6.4 | % | 5.9 | % | 6.1 | % | |||||||
Climate Solutions | 14.9 | % | 14.2 | % | 13.8 | % | 12.3 | % | |||||||
Power Transmission Solutions | 11.6 | % | 16.0 | % | 10.6 | % | 13.6 | % | |||||||
Consolidated | 9.5 | % | 10.9 | % | 9.4 | % | 9.7 | % | |||||||
Income from Operations | $ | 83.0 | $ | 91.4 | $ | 157.8 | $ | 160.7 | |||||||
Interest Expense | 14.7 | 14.8 | 29.1 | 29.8 | |||||||||||
Interest Income | 1.0 | 1.2 | 2.0 | 2.3 | |||||||||||
Income before Taxes | 69.3 | 77.8 | 130.7 | 133.2 | |||||||||||
Provision for Income Taxes | 15.0 | 19.4 | 28.8 | 32.1 | |||||||||||
Net Income | 54.3 | 58.4 | 101.9 | 101.1 | |||||||||||
Less: Net Income Attributable to Noncontrolling Interests | 1.3 | 1.8 | 2.6 | 2.9 | |||||||||||
Net Income Attributable to Regal Beloit Corporation | $ | 53.0 | $ | 56.6 | $ | 99.3 | $ | 98.2 |
July 1, | December 31, | ||||||||
2017 | 2016 | ||||||||
Cash and Cash Equivalents | $ | 243.7 | $ | 284.5 | |||||
Trade Receivables, Net | 544.5 | 462.2 | |||||||
Inventories | 698.2 | 660.8 | |||||||
Working Capital | 910.3 | 830.4 | |||||||
Current Ratio | 2.2:1 | 2.2:1 |
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 1, 2017, the interest rate was 1.9%. At December 31, 2016, the interest rate was 1.6% |
Instrument | Notional Amount | Maturity | Rate Paid | Rate Received | Fair Value (Loss) | |||||||||
Swap | $ | 100.0 | August 23, 2017 | 5.4 | % | LIBOR (3 month) | $ | (1.1 | ) |
Gain (Loss) From | ||||||||||||||||
Currency | Notional Amount | Fair Value | 10% Appreciation of Counter Currency | 10% Depreciation of Counter Currency | ||||||||||||
Chinese Renminbi | $ | 324.2 | $ | 3.1 | $ | 32.4 | $ | (32.4 | ) | |||||||
Mexican Peso | 229.8 | (5.6 | ) | 23.0 | (23.0 | ) | ||||||||||
Euro | 59.8 | 0.5 | 6.0 | (6.0 | ) | |||||||||||
Indian Rupee | 40.7 | 3.0 | 4.1 | (4.1 | ) | |||||||||||
Canadian Dollar | 37.1 | 0.1 | 3.7 | (3.7 | ) | |||||||||||
Australian Dollar | 13.7 | (0.3 | ) | 1.4 | (1.4 | ) | ||||||||||
Thai Baht | 6.2 | — | 0.6 | (0.6 | ) | |||||||||||
British Pound | 7.8 | 0.1 | 0.8 | (0.8 | ) |
Gain (Loss) From | ||||||||||||||||
Commodity | Notional Amount | Fair Value | 10% Appreciation of Commodity Prices | 10% Depreciation of Commodity Prices | ||||||||||||
Copper | $ | 62.9 | $ | 4.9 | $ | 6.3 | $ | (6.3 | ) | |||||||
Aluminum | 5.3 | 0.3 | 0.5 | (0.5 | ) |
2017 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 2 to May 6 | 763 | $ | 79.56 | — | 2,320,000 | ||||||||
May 7 to June 3 | 239,522 | 78.83 | 213,140 | 2,106,860 | |||||||||
June 4 to July 1 | 64,156 | 78.68 | 63,664 | 2,043,196 | |||||||||
304,441 | 276,804 |
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 1, 2017, 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 A. Lazzerini | |
Robert A. Lazzerini Vice President Corporate Controller (Principal Accounting Officer) | |
Date: August 8, 2017 |
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 1, 2017, 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 1, | December 31, | January 2, | January 3, | December 28, | December 29, | ||||||||||||||||||
2017 | 2016 | 2016 | 2015 | 2013 | 2012 | ||||||||||||||||||
Earnings Available for Fixed Charges: | |||||||||||||||||||||||
Income Before Taxes | $ | 130.7 | $ | 266.4 | $ | 196.9 | $ | 90.3 | $ | 170.5 | $ | 269.9 | |||||||||||
Interest Expense | 29.1 | 58.7 | 60.2 | 39.1 | 42.4 | 44.5 | |||||||||||||||||
Estimated Interest Component of Rental Expense | 7.6 | 14.1 | 15.0 | 12.8 | 13.1 | 12.2 | |||||||||||||||||
Total Earnings Available for Fixed Charges | $ | 167.4 | $ | 339.2 | $ | 272.1 | $ | 142.2 | $ | 226.0 | $ | 326.6 | |||||||||||
Fixed Charges: | |||||||||||||||||||||||
Interest Expense | $ | 29.1 | $ | 58.7 | $ | 60.2 | $ | 39.1 | $ | 42.4 | $ | 44.5 | |||||||||||
Estimated Interest Component of Rental Expense | 7.6 | 14.1 | 15.0 | 12.8 | 13.1 | 12.2 | |||||||||||||||||
Total Fixed Charges | $ | 36.7 | $ | 72.8 | $ | 75.2 | $ | 51.9 | $ | 55.5 | $ | 56.7 | |||||||||||
Ratio of Earnings to Fixed Charges | 4.6 | 4.7 | 3.6 | 2.7 | 4.1 | 5.6 |
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. 01, 2017 |
Aug. 04, 2017 |
|
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. 01, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 44,596,861 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 01, 2017 |
Jul. 02, 2016 |
Jul. 01, 2017 |
Jul. 02, 2016 |
|
Income Statement [Abstract] | ||||
Net Sales | $ 869.2 | $ 838.6 | $ 1,682.7 | $ 1,656.8 |
Cost of Sales | 646.2 | 615.7 | 1,244.1 | 1,216.5 |
Gross Profit | 223.0 | 222.9 | 438.6 | 440.3 |
Operating Expenses | 140.0 | 131.5 | 280.8 | 279.6 |
Income From Operations | 83.0 | 91.4 | 157.8 | 160.7 |
Interest Expense | 14.7 | 14.8 | 29.1 | 29.8 |
Interest Income | 1.0 | 1.2 | 2.0 | 2.3 |
Income Before Taxes | 69.3 | 77.8 | 130.7 | 133.2 |
Provision For Income Taxes | 15.0 | 19.4 | 28.8 | 32.1 |
Net Income | 54.3 | 58.4 | 101.9 | 101.1 |
Less: Net Income Attributable to Noncontrolling Interests | 1.3 | 1.8 | 2.6 | 2.9 |
Net Income Attributable to Regal Beloit Corporation | $ 53.0 | $ 56.6 | $ 99.3 | $ 98.2 |
Earnings Per Share Attributable to Regal Beloit Corporation: | ||||
Basic (in dollars per share) | $ 1.19 | $ 1.27 | $ 2.22 | $ 2.20 |
Assuming Dilution (in dollars per share) | 1.18 | 1.26 | 2.20 | 2.19 |
Cash Dividends Declared Per Share (in dollars per share) | $ 0.26 | $ 0.24 | $ 0.50 | $ 0.47 |
Weighted Average Number of Shares Outstanding: | ||||
Basic (in shares) | 44.7 | 44.7 | 44.8 | 44.7 |
Assuming Dilution (in shares) | 45.1 | 45.0 | 45.1 | 45.0 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 01, 2017 |
Jul. 02, 2016 |
Jul. 01, 2017 |
Jul. 02, 2016 |
|
Statement of Comprehensive Income [Abstract] | ||||
Decrease in fair value of hedging activities, tax | $ 6.1 | $ (6.7) | $ 18.0 | $ (5.4) |
Reclassification of losses included in net income, tax | 1.8 | 4.7 | 6.2 | 9.7 |
Reclassification adjustments for pension and post retirement benefits included in net income, tax | $ 0.2 | $ 0.4 | $ 0.4 | $ 0.6 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Millions |
Jul. 01, 2017 |
Dec. 31, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 10.4 | $ 11.5 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 44,600,000 | 44,800,000 |
Common stock, shares outstanding (in shares) | 44,600,000 | 44,800,000 |
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jul. 01, 2017 |
Jul. 02, 2016 |
Jul. 01, 2017 |
Jul. 02, 2016 |
Dec. 31, 2016 |
Jan. 02, 2016 |
|
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) | $ 0.26 | $ 0.24 | $ 0.50 | $ 0.47 |
BASIS OF PRESENTATION |
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Jul. 01, 2017 | |||||||||||||||||||||
