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What changed in SPX Technologies, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of SPX Technologies, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+328 added−322 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-23)

Top changes in SPX Technologies, Inc.'s 2024 10-K

328 paragraphs added · 322 removed · 248 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeHistorically, our businesses generally tend to be stronger in the second half of the year. Our website address is www.spx.com. Information on our website is not incorporated by reference herein. We file reports with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and certain amendments to these reports.
Biggest changeMany of our businesses closely follow changes in the industries and end markets they serve. In addition, certain businesses have seasonal fluctuations. Historically, our businesses generally tend to be stronger in the second half of the year. Our website address is www.spx.com. Information on our website is not incorporated by reference herein.
The board of managers of the divested subsidiaries each received a solvency opinion from an independent advisory firm that the divested subsidiaries were solvent after giving effect to the Asbestos Portfolio Sale. On April 3, 2023, we completed the acquisition of T.A. Morrison & Co. Inc.
The board of managers of each of the divested subsidiaries received a solvency opinion from an independent advisory firm that the divested subsidiaries were solvent after giving effect to the Asbestos Portfolio Sale. On April 3, 2023, we completed the acquisition of T.A. Morrison & Co. Inc.
On June 2, 2023, we completed the acquisition of ASPEQ Heating Group (“ASPEQ”), a leading provider of electrical heating solutions to customers in industrial and commercial markets. The post-acquisition operating results of ASPEQ are reflected within our HVAC reportable segment. 2 On February 7, 2024, we completed the acquisition of Ingénia Technologies Inc.
On June 2, 2023, we completed the acquisition of ASPEQ Heating Group (“ASPEQ”), a leading provider of electrical heating solutions to customers in industrial and commercial markets. The post-acquisition operating results of ASPEQ are reflected within our HVAC reportable segment. On February 7, 2024, we completed the acquisition of Ingénia Technologies Inc.
Particular risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements, include the following: cyclical changes and specific industry events in the Company’s markets; changes in anticipated capital investment and maintenance expenditures by customers; availability, limitations or cost increases of raw materials and/or commodities that cannot be recovered in product pricing; the impact of competition on profit margins and the Company’s ability to maintain or increase market share; inadequate performance by third-party suppliers and subcontractors for outsourced products, components and services and other supply-chain risks; the uncertainty of claims resolution with respect to environmental and other contingent liabilities; the impact of climate change and any legal or regulatory actions taken in response thereto; cyber-security risks; risks with respect to the protection of intellectual property, including with respect to the Company’s digitalization initiatives; the impact of overruns, inflation and the incurrence of delays with respect to long-term fixed-price contracts; defects or errors in current or planned products; the impact of pandemics and governmental and other actions taken in response; domestic economic, political, legal, accounting and business developments adversely affecting the Company’s business, including regulatory changes; changes in worldwide economic conditions, including as a result of geopolitical conflicts; uncertainties with respect to the Company’s ability to identify acceptable acquisition targets; uncertainties surrounding timing and successful completion of acquisition or disposition transactions, including with respect to integrating acquisitions and achieving cost savings or other benefits from acquisitions; the impact of retained liabilities of disposed businesses; potential labor disputes; and extreme weather conditions and natural and other disasters.
Particular risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements, include the following: cyclical changes and specific industry events in the Company’s markets; changes in anticipated capital investment and maintenance expenditures by customers; availability, limitations or cost increases of raw materials and/or commodities, including as a result of new or increased tariffs, that cannot be recovered in product pricing; the impact of competition on profit margins and the Company’s ability to maintain or increase market share; inadequate performance by third-party suppliers and subcontractors for outsourced products, components and services and other supply-chain risks; the uncertainty of claims resolution with respect to environmental and other contingent liabilities; the impact of climate change and any legal or regulatory actions taken in response thereto; cyber-security risks; risks with respect to the protection of intellectual property, including with respect to the Company’s digitalization initiatives; the impact of overruns, inflation and the incurrence of delays with respect to long-term fixed-price contracts; defects or errors in current or planned products; the impact of pandemics and governmental and other actions taken in response; domestic economic, political, legal, accounting and business developments adversely affecting the Company’s business, including regulatory changes; changes in worldwide economic conditions, including as a result of geopolitical conflicts; uncertainties with respect to the Company’s ability to identify acceptable acquisition targets; uncertainties surrounding timing and successful completion of acquisition or disposition transactions, including with respect to integrating acquisitions and achieving cost savings or other benefits from acquisitions; the impact of retained liabilities of disposed businesses; potential labor disputes; and extreme weather conditions and natural and other disasters.
For information regarding supply chain disruptions and labor shortages refer to “MD&A - Supply Chain Disruptions, Labor Shortages, and Cost Increases.” Competition Our competitive position cannot be determined accurately in the aggregate or by reportable or operating segment since we and our competitors do not offer all the same product lines or serve all the same markets.
For information regarding supply chain disruptions and labor shortages refer to “MD&A - Supply Chain Disruptions, Labor Shortages, and Cost Increases.” 4 Competition Our competitive position cannot be determined accurately in the aggregate or by reportable or operating segment since we and our competitors do not offer all the same product lines or serve all the same markets.
The primary distribution channels for the segment’s products are direct to customers and third-party distributors. The segment serves a global customer base in North America, Europe, Africa and Asia. Core brands for our underground pipe and cable locators and inspection and rehabilitation equipment are Radiodetection, Pearpoint, Schonstedt, Dielectric, Riser Bond, Cues, ULC Robotics, and Sensors & Software.
The primary distribution channels for the segment’s products are direct to customers and third-party distributors. The segment serves a global customer base in North America, Europe, Africa and Asia. Core brands for our underground pipe and cable locators and inspection and rehabilitation equipment are Radiodetection, Pearpoint, Schonstedt, Dielectric, Cues, ULC Robotics, and Sensors & Software.
Our market leading brands, coupled with our commitment to continuous innovation and focus on our customers’ needs, enables our HVAC cooling and heating businesses to serve an expanding number of industrial, commercial and residential customers. Growth for our HVAC businesses will be driven by innovation, increased scalability, and our ability to meet the needs of broader markets.
Our market leading brands, coupled with our commitment to continuous innovation and focus on our customers’ needs, enables our HVAC cooling and heating businesses to serve an expanding number of industrial, commercial, data center, and residential customers. Growth for our HVAC businesses will be driven by innovation, increased scalability, and our ability to meet the needs of broader markets.
Human Capital Resources At December 31, 2023, we had approximately 4,100 employees, with approximately 3,300 employed in the United States. We also leverage temporary workers to provide flexibility for our business and manufacturing needs. Six domestic collective bargaining agreements cover approximately 460 of our employees. In addition, we have various collective labor arrangements covering certain of our non-U.S. employee groups.
Human Capital Resources At December 31, 2024, we had approximately 4,300 employees, with approximately 3,300 employed in the United States. We also leverage temporary workers to provide flexibility for our business and manufacturing needs. Six domestic collective bargaining agreements cover approximately 460 of our employees. In addition, we have various collective labor arrangements covering certain of our non-U.S. employee groups.
Divestitures We regularly review and negotiate potential divestitures in the ordinary course of business, some of which are or may be m aterial. As previously indicated, the divestiture of three wholly-owned subsidiaries that hold asbestos liabilities and certain assets, including related insurance assets, was completed in 2022 and the divestiture of Transformer Solutions was completed in 2021.
Divestitures We regularly review and negotiate potential divestitures in the ordinary course of business, some of which are or may be m aterial. As previously indicated, the divestiture of three wholly-owned subsidiaries that hold asbestos liabilities and certain assets, including related insurance assets, was completed in 2022 and the divestiture of Transformer Solutions was completed in 202 1.
Approximately 76 % of the segment’s backlog as of December 31, 2023 is expected to be recognized as revenue during 2024. The segment engineers, designs, manufactures, services, and installs underground pipe and cable locators, inspection and rehabilitation equipment, robotic systems, transportation systems, communication technologies, and aids to navigation.
Approximately 58 % of the segment’s backlog as of December 31, 2024 is expected to be recognized as revenue during 2025. The segment engineers, designs, manufactures, services, and installs underground pipe and cable locators, inspection and rehabilitation equipment, robotic systems, transportation systems, communication technologies, and aids to navigation.
We believe that we generally will be able to continue to obtain adequate supplies of key products, components or appropriate substitutes at reasonable costs. 4 We are subject to increases in the prices of many of our key raw materials, including petroleum-based products and steel.
We believe that we generally will be able to continue to obtain adequate supplies of key products, components or appropriate substitutes at reasonable costs. We are subject to increases in the prices, including from the impact of tariffs, of many of our key raw materials, including petroleum-based products and steel.
As previously indicated, we completed the wind-down of our DBT and Heat Transfer businesses in the fourth quarters of 2021 and 2020, res pectively. International Operations We are a multinational co rporation with operations in over 15 countries. Sales outside the United States were $287.1 , $237.4 and $228.0 in 2023, 2022 and 2021, respectively.
As previously indicated, we completed the wind-down of our DBT and Heat Transfer businesses in the fourth quarters of 2021 and 2020, respectively. International Operations We are a multinational co rporation with operations in over 15 countries. Sales outside the United States were $343.1 , $287.1 and $237.4 in 2024, 2023 and 2022, respectively.
With operations in 15 countries and approximat ely 4,100 emp loyees, we offer a wide array of highly engineered infrastructure products with strong brands. HVAC solutions offered by our businesses include package and process cooling equipment, engineered air movement solutions, residential and commercial boilers, electrical heating, and ventilation products.
With operations in over 15 countries and approximat el y 4,300 emp loyees, we offer a wide array of highly engineered infrastructure products with strong brands. HVAC solutions offered by our businesses include package and process cooling equipment, engineered air movement and handling solutions, residential and commercial boilers, electrical heating, and ventilation products.
Based on a review of our post-spin portfolio and the belief that a recovery within the power generation markets was unlikely in the foreseeable future, we decided coming out of the Spin-Off that our strategic focus at that time would be on our (i) scalable growth businesses that serve the heating, ventilation and cooling (“HVAC”) and detection and measurement markets and (ii) power transformer and process cooling systems businesses.
Based on a review of our portfolio of businesses, and the belief that a recovery within the power generation markets was unlikely in the foreseeable future, we decided in 2015 that our strategic focus would be on our (i) scalable growth businesses that serve the heating, ventilation and cooling (“HVAC”) and detection and measurement markets and (ii) power transformers and process cooling systems businesses.
Acquisitions We regularly review and negotiate potential acquisitions in the ordinary course of business, some of which are or may be material. As previously indicated, we acquired Ingénia in 2024, TAMCO and ASPEQ in 2023, ITL in 2022, and Sealite, ECS, and Cincinnati Fan in 2021.
We regularly review and negotiate potential acquisitions in the ordinary course of business, some of which are or may be material. As previously indicated, we acquired KTS in January 2025, Ingénia in 2024, TAMCO and ASPEQ in 2023, and ITL in 2022.
This is consistent with the way our Chief Operating Decision Maker (“CODM”) evaluates the results of each segment. HVAC Reportable Segment Our HVAC reportable segment had revenues of $1,122.3 , $913.8, and $752.1 in 2023, 2022 and 2021, respectively, and backlog of $306.1 and $243.1 as of December 31, 2023 and 2022 , respectively.
This is consistent with the way our Chief Operating Decision Maker (“CODM”), the President and Chief Executive Officer, evaluates the results of each segment. HVAC Reportable Segment Our HVAC reportable segment had revenues of $1,364.7 , $1,122.3, and $913.8 in 2024, 2023 and 2022, respectively, and backlog of $436.8 and $306.1 as of December 31, 2024 and 2023 , respectively.
Patents/Trademarks We own 160 domestic and 360 foreign patents (comprising 140 patent “families”) (foreign patents include patents in individual countries in the European Union (“EU”), as well as EU-level patents), including 13 patents that were issued in 2023, covering a variety of our products and manufacturing methods. We also own a number of registe red trademark s.
Patents/Trademarks We own 227 domestic and 402 foreign patents (comprising 159 patent “families”) (foreign patents include patents in individual countries in the European Union (“EU”), as well as EU-level patents), including 24 patents that were issued in 2024, covering a variety of our products and manufacturing methods. We also own a number of registered trademark s.
