Discontinued Operations and Assets and Liabilities Held for Sale

Spin-Off of SPX FLOW

As indicated in Note 1, we completed the Spin-Off of SPX FLOW on September 26, 2015. The results of SPX FLOW are presented as a discontinued operation within the accompanying consolidated statements of operations and consolidated statements of cash flows. Major classes of line items constituting pre-tax income and after-tax income of SPX FLOW for the years ended December 31, 2015 ⁽¹⁾, 2014 and 2013 are shown below:



	Year ended December 31,
	2015 ⁽¹⁾			2014			2013
Revenues	$	1,775.1		$	2,768.4		$	2,804.5
Costs and expenses:
Costs of products sold	1,179.3			1,831.0			1,906.9
Selling, general and administrative ⁽²⁾	368.2			507.8			522.4
Intangible amortization	17.7			26.1			27.2
Impairment of intangible assets	15.0			11.7			6.7
Special charges	41.2			13.8			14.4
Other income (expense), net ⁽³⁾	1.3			(1.9		)	(5.5		)
Interest expense, net	(32.6		)	(41.1		)	(41.7		)
Income before taxes	122.4			335.0			279.7
Income tax provision	(43.0		)	(75.5		)	(78.2		)
Income from discontinued operations	79.4			259.5			201.5
Less: Net income (loss) attributable to noncontrolling interest	(0.9		)	(2.2		)	1.7
Income from discontinued operations attributable to shareholders	$	80.3		$	261.7		$	199.8


⁽¹⁾	Represents financial results for SPX FLOW through the date of Spin-Off (i.e., the nine months ended September 26, 2015), except for a revision to increase the income tax provision by $1.4 that was recorded during the fourth quarter of 2015.


⁽²⁾	Includes $30.8 and $3.5 for the years ended December 31, 2015 and December 31, 2014, respectively, of professional fees and other costs that were incurred in connection with the Spin-Off.


⁽³⁾	Includes, for the year ended December 31, 2014, $5.0 of costs incurred to obtain the consents required of the holders of our 6.875% senior notes to amend certain provisions of the indenture governing such senior notes, with such consent obtained in connection with the Spin-Off.

The assets and liabilities of SPX FLOW have been reclassified to assets and liabilities of discontinued operations as of December 31, 2014. The components of SPX FLOW’s assets and liabilities as of December 31, 2014 are shown below:



ASSETS:
Cash and equivalents	$	190.4
Accounts receivable, net	593.9
Inventories, net	330.4
Other current assets	106.5
Assets of discontinued operations - current	1,221.2
Property, plant and equipment, net	433.0
Goodwill	1,081.0
Intangibles, net	659.3
Other assets	101.4
Assets of discontinued operations - non current	2,274.7
Total assets - discontinued operations	$	3,495.9

LIABILITIES:
Accounts payable	$	252.0
Accrued expenses	452.1
Income taxes payable	35.4
Short-term debt and current maturities of long-term debt	26.3
Liabilities of discontinued operations - current	765.8
Long-term debt	610.3
Other long-term liabilities (includes $227.1 of "Deferred and other income taxes")	421.9
Liabilities of discontinued operations - non current	1,032.2
Total liabilities - discontinued operations	$	1,798.0

The following table presents selected financial information regarding cash flows of SPX FLOW that are included within discontinued operations in the consolidated statements of cash flows:



	Year ended December 31,
	2015 ⁽¹⁾		2014		2013
Non-cash items included in income from discontinued operations
Depreciation and amortization	$	44.3	$	65.8	$	69.9
Impairment of intangible assets	15.0		11.7		6.7
Capital expenditures	43.1		40.7		23.4
Payment of capital lease obligation	—		60.8		—


⁽¹⁾	Represents financial results for SPX FLOW through the date of Spin-Off (i.e., the nine months ended September 26, 2015).

Transition Services Agreement - On September 26, 2015 in connection with the Spin-Off, we entered into a transition services agreement with SPX FLOW, under which SPX FLOW or certain of its subsidiaries provide us, and we provide SPX FLOW or certain of its subsidiaries, with certain services to help ensure an orderly transition following the Spin-Off (the "Transition Services Agreement"). The services we agreed to provide to SPX FLOW include information technology, human resources, finance and financial reporting, and other administrative services. The services SPX FLOW has agreed to provide to us include information technology, human resources, finance and financial reporting, tax compliance, facility access and other administrative services. The charges for these services are intended to allow SPX FLOW or us, as applicable, to recover the direct and indirect costs incurred in providing such services. The Transition Services Agreement generally provides for a term of services starting at the Spin-Off date and continuing for a period of up to twelve months following the Spin-Off. Other than with respect to certain fixed-term pass-through services, the applicable recipient of services may terminate any transition services it is receiving upon thirty days' prior notice to the other party, with any extension or renewal of the Transition Services Agreement or the services provided thereunder requiring mutual agreement between SPX FLOW and us.