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 December 31, 2016, which has been derived from audited consolidated financial statements, and (b) unaudited interim condensed consolidated financial statements as of July 1, 2017 and for the three and six months ended July 1, 2017 and July 2, 2016, 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 2016 Annual Report on Form 10-K filed on March 1, 2017. 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 1, 2017 are not necessarily indicative of the results that may be expected for the entire fiscal year ending December 30, 2017. 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. New Accounting Standards In May 2017, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2017-09, Stock Compensation - Scope of Modification Accounting. The ASU amends the scope of modification accounting for share-based payment arrangements. The ASU provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under Accounting Standards Codification ("ASC") 718. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. The ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted and prospective application is required. The Company plans to adopt this pronouncement for fiscal years beginning December 31, 2017 and will consider the impact that this standard may have on future share based award changes, should they occur. In February 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The ASU amends current guidance to require employers that present a measure of operating income in their statement of income to include only the service cost component of net periodic pension cost and net periodic postretirement benefit cost in operating expenses (together with other employee compensation costs). The other components of net benefit cost, including amortization of prior service cost/credit, and settlement and curtailment effects, are to be included in nonoperating expenses. Employers that do not present a measure of operating income are required to include the service cost component in the same line item as other employee compensation costs. The ASU also stipulates that only the service cost component of net benefit cost is eligible for capitalization. The changes, which respond to input from financial statement users, are intended to classify costs according to their natures, and better align the effect of defined benefit plans on operating income with International Financial Reporting Standards. The ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The ASU will impact the components of income before taxes but will not impact the amount of income before taxes. 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 fiscal years beginning after December 15, 2018 under a modified retrospective approach and early adoption is permitted. The Company has identified a six step process to successfully implement the new Lease standard: Form a task force to become experts and take the lead on understanding and implementing the new Lease standard; Update lease inventories; Decide on transition method; Review legal agreements and debt covenants; Consider IT needs; Discuss with stakeholders. The Company is currently evaluating the impact the adoption of ASU 2016-02 will have on its consolidated financial statements and has commenced the first step of identifying a task force to take the lead in implementing the new Lease standard. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, a comprehensive new revenue recognition standard that supersedes current revenue recognition requirements. 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. ASU No. 2014-09 (and related updates) will become effective for the Company at the beginning of its 2018 fiscal year. The standard allows the option of using either a full retrospective or a modified retrospective approach for the adoption of the standard. The Company has identified a four step process to successfully implement the new revenue standard - data gathering, assessment, solution development, and solution implementation. The Company has completed Step one, data gathering, and is currently finishing the assessment phase. The Company is in the process of evaluating and quantifying the materiality of the standard’s impact on its consolidated financial statements. The Company plans to adopt this accounting standard update using the modified retrospective method, with the cumulative effect of initially applying this update recognized in the first reporting period of 2018. The Company is in the process of drafting an updated accounting policy, evaluating new disclosure requirements and identifying and implementing appropriate changes to its business processes, systems and controls to support recognition and disclosure under the new guidance. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting. The new guidance includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. The provisions include:
The Company adopted the provisions of ASU 2016-09 on January 1, 2017. As a result of adopting the standard, the Changes in Operating Assets and Liabilities, Net of Acquisitions and Divestitures line in the Cash Flows From Operating Activities section on the Condensed Consolidated Statements of Cash Flows and the Shares Surrendered for Taxes line in the Cash Flows from Financing Activities section were both adjusted by $1.9 million for 2016. The presentation on the Condensed Consolidated Statements of Cash Flows for shares surrendered by employees to meet the minimum statutory withholding requirement and excess tax benefits were applied retrospectively. In addition, the Excess Tax Expense from Share-Based Compensation lines in the Cash Flows from Operating Activities section and the Cash Flows from Financing Activities section were removed. The Company removed the excess tax benefits from the calculation of dilutive shares on a prospective basis. In addition, the Company began recording all tax effects associated with stock-based compensation through the income statement on a prospective basis. The Company did not have any awards classified as liability awards due to the statutory tax withholding requirements as of January 1, 2017. The Company made an accounting policy election to continue to estimate forfeitures as it had previously. |
OTHER FINANCIAL INFORMATION |
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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 50% of the Company's inventory at July 1, 2017, and 55% at December 31, 2016 was determined using the LIFO method. Property, Plant and Equipment Property, plant, and equipment by major classification was as follows (dollars in millions):
Other As part of the purchase agreement of the 2008 acquisition of the Wuxi Hwada Motor Co., the Company agreed that if certain relocation compensation was received for the relocation of the business, the Company would pay a portion of that compensation to the seller as part of a deferred contingent purchase price. During the six months ended July 1, 2017, a final deferred contingent purchase price payment of $5.3 million was made under this agreement. |
ACQUISITIONS AND DIVESTITURES |
6 Months Ended |