At the beginning of 2023, we launched our updated Global Employee Survey with over 90% employee participation. This annual survey captures employee feedback on topics related to Engagement and Diversity & Inclusion. The results of the survey informed discussions about what is most important to our employees and helped us develop action plans to focus on those priorities.
At the beginning of 2024, we launched our updated Global Employee Survey with over 90% employee participation, the results of which informed discussions about what is most important to our employees and helped us develop action plans to focus on those priorities.
(“SPX FLOW”), a wholly-owned subsidiary of SPX prior to the Spin-Off, which at the time of the Spin-Off held the businesses comprising our Flow Technology reportable segment, our Hydraulic Technologies business, and certain of our corporate subsidiaries. Prior to the Spin-Off, our businesses serving the power generation markets had a major impact on the consolidated financial results of SPX.
(“SPX FLOW”), a wholly-owned subsidiary of SPX prior to the Spin-Off, which at the time of the Spin-Off held the businesses comprising our Flow Technology reportable segment, our Hydraulic Technologies business, and certain of our corporate subsidiaries.
(“Ingénia”) which specializes in the design and manufacture of custom air handling units that demand high levels of precision and reliability in healthcare, pharmaceutical, education, food processing and industrial end markets. The post-acquisition results of Ingénia will be reflected within our HVAC reportable segment.
(“Ingénia”) which specializes in the design and manufacture of custom air handling units that demand high levels of precision and reliability in healthcare, pharmaceutical, education, food processing and industrial end markets. The post-acquisition operating results of Ingénia are reflected within our HVAC reportable segment. On January 27, 2025, we completed the acquisition of Kranze Technology Solutions, Inc.
Unless otherwise indicated, the description of our business provided in Part I pertains to continuing operations only (see Notes 1 and 4 to our consolidated financial statements for information on discontinued operations). We are a diversified, global supplier of infrastructure equipment serving the HVAC and detection and measurement markets.
Unless otherwise indicated, the description of our business provided in Part I pertains to continuing operations only (see Notes 1 and 4 to our consolidated financial statements for information on discontinued operations).
Our transportation systems are sold under the Genfare brand, our communication technologies products are sold under the TCI and ECS brands, and our aids to navigation products are sold under the Flash Technology, ITL, Sabik Marine, Sealite, and Avlite brands.
Our transportation systems are sold under the Genfare brand, our communication technologies products are sold under the TCI, ECS, and KTS brands, and our aids to navigation products are sold under the Flash Technology, ITL, Sabik Marine, Sealite, and Avlite brands. 3 Acquisitions From time to time, we may make acquisitions that do not significantly impact our financial position or operations.
In determining our reportable segments, we apply the threshold criteria of the Segment Reporting Topic of the Financial Accounting Standards Board Codification (“Codification”). Operating income for our reportable segments is determined before considering impairment and special charges, long-term incentive compensation, certain other operating income/expense, other indirect corporate expenses, intangible asset amortization expense, inventory step-up charges, and certain other acquisition-related costs.
Operating income for our reportable segments is determined before considering, if applicable, impairments and special charges, long-term incentive compensation, certain other operating income/expense, other indirect corporate expenses, intangible asset amortization expense, inventory step-up charges, and certain other acquisition and integration-related costs.
Core brands for our cooling products include Marley, Recold, SGS, Cincinnati Fan, TAMCO, and Ingénia , while our heating products are sold under the Berko, Qmark, Fahrenheat, Leading Edge, Patterson-Kelley, Weil-McLain, Williamson-Thermoflo, INDEECO, Heatrex, AccuTherm, Brasch, Spectrum, BannerDay PipeHeating, and Solar Products brands. 3 Detection and Measurement Reportable Segmen t Our Detection and Measurement reportable segment had revenues of $618.9, $547.1, and $467.4 in 2023, 2022 and 2021, respectively, and backlog of $244.5 and $251.0 as of December 31, 2023 and 2022 , respectively.
Core brands for our cooling products include Marley, Recold, SGS, Cincinnati Fan, TAMCO, and Ingénia , while our heating products are sold under the Berko, Qmark, Fahrenheat, Leading Edge, Patterson-Kelley, Weil-McLain, Williamson-Thermoflo, INDEECO, Heatrex, AccuTherm, Brasch, Spectrum, BannerDay PipeHeating, and Solar Products brands.
Approximately 98 % of the segment’s backlog as of December 31, 2023 is expected to be recognized as revenue during 2024. The segment engineers, designs, manufactures, installs and services cooling products and engineered air movement solutions for the HVAC industrial and power generation markets, as well as heating and ventilation products for the residential, industrial, and commercial markets.
The segment engineers, designs, manufactures, installs and services cooling products and engineered air movement and handling solutions for the HVAC industrial, commercial, data center, and power generation markets, as well as heating and ventilation products for the residential, industrial, and commercial markets.
Copies of these reports are available free of charge on our website as soon as reasonably practicable after we file the reports with the SEC. The SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 6
The SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 5
We believe through these efforts we can unlock greater potential, provide new opportunities for our employees, and benefit from diverse backgrounds and points of view.
During 2024, we continued our focus on enhancing our programs aimed at ensuring that we provide an inclusive environment where all employees feel valued and respected. We believe through these efforts we can unlock greater potential, provide new opportunities for our employees, and benefit from varying backgrounds and points of view.
Valuing diversity and inclusion is, and will be, an on-going part of the culture we are continuously working to strengthen. 5 Other Matters No customer or group of customers that, to our knowledge, are under common control accounted for more than 10 % of our consolidated revenues for any period presented.
Other Matters No customer or group of customers that, to our knowledge, are under common control accounted for more than 10 % of our consolidated revenues for any period presented. Our businesses maintain sufficient levels of working capital to support customer requirements, particularly inventory. We believe our businesses’ sales and payment terms are generally similar to those of our competitors.
As a result, we have significantly reduced our exposure to the power generation markets as indicated by the dispositions of our dry cooling and Balcke Dürr businesses during 2016. Additionally, during 2018, we initiated a plan to wind-down the SPX Heat Transfer (“Heat Transfer”) business, with the wind-down completed during the fourth quarter of 2020.
As a result, we subsequently significantly reduced our exposure to the power generation markets. This reduction included the wind-down of the SPX Heat Transfer Business (“Heat Transfer”), completed during the fourth quarter of 2020, and the wind-down of our South African subsidiary, DBT Technologies (PTY) LTD (“DBT”) in 2021 when we substantially ceased all operations.
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In the years leading up to the Spin-Off, these businesses experienced significant declines in revenues and profitability associated with weak demand and increased competition within the global power generation markets.
Added
In addition, we completed the sale of our Transformer Solutions business (“Transformer Solutions”) during 2021. As a result, we are reporting Heat Transfer, DBT, and Transformer Solutions as discontinued operations in the accompanying consolidated financial statements. See Note 4 for additional details regarding discontinued operations and Notes 4 and 15 for additional details of DBT’s dispute resolution matters.
Removed
As a result of completing such wind-down activities, we are reporting the Heat Transfer business as a discontinued operation for all periods presented. Lastly, with its substantial completion of its remaining scope on the large power projects in South Africa, our South African subsidiary, DBT Technologies (PTY) LTD (“DBT”), completed wind-down activities during the fourth quarter of 2021.
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(“KTS”), which specializes in digital interoperability and tactical networking solutions, primarily for the defense industry. The post-acquisition operating results of KTS will be reflected within our Detection and Measurement reportable segment.
Removed
As a result of completing wind-down activities, we are reporting the DBT business as a discontinued operation for all periods presented.
Added
A description of the general development of our business, including with respect to developments occurring prior to those discussed above, is included in Item 1 of our Annual Report on Form 10-K for the year ended December 31, 2023 , which description is incorporated by reference. 2 We are a diversified, global supplier of infrastructure equipment serving the HVAC and detection and measurement markets.
Removed
On April 19, 2021 and August 2, 2021, we completed the acquisitions of Sealite Pty Ltd and affiliated entities, including Sealite USA, LLC (doing business as Avlite Systems) and Star2M Pty Ltd (collectively, “Sealite”), and of Enterprise Control Systems Ltd (“ECS”), respectively.
Added
In determining our reportable segments, we apply the threshold criteria of the Segment Reporting Topic of the Financial Accounting Standards Board Codification (“Codification”).
Removed
Sealite is a leader in the design and manufacture of marine and aviation aids to navigation products, while ECS is a manufacturer and designer of highly-engineered tactical datalinks and radio frequency (“RF”) countermeasures, including counter-drone and counter-improvised explosive device RF jammers. The post-acquisition operating results of Sealite and ECS are reflected within our Detection and Measurement reportable segment.
Added
Approximately 88 % of the segment’s backlog as of December 31, 2024 is expected to be recognized as revenue during 2025.
Removed
On October 1, 2021, we completed the sale of SPX Transformer Solutions, Inc. (“Transformer Solutions”) pursuant to the terms of the Stock Purchase Agreement dated June 8, 2021 with GE-Prolec Transformers, Inc. (the “Purchaser”) and Prolec GE Internacional, S. de R.L. de C.V. We are reporting Transformer Solutions as a discontinued operation for all periods presented.
Added
Detection and Measurement Reportable Segmen t Our Detection and Measurement reportable segment had revenues of $619.2, $618.9, and $547.1 in 2024, 2023 and 2022, respectively, and backlog of $220.9 and $244.5 as of December 31, 2024 and 2023 , respectively.
Removed
O n December 15, 2021, we completed the acquisition of Cincinnati Fan & Ventilator Co., Inc. (“Cincinnati Fan”), a leader in engineered air movement solutions, including blowers and critical exhaust systems. The post-acquisition operating results of Cincinnati Fan are reflected within our HVAC reportable segment.
Added
These acquisitions primarily complement our existing business operations or strategic initiatives with no significant impact to our financial outlook and end markets, or requiring a significant investment of resources. Such acquisitions are not separately identified within this report on Form 10-K.
Removed
In 2023, we continued deployment of our Frontline Leader Program and have now trained more than 240 leaders in the fundamentals of effective leadership, communication, and team development. We also continue expanding the strength of our most senior leaders through our Executive Leadership Development Program that has been conducted for three cohorts.
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In 2024, we introduced our Building Strength program, adding development opportunities for all employees in leadership, communication, team development, and collaboration directly aligned to our Leadership Model.
Removed
Additionally, in 2023 we implemented the final piece to our leadership development program with the launch of our Mid-level Program, “Amplified Leadership,” graduating 44 leaders. Further, we expanded the use of our online learning platform and offered several facilitated courses on focused topics, including training over 100 leaders on having “Better Conversations Every Day” with their teams.
Added
We continued to expand participation in our leadership development programs and have now trained 275 leaders through our “Frontline Leaders Program” and 92 leaders have completed our midlevel leader program, “Amplified Leadership.” We are looking forward to launching our fourth cohort of our Executive Leadership Program in 2025 adding to our growing class of more than 100 leaders who have completed this advanced development program.
Removed
During 2023, we continued our focus on enhancing our programs aimed at ensuring that we provide an inclusive environment where all employees feel valued and respected. We continued our annual leader training, engaging just under 600 people-leaders on techniques to have effective conversations on diversity and inclusion.
Added
We file reports with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and certain amendments to these reports. Copies of these reports are available free of charge on our website as soon as reasonably practicable after we file the reports with the SEC.
Removed
Our businesses maintain sufficient levels of working capital to support customer requirements, particularly inventory. We believe our businesses’ sales and payment terms are generally similar to those of our competitors. Many of our businesses closely follow changes in the industries and end markets they serve. In addition, certain businesses have seasonal fluctuations.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, these barriers may impact our existing businesses, including making it more difficult for them to grow; • Local political, economic and social conditions, including the possibility of hyperinflationary conditions, political instability, nationalization of private enterprises, or unexpected changes relating to currency could adversely impact our revenues and operations; • Customs, tariffs and trade restrictions may make it difficult or impossible for us to move our products or assets across borders in a cost-effective manner; • Transportation and shipping expenses may add additional cost to our products; • Complications related to shipping, including delays due to weather, labor action, or customs, may impact our profit margins or lead to lost business; • Local, regional or worldwide hostilities, including armed conflicts, could impact our operations; • Distance and language and cultural differences may make it more difficult to manage our business and employees and to effectively market our products and services; and • Public health crises, including the outbreak of a pandemic or other contagious disease. 11 Any of the above factors or other factors affecting social and economic activity in the United Kingdom and China or affecting the movement of people and products into and from these countries to our major markets, could have a significant negative effect on our operations.