Other Agreements with SPX FLOW - In connection with the Spin-Off, we entered into other definitive agreements with SPX that, among other matters, set forth the terms and conditions of the Spin-Off and provide a framework for our relationship with SPX FLOW after the Spin-Off, including the following:


•	Separation and Distribution Agreement


•	Tax Matters Agreement


•	Employee Matters Agreement


•	Trademark License Agreement

Pursuant to the Separation and Distribution Agreement, the Employee Matters Agreement and the Tax Matters Agreement between us and SPX FLOW, SPX FLOW has agreed to indemnify us for certain liabilities, and we have agreed to indemnify SPX FLOW for certain liabilities, in each case for uncapped amounts. As of December 31, 2015, no indemnification claims have been initiated.

The financial activity governed by these agreements between SPX FLOW and us is not material to our consolidated financial results for the year ended December 31, 2015.

We also entered into a five-year agreement with SPX FLOW to lease office space for our corporate headquarters. Annual lease costs associated with the agreement are $2.1.

Other Discontinued Operations Activity

Fenn — Sold for cash consideration of $3.5 during 2014, resulting in a loss, net of taxes, of $0.4.

Precision Components — Sold for cash consideration of $62.6 during 2014 (inclusive of cash paid of $0.4 associated with the working capital settlement), resulting in a loss, net of taxes, of $6.9.

TPS — Sold for cash consideration of $42.5 during 2014, resulting in a gain, net of taxes, of $21.7.

Dielectric — Sold assets of the business during 2013 for cash consideration of $4.7, resulting in a gain of less than $0.1.

Kayex — Closed the business during 2013. We recorded a gain, net of taxes, of $1.3 during 2013 associated primarily with a gain on the sale of a perpetual license related to certain of the business's intangible assets, which was partially offset by a loss related to severance costs and asset impairment charges. Proceeds from the sale of the perpetual license totaled $6.9.

In addition to the businesses discussed above, we recognized net losses of $5.2, $1.1 and $5.3 during 2015, 2014 and 2013, respectively, resulting from adjustments to gains/losses on dispositions of businesses discontinued prior to 2013.

Changes in estimates associated with liabilities retained in connection with a business divestiture (e.g., income taxes) may occur. As such, it is possible that the resulting gains/losses on these and other previous divestitures may be materially adjusted in subsequent periods.

For the years ended December 31, 2015, 2014 and 2013, selected information regarding the results of operations of our businesses included in discontinued operations, other than SPX FLOW, was as follows:



	Year ended December 31,
	2015		2014			2013
Revenues	$	—	$	27.7		$	148.9
Pre-tax income (loss)	—		(6.1		)	7.0
Income (loss) from discontinued operations, net	—		(5.0		)	5.3

For the years ended December 31, 2015, 2014 and 2013, results of operations from our businesses reported as discontinued operations were as follows:



	Year ended December 31,
	2015 ⁽¹⁾			2014			2013
SPX FLOW
Income from discontinued operations	$	122.4		$	335.0		$	279.7
Income tax provision	(43.0		)	(75.5		)	(78.2		)
Income from discontinued operations, net	79.4			259.5			201.5

All other
Income (loss) from discontinued operations	(8.6		)	22.1			3.6
Income tax (provision) benefit	3.4			(13.8		)	(2.3		)
Income (loss) from discontinued operations, net	(5.2		)	8.3			1.3

Total
Income from discontinued operations	113.8			357.1			283.3
Income tax provision	(39.6		)	(89.3		)	(80.5		)
Income from discontinued operations, net	$	74.2		$	267.8		$	202.8


⁽¹⁾	Represents amounts for SPX FLOW through the date of Spin-Off (i.e., the nine months ended September 26, 2015), except for a revision to increase the income tax provision by $1.4 that was recorded during the fourth quarter of 2015.

Agreement for Sale of Dry Cooling Business

As indicated in Note 1, on November 20, 2015, we entered into an agreement for the sale of our dry cooling business. The assets and liabilities of our dry cooling business are presented as "held for sale" within the accompanying consolidated balance sheet as of December 31, 2015. We do not expect a material gain or loss to result from the sale. The major classes of assets and liabilities held for sale as of December 31, 2015 are shown below:



Assets:
Accounts receivable, net	$	49.2
Inventories, net	12.9
Other current assets	13.9
Property, plant and equipment, net	3.3
Goodwill	10.7
Intangibles, net	8.3
Other assets	8.8
Assets held for sale	$	107.1
Liabilities:
Accounts payable	$	13.7
Accrued expenses	25.3
Other long-term liabilities	2.3
Liabilities held for sale	$	41.3