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Jul. 01, 2017 | |
Business Combinations [Abstract] | |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES There were no acquisition related expenses for the six months ended July 1, 2017 and July 2, 2016. 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 $19.6 million. The purchase price of Elco is reflected as a component of equity. 2016 Divestitures Mastergear Worldwide On June 1, 2016, the Company sold its Mastergear Worldwide ("Mastergear") business to Rotork PLC for a purchase price of $25.1 million, subject to customary finalization. Mastergear was included in the Company's Power Transmission Solutions segment. Gains related to the sale of $0.1 million and $11.6 million were recorded as a reduction to Operating Expenses in the Condensed Consolidated Statements of Income during fiscal 2017 and 2016, respectively. Venezuelan Subsidiary 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 is to be received in 24 monthly installments. The Company may receive additional amounts in the future related to certain accounts receivable of this business. The gains will be recognized as the cash is received. The Company wrote down its investment and ceased operations of this subsidiary in 2015. |
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 1, 2017 and July 2, 2016 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 1, 2017 (in millions):
Intangible Assets Intangible assets consisted of the following (in millions):
Amortization expense recorded for the three and six months ended July 1, 2017 was $13.9 million and $28.0 million, respectively. Amortization expense recorded for the three and six months ended July 2, 2016 was $15.8 million and $31.4 million, respectively. Amortization expense for 2017 is estimated to be $55.3 million. Estimated expected future annual amortization for intangible assets is as follows (in millions):
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BUSINESS SEGMENTS |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BUSINESS SEGMENTS | BUSINESS SEGMENTS 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 the 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. The following sets forth certain financial information attributable to the Company's operating segments as of and for the three and six months ended July 1, 2017 and July 2, 2016 (in millions):
The following table presents identifiable assets information attributable to the Company's operating segments as of July 1, 2017 and December 31, 2016 (in millions):
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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 1, 2017 and December 31, 2016 was as follows (in millions):
The Credit Agreement In connection with the Company's acquisition of the Power Transmission Solutions business of Emerson Electric Co. (the "PTS Acquisition"), on January 30, 2015, the Company entered into a 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”), including a $100.0 million letter of credit sub facility, available for general corporate purposes. 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 Term Facility was drawn in full on January 30, 2015 in connection with the closing of the PTS Acquisition. The loan under the Term Facility requires 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, unless previously prepaid. The weighted average interest rate on the Term Facility was 2.5% and 2.4% for the three and six months ended July 1, 2017 and 1.9% for the three and six months ended July 2, 2016. The Credit Agreement requires the Company 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. At July 1, 2017, the Company had borrowings under the Multicurrency Revolving Facility in the amount of $15.9 million, $32.3 million of standby letters of credit issued under the facility, and $451.8 million of available borrowing capacity. The average daily balance in borrowings under the Multicurrency Revolving Facility was $114.8 million and $109.2 million, and the weighted average interest rate on the Multicurrency Revolving Facility was 2.5% and 2.4% for the three and six months ended July 1, 2017, respectively. The average daily balance in borrowings under the Multicurrency Revolving Facility was $29.8 million and $52.7 million and the weighted average interest rate on the Multicurrency Revolving Facility was 1.9% for the three and six months ended July 2, 2016. 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. Senior Notes At July 1, 2017, 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”) in a private placement which were issued in seven tranches with maturities from seven to twelve years and 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”). The 2011 Notes are included in Long-Term Debt and the 2007 Notes are included in Current Maturities of Long-Term Debt on the Condensed Consolidated Balance Sheets. Details on the Notes at July 1, 2017 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. The Company was in compliance with all financial covenants contained in the Notes and the Credit Agreement as of July 1, 2017. Other Notes Payable At July 1, 2017, other notes payable of approximately $5.3 million were outstanding with a weighted average interest rate of 5.1%. At December 31, 2016, other notes payable of approximately $5.1 million were outstanding with a weighted average rate of 5.6%. 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 $1,325.3 million and $1,433.4 million as of July 1, 2017 and December 31, 2016, respectively. |
POST RETIREMENT PLANS |
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Pension and Other Postretirement Benefits Cost (Reversal of Cost) [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 2017 fiscal year is $2.2 million and $0.2 million, respectively. For the three months ended July 1, 2017 and July 2, 2016, the Company contributed $1.4 million and $1.1 million, respectively, to post retirement plans. For the six months ended July 1, 2017 and July 2, 2016, the Company contributed $2.2 million and $2.2 million, respectively, to post retirement plans. The Company expects to make total contributions of $4.4 million in 2017. The Company contributed a total of $10.4 million in fiscal 2016. 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 2016 Annual Report on Form 10-K filed on March 1, 2017. |