Biggest changeIn addition, these barriers may impact our existing businesses, including making it more difficult for them to grow; • Local political, economic and social conditions, including the possibility of hyperinflationary conditions, political instability, and nationalization of private enterprises; • Unexpected changes relating to currency exchange rates could adversely impact our operations, revenues, operating profit and cash flows; • Transportation and shipping expenses may add additional cost to our products; • Complications related to shipping, including delays due to weather, labor action, or customs, may impact our profit margins or lead to lost business; • Local, regional or worldwide hostilities, including armed conflicts, could impact our operations; • Distance and language and cultural differences may make it more difficult to manage our business and employees and to effectively market our products and services; and 10 • Public health crises, including the outbreak of a pandemic or other contagious disease.
Our business, reputation, operating results, 12 and financial condition could be materially adversely affected if, as a result of a significant cyber event or otherwise, our operations or industrial processes are disrupted or shutdown; our confidential, proprietary information is stolen or disclosed; the performance or security of our cloud-based product offerings is impacted; our intranet and internet sites are compromised; data is manipulated or destroyed; we incur costs or are required to pay fines in connection with stolen customer, employee, or other confidential information; we must dedicate significant resources to system repairs or increase cyber security protection; or we otherwise incur significant litigation or other costs.
Our business, reputation, operating results, and financial condition could be materially adversely affected if, as a result of a significant cyber event or otherwise, our operations or industrial processes are disrupted or shutdown; our confidential, proprietary information is stolen or disclosed; the performance or security of our cloud-based product offerings is impacted; our intranet and internet sites are compromised; data is manipulated or destroyed; we incur costs or are required to pay fines in connection with stolen customer, employee, or other confidential information; we must dedicate significant resources to system repairs or increase cyber security protection; or we otherwise incur significant litigation or other costs.
Upon expiration or termination of any of our agreements with third-party vendors, we may not be able to replace the services provided to us in a timely manner or on terms and conditions, including service levels and cost, that are favorable to us, and a transition from one vendor to another vendor could subject us to operational delays and inefficiencies until the transition is complete.
Upon expiration or termination of any of our agreements with third-party vendors, we may not be able to replace the services provided to us in a 11 timely manner or on terms and conditions, including service levels and cost, that are favorable to us, and a transition from one vendor to another vendor could subject us to operational delays and inefficiencies until the transition is complete.
The occurrence of any defects, errors, failures or quality issues could result in cancellation of orders, product returns, diversion of our resources, legal actions by our customers or our customers’ end users and other losses to us or to any of our customers or end users, and could also result in the loss of or delay in 13 market acceptance of our products and loss of sales, which would harm our business and adversely affect our revenues, profitability and cash flows.
The occurrence of any defects, errors, failures or quality issues could result in cancellation of orders, product returns, diversion of our resources, legal actions by our customers or our customers’ end users and other losses to us or to any of our customers or end users, and could also result in the loss of or delay in market acceptance of our products and loss of sales, which would harm our business and adversely affect our revenues, profitability and cash flows.
The failure of our IT systems or those of our business partners or third-party service providers to perform properly, or difficulties encountered in the development of new systems or the upgrade of existing systems, could disrupt our business and harm our reputation, which may result in decreased sales, increased overhead costs, excess or obsolete inventory, and product shortages, causing our business, reputation, financial condition, and operating results to suffer.
The failure of our IT systems or those of our business partners or third-party service providers to perform properly, or difficulties encountered in the development of new systems or the upgrade of existing systems, could disrupt our business and harm our reputation, which may result in decreased sales, increased costs, excess or obsolete inventory, and product shortages, causing our business, reputation, financial condition, and operating results to suffer.
For example, our Radiodetection business manufactures a number of detection instruments in the United Kingdom and sells to customers in other countries, therefore increased strength of the British pound sterling will increase the effective price of these products sold in British pound sterling 15 into other countries; and decreased strength of British pound sterling could have a material adverse effect on the cost of materials and products purchased outside of the United Kingdom.
For example, our Radiodetection business manufactures a number of detection instruments in the United Kingdom and sells to customers in other countries, therefore increased strength of the British pound sterling will increase the effective price of these products sold in British pound sterling into other countries; and decreased strength of British pound sterling could have a material adverse effect on the cost of materials and products purchased outside of the United Kingdom.
Significant changes in market conditions and estimates or judgments used to determine expected future cash 16 flows that indicate a reduction in carrying value may give, and have given, rise to impairments in the period that the change becomes known. Cost reduction actions may affect our business. Cost reduction actions often result in charges against earnings.
Significant changes in market conditions and estimates or judgments used to determine expected future cash flows that indicate a reduction in carrying value may give, and have given, rise to impairments in the period that the change becomes known. Cost reduction actions may affect our business. Cost reduction actions often result in charges against earnings.
Our reliance on U.S. revenues and U.S. manufacturing bases exposes us to a number of risks, including: • Government embargoes or foreign trade restrictions such as antidumping duties, as well as the imposition of trade sanctions by the United States against a class of products imported from or sold and exported to, or the loss of “normal trade relations” status with, countries in which we conduct business, could significantly increase our cost of products imported into or exported from the United States or reduce our sales and harm our business and the relaxation of 10 embargoes and foreign trade restrictions by the United States could adversely affect the market for our products in the United States; • Customs and tariffs may make it difficult or impossible for us to move our products or assets across borders in a cost-effective manner and may increase the cost of our raw materials, including raw materials sourced domestically; • Transportation and shipping expenses may add additional cost to our products; • Complications related to shipping, including delays due to weather, labor action, or customs, may impact our profit margins or lead to lost business; • Environmental and other laws and regulations could increase our costs or limit our ability to run our business; and • Our ability to obtain supplies from foreign vendors and ship products internationally may be impaired during times of crisis or otherwise.
Our reliance on U.S. revenues and U.S. manufacturing bases exposes us to a number of risks, including: • Government embargoes or foreign trade restrictions such as antidumping duties, as well as the imposition of trade sanctions by the United States against a class of products imported from or sold and exported to, or the loss of “normal trade relations” status with, countries in which we conduct business, could significantly increase our cost of products imported into or exported from the United States or reduce our sales and harm our business and the relaxation of 9 embargoes and foreign trade restrictions by the United States could adversely affect the market for our products in the United States; • Customs and tariffs may make it difficult or impossible for us to move our products or assets across borders in a cost-effective manner, may increase the price of our products which may lead to lost business, and may increase the cost of our raw materials, including raw materials sourced domestically; • Transportation and shipping expenses may add additional cost to our products; • Complications related to shipping, including delays due to weather, labor action, or customs, may impact our profit margins or lead to lost business; • Environmental and other laws and regulations could increase our costs or limit our ability to run our business; and • Our ability to obtain supplies from foreign vendors and ship products internationally may be impaired during times of crisis or otherwise.
While we believe we have the experience, skill and management abilities, as well as access to the necessary experts and consultants, to plan and execute these projects without significant disruption to our businesses, ERP and other application implementations and updates are very complex and inherently subject to risks and uncertainty.
While we believe we have the experience, skill and management abilities, as well as access to the necessary experts and consultants, to plan and execute these projects without significant disruption to our businesses, ERP and other application implementations and updates are complex and inherently subject to risks and uncertainty.
Failure of one or more of our larger lenders, or several of our smaller lenders, could significantly reduce availability of our credit, which could harm our liquidity. 17 Failure of our internal control over financial reporting could adversely affect our business and financial results. Our management is responsible for establishing and maintaining effective internal control over financial reporting.
Failure of one or more of our larger lenders, or several of our smaller lenders, could significantly reduce availability of our credit, which could harm our liquidity. Failure of our internal control over financial reporting could adversely affect our business and financial results. Our management is responsible for establishing and maintaining effective internal control over financial reporting.
In connection with these and any future audits, there is a risk that we could be challenged by tax authorities on certain of the tax positions we have taken, or will take, on our tax returns.
In connection with these and any future examinations or audits, there is a risk that we could be challenged by tax authorities on certain of the tax positions we have taken, or will take, on our tax returns.
The businesses of many of our customers are to varying degrees cyclical and have experienced, and may continue to experience, periodic downturns. Cyclical changes and specific industry events could also affect sales of products in our other businesses.
The businesses of many of our customers are to varying degrees cyclical and have experienced, and may continue to experience, periodic downturns. Cyclical changes and specific industry events could also affect sales of products in our businesses.
Our recent and future acquisitions involve a number of risks and may present financial, managerial and operational challenges, including: • Adverse effects on our reported operating results due to charges to earnings, including potential impairment charges associated with goodwill and other intangibles; • Diversion of management attention from core business operations; • Integration of technology, operations, personnel and financial and other systems; • Increased expenses; • Increased foreign operations, often with unique issues relating to corporate culture, compliance with legal and regulatory requirements and other challenges; • Assumption of known and unknown liabilities and exposure to litigation; • Increased levels of debt or dilution to existing stockholders; • Potential disputes with the sellers of acquired businesses; and • Potential cybersecurity risks, as acquired systems may not possess the appropriate security measures.
Our recent and future acquisitions involve a number of risks and may present financial, managerial and operational challenges, including: • Adverse effects on our reported operating results due to charges to earnings, including potential impairment charges associated with goodwill and other intangible assets; • Diversion of management attention from core business operations; • Integration of technology, operations, personnel and financial and other systems; • Increased expenses; • Increased foreign operations, often with unique issues relating to corporate culture, compliance with legal and regulatory requirements and other challenges; • Assumption of known and unknown liabilities and exposure to litigation; • Increased levels of debt or dilution to existing stockholders; • Potential disputes with the sellers of acquired businesses; and • Potential cybersecurity risks, as acquired systems may not possess the appropriate security measures.
Current economic conditions could also impact the ability of suppliers and subcontractors to access credit and, thus, impair their ability to provide us quality products or services in a timely manner, or at all. Risks Related to Our Manufacturing and Operations Cost overruns, inflation, delays and other risks could significantly impact our results, particularly with respect to fixed-price contracts.
Prevailing economic conditions could also impact the ability of suppliers and subcontractors to access credit and, thus, impair their ability to provide us quality products or services in a timely manner, or at all. Risks Related to Our Manufacturing and Operations Cost overruns, inflation, delays and other risks could significantly impact our results, particularly with respect to fixed-price contracts.
In addition, we cannot assure you that future borrowings or equity financing will be available for the payment or refinancing of our indebtedness.
In addition, we cannot assure you 16 that future borrowings or equity financing will be available for the payment or refinancing of our indebtedness.
We cannot assure you that expenses or losses for uncollectible amounts will not have a material adverse effect on our earnings and cash flows. Commodity, currency and interest rate hedging activities may adversely impact our financial performance as a result of changes in relevant commodity prices, interest rates and currency rates.
We cannot assure you that expenses or losses for uncollectible amounts will not have a material adverse effect on our earnings and cash flows. Currency and interest rate hedging activities may adversely impact our financial performance as a result of changes in relevant interest rates and currency rates.
In addition, competitive environments in slow-growth markets, to which some of our businesses have exposure, have been inherently more influenced by pricing and 7 domestic and global economic conditions. To remain competitive, we need to invest in manufacturing, marketing, customer service and support, and our distribution networks.
In addition, competitive environments in slow-growth markets, to which some of our businesses have exposure, have been inherently more influenced by pricing and 6 domestic and global economic conditions. To remain competitive, we need to invest in manufacturing, marketing, customer service and support, and our distribution networks.
Further, certain of these contracts provide for penalties or liquidated damages for failure to timely perform our obligations under the contract, or require that we, at our expense, correct and remedy certain defects to the satisfaction of the 8 other party.
Further, certain of these contracts provide for penalties or liquidated damages for failure to timely perform our obligations under the contract, or require that we, at our expense, correct and remedy certain defects to the satisfaction of the 7 other party.
As a result, anticipated benefits could be delayed, differ significantly from our estimates and the other information contained in this report, or not be realized. 9 Dispositions or liabilities retained in connection with dispositions could negatively affect us.
As a result, anticipated benefits could be delayed, differ significantly from our estimates and the other information contained in this report, or not be realized. 8 Dispositions or liabilities retained in connection with dispositions could negatively affect us.
