Discontinued Operations and Other Dispositions

Sale of Balcke Dürr Business

As indicated in Note 1, on December 30, 2016, we completed the sale of Balcke Dürr for cash proceeds of less than $0.1. In addition, we left $21.1 of cash in Balcke Dürr at the time of the sale and provided the Buyer with a non-interest bearing loan of $9.1, payable in installments due at the end of 2018 and 2019. In connection with the sale, we recorded a net loss of $78.6 to “Gain (loss) on disposition of discontinued operations, net of tax.”

The purchase agreement provides that existing parent company guarantees of approximately €79.0 and bank and surety bonds of approximately €79.0 will remain in place through each instrument’s expiration date, with such expiration dates ranging from 2017 to 2022. Balcke Dürr and the Buyer have provided us a full indemnity in the event that any of these guarantees or bonds are called. Also, Balcke Dürr has provided cash collateral of €4.0 and mutares AG has provided a guarantee of €5.0 as a security for the above indemnifications. The net loss on the sale of the business of $78.6 includes a charge of $5.1 associated with the estimated fair value of the guarantees and bonds, after consideration of the indemnifications provided in the event any of the guarantees or bonds are called. See Note 15 for further details regarding the estimated fair value of these guarantees and bonds.

The final sales price for Balcke Dürr is subject to adjustment based on working capital existing at the closing date and is subject to agreement with the Buyer. Final agreement of the working capital amount with the Buyer has yet to occur. Accordingly, it is possible that the sales price and resulting loss for this divestiture may be materially adjusted in subsequent periods.

As indicated in Note 1, the results of Balcke Dürr are presented as a discontinued operation within the accompanying consolidated financial statements for all periods presented. Major classes of line items constituting pre-tax income (loss) and after-tax income (loss) of Balcke Dürr for the years ended December 31, 2016, 2015 and 2014 are shown below:



	Year ended December 31,
	2016			2015			2014
Revenues	$	153.4		$	160.3		$	258.3
Costs and expenses:
Costs of products sold	144.2			143.8			198.5
Selling, general and administrative	31.4			37.9			50.6
Impairment of goodwill	—			13.7			—
Special charges (credits), net	(1.3		)	12.7			3.4
Other expense	(0.2		)	(0.9		)	(2.1		)
Income (loss) before taxes	(21.1		)	(48.7		)	3.7
Income tax (provision) benefit	4.5			9.1			(2.2		)
Income (loss) from discontinued operations	$	(16.6	)	$	(39.6	)	$	1.5

The assets and liabilities of Balcke Dürr have been reclassified to assets and liabilities of discontinued operations as of December 31, 2015. The major classes of Balcke Dürr’s assets and liabilities as of December 31, 2015 are shown below:



ASSETS:
Cash and equivalents	$	4.2
Accounts receivable, net	61.9
Inventories, net	9.4
Other current assets	8.7
Assets of discontinued operations - current	84.2
Property, plant and equipment, net	14.2
Other assets (includes $19.6 of “Deferred and other income taxes”)	21.6
Assets of discontinued operations - non current	35.8
Total assets - discontinued operations	$	120.0

LIABILITIES:
Accounts payable	$	19.9
Accrued expenses	53.9
Income taxes payable	0.1
Liabilities of discontinued operations - current	73.9
Liabilities of discontinued operations - non current (includes $15.5 of “Deferred and other income taxes”)	24.0
Total liabilities - discontinued operations	$	97.9

The following table presents selected financial information for Balcke Dürr that is included within discontinued operations in the consolidated statements of cash flows:



	Year ended December 31,
	2016		2015		2014
Non-cash items included in income (loss) from discontinued operations, net of tax
Depreciation and amortization	$	2.0	$	2.2	$	2.8
Impairment of goodwill	—		13.7		—
Capital expenditures	0.7		1.9		1.1

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⁾ and 2014 are shown below:



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


⁽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 following table presents selected financial information for SPX FLOW that is included within discontinued operations in the consolidated statements of cash flows:



	Year ended December 31,
	2015 ⁽¹⁾		2014
Non-cash items included in income from discontinued operations, net of tax
Depreciation and amortization	$	44.3	$	65.8
Impairment of intangible assets	15.0		11.7
Capital expenditures	43.1		40.7
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).

In connection with the Spin-Off, we entered into definitive agreements with SPX FLOW 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; and


•	Trademark License Agreement.

Pursuant to the Separation and Distribution Agreement, the Employee Matters Agreement and the Tax Matters Agreement, 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, 2016, no indemnification claims have been initiated.

The financial activity governed by these agreements between SPX FLOW and us was not material to our consolidated financial results for the years ended December 31, 2016 and 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 LLC — Sold for cash consideration of $3.5 during 2014, resulting in a loss, net of taxes, of $0.4.

SPX Precision Components — Sold for cash consideration of $62.6 during 2014, resulting in a loss, net of taxes, of $6.9.

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

In addition to the businesses discussed above, we recognized net losses of $2.7, $5.2 and $1.1 during 2016, 2015 and 2014, respectively, resulting from adjustments to gains/losses on dispositions of businesses discontinued prior to 2014.

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

The following table presents selected information regarding the results of operations of our businesses included in discontinued operations, other than Balcke Dürr and SPX FLOW, for the years ended December 31, 2016, 2015 and 2014:



	Year ended December 31,
	2016		2015		2014
Revenues	$	—	$	—	$	27.7
Pre-tax loss	—		—		(6.1		)
Loss from discontinued operations, net	—		—		(5.0		)

For the years ended December 31, 2016, 2015 and 2014, results of operations from our businesses reported as discontinued operations were as follows:



	Year ended December 31,
	2016			2015 ⁽¹⁾			2014
Balcke Dürr
Income (loss) from discontinued operations	$	(107.0	)	$	(48.7	)	$	3.7
Income tax (provision) benefit	11.8			9.1			(2.2		)
Income (loss) from discontinued operations, net	(95.2		)	(39.6		)	1.5

SPX FLOW
Income from discontinued operations	$	—		$	122.4		$	335.0
Income tax provision	—			(43.0		)	(75.5		)
Income from discontinued operations, net	—			79.4			259.5

All other
Income (loss) from discontinued operations	$	(3.7	)	$	(8.6	)	$	22.1
Income tax (provision) benefit	1.0			3.4			(13.8		)
Income (loss) from discontinued operations, net	(2.7		)	(5.2		)	8.3

Total
Income (loss) from discontinued operations	$	(110.7	)	$	65.1		$	360.8
Income tax (provision) benefit	12.8			(30.5		)	(91.5		)
Income (loss) from discontinued operations, net	$	(97.9	)	$	34.6		$	269.3


⁽¹⁾	For SPX FLOW, represents financial results 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.

Other Dispositions

As indicated in Note 1, on November 20, 2015, we entered into an agreement for the sale of our dry cooling business. On March 30, 2016, we completed the sale for cash proceeds of $47.6 (net of cash transferred with the business of $3.0). In connection with the sale, we recorded a gain of $18.4. The gain includes a reclassification from “Equity” of other comprehensive income of $40.4 related to foreign currency translation.

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. 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

On January 7, 2014, we completed the sale of our 44.5% interest in EGS Electrical Group, LLC and Subsidiaries (“EGS”) for cash proceeds of $574.1. As a result of the sale, we recorded a gain of $491.2 to “Other income (expense), net” during 2014. Prior to sale, we accounted for our investment in EGS under the equity method.