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHAREHOLDERS' EQUITY | SHAREHOLDERS’ EQUITY Repurchase of Common Stock The Company acquired and retired 276,804 shares of its common stock in the quarter ended July 1, 2017, at an average cost of $78.42 per share for a total cost of $21.7 million. The repurchases were under the 3.0 million share repurchase program approved by the Company’s Board of Directors in November, 2013. There are approximately 2.0 million shares of the Company's 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 $4.1 million and $3.8 million in share-based compensation expense for the three months ended July 1, 2017 and July 2, 2016, respectively. Share-based compensation expense was $7.1 million for the six months ended July 1, 2017 and July 2, 2016. The total income tax benefit recognized in the Consolidated Statements of Income for share-based compensation expense was $1.6 million and $1.4 million for the three months ended July 1, 2017 and July 2, 2016, respectively. The total income tax benefit recognized in the Consolidated Statements of Income for share-based compensation expense was $2.7 million for the six months ended July 1, 2017 and July 2, 2016. The Company recognizes compensation expense on grants of share-based compensation awards on a straight-line basis over the vesting period of each award. As of July 1, 2017, total unrecognized compensation cost related to share-based compensation awards was approximately $31.3 million, net of estimated forfeitures, which the Company expects to recognize over a weighted average period of approximately 2.4 years. Approximately 0.9 million shares were available for future grant under the 2013 Equity Incentive Plan at July 1, 2017. Options and Stock Appreciation Rights The Company uses stock settled stock appreciation rights (“SARs”) as a form of share-based incentive awards. SARs are the right to receive stock in an amount equal to the appreciation in value of a share of stock over the base price per share that 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 1, 2017 and July 2, 2016, expired and canceled shares were immaterial. The table below presents share-based compensation activity for the six months ended July 1, 2017 and July 2, 2016 (in millions):
The assumptions used in the Company's Black-Scholes valuation related to grants for options and SARs were as follows:
The average risk-free interest rate is based on US 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 1, 2017.
Compensation expense recognized related to options and SARs was $2.2 million for the six months ended July 1, 2017. As of July 1, 2017, 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 1, 2017:
RSAs vest on the first 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 1, 2017. As of July 1, 2017, 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 1, 2017:
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 $3.3 million for the six months ended July 1, 2017. As of July 1, 2017, there was $11.4 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 award agreements, acceleration of vesting may occur under a change in control, death or disability. There are no voting rights associated with PSUs 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 1, 2017:
Compensation expense for awards granted is recognized based on the Monte Carlo simulation value or the expected payout ratio depending upon the performance criterion for the award, net of estimated forfeitures. Compensation expense recognized related to PSUs was $1.0 million for the six months ended July 1, 2017. Total unrecognized compensation expense for all PSUs granted as of July 1, 2017 is estimated to be $6.9 million recognized as a charge to earnings over a weighted average period of 2.4 years. |
INCOME TAXES |
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Jul. 01, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The effective tax rate for the three months ended July 1, 2017 was 21.6% versus 24.9% for the three months ended July 2, 2016. The effective tax rate for the six months ended July 1, 2017 was 22.0% versus 24.1% for the six months ended July 2, 2016. The change in the effective tax rate for the three months and six months ended July 1, 2017 was primarily driven by the mix of earnings and the 2016 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 1, 2017 and December 31, 2016, the Company had approximately $10.2 million and $10.0 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 US Federal and state/local income tax examinations by tax authorities for years prior to 2012, and the Company is no longer subject to non-US income tax examinations by tax authorities for years prior to 2010. |
EARNINGS PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE 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 0.4 million and 1.3 million for the three months ended July 1, 2017 and July 2, 2016, respectively, and 0.4 million and 1.2 million for the six months ended July 1, 2017 and July 2, 2016, respectively. The following table reconciles the basic and diluted shares used in earnings per share calculations for the three and six months ended July 1, 2017 and July 2, 2016 (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 2007 is subject to numerous claims filed in various jurisdictions relating to certain sub-fractional motors that were primarily manufactured through 2004 and that were included as components of residential and commercial ventilation units manufactured and sold in high volumes by a third party. These ventilation units are subject to regulation by government agencies such as the US Consumer Product Safety Commission (“CPSC”). The claims generally allege that the ventilation units were the cause of fires. The Company has recorded an estimated liability for incurred claims. Based on the current facts, the Company cannot assure that these claims, individually or in the aggregate, will not have a material adverse effect on its subsidiary's financial condition. The Company's subsidiary cannot reasonably predict the outcome of these claims, the nature or extent of any CPSC or other remedial actions, if any, that the Company's subsidiary may need to undertake with respect to motors that remain in the field, or the costs that may be incurred, some of which could be significant. The Company is, from time to time, party to litigation and other legal or regulatory proceedings that arise in the normal course of its business operations and the outcomes of which are subject to significant uncertainty, including product warranty and liability claims, contract disputes and environmental, asbestos, intellectual property, 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. Many of these matters will only be resolved when one or more future events occur or fail to occur. Management conducts regular reviews, including updates from legal counsel, to assess the need for accounting recognition or disclosure of these contingencies, and such assessment inherently involves an exercise in judgment. 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 1, 2017 and July 2, 2016 (in millions):
These liabilities are included in Other Accrued Expenses and Other Noncurrent Liabilities on the Consolidated Balance Sheet. |