Increased strength of the U.S. dollar will increase the effective price of our products sold in U.S. dollars into other countries, including countries utilizing the Euro, which may have a material adverse effect on sales or require us to lower our prices, and also decrease our reported revenues or margins related to sales conducted in foreign currencies to the extent we are unable or determine not to increase local currency prices.
Increased strength of the U.S. dollar will increase the effective price of our products sold in U.S. dollars into other countries, which may have a material adverse effect on sales or require us to lower our prices, and also decrease our reported 14 revenues or margins related to sales conducted in foreign currencies to the extent we are unable or determine not to increase local currency prices.
In addition, the impacts of climate change and legal or regulatory initiatives to address climate change could have a long-term adverse impact on our business and results of operations.
The impacts of climate change and legal or regulatory initiatives to address climate change could have a long-term adverse impact on our business and results of operations.
As of December 31, 2023, we had the ability to issue up to an additional 3.597 s hares as restricted stock units, performance stock units, or stock options under our 2019 Stock Compensation Plan. We also may issue a significant number of additional shares, i n connection with acquisitions, through a registration statement, or otherwise.
As of December 31, 2024, we had the ability to issue up to an additional 3.409 s hares as restricted stock units, performance stock units, or stock options under our 2019 Stock Compensation Plan. We also may issue a significant number of additional shares, i n connection with acquisitions, through a registration statement, or otherwise.
We sell our products in highly competitive markets, which could result in pressure on our profit margins and limit our ability to maintain or increase the market share of our products. We compete on a number of fronts, including on the basis of service, product performance, technical innovation and price.
Our failure to compete effectively could harm our business. We sell our products in highly competitive markets, which could result in pressure on our profit margins and limit our ability to maintain or increase the market share of our products. We compete on a number of fronts, including on the basis of service, product performance, technical innovation and price.
In addition, economic instabilities resulting from geopolitical activities, including instabilities associated with the armed conflict in Ukraine, and the imposition of governmental sanctions in response thereto, and any conflict or threat of conflict that may affect Taiwan or any other nations, could negatively impact our results of operations and prospects.
Downturns in global economies could negatively impact our results of operations and prospects. In addition, economic instabilities resulting from geopolitical activities, including instabilities associated with armed conflicts, and the imposition of governmental sanctions in response thereto, and any conflict or threat of conflict that may affect Taiwan or any other nations, could negatively impact our results of operations and prospects.
Difficulties presented by domestic economic, political, legal, accounting and business factors could negatively affect our business. In 2023, approximately 84% of our revenues were generated inside the United States.
Difficulties presented by domestic economic, political, legal, accounting and business factors could negatively affect our business. In 2024, approximately 83% of our revenues were generated inside the United States.
Risks Related to Contingent Liabilities Our current and planned products may contain defects or errors that are detected only after delivery to customers. If that occurs, our reputation may be harmed and we may face additional costs.
Costs incurred to defend our rights may be material. 12 Risks Related to Contingent Liabilities Our current and planned products may contain defects or errors that are detected only after delivery to customers. If that occurs, our reputation may be harmed and we may face additional costs.
The steps we have taken may not prevent unauthorized use of our technology or knowledge, particularly in foreign countries where the laws may not protect our proprietary rights to the same extent as in the United States. Costs incurred to defend our rights may be material.
The steps we have taken may not prevent unauthorized use of our technology or knowledge, particularly in foreign countries where the laws may not protect our proprietary rights to the same extent as in the United States.
If the fair value of any of our reporting units is insufficient to recover the carrying value of the goodwill and other intangible assets of the respective reporting unit, a material non-cash charge to earnings could result. At December 31, 2023, we had goodwill and other intangible assets, net, of $1,385.6.
If the fair value of any of our reporting units is insufficient to recover the carrying value of the goodwill and other intangible assets of the respective reporting unit, a material non-cash charge to earnings could result. At December 31, 2024, we had goodwill and other intangible assets, net, of $1,537.5.
Reduced demand for our products and services could result in the delay or cancellation of existing orders or lead to excess manufacturing capacity, which unfavorably impacts our absorption of fixed manufacturing costs. Reduced demand may also erode average selling prices in the relevant market. We operate in highly competitive markets. Our failure to compete effectively could harm our business.
Reduced demand for, or increased costs of, our products and services could result in the delay or cancellation of existing or future orders, or lead to excess manufacturing capacity, which unfavorably impacts our absorption of fixed manufacturing costs. Reduced demand may also erode average selling prices in the relevant market. We operate in highly competitive markets.
Changes in applicable U.S. or foreign tax laws and regulations, or their interpretation and application, could have a material impact on our financial position, results of operations, and cash flows. As indicated in Note 12 to our consolidated financial statements, certain of our income tax returns are currently under audit.
Changes in applicable U.S. or foreign tax laws and regulations, or their interpretation and application, could have a material impact on our financial position, results of operations, and cash flows. As indicated in Note 12 to our consolidated financial statements, we regularly have various income tax returns under examination or audit.
We have defined benefit pension and postretirement plans, including both qualified and non-qualified plans, which cover a portion of our salaried and hourly employees and retirees, including a portion of our employees and retirees in foreign countries. As of December 31, 2023, our net liability to these plans was $100.1.
We have defined benefit pension and postretirement plans, including both qualified and non-qualified plans, which cover a portion of our salaried and hourly employees and retirees, including a portion of our employees and retirees in foreign countries. As of December 31, 2024, our net liability to these plans was $96.8.
Expectations from investors, customers, team members, government agencies and other third parties concerning ESG reporting have increased, and our ability to meet those expectations is dependent on a variety of factors, including cooperation from sourcing vendors and other third parties and having access to consistent and reliable data.
Expectations from investors, customers, team members, certain government agencies and other third parties for reporting on sustainability and social responsibility matters have increased, and our ability to meet those expectations is dependent on a variety of factors, including cooperation from sourcing vendors and other third parties and having access to consistent and reliable data.
To the extent we generate revenues outside of the United States, non-U.S. revenues and non-U.S. manufacturing bases expose us to a number of risks, including: • Significant competition could come from local or long-term participants in non-U.S. markets who may have significantly greater market knowledge and substantially greater resources than we do; • Local customers may have a preference for locally-produced products; • Credit risk or financial condition of local customers and distributors could affect our ability to market our products or collect receivables; • Regulatory or political systems or barriers may make it difficult or impossible to enter or remain in new markets.
To the extent we generate revenues outside of the United States, non-U.S. revenues and non-U.S. manufacturing bases expose us to a number of risks, including: • Customs, tariffs and trade restrictions may make it difficult or impossible for us to move our products or assets across borders in a cost-effective manner, may increase the price of our products which may lead to lost business, and may increase the cost of our raw materials, including raw materials sourced domestically; • Significant competition could come from local or long-term participants in non-U.S. markets who may have significantly greater market knowledge and substantially greater resources than we do; • Local customers may have a preference for locally-produced products; • Credit risk or financial condition of local customers and distributors could affect our ability to market our products or collect receivables; • Regulatory or political systems or barriers may make it difficult or impossible to enter or remain in new markets.
Further, we may be subject to work stoppages, which are beyond our control, at our suppliers or customers. 14 Risks Related to Financial Matters We may not be able to finance future needs or adapt our business plan to react to changes in economic or business conditions because of restrictions placed on us by our senior credit facilities and any existing or future instruments governing our other indebtedness.
Risks Related to Financial Matters We may not be able to finance future needs or adapt our business plan to react to changes in economic or business conditions because of restrictions placed on us by our senior credit facilities and any existing or future instruments governing our other indebtedness.
In addition, at December 31, 2023, we had $13.4 of available issuance capacity under our foreign credit instrument facilities after giving effect to $11.6 res erved for outstanding letters of credit. At December 31, 2023, our cash and equivalents balance wa s $104.9 .
In addition, at December 31, 2024, we had $8.0 of available issuance capacity under our foreign credit instrument facilities after giving effect to $17.0 res erved for outstanding letters of credit. At December 31, 2024, our cash and equivalents balance wa s $161.4 .
We use derivative financial instruments in order to reduce the substantial effects of currency and commodity fluctuations and interest rate exposure on our cash flow and financial condition. These instruments may include foreign currency and commodity forward contracts, currency swap agreements and currency option contracts, as well as interest rate swap agreements.
We use derivative financial instruments in order to reduce the substantial effects of currency and interest rate exposure on our cash flow and financial condition. These instruments may include foreign currency, currency swap agreements and currency option contracts, as well as interest rate swap agreements. We have entered into, and may continue to enter into, these or other hedging arrangements.
Failure to meet evolving expectations for reporting on environmental, social, and governance ( “ ESG ” ) matters could adversely affect our sales and results of operations.
Failure to meet evolving expectations for other reporting on sustainability and social responsibility matters could adversely affect our sales and results of operations.
We have entered into, and may continue to enter into, such hedging arrangements. By utilizing hedging instruments, we may forgo benefits that might result from fluctuations in currency exchange, commodity and interest rates. We are also exposed to the risk that counterparties to hedging contracts will default on their obligations.
By utilizing hedging instruments, we may forgo benefits that might result from fluctuations in currency exchange and interest rates. We are also exposed to the risk that counterparties to hedging contracts will default on their obligations. A default by such counterparties in performing their obligations under these hedging instruments could have an adverse effect on us.
A default by such counterparties in performing their obligations under these hedging instruments could have an adverse effect on us. Changes in tax laws and regulations or other factors could cause our income tax obligations to increase, potentially reducing our net income and adversely affecting our cash flows. We are subject to taxation in various jurisdictions around the world.
Changes in tax laws and regulations or other factors could cause our income tax obligations to increase, potentially reducing our net income and adversely affecting our cash flows. We are subject to taxation in various jurisdictions around the world.
At December 31, 2023, we h a d $558.3 in total indebtedness. On that same date, we h ad $489.2 o f available borrowing capacity under our revolving credit facilities, after givin g effect to $10.8 reserved for outstanding letters of credit.
At December 31, 2024, we h a d $614.7 in total indebtedness. On that same date, we h ad $909.0 o f available borrowing capacity under our revolving credit facilities, after givin g effect to borrowings under the domestic revolving loan facilities of $80.0 and $11.0 reserved for outstanding letters of credit.
Many of our businesses closely follow changes in the industries and end markets that they serve.
Other considerations are also incorporated, including comparable price multiples. Many of our businesses closely follow changes in the industries and end markets that they serve.
The fair values of our reporting units generally are based on discounted cash flow projections that are believed to be reasonable under current and forecasted circumstances, the results of which form the basis for making judgments about carrying values of the reported net assets of our reporting units. Other considerations are also incorporated, including comparable price multiples.
If the fair value is insufficient to recover the carrying value of our goodwill and indefinite-lived intangible assets, we may be required to record a material non-cash charge to earnings. 15 The fair values of our reporting units generally are based on discounted cash flow projections that are believed to be reasonable under current and forecasted circumstances, the results of which form the basis for making judgments about carrying values of the reported net assets of our reporting units.
If we were unable to attract and retain sufficient numbers of qualified individuals or our costs to do so were to increase significantly, our operations could be materially adversely affected.
If we were unable to attract and retain sufficient numbers of qualified individuals or our costs to do so were to increase significantly, our operations could be materially adversely affected. 13 We are subject to work stoppages, union negotiations, labor disputes and other matters associated with our labor force, which may adversely impact our operations and cause us to incur incremental costs.
These threats pose a risk to the security of our systems and networks, and those of our business partners and third-party service providers, and to the confidentiality, availability, and integrity of our data. Despite our implementation of security measures, cybersecurity threats, such as malicious software, ransomware, phishing attacks, computer viruses, and attempts to gain unauthorized access, cannot be completely mitigated.
These threats pose a risk to the security of our systems and networks, and those of our business partners and third-party service providers, and to the confidentiality, availability, and integrity of our data.
Four of these collective bargaining agreements expire in 2024 and are scheduled for negotiation and renewal. We also have various co llective labor arrangements covering certain non-U.S. employee groups. We are subject to potential union campaigns, work stoppages, union negotiations and other potential labor disputes.
At December 31, 2024, we had six domestic collective bargaining agreements covering approximately 460 of our approximately 4,300 employees. None of these collective bargaining agreements will expire in 2025 or are scheduled for negotiation and renewal. We also have various co llective labor arrangements covering certain non-U.S. employee groups.
Removed
Downturns in global economies could negatively impact our results of operations and prospects.
Added
Any of the above factors or other factors affecting social and economic activity in the United Kingdom, Canada, and China or affecting the movement of people and products into and from these countries to our major markets, could have a significant negative effect on our operations.
Removed
Furthermore, costs associated with responding to ESG related laws, regulations, or customer requirements may have an adverse impact on our business, financial condition and results of operations and cash flows.
Added
In addition, under recently implemented governmental requirements, we will incur additional costs in complying with climate-related reporting mandates. Under laws enacted in California, we, and other companies doing business in California that exceed requisite financial thresholds, will be subject to extensive climate-related reporting.
Removed
We are subject to work stoppages, union negotiations, labor disputes and other matters associated with our labor force, which may adversely impact our operations and cause us to incur incremental costs. At December 31, 2023, we had six domestic collective bargaining agreements covering approximately 460 of our over 4,100 employees.
Added
The reporting requirements of the California laws and related regulations will result in increased compliance costs and could result in regulatory reporting risks. Failure to comply with laws and regulations can have adverse consequences, including civil, administrative, and criminal penalties as well as a negative impact on the Company’s reputation, business, results of operations and cash flows.
Removed
If the fair value is insufficient to recover the carrying value of our goodwill and indefinite-lived intangible assets, we may be required to record a material non-cash charge to earnings.
Added
Despite our implementation of security measures, cybersecurity threats, such as malicious software, ransomware, phishing attacks, computer viruses, and attempts to gain unauthorized access, cannot be completely mitigated and may become more virulent due to further development through the application of artificial intelligence.
Added
We are subject to potential union campaigns, work stoppages, union negotiations and other potential labor disputes. Further, we may be subject to work stoppages, which are beyond our control, at our suppliers or customers.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

3 edited+0 added−0 removed11 unchanged
Biggest changeWe have established incident response and recovery plans to address potential cybersecurity incidents which are regularly evaluated for their effectiveness.
Biggest changeWe have established incident response and recovery plans to address potential cybersecurity incidents, including assessing the severity of a cyber incident, which are regularly evaluated for their effectiveness.
The Audit Committee receives regular cybersecurity risk reports from management and, at least annually, our Board receives reports from management, including our CIO and CISO about the prevention, detection, mitigation, and remediation of cybersecurity incidents, including material security risks and information security vulnerabilities. 19
The Audit Committee receives regular cybersecurity risk reports from management and, at least annually, our Board receives reports from management, including our CIO and CISO about the prevention, detection, mitigation, and remediation of cybersecurity incidents, including material security risks and information security vulnerabilities. 18
Despite this, there can be no guarantee that our policies and procedures will be effective. Refer to “Risk Factors” for additional detail about the material cybersecurity risks we face.
Despite this, there can be no guarantee that our policies and procedures will be effective. Refer to “ Risk Factors ” for additional detail about the material cybersecurity risks we face.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed1 unchanged
Biggest changeProperties The following is a summary of our principal properties as of December 31, 2023: No. of Approximate Square Footage Location Facilities Owned Leased (in millions) HVAC reportable segment 11 U.S. states and 3 foreign countries 26 2.0 1.8 Detection and Measurement reportable segment 8 U.S. states and 5 foreign countries 21 0.4 0.4 Corporate 1 U.S. state 1 — 0.1 Total 48 2.4 2.3 In addition to manufacturing plants, we own and lease various sales, service and other locations throughout the world.
Biggest changeProperties The following is a summary of our principal properties as of December 31, 2024: No. of Approximate Square Footage Location Facilities Owned Leased (in millions) HVAC reportable segment 11 U.S. states and 3 foreign countries 28 2.3 1.9 Detection and Measurement reportable segment 8 U.S. states and 5 foreign countries 21 0.2 0.5 Corporate 1 U.S. state 1 — 0.1 Total 50 2.5 2.5 In addition to manufacturing plants, we own and lease various sales, service and other locations throughout the world.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+1 added−1 removed2 unchanged
Biggest changeThe number of stockholders of record of our common stock as of February 16, 2024 was 2,144. 21 Company Performance This graph shows a five-year comparison of cumulative total returns for SPX, the S&P 500 Index, the S&P 1500 Industrials Index, and the S&P 600 Index.
Biggest changeThe number of stockholders of record of our common stock as of February 21, 2025 was 2,038. 20 Company Performance This graph shows a five-year comparison of cumulative total returns for SPX, the S&P 500 Index, the S&P 1500 Industrials Index, and the S&P 600 Index.
Pursuant to the 2022 re-authorization, we repurchased 706,827 of our common stock for an aggregate purchase price of $33.7 million during the year ended December 31, 2022. As of December 31, 2023, the maximum approximate dollar value of our common stock that may be purchased under this authorization during the current fiscal year is $100.0 million.
Pursuant to the 2022 re-authorization, we repurchased 706,827 of our common stock for an aggregate purchase price of $33.7 million during the year ended December 31, 2022. As of December 31, 2024, the maximum approximate dollar value of our common stock that may be purchased under this authorization during the current fiscal year is $100.0 million.
Our senior credit agreement permits an unlimited amount of share repurchases if our consolidated leverage ratio (as calculated under the senior credit agreement) is less th an 2.75 to 1.00.
Our senior credit agreement permits an unlimited amount of share repurchases if our consolidated leverage ratio (as calculated under the senior credit agreement) is less than 2.75 to 1.00.
On May 9, 2023, and May 10, 2022, our Board of Directors re-authorized management, in its sole discretion, to repurchase our capital stock in any fiscal year.
On May 14, 2024, May 9, 2023, and May 10, 2022, our Board of Directors re-authorized management, in its sole discretion, to repurchase our capital stock in any fiscal year.
O therwise, the senior credit agreement restricts our repurchase of shares if the amount of repurchases in an y fiscal year exceeds $100.0 million plus a basket amount based on our cumulative consolidated net income from a specified date.
Otherwise, the senior credit agreement restricts our repurchase of shares if the amount of repurchases in any fiscal year exceeds $100.0 million plus a basket amount based on our cumulative consolidated net income from a specified date.
Removed
The graph assumes an initial investment of $100 on December 31, 2018 and the reinvestment of dividends. 2018 2019 2020 2021 2022 2023 SPX Technologies, Inc. $ 100.00 $ 181.65 $ 194.72 $ 213.07 $ 234.38 $ 360.62 S&P 500 100.00 131.49 155.68 200.37 164.08 207.21 S&P 1500 Industrials 100.00 129.80 144.98 177.13 165.75 199.52 S&P 600 100.00 120.86 132.43 165.89 137.00 156.02 22
Added
The graph assumes an initial investment of $100 on December 31, 2019 and the reinvestment of dividends. 2019 2020 2021 2022 2023 2024 SPX Technologies, Inc. $ 100.00 $ 107.19 $ 117.30 $ 129.03 $ 198.53 $ 286.01 S&P 500 100.00 118.40 152.39 124.79 157.59 197.02 S&P 1500 Industrials 100.00 111.69 136.47 127.69 153.71 179.75 S&P 600 100.00 109.57 137.26 113.35 129.09 137.90 21

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

158 edited+61 added−58 removed93 unchanged
Biggest changeThe following table provides selected financial information for the years ended December 31, 2023, 2022, and 2021, including the reconciliation of organic revenue increase to net revenue increase: Year ended December 31, 2023 vs 2022 vs 2023 2022 2021 2022 % 2021 % Revenues $ 1,741.2 $ 1,460.9 $ 1,219.5 19.2 % 19.8 % Gross profit 670.0 523.9 431.8 27.9 21.3 % of revenues 38.5 % 35.9 % 35.4 % Selling, general and administrative expense 394.4 355.7 309.6 10.9 14.9 % of revenues 22.7 % 24.3 % 25.4 % Intangible amortization 43.9 28.5 21.6 54.0 31.9 Impairment of goodwill and intangible assets — 13.4 30.0 * * Special charges, net 0.8 0.4 1.0 100.0 (60.0) Other operating (income) expense, net 9.0 74.9 (4.1) * * Other income (expense), net (10.1) (15.2) 9.0 * * Interest expense, net (25.5) (7.6) (12.6) 235.5 (39.7) Loss on amendment/refinancing of senior credit agreement — (1.1) (0.2) * * Income from continuing operations before income taxes 186.3 27.1 69.9 587.5 (61.2) Income tax provision (41.6) (7.3) (10.9) * * Income from continuing operations 144.7 19.8 59.0 630.8 (66.4) Components of consolidated revenue increase: Organic 12.2 11.8 Foreign currency 0.1 (1.7) Acquisitions 6.9 9.7 Net revenue increase 19.2 19.8 ___________________________________________________________________ * Not meaningful for comparison purposes . 29 Revenues — For 2023, the increase in revenues, compared to 2022, was due to the impact of organic revenue growth within the HVAC and Detection and Measurement reportable segments and, to a lesser extent, the impact of the TAMCO and ASPEQ acquisitions.
Biggest changeThis metric, however, is not a measure of financial performance under GAAP, should not be considered a substitute for net revenue growth (decline) as determined in accordance with GAAP, and may not be comparable to similarly titled measures reported by other companies. 27 The following table provides selected financial information for the years ended December 31, 2024, 2023, and 2022, including the reconciliation of organic revenue increase to net revenue increase: Year ended December 31, 2024 vs 2023 vs 2024 2023 2022 2023 % 2022 % Revenues $ 1,983.9 $ 1,741.2 $ 1,460.9 13.9 % 19.2 % Gross profit 799.4 670.0 523.9 19.3 27.9 % of revenues 40.3 % 38.5 % 35.9 % Selling, general and administrative expense 414.6 394.4 355.7 5.1 10.9 % of revenues 20.9 % 22.7 % 24.3 % Intangible amortization 64.5 43.9 28.5 46.9 54.0 Impairment of goodwill and intangible assets — — 13.4 * * Special charges, net 3.6 0.8 0.4 350.0 100.0 Other operating expense, net 8.4 9.0 74.9 * * Other expense, net (9.3) (10.1) (15.2) * * Interest expense, net (43.6) (25.5) (7.6) 71.0 235.5 Loss on amendment/refinancing of senior credit agreement — — (1.1) * * Income from continuing operations before income taxes 255.4 186.3 27.1 37.1 587.5 Income tax provision (53.6) (41.6) (7.3) 28.8 469.9 Income from continuing operations 201.8 144.7 19.8 39.5 630.8 Components of consolidated revenue increase: Organic 6.2 12.2 Foreign currency — 0.1 Acquisitions 7.7 6.9 Net revenue increase 13.9 19.2 ___________________________________________________________________ * Not meaningful for comparison purposes .
The organic revenue growth within the HVAC reportable segment was due primarily to increased sales of cooling products associated with both volume and price increases. Organic revenue growth within the Detection and Measurement reportable segment was due primarily to higher volumes of large projects within the communication technologies, transportation and aids to navigation businesses.
The organic revenue growth within the HVAC reportable segment was due primarily to increased sales of cooling products associated with both volume and price increases. Organic revenue growth within the Detection and Measurement reportable segment was due primarily to higher volumes of large projects within the communication technologies, transportation and aids to navigation businesses.
Wind-Down of DBT Business As a culmination of our strategic shift away from power generation markets, we completed the wind-down of our DBT business during the fourth quarter of 2021. As a result, we are reporting DBT as a discontinued operation in our consolidated financial statements for all periods presented.
Wind-Down of DBT Business As the culmination of our strategic shift away from power generation markets, we completed the wind-down of our DBT business during the fourth quarter of 2021. As a result, we are reporting DBT as a discontinued operation in our consolidated financial statements for all periods presented.
Income — For 2023, the increase in income, compared to 2022, was due primarily to the impact of the revenue growth mentioned above. For 2023, the increase in margin, compared to 2022, was due primarily to price increases and greater absorption of manufacturing costs as a result of higher volumes, as well as favorable sales mix primarily associated with acquisitions.
For 2023, the increase in income, compared to 2022, was due primarily to the impact of the revenue growth mentioned above. For 2023, the increase in margin, compared to 2022, was due primarily to price increases and greater absorption of manufacturing costs as a result of higher volumes, as well as favorable sales mix primarily associated with acquisitions.