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 using derivative instruments are commodity price risk, currency exchange risk, 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 is exposed to credit losses in the event of non-performance by the counterparties to various financial agreements, including its commodity hedging transactions, foreign currency exchange contracts and interest rate swap agreements. Exposure to counterparty credit risk is managed by limiting counterparties to major international banks and financial institutions meeting established credit guidelines and continually monitoring their compliance with the credit guidelines. The Company does not obtain collateral or other security to support financial instruments subject to credit risk. The Company does not anticipate non-performance by its counterparties, but cannot provide assurances. The Company recognizes all derivative instruments as either assets or liabilities at fair value in the statement of financial position. 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 1, 2017. 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 AOCI 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. At July 1, 2017, the Company had $(2.1) 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 December 31, 2016, the Company had $(7.5) million, net of tax, of derivative losses on closed hedge instruments in AOCI that was subsequently realized in earnings when the hedged items impacted earnings. As of July 1, 2017, the Company had the following currency forward contracts outstanding (with maturities extending through October 2019) to hedge forecasted foreign currency cash flows (in millions):
As of July 1, 2017, the Company had the following commodity forward contracts outstanding (with maturities extending through December 2018) to hedge forecasted purchases of commodities (notional amounts expressed in terms of the dollar value of the hedged item (in millions):
As of July 1, 2017, 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 1, 2017 and December 31, 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 1, 2017 and July 2, 2016, respectively, was immaterial. Derivatives Not Designated as Cash Flow Hedging Instruments (in millions):
The net AOCI hedging component balance of $(1.7) million loss at July 1, 2017 includes $0.4 million of net current deferred gains 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 1, 2017 and December 31, 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 Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The inputs used to measure fair value are classified into the following hierarchy:
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 short-term deposits approximate their carrying values as of July 1, 2017 and December 31, 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 1, 2017 and December 31, 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 1, 2017 and December 31, 2016 (in millions):
Level 1 fair value measurements for assets held in a Rabbi Trust are unadjusted quoted prices. Level 2 fair value measurements for derivative assets and liabilities are measured using quoted prices in active markets for similar assets and liabilities. Interest rate swaps are valued based on the discounted cash flows for the LIBOR forward yield curve for a swap with similar contractual terms. Foreign currency forwards are valued based on exchange rates quoted by domestic and foreign banks for similar instruments. Commodity forwards are valued based on observable market transactions of forward commodity prices. During the six months ended July 1, 2017, 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 The Company incurred restructuring and restructuring related costs on projects beginning in 2014. Restructuring costs include employee termination and plant relocation costs. Restructuring-related costs include 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 1, 2017 and July 2, 2016 (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 1, 2017 and July 2, 2016, respectively (in millions):
The following table shows the allocation of Restructuring Costs by segment for the three and six months ended July 1, 2017 and July 2, 2016. (in millions):
The Company's current restructuring activities are expected to continue into 2018. The Company expects to record aggregate future charges of approximately $8.7 million which includes $1.8 million of employee termination expenses and $6.9 million of facility related and other costs. |
SUBSEQUENT EVENT |
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Jul. 01, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | SUBSEQUENT EVENT The Company has evaluated subsequent events from July 1, 2017 through the date of this report. The Company is not aware of any subsequent events that would require recognition or disclosure. |
BASIS OF PRESENTATION (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||
New Accounting Standards | New Accounting Standards In May 2017, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2017-09, Stock Compensation - Scope of Modification Accounting. The ASU amends the scope of modification accounting for share-based payment arrangements. The ASU provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under Accounting Standards Codification ("ASC") 718. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. The ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted and prospective application is required. The Company plans to adopt this pronouncement for fiscal years beginning December 31, 2017 and will consider the impact that this standard may have on future share based award changes, should they occur. In February 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The ASU amends current guidance to require employers that present a measure of operating income in their statement of income to include only the service cost component of net periodic pension cost and net periodic postretirement benefit cost in operating expenses (together with other employee compensation costs). The other components of net benefit cost, including amortization of prior service cost/credit, and settlement and curtailment effects, are to be included in nonoperating expenses. Employers that do not present a measure of operating income are required to include the service cost component in the same line item as other employee compensation costs. The ASU also stipulates that only the service cost component of net benefit cost is eligible for capitalization. The changes, which respond to input from financial statement users, are intended to classify costs according to their natures, and better align the effect of defined benefit plans on operating income with International Financial Reporting Standards. The ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The ASU will impact the components of income before taxes but will not impact the amount of income before taxes. 