The increase in operating income in 2023, compared to 2022, was due primarily to (i) higher income for both our HVAC and Detection and Measurement reportable segments of $103.6, (ii) the loss on the Asbestos Portfolio Sale of $73.9 incurred in 2022, and (iii) lower corporate expense of $10.2 primarily related to higher costs incurred on strategic and transformational initiatives executed during 2022, primarily related to the Asbestos Portfolio Sale, as well as expenses incurred in connection with asbestos-related matters during 2022, prior to the Asbestos Portfolio Sale.
The increase in operating income in 2023, compared to 2022, was due primarily to (i) higher income for both our HVAC and Detection and Measurement reportable segments of $103.6, (ii) the loss on the Asbestos Portfolio Sale of $73.9 incurred in 2022, and (iii) lower corporate expense of $10.2 primarily related to higher costs incurred on strategic and transformational initiatives 23 executed during 2022, primarily related to the Asbestos Portfolio Sale, as well as expenses incurred in connection with asbestos-related matters during 2022, prior to the Asbestos Portfolio Sale.
Cash flows used in financing activities of continuing operations for the year ended December 31, 2022 were comprised primarily of repurchases of common stock of $33.7, minimum tax withholdings paid on behalf of employees on net-share settlements of long-term incentive awards, net of proceeds from options exercised, of $3.5, and contingent consideration of $1.3 paid in relation to the Sensors & Software acquisition.
Cash flows used in financing activities of continuing operations for the year ended December 31, 2022 were comprised primarily of repurchases of common stock of $33.7, minimum tax withholdings paid on behalf of employees on net-share settlements of long-term incentive awards, net of proceeds from options exercised, of $3.5, and contingent consideration of $1.3 paid in relation to the acquisition of Sensors & Software, Inc.
The increase in cash flows from operating activities was due primarily to (i) the increase in income during the period discussed above, (ii) cash contributed during 2022 to the divested subsidiaries of $138.8 in connection with the Asbestos Portfolio Sale, (iii) a reduction in the level of elevated purchases of raw materials and components during 2023, primarily within our HVAC reportable segment, due to a more stable supply chain environment, (iv) working capital improvements at certain of our project-related businesses, as 24 cash flows for these businesses are often subject to contract milestones that can impact the timing of cash flows from period to period, (v) net payments for asbestos-related matters made prior to the Asbestos Portfolio Sale in 2022, of $15.3, and (vi) a cash payment of $10.0 during the first half of 2022 in connection with the transfer of our postretirement life insurance benefit obligation to an insurance carrier (see Note 11 to our consolidated financial statements for additional details).
The increase in cash flows from operating activities in 2023, compared to 2022, was due primarily to (i) the increase in income during the period discussed above, (ii) cash contributed during 2022 to the divested subsidiaries of $138.8 in connection with the Asbestos Portfolio Sale, (iii) a reduction in the level of elevated purchases of raw materials and components during 2023, primarily within our HVAC reportable segment, due to a more stable supply chain environment, (iv) working capital improvements at certain of our project-related businesses, as cash flows for these businesses are often subject to contract milestones that can impact the timing of cash flows from period to period, (v) net payments for asbestos-related matters made prior to the Asbestos Portfolio Sale in 2022, of $15.3, and (vi) a cash payment of $10.0 during the first half of 2022 in connection with the transfer of our postretirement life insurance benefit obligation to an insurance carrier (see Note 11 to our consolidated financial statements for additional details).
Due to uncertainties inherent in the estimation process, it is reasonably possible that the ultimate revenues and completion costs on our long-term contracts, including those arising from contract penalty provisions and final contract settlements, will be revised during the duration of the contract. These revised revenues and costs are recognized in the period in which the revisions are determined.
Due to uncertainties inherent in the estimation process, it is reasonably possible that the ultimate revenues and completion costs on our complex long-term contracts, including those arising from contract penalty provisions and final contract settlements, will be revised during the duration of the contract. These revised revenues and costs are recognized in the period in which the revisions are determined.
Supply Chain Disruptions, Labor Shortages, and Cost Increases The impact of the COVID-19 pandemic on our operating results throughout 2023 was minimal. However, during January 2022, there was an increase in pandemic cases at certain of our manufacturing facilities, which resulted in a high-level of absenteeism at such facilities during the month.
Supply Chain Disruptions, Labor Shortages, and Cost Increases The impact of the COVID-19 pandemic on our operating results throughout 2024 and 2023 was minimal. However, during January 2022, there was an increase in pandemic cases at certain of our manufacturing facilities, which resulted in a high-level of absenteeism at such facilities during the month.
Additionally, to the extent we are more or less productive than originally anticipated, estimated costs and profitability may also be impacted. • Effect of Foreign Currency Fluctuations — Fluctuations between currencies in which our long-term contracts are denominated and the currencies under which contract costs are incurred can have an impact on profitability.
Additionally, to the extent we are more or less productive than originally anticipated, estimated costs and profitability may also be impacted. 45 • Effect of Foreign Currency Fluctuations — Fluctuations between currencies in which our long-term contracts are denominated and the currencies under which contract costs are incurred can have an impact on profitability.
In addition, we also acquire other categories of assets and liabilities which can include, but are not limited to, accounts receivable, accounts payable and other working capital. Due to their short-term nature, 42 the fair values of these assets and liabilities generally approximate the carrying values reflected on the acquired balance sheet.
In addition, we also acquire other categories of assets and liabilities which can include, but are not limited to, accounts receivable, accounts payable and other working capital. Due to their short-term nature, the fair values of these assets and liabilities generally approximate the carrying values reflected on the acquired balance sheet.
Concentrations of Credit Risk Financial instruments that potentially subject us to significant concentrations of credit risk consist of cash and equivalents, trade accounts receivable, COLI policies, and interest rate swaps and FX forward contracts. These financial instruments, other 40 than trade accounts receivable, are placed with high-quality financial institutions throughout the world.
Concentrations of Credit Risk Financial instruments that potentially subject us to significant concentrations of credit risk consist of cash and equivalents, trade accounts receivable, COLI policies, interest rate swaps, and FX forward contracts. These financial instruments, other than trade accounts receivable, are placed with high-quality financial institutions throughout the world.
While management believes that the assumptions used are appropriate, actual results may differ. 47 The discount rate enables us to state expected future cash flows at a present value on the measurement date. This rate is the yield on high-quality fixed income investments at the measurement date.
While management believes that the assumptions used are appropriate, actual results may differ. The discount rate enables us to state expected future cash flows at a present value on the measurement date. This rate is the yield on high-quality fixed income investments at the measurement date.
Asbestos Matters As indicated in Note 1 to our consolidated financial statements, we completed the Asbestos Portfolio Sale on November 1, 2022, which resulted in the divestiture of three wholly-owned subsidiaries that hold asbestos liabilities and certain assets, including related insurance assets.
Asbestos Matters As indicated in Note 1 to our consolidated financial statements, we completed the Asbestos Portfolio Sale on November 1, 2022, which resulted in the divestiture of three wholly-owned subsidiaries that hold asbestos liabilities and certain assets, 43 including related insurance assets.
Our estimation process for determining revenues and costs for our long-term contracts is based upon (i) our historical experience, (ii) the professional judgment and knowledge of our engineers, project managers, and operations and financial professionals, and (iii) an assessment of the key underlying factors (see below).
Our estimation process for determining revenues and costs for our complex long-term contracts is based upon (i) our historical experience, (ii) the professional judgment and knowledge of our engineers, project managers, operations, and financial professionals, and (iii) an assessment of the key underlying factors (see below).
Although we have experienced success in enforcing and defending our rights through the dispute resolution process over the past few years (including the matters mentioned below), we have invested, and would have continued to invest, significant management and financial resources to defend and pursue these matters.
Although we had experienced success in enforcing and defending our rights through the dispute resolution process over the past few years (including the matters mentioned below), we had invested, and would have continued to invest, significant management and financial resources to defend and pursue these matters.
We maintain third-party stop-loss insurance policies to cover certain liability costs in excess of predetermined retained amounts; however, this insurance may be insufficient or unavailable (e.g., because of insurer insolvency) to protect us against potential loss exposures.
We maintain third-party stop-loss insurance policies to cover certain liability costs in excess of predetermined retained amounts; however, this insurance may be insufficient or unavailable (e.g., because of insurer insolvency) to protect us against potential 44 loss exposures.
We periodically evaluate the credit standing of these financial institutions. We maintain cash levels in bank accounts that, at times, may exceed federally-insured limits. We have not experienced significant loss, and believe we are not exposed to significant risk of loss, in these accounts.
We periodically evaluate the credit standing of these financial institutions. 39 We maintain cash levels in bank accounts that, at times, may exceed federally-insured limits. We have not experienced significant loss, and believe we are not exposed to significant risk of loss, in these accounts.
As a result, we are reporting Heat Transfer as a discontinued operation for all periods presented. Sale of Transformer Solutions Business On October 1, 2021, we completed the sale of Transformer Solutions pursuant to the terms of the Stock Purchase Agreement dated June 8, 2021.
As a result, we are reporting Heat Transfer as a discontinued operation for all periods presented. 30 Sale of Transformer Solutions Business On October 1, 2021, we completed the sale of Transformer Solutions pursuant to the terms of the Stock Purchase Agreement dated June 8, 2021.
Factors that may affect revenue and costs relating to long-term contracts include, but are not limited to, the following: • Cost Recovery for Product Design Changes and Claims — On occasion, design specifications may change during the course of the contract.
Factors that may affect revenue and costs relating to complex long-term contracts include, but are not limited to, the following: • Cost Recovery for Product Design Changes and Claims — On occasion, design specifications may change during the course of the contract.
When appropriate, our estimates of the acquired fair values include assistance from an independent third-party. Inventories, long-lived assets (primarily property, plant and equipment), goodwill, and intangible assets generally represent the largest components of our acquisitions.
When appropriate, our estimates of the acquired fair values include assistance from an independent third-party. 41 Inventories, long-lived assets (primarily property, plant and equipment), goodwill, and intangible assets generally represent the largest components of our acquisitions.
The Settlement Agreement provides for full and final settlement and 32 mutual release of all claims between the parties with respect to the projects, including any claim against SPX Technologies, Inc. as guarantor of DBT's performance on the projects.
The Settlement Agreement provides for full and final settlement and mutual release of all claims between the parties with respect to the projects, including any claim against SPX Technologies, Inc. as guarantor of DBT's performance on the projects.
See Notes 1 and 4 to our consolidated financial statements for additional detail. 26 • Impairment of Goodwill and Indefinite-Lived Intangible Assets ◦ During the fourth quarter of 2022, we performed our annual impairment analyses of our goodwill and indefinite-lived intangible assets.
See Notes 1 and 4 to our consolidated financial statements for additional detail. • Impairment of Goodwill and Indefinite-Lived Intangible Assets ◦ During the fourth quarter of 2022, we performed our annual impairment analyses of our goodwill and indefinite-lived intangible assets.
In addition, DBT made payments of $25.3 to MHI during the year ended December 31, 2023 in connection with the Settlement Agreement. ◦ See Notes 4 and 15 to our consolidated financial statements for additional details. • Actuarial Losses on Pension and Postretirement Plans ◦ During 2023, we recorded actuarial losses of $11.3 in the fourth quarter in connection with the annual remeasurement of our pension and postretirement plans with such losses resulting primarily from decreases in discount rates. ◦ See Notes 1 and 11 to our consolidated financial statements for additional details. 25 • Resolution of Dispute with Former Representative ◦ During the fourth quarter of 2023 we recorded a charge of $9.0 related to the resolution of a dispute with a former representative at one of our businesses within the Detection and Measurement reportable segment. ◦ See Note 15 to our consolidated financial statements for additional details. 2022: • Transfer of Postretirement Life Insurance Benefit Obligation ◦ On February 17, 2022, we transferred our obligation for life insurance benefits under our postretirement benefit plans to an insurance carrier for cash consideration paid of $10.0. ◦ In connection with the transfer, we recorded a net charge of $0.3 to “Other income (expense), net.” ◦ See Note 11 to our consolidated financial statements for additional details. • On March 31, 2022, we completed the acquisition of ITL ◦ The purchase price for ITL was $40.4, net of (i) an adjustment to the purchase price received during 2022 of $1.4 related to acquired working capital and (ii) cash acquired of $1.1. ◦ The post-acquisition operating results of ITL are included within our Detection and Measurement reportable segment. • Amendment of Senior Credit Agreement ◦ On August 12, 2022, we amended and restated our then-existing credit agreement. ◦ The then-existing credit agreement provided for committed senior secured financing with an aggregate amount of $770.0, with a final maturity of August 12, 2027. ◦ See Note 13 to our consolidated financial statements for additional details. • Settlement and Actuarial Gains and Losses - Pension and Postretirement Plans ◦ In connection with the sale of Transformer Solutions, a significant number of participants of the U.S.
In addition, DBT made a payment of $25.3 to MHI during the year ended December 31, 2023, in connection to the Settlement Agreement. ◦ See Notes 4 and 15 to our consolidated financial statements for additional details. 25 • Actuarial Losses on Pension and Postretirement Plans ◦ During 2023, we recorded actuarial losses of $11.3 in the fourth quarter in connection with the annual remeasurement of our pension and postretirement plans with such losses resulting primarily from decreases in discount rates. ◦ See Notes 1 and 11 to our consolidated financial statements for additional details. • Resolution of Dispute with Former Representative ◦ During the fourth quarter of 2023, we recorded a charge within “Other operating expense, net” of $9.0 related to the resolution of a dispute with a former representative at one of our businesses within the Detection and Measurement reportable segment. ◦ See Note 15 to our consolidated financial statements for additional details. 2022: • Transfer of Postretirement Life Insurance Benefit Obligation ◦ On February 17, 2022, we transferred a portion of our obligation for life insurance benefits under our postretirement benefit plans to an insurance carrier for cash consideration paid of $10.0. ◦ In connection with the transfer, we recorded a net charge of $0.3 to “Other expense, net.” ◦ See Note 11 to our consolidated financial statements for additional details. • On March 31, 2022, we completed the acquisition of ITL ◦ The purchase price for ITL was $40.4, net of (i) an adjustment to the purchase price received during 2022 of $1.4 related to acquired working capital and (ii) cash acquired of $1.1. ◦ The post-acquisition operating results of ITL are included within our Detection and Measurement reportable segment. • Amendment of Senior Credit Agreement ◦ On August 12, 2022, we amended and restated our then-existing credit agreement. ◦ The then-existing credit agreement provided for committed senior secured financing with an aggregate amount of $770.0, with a final maturity of August 12, 2027. ◦ See Note 13 to our consolidated financial statements for additional details. • Settlement and Actuarial Gains and Losses - Pension and Postretirement Plans ◦ In connection with the sale of Transformer Solutions, a significant number of participants of the U.S.
Plan during the first nine months of 2022, required us to record settlement and actuarial losses of $6.2 during this period. ◦ In addition, we recorded settlement and actuarial gains o f $8.0 in t he fourth quarter of 2022 in connection with the annual remeasurement of our pension and postretirement plans, with such gains resulting primarily from the impact of increases in discount rates, partially offset by lower than expected returns on plan assets. ◦ See Notes 1 and 11 to our consolidated financial statements for additional details. • Repurchases of Common Stock — During the second quarter of 2022, we repurchased 706,827 shares of our common stock for $33.7. • Changes in Estimated Fair Value of an Equity Security ◦ We recorded losses of $3.0 within “ Other income (expense), net ” related to decreases in the estimated fair value of an equity security that we hold. ◦ See Note 17 to our consolidated financial statements for additional details. • Asbestos-Related Matters ◦ During the third quarter of 2022, we received a ruling from a North Carolina trial court that certain excess insurance carriers associated with our asbestos product liability matters are not required to cover the costs of defending suits that are dismissed without an indemnity payment. ◦ As a result of this ruling, we recorded charges of $21.7 during the third quarter, with $16.5 ref lected in “Income from continuing operations before income taxes” and the remainder in “Gain (loss) on disposition of discontinued operations, net of tax.” ◦ On November 1, 2022, we completed the Asbestos Portfolio Sale.
Plan during the first nine months of 2022, required us to record settlement and actuarial losses of $6.2 during this period. ◦ In addition, we recorded settlement and actuarial gains o f $8.0 in t he fourth quarter of 2022 in connection with the annual remeasurement of our pension and postretirement plans, with such gains resulting primarily from the impact of increases in discount rates, partially offset by lower than expected returns on plan assets. ◦ See Notes 1 and 11 to our consolidated financial statements for additional details. • Repurchases of Common Stock — During the second quarter of 2022, we repurchased 706,827 shares of our common stock for $33.7. • Changes in Estimated Fair Value of an Equity Security ◦ We recorded losses of $3.0 within “ Other expense, net ” related to decreases in the estimated fair value of an equity security that we hold. ◦ See Note 17 to our consolidated financial statements for additional details. • Asbestos-Related Matters ◦ During the third quarter of 2022, we received a ruling from a North Carolina trial court that certain excess insurance carriers associated with our then-existing asbestos product liability matters are not required to cover the costs of defending suits that are dismissed without an indemnity payment. 26 ◦ As a result of this ruling, we recorded charges of $21.7 during the third quarter, with $16.5 ref lected in “Income from continuing operations before income taxes” and the remainder in “Loss on disposition of discontinued operations, net of tax.” ◦ On November 1, 2022, we completed the Asbestos Portfolio Sale.
Although it was reasonably possible that some loss may have been incurred in connection with these claims (which totaled approximately South African Rand 2,815.2 or $153.2), we were unable to estimate the potential loss or range of potential loss associated with these claims due to the (i) lack of support provided by MHI for these claims; (ii) complexity of contractual relationships between the end customer, MHI, and DBT; (iii) legal interpretation of the contract provisions and application of South African law to the contracts; and (iv) unpredictable nature of any dispute resolution processes that had occurred or may have occurred in connection with these claims.
Although it was reasonably possible that some loss may have been incurred in connection with these claims (which totaled approximately South African Rand 2,815.2 or $149.7), we were unable to estimate the potential loss or range of potential loss associated with these claims due to the (i) lack of support provided by MHI for these claims; (ii) complexity of contractual relationships between the end customer, MHI, and DBT; (iii) legal interpretation of the contract provisions and application of South African law to the contracts; and (iv) unpredictable nature of any dispute resolution processes that had occurred or may have occurred in connection with these claims.
The combination of these matters negatively impacted our operating results during the first half of 2022, as we experienced lower absorption of manufacturing costs and, in some cases, the negative impact of cost increases on fixed-price customer contracts. During 2023, we experienced more stable labor and supply chain environments and continue to actively manage these matters.
The combination of these matters negatively impacted our operating results during the first half of 2022, as we experienced lower absorption of manufacturing costs and, in some cases, the negative impact of cost increases on fixed-price customer contracts. Throughout 2024 and 2023, we experienced more stable labor and supply chain environments and continue to actively manage these matters.
The expected pension contributions for the U.S. plans in 2024 and therea fter reflect the minimum required contributions under the Pension Protection Act of 2006 and the Worker, Retiree, and Employer Recovery Act of 2008. These contributions do not reflect potential voluntary contributions, or additional contributions that may be required in connection with acquisitions, dispositions or related plan mergers.
The expected pension contributions for the U.S. plans in 2025 and therea fter reflect the minimum required contributions under the Pension Protection Act of 2006 and the Worker, Retiree, and Employer Recovery Act of 2008. These contributions do not reflect potential voluntary contributions, or additional contributions that may be required in connection with acquisitions, dispositions or related plan mergers.
Resolution of Dispute with Former Representative On January 18, 2024, a jury ruled that one of our businesses within the Detection and Measurement reportable segment had breached its contract and implied duties of good faith and fair dealings in connection with an agreement entered into with a former representative.
Resolution of Dispute with Former Representative On January 18, 2024, a jury ruled that one of our businesses within the Detection and Measurement reportable segment had breached its contract and implied duties of good faith and fair dealing in connection with an agreement entered into with a former representative.
In determining our accruals, we generally do not discount environmental accruals and do not reduce them by anticipated insurance, litigation and other recoveries. We take into account third-party indemnification from financially viable parties in determining our accruals where there is no dispute regarding the right to indemnification.
In determining our accruals, we do not discount our environmental accruals and do not reduce them by anticipated insurance, litigation or other recoveries. We take into account third-party indemnification from financially viable parties in determining our accruals where there is no dispute regarding the right to indemnification.
Accordingly, our estimates may change based on future developments, including new or changes in existing environmental laws or policies, differences in costs required to complete anticipated actions from estimates provided, future findings of investigation or remediation actions, or alteration to the expected remediation plans.
Accordingly, our estimates may change based on future developments, including new or changes in existing environmental laws or policies, differences in costs required to complete anticipated actions from estimates provided, future findings of investigation or remediation actions, changes in our allocation of shared remediation costs, or alteration to the expected remediation plans.
Also, while we believe we are entitled to indemnification from third parties for some of these claims, these rights may be insufficient or unavailable to protect us against potential loss exposures. Our recorded liabilities related to these matter s, primarily associated with environmental matters, totaled $37.9 and $39.5 at December 31, 2023 and 2022, respectively.
Also, while we believe we are entitled to indemnification from third parties for some of these claims, these rights may be insufficient or unavailable to protect us against potential loss exposures. Our recorded liabilities related to these matter s, primarily associated with environmental matters, totaled $39.9 and $37.9 at December 31, 2024 and 2023, respectively.
As a result, the South African Rand 126.6 (or $7.0) was recorded as income during the first quarter of 2023, with such amount recorded within “Gain (loss) on disposition of discontinued operations, net of tax.” Additionally, in June 2023, the arbitration tribunal ruled DBT was entitled to recover $1.3 of legal costs incurred related to the arbitration.
As a result, the South African Rand 126.6 (or $7.0) was recorded as income during the first quarter of 2023, with such amount recorded within “Loss on disposition of discontinued operations, net of tax.” Additionally, in June 2023, the arbitration tribunal ruled DBT was entitled to recover $1.3 of legal costs incurred related to the arbitration.
Such charge is included in “Gain (loss) on disposition of discontinued operations, net of tax” for the year ended December 31, 2023. Prior to the Settlement Agreement, on February 22, 2021, a dispute adjudication panel issued a ruling in favor of DBT against MHI related to costs incurred in connection with delays on two units of the Kusile project.
Such charge is included in “Loss on disposition of discontinued operations, net of tax” for the year ended December 31, 2023. Prior to the Settlement Agreement, on February 22, 2021, a dispute adjudication panel issued a ruling in favor of DBT against MHI related to costs incurred in connection with delays on two units of the Kusile project.
See Note 16 to our consolidated financial statements for further details on our long-term incentive compensation plans. Liquidity and Financial Condition Cash Flows Listed below are the cash flows from (used in) operating, investing and financing activities, and discontinued operations, as well as the net change in cash and equivalents for the years ended December 31, 2023, 2022 and 2021.
See Note 16 to our consolidated financial statements for further details on our long-term incentive compensation plans. 34 Liquidity and Financial Condition Cash Flows Listed below are the cash flows from (used in) operating, investing and financing activities, and discontinued operations, as well as the net change in cash and equivalents for the years ended December 31, 2024, 2023 and 2022.
On September 5, 2023, DBT and SPX entered into an agreement with MHI to resolve all claims between the parties with respect to the two large power projects in South Africa.
On September 5, 2023, DBT and SPX entered into the Settlement Agreement with MHI to resolve all claims between the parties with respect to the two large power projects in South Africa.
While we (and our subsidiaries) maintain property, cargo, auto, product, general liability, environmental, and directors’ and officers’ liability insurance and have acquired rights under similar policies in connection with acquisitions that we believe cover a significant portion of these claims, this insurance may be insufficient or unavailable (e.g., in the case of insurer insolvency) to protect us against potential loss exposures.
While we (and our subsidiaries) maintain property, cargo, auto, product, general liability, environmental, and directors’ and officers’ liability insurance, among other lines of coverage, and have acquired rights under similar policies in connection with acquisitions that we believe cover a significant portion of these claims, this insurance may be insufficient or unavailable (e.g., in the case of insurer insolvency) to protect us against potential loss exposures.