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 fiscal years beginning after December 15, 2018 under a modified retrospective approach and early adoption is permitted. The Company has identified a six step process to successfully implement the new Lease standard: Form a task force to become experts and take the lead on understanding and implementing the new Lease standard; Update lease inventories; Decide on transition method; Review legal agreements and debt covenants; Consider IT needs; Discuss with stakeholders. The Company is currently evaluating the impact the adoption of ASU 2016-02 will have on its consolidated financial statements and has commenced the first step of identifying a task force to take the lead in implementing the new Lease standard. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, a comprehensive new revenue recognition standard that supersedes current revenue recognition requirements. 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. ASU No. 2014-09 (and related updates) will become effective for the Company at the beginning of its 2018 fiscal year. The standard allows the option of using either a full retrospective or a modified retrospective approach for the adoption of the standard. The Company has identified a four step process to successfully implement the new revenue standard - data gathering, assessment, solution development, and solution implementation. The Company has completed Step one, data gathering, and is currently finishing the assessment phase. The Company is in the process of evaluating and quantifying the materiality of the standard’s impact on its consolidated financial statements. The Company plans to adopt this accounting standard update using the modified retrospective method, with the cumulative effect of initially applying this update recognized in the first reporting period of 2018. The Company is in the process of drafting an updated accounting policy, evaluating new disclosure requirements and identifying and implementing appropriate changes to its business processes, systems and controls to support recognition and disclosure under the new guidance. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting. The new guidance includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. The provisions include:
The Company adopted the provisions of ASU 2016-09 on January 1, 2017. As a result of adopting the standard, the Changes in Operating Assets and Liabilities, Net of Acquisitions and Divestitures line in the Cash Flows From Operating Activities section on the Condensed Consolidated Statements of Cash Flows and the Shares Surrendered for Taxes line in the Cash Flows from Financing Activities section were both adjusted by $1.9 million for 2016. The presentation on the Condensed Consolidated Statements of Cash Flows for shares surrendered by employees to meet the minimum statutory withholding requirement and excess tax benefits were applied retrospectively. In addition, the Excess Tax Expense from Share-Based Compensation lines in the Cash Flows from Operating Activities section and the Cash Flows from Financing Activities section were removed. The Company removed the excess tax benefits from the calculation of dilutive shares on a prospective basis. In addition, the Company began recording all tax effects associated with stock-based compensation through the income statement on a prospective basis. The Company did not have any awards classified as liability awards due to the statutory tax withholding requirements as of January 1, 2017. The Company made an accounting policy election to continue to estimate forfeitures as it had previously. |
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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ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) |
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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 1, 2017 and July 2, 2016 were as follows (in millions):
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GOODWILL AND INTANGIBLE ASSETS (Tables) |
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Jul. 01, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Changes To Goodwill | The following information presents changes to goodwill during the six months ended July 1, 2017 (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. 01, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Reportable Segments | The following sets forth certain financial information attributable to the Company's operating segments as of and for the three and six months ended July 1, 2017 and July 2, 2016 (in millions):
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Reconciliation of Segment Assets | The following table presents identifiable assets information attributable to the Company's operating segments as of July 1, 2017 and December 31, 2016 (in millions):
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DEBT AND BANK CREDIT FACILITIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 01, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Indebtedness | The Company’s indebtedness as of July 1, 2017 and December 31, 2016 was as follows (in millions):
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Details On The Senior Notes | Details on the Notes at July 1, 2017 were (in millions):
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POST RETIREMENT PLANS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 01, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [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. 01, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Share-Based Compensation Activity | The table below presents share-based compensation activity for the six months ended July 1, 2017 and July 2, 2016 (in millions):
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The assumptions used in the Company's Monte Carlo simulation related to grants for performance share units were as follows:
The assumptions used in the Company's Black-Scholes valuation related to grants for options and SARs 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 1, 2017.
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Summary Of RSA Award Activity | Following is a summary of RSA award activity for the six months ended July 1, 2017:
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Summary Of RSU Award Activity | Following is a summary of RSU award activity for the six months ended July 1, 2017:
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Summary Of PSU Award Activity | Following is a summary of PSU award activity for the six months ended July 1, 2017:
|
EARNINGS PER SHARE (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 01, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 earnings per share calculations for the three and six months ended July 1, 2017 and July 2, 2016 (in millions):
|
CONTINGENCIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 01, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 1, 2017 and July 2, 2016 (in millions):
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DERIVATIVE INSTRUMENTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 01, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Notional Amounts Of Forward Contracts | As of July 1, 2017, the Company had the following currency forward contracts outstanding (with maturities extending through October 2019) to hedge forecasted foreign currency cash flows (in millions):
As of July 1, 2017, the Company had the following commodity forward contracts outstanding (with maturities extending through December 2018) 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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Schedule Of Fair Values Of Derivative Instruments | Fair values of derivative instruments as of July 1, 2017 and December 31, 2016 were (in millions):
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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
The ineffective portion of hedging instruments recognized during the three and six months ended July 1, 2017 and July 2, 2016, respectively, was immaterial. Derivatives Not Designated as Cash Flow Hedging Instruments (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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FAIR VALUE (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 01, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 1, 2017 and December 31, 2016 (in millions):
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RESTRUCTURING AND RELATED COSTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 01, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 1, 2017 and July 2, 2016 (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 1, 2017 and July 2, 2016, respectively (in millions):
The following table shows the allocation of Restructuring Costs by segment for the three and six months ended July 1, 2017 and July 2, 2016. (in millions):
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BASIS OF PRESENTATION (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jul. 01, 2017 |
Jul. 02, 2016 |
Dec. 31, 2016 |
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New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Net cash provided by (used in) operating activities | $ 148.9 | $ 176.1 | |
Net cash provided by (used in) operating activities | $ (164.5) | $ (151.7) | |
Accounting Standards Update 2016-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Net cash provided by (used in) operating activities | $ 1.9 | ||
Net cash provided by (used in) operating activities | $ (1.9) |
OTHER FINANCIAL INFORMATION (Percentage Distribution Between Major Classes of Inventory) (Details) |
6 Months Ended | 12 Months Ended |
---|---|---|
Jul. 01, 2017 |
Dec. 31, 2016 |
|
Inventory [Line Items] | ||
Percentage of inventory cost using the LIFO method | 50.00% | 55.00% |
Inventory Concentration Risk | Inventories | Raw Material and Work in Process | ||
Inventory [Line Items] | ||
Percentage of total Inventory | 48.00% | 45.00% |
Inventory Concentration Risk | Inventories | Finished Goods and Purchased Parts | ||
Inventory [Line Items] | ||
Percentage of total Inventory | 52.00% | 55.00% |
ACQUISITIONS AND DIVESTITURES (Acquisitions) (Details) - USD ($) |
6 Months Ended | ||
---|---|---|---|
Jan. 18, 2016 |
Jul. 01, 2017 |
Jul. 02, 2016 |
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Business Acquisition [Line Items] | |||
Acquisition-related expenses | $ 0 | $ 0 | |
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 |
GOODWILL AND INTANGIBLE ASSETS (Schedule Of Changes To Goodwill) (Details) $ in Millions |
6 Months Ended |
---|---|
Jul. 01, 2017
USD ($)
| |
Goodwill [Roll Forward] | |
Beginning balance | $ 1,453.2 |
Translation Adjustments | 15.8 |
Ending balance | 1,469.0 |
Cumulative Goodwill Impairment Charges | 275.7 |
Commercial and Industrial Systems | |
Goodwill [Roll Forward] | |
Beginning balance | 540.6 |
Translation Adjustments | 6.6 |
Ending balance | 547.2 |
Cumulative Goodwill Impairment Charges | 244.8 |
Climate Solutions | |
Goodwill [Roll Forward] | |
Beginning balance | 341.8 |
Translation Adjustments | 1.2 |
Ending balance | 343.0 |
Cumulative Goodwill Impairment Charges | 7.7 |
Power Transmission Solutions | |
Goodwill [Roll Forward] | |
Beginning balance | 570.8 |
Translation Adjustments | 8.0 |
Ending balance | 578.8 |
Cumulative Goodwill Impairment Charges | $ 23.2 |
GOODWILL AND INTANGIBLE ASSETS (Schedule Of Estimated Amortization) (Details) $ in Millions |
Jul. 01, 2017
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
Estimated annual amortization, 2018 | $ 53.3 |
Estimated annual amortization, 2019 | 52.9 |
Estimated annual amortization, 2020 | 49.8 |
Estimated annual amortization, 2021 | 42.1 |
Estimated annual amortization, 2022 | $ 40.4 |
GOODWILL AND INTANGIBLE ASSETS (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 01, 2017 |
Jul. 02, 2016 |
Jul. 01, 2017 |
Jul. 02, 2016 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible assets | $ 13.9 | $ 15.8 | $ 28.0 | $ 31.4 |
Estimated amortization expense in 2017 | $ 55.3 | $ 55.3 |
DEBT AND BANK CREDIT FACILITIES (Schedule Of Indebtedness) (Details) - USD ($) $ in Millions |
Jul. 01, 2017 |
Dec. 31, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Less: Debt Issuance costs | $ (7.1) | $ (9.7) |
Long-term debt | 1,300.2 | 1,411.5 |
Less: Current Maturities | 100.7 | 100.6 |
Non-Current Portion | 1,199.5 | 1,310.9 |
Term Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 686.1 | 798.1 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 600.0 | 600.0 |
Line of Credit | Multicurrency Revolving Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 15.9 | 18.0 |
Other | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 5.3 | $ 5.1 |
POST RETIREMENT PLANS (Schedule Of Net Periodic Defined Benefit Pension Cost) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 01, 2017 |
Jul. 02, 2016 |
Jul. 01, 2017 |
Jul. 02, 2016 |
|
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | ||||
Service Cost | $ 1.8 | $ 2.0 | $ 3.6 | $ 4.1 |
Interest Cost | 2.4 | 2.7 | 4.8 | 5.1 |
Expected Return on Plan Assets | (2.8) | (2.9) | (5.6) | (5.9) |
Amortization of Prior Service Cost and Net Actuarial Loss | 0.6 | 1.0 | 1.2 | 1.9 |
Net Periodic Benefit Cost | $ 2.0 | $ 2.8 | $ 4.0 | $ 5.2 |
POST RETIREMENT PLANS (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jul. 01, 2017 |
Jul. 02, 2016 |
Jul. 01, 2017 |
Jul. 02, 2016 |
Dec. 31, 2016 |
|
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | |||||
Estimated net actuarial loss to be amortized from accumulated other comprehensive loss | $ 2.2 | $ 2.2 | |||
Estimated prior service cost to be amortized from accumulated other comprehensive loss | 0.2 | 0.2 | |||
Contribution to defined benefit pension plans | 1.4 | $ 1.1 | 2.2 | $ 2.2 | $ 10.4 |
Expected total contribution to defined benefit pension plans | $ 4.4 | $ 4.4 |
SHAREHOLDERS' EQUITY (Schedule Of Share-Based Compensation Activity) (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jul. 01, 2017 |
Jul. 02, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Cash received from stock option exercises | $ 0.4 | $ 0.5 |
Options and SAR's | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total intrinsic value of share-based incentive awards exercised | 3.1 | 0.3 |
Cash received from stock option exercises | 0.4 | 0.5 |
Income tax benefit (expense) from the exercise of stock options | 0.7 | (0.1) |
Total fair value of share-based incentive awards vested | $ 4.3 | $ 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. 01, 2017 |
Dec. 31, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Per share weighted average fair value of grants (in dollars per share) | $ 23.31 | $ 15.22 |
Risk-free interest rate | 2.10% | 1.40% |
Expected life (years) | 7 years | 7 years |
Expected volatility | 28.60% | 29.60% |
Expected dividend yield | 1.30% | 1.70% |
SHAREHOLDERS' EQUITY (Summary Of RSA Award Activity) (Details) - Restricted Stock Awards (RSAs) - $ / shares |
6 Months Ended | 12 Months Ended |
---|---|---|
Jul. 01, 2017 |
Dec. 31, 2016 |
|
Shares | ||
Unvested (in shares) | 19,593 | |
Granted (in shares) | 13,941 | |
Vested (in shares) | (19,593) | |
Unvested (in shares) | 13,941 | 19,593 |
Weighted Average Fair Value at Grant Date | ||
Unvested, weighted average fair value at grant date (in dollars per share) | $ 57.43 | |
Granted, weighted average fair value at grant date (in dollars per share) | 80.70 | |
Vested, weighted average fair value at grant date (in dollars per share) | 57.43 | |
Unvested, weighted average fair value at grant date (in dollars per share) | $ 80.70 | $ 57.43 |
Unvested, weighted average remaining contractual term | 10 months 24 days | 4 months 24 days |
SHAREHOLDERS' EQUITY (Summary Of RSU Award Activity) (Details) - Restricted Stock Units (RSUs) - $ / shares |
6 Months Ended | 12 Months Ended |
---|---|---|
Jul. 01, 2017 |
Dec. 31, 2016 |
|
Shares | ||
Unvested (in shares) | 277,863 | |
Granted (in shares) | 75,614 | |
Vested (in shares) | (78,625) | |
Forfeited (in shares) | (1,634) | |
Unvested (in shares) | 273,218 | 277,863 |
Weighted Average Fair Value at Grant Date | ||
Unvested, weighted average fair value at grant date (in dollars per share) | $ 69.23 | |
Granted, weighted average fair value at grant date (in dollars per share) | 80.46 | |
Vested, weighted average fair value at grant date (in dollars per share) | 75.15 | |
Forfeited, weighted average fair value at grant date (in dollars per share) | 67.90 | |
Unvested, weighted average fair value at grant date (in dollars per share) | $ 70.64 | $ 69.23 |
Unvested, weighted average remaining contractual term | 2 years 1 month 6 days | 1 year 8 months 12 days |
SHAREHOLDERS' EQUITY (Schedule Of Assumptions Used In Monte Carlo Simulation For Performance Share Units) (Details) - Performance Share Units (PSUs) |
6 Months Ended | |
---|---|---|
Jul. 01, 2017 |
Jul. 02, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 1.60% | 0.90% |
Expected life (years) | 3 years | 3 years |
Expected volatility | 24.00% | 23.00% |
Expected dividend yield | 1.30% | 1.70% |
SHAREHOLDERS' EQUITY (Summary Of PSU Award Activity) (Details) - Performance Share Units (PSUs) - $ / shares |
6 Months Ended | 12 Months Ended |
---|---|---|
Jul. 01, 2017 |
Dec. 31, 2016 |
|
Shares | ||
Unvested (in shares) | 133,340 | |
Granted (in shares) | 48,403 | |
Vested (in shares) | (110) | |
Forfeited (in shares) | (24,705) | |
Unvested (in shares) | 156,928 | 133,340 |
Weighted Average Fair Value at Grant Date | ||
Unvested, weighted average fair value at grant date (in dollars per share) | $ 65.28 | |
Granted, weighted average fair value at grant date (in dollars per share) | 90.80 | |
Vested, weighted average fair value at grant date (in dollars per share) | 83.74 | |
Forfeited, weighted average fair value at grant date (in dollars per share) | 83.21 | |
Unvested, weighted average fair value at grant date (in dollars per share) | $ 70.31 | $ 65.28 |
Unvested, weighted average remaining contractual term | 2 years 4 months 24 days | 2 years |
INCOME TAXES (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jul. 01, 2017 |
Jul. 02, 2016 |
Jul. 01, 2017 |
Jul. 02, 2016 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | |||||
Effective tax rate | 21.60% | 24.90% | 22.00% | 24.10% | |
Federal statutory income tax rate | 35.00% | 35.00% | |||
Unrecognized tax benefits | $ 10.2 | $ 10.2 | $ 10.0 |
EARNINGS PER SHARE (Details) - shares shares in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 01, 2017 |
Jul. 02, 2016 |
Jul. 01, 2017 |
Jul. 02, 2016 |
|
Earnings Per Share [Abstract] | ||||
Shares excluded from the calculation of the effect of dilutive securities | 0.4 | 1.3 | 0.4 | 1.2 |
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | ||||
Denominator for Basic Earnings Per Share | 44.7 | 44.7 | 44.8 | 44.7 |
Effect of Dilutive Securities | 0.4 | 0.3 | 0.3 | 0.3 |
Denominator for Diluted Earnings Per Share | 45.1 | 45.0 | 45.1 | 45.0 |
CONTINGENCIES (Details) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 01, 2017
USD ($)
|
Jul. 02, 2016
USD ($)
|
Jul. 01, 2017
USD ($)
subsidiary
|
Jul. 02, 2016
USD ($)
|
|
Commitments and Contingencies Disclosure [Abstract] | ||||
Number of subsidiaries involved in litigation | subsidiary | 1 | |||
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Beginning Balance | $ 18.2 | $ 17.5 | $ 20.3 | $ 19.1 |
Less: Payments | (4.5) | (4.6) | (12.8) | (9.7) |
Provisions | 4.4 | 6.3 | 10.5 | 9.8 |
Translation Adjustments | 0.0 | 0.0 | 0.1 | 0.0 |
Ending Balance | $ 18.1 | $ 19.2 | $ 18.1 | $ 19.2 |
DERIVATIVE INSTRUMENTS (Narrative) (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended |
---|---|---|
Jul. 01, 2017 |
Dec. 31, 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 | $ 2.1 | $ 7.5 |
Net AOCI hedging component | (1.7) | |
Net current deferred losses expected to be realized in the next twelve months | 0.4 | |
Receive-Variable/Pay-Fixed Interest Rate Swap | ||
Derivative [Line Items] | ||
Notional amount of instrument | $ 100.0 |
RESTRUCTURING AND RELATED COSTS (Schedule Of Restructuring Reserve) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 01, 2017 |
Jul. 02, 2016 |
Jul. 01, 2017 |
Jul. 02, 2016 |
|
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | $ 1.0 | $ 1.0 | $ 0.6 | $ 1.3 |
Provision | 7.7 | 1.7 | 10.9 | 3.1 |
Less: Payments | 7.4 | 1.3 | 10.2 | 3.0 |
Ending Balance | $ 1.3 | $ 1.4 | $ 1.3 | $ 1.4 |
RESTRUCTURING AND RELATED COSTS (Narrative) (Details) $ in Millions |
Jul. 01, 2017
USD ($)
|
---|---|
Restructuring Cost and Reserve [Line Items] | |
Expected future restructuring charges | $ 8.7 |
Employee termination expenses | |
Restructuring Cost and Reserve [Line Items] | |
Expected future restructuring charges | 1.8 |
Facility and other related costs | |
Restructuring Cost and Reserve [Line Items] | |
Expected future restructuring charges | $ 6.9 |
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