Other expense , net, for 2022 was composed primarily of $16.5 of asbestos-related charges incurred prior to the Asbestos Portfolio Sale, a loss of $3.0 related to a change in the estimated fair value of an equity security that we hold, environmental remediation charges of $2.9, and foreign currency transaction losses of $1.1, partially offset by pension and postretirement income (inclusive of net settlement and actuarial gains of $1.5) of $4.4, income of $2.0 derived from company-owned life insurance policies, and $3.0 of income associated with transition services agreements.
Other expense , net, for 2022 was composed primarily of $16.5 of asbestos-related charges incurred prior to the Asbestos Portfolio Sale, a loss of $3.0 related to a change in the estimated fair value of an equity security that we hold, environmental remediation charges of $2.9, and foreign currency transaction losses of $1.1, partially offset by pension and postretirement income (inclusive of net settlement and actuarial gains of $1.5) of $4.4, income of $2.0 derived from COLI policies, and $3.0 of income associated with transition services agreements.
This loss for the year ended December 31, 2023 was partially offset by the arbitration awards received, which are discussed above. Loss for the years ended December 31, 2022 and 2021 resulted primarily from legal costs incurred in connection with various dispute resolution matters prior to the Settlement Agreement.
This loss for the year ended December 31, 2023 was partially offset by arbitration awards received, which are discussed above. Loss for the year ended December 31, 2022 resulted primarily from legal costs incurred in connection with various dispute resolution matters prior to the Settlement Agreement.
See Note 12 to our consolidated financial statements for additional details regarding our uncertain tax positions. 48 New Accounting Pronouncements See Note 3 to our consolidated financial statements for a discussion of recent accounting pronouncements. 49
See Note 12 to our consolidated financial statements for additional details regarding our uncertain tax positions. 47 New Accounting Pronouncements See Note 3 to our consolidated financial statements for a discussion of recent accounting pronouncements. 48
Other Income (Expense), Net — Other expense, net, for 2023 was composed primarily of (i) pensi on and postretirement expense of $12.2 (including actuarial losses of $11.3), (ii) foreign currency transaction losses of $0.9 , and (iii) environmental remediation charges of $0.9, partially offset by gains of (i) $3.6 related to a change in the estimated fair value of an equity security that we hold and (ii) $0.4 related to income derived from company-owned life insurance policies .
Other expense, net, for 2023 was composed primarily of (i) pensi on and postretirement expense of $12.2 (including actuarial losses of $11.3), (ii) foreign currency transaction losses of $0.9 , and (iii) environmental remediation charges of $0.9, partially offset by gains of (i) $3.6 related to a change in the estimated fair value of an equity security that we hold and (ii) $0.4 related to income derived from COLI policies .
These increases were partially offset by (i) lower costs related to various strategic and transformational initiatives during 2023, as 2022 included spend related to the Asbestos Portfolio Sale, and (ii) expenses in connection with asbestos-related matters incurred during 2022 prior to the Asbestos Portfolio Sale.
These increases were partially offset by (i) lower costs related to various strategic and transformational initiatives during 2023, as 2022 included significant costs on strategic and transformational initiatives related to the Asbestos Portfolio Sale, and (ii) expenses in connection with asbestos-related matters incurred during 2022 prior to the Asbestos Portfolio Sale.
Intangible Amortization — For 2023, the increase in intangible amortization, compared to 2022, was primarily due to incremental intangible amortization related to backlog and other intangible assets associated with the TAMCO and ASPEQ acquisitions. In addition, 2023 included a full year's amortization related to the ITL acquisition, compared to nine months in the 2022 period.
For 2023, the increase in intangible amortization, compared to 2022, was primarily due to incremental intangible amortization related to backlog and other intangible assets associated with the TAMCO and ASPEQ acquisitions. In addition, 2023 included a full year of amortization related to the ITL acquisition, compared to nine months in the 2022 period.
(3) Loss for the year ended December 31, 2023 resulted primarily from the charge, and related income tax impacts, recorded in connection with the Settlement Agreement referred to above and legal costs in connection with the various dispute resolution matters.
(2) Loss for the year ended December 31, 2023 resulted primarily from the charge, and related income tax impacts, recorded in connection with the Settlement Agreement referred to above and legal costs incurred in connection with the various dispute resolution matters.
Most of our businesses recognize revenue at a point in time as satisfaction of the related performance obligations occur at the time of shipment or delivery, while certain of our businesses recognize revenue and costs for long-term contracts over-time.
Most of our businesses recognize revenue at a point in time as satisfaction of the related performance obligations occur at the time of shipment or delivery, while certain of our businesses recognize revenue and costs for certain complex long-term and subscription or service contracts over-time.
The charge included the write-off of $15.2 in net amounts due from MHI. Such charge is included in “Gain (loss) on disposition of discontinued operations, net of tax” for the year ended December 31, 2023.
The charge included the write-off of $15.2 in net amounts due from MHI. Such charge is included in “Loss on disposition of discontinued operations, net of tax” for the year ended December 31, 2023.
Our accruals for risk management matters are determined by us, are based on claims filed and an estimate of claims incurred but not yet reported, and generally are not discounted. We consider a number of factors, including third-party actuarial valuations, when making these determinations.
Our accruals for risk management matters are determined by us, are based on claims filed and estimates of claims incurred but not yet reported, and are not discounted. We consider a number of factors, including third-party actuarial valuations, when making these determinations.
As previously disclosed, DBT had asserted claims against the remaining prime contractor on two large projects, MHI, of approximately South African Rand 1,000.0 (or $54.4) and MHI had asserted, or issued letters of intent to claim for, alleged damages against DBT.
As previously disclosed, DBT had asserted claims against the remaining prime contractor on two large projects, MHI, of approximately South African Rand 1,000.0 (or $53.2) and MHI had asserted, or issued letters of intent to claim for, alleged damages against DBT.
The trend in healthcare costs is difficult to e stimate, and it can significantly impact our postretirement liabilities and costs. The healthcare cost trend rate for 2023, which is the weighted-average annual projected rate of increase in the per capita cost of covered benefits, is 6.8%.
The trend in healthcare costs is difficult to e stimate, and it can significantly impact our postretirement liabilities and costs. The healthcare cost trend rate for 2024, which is the weighted-average annual projected rate of increase in the per capita cost of covered benefits, is 6.5%.
The increase in long-term incentive compensation expense in 2023, compared to 2022, was due primarily to the impact of forfeitures resulting from various participant resignations during 2022. 35 The decrease in long-term incentive compensation in 2022, compared to 2021, was due primarily to the impact of forfeitures resulting from various participant resignations during 2022.
The increase in long-term incentive compensation expense in 2023, compared to 2022, was due primarily to the impact of forfeitures resulting from various participant resignations during 2022.
Investing Activiti es - Cash flows used in investing activities of continuing operations for the year ended December 31, 2023 were comprised of net cash utilized in the acquisitions of TAMCO and ASPEQ of $547.0 and capital expenditu res of $23.9, partially offset by net proceeds from company-owned life insurance policies of $0.7.
Investing Activiti es - Cash flows used in investing activities of continuing operations for the year ended December 31, 2023 were comprised of net cash utilized in the acquisitions of TAMCO and ASPEQ of $547.0 and capital expenditu res of $23.9, partially offset by net proceeds from COLI policies of $0.7.
Selling, General a nd Administrative (“SG&A”) Expense — For 2023, the increase in SG&A expense, compared to 2022, was due primarily to (i) higher employee compensation, inclusive of increases in short-term incentive compensation expense, (ii) increases in sales incentive plan expense driven by the higher revenues mentioned above, (iii) acquisition-related costs and incremental SG&A expenses associated with the acquired TAMCO and ASPEQ businesses, and (iv) higher travel expense.
For 2023, the increase in SG&A expense, compared to 2022, was due primarily to (i) higher employee compensation, inclusive of increases in short-term incentive compensation expense, (ii) increases in sales incentive plan expense driven by the higher revenues mentioned above, (iii) acquisition-related costs and incremental SG&A expenses associated with the acquired TAMCO and ASPEQ businesses, and (iv) higher travel expense.
Of these amounts, $29.4 and $30.8 are included in “Other long-term liabilities” within our consolidated balance sheets at December 31, 2023 and 2022, respectively, with th e remainder included in “Accrued expenses.” The liabilities we record for these matters are based on a number of assumptions, inc luding historical claims and payment experience.
Of these amounts, $32.0 and $29.4 are included in “Other long-term liabilities” within our consolidated balance sheets at December 31, 2024 and 2023, respectively, with th e remainder included in “Accrued expenses.” The liabilities we record for these matters are based on a number of assumptions, inc luding historical claims and payment experience.
Such amount received from MHI was recorded to “Gain (loss) on disposition of discontinued operations, net of tax” during the year ended December 31, 2023. Additionally, in May 2023, a separate arbitration tribunal ruled DBT was entitled to recover $5.5 of legal costs incurred related to a prior arbitration hearing.
Such amount received from MHI was recorded to “Loss on disposition of discontinued operations, net of tax” during the year ended December 31, 2023. Additionally, in May 2023, a separate arbitration tribunal ruled DBT was entitled to recover $5.5 of legal costs incurred related to another prior arbitration.
See Note 10 to our consolidated financial statements for additional details. 30 Special Charges, Net — Special charges, net, relate primarily to restructuring initiatives to consolidate manufacturing, distribution, sales and administrative facilities, reduce workforce, and rationalize certain product lines. See Note 8 to our consolidated financial statements for the details of actions taken in 2023, 2022, and 2021.
Special Charges, Net — Special charges, net, relate primarily to restructuring initiatives to consolidate manufacturing, distribution, sales and administrative facilities, reduce workforce, and rationalize certain product lines. See Note 8 to our consolidated financial statements for the details of actions taken in 2024, 2023, and 2022.
On January 26, 2024, we negotiated a settlement requiring a payment to the former representative of $9.0 to resolve all claims related to the matter. This amount was recorded to “Other operating (income) expense, net” within the consolidated statement of operations for the year ended December 31, 2023.
On January 26, 2024, we negotiated a settlement requiring a payment to the former representative of $9.0 to resolve all claims related to the matter. This amount was recorded to “Other operating expense, net” within the consolidated statement of operations for the year ended December 31, 2023 and paid during the first quarter of 2024.
In addition to the above, we entered FX forward contracts associated with the Settlement Agreement, to mitigate our exposure to fluctuations in the South African Rand, with a notional amount of South African Rand 480.9 (or $24.9 at the time of execution) and a fair value of $1.3, which is included within “Assets of DBT and Heat Transfer” on the consolidated balance sheet as of December 31, 2023, all of which are scheduled to mature within one year.
In addition to the above, we entered FX forward contracts associated with the Settlement Agreement to mitigate our exposure to fluctuations in the South African Rand, with a notional amount of South African Rand 480.9 (or $24.9 at the time of execution) and a fair value of $1.3, which was included within “Assets of DBT and Heat Transfer” on the consolidated balance sheet as of December 31, 2023.
Impairment of Goodwill and Indefinite-Lived Intangible Assets Goodwill and indefinite-lived intangible assets are not amortized, but instead are subject to annual impairment testing. We review goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter and continually assess whether a triggering event has occurred to determine whether the carrying value exceeds the implied fair value.
Impairment of Goodwill and Indefinite-Lived Intangible Assets Goodwill and indefinite-lived intangible assets are not amortized, but instead are subject to annual impairment testing. We review goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter and continually assess whether a triggering event has occurred that indicates the carrying value may exceed the implied fair value.
The credit facilities (the “Senior Credit Facilities”) under the Credit Agreement consist of the following at December 31, 2023 (each with a final maturity of August 12, 2027): • Term loan facilities in an aggregate principal amount of $545.0 ($245.0 and $300.0 related to our original term loan and the Incremental Term Loan, respectively); 38 • A multicurrency revolving credit facility, available for loans and letters of credit in Dollars, Euro, Sterling and other currencies, in an aggregate principal amount up to the equivalent of $500.0 (with sub-limits equal to the equivalents of $200.0 for financial letters of credit, $50.0 for non-financial letters of credit, and $150.0 for non-U.S. exposure); and • A bilateral foreign credit instrument facility, available for performance letters of credit and bank undertakings, in an aggregate principal amount in various currencies up to the equivalent of $25.0.
In June 2023, we borrowed $300.0 under the Incremental Term Loan in connection with the ASPEQ acquisition. 37 The credit facilities (the “Senior Credit Facilities”) under the Credit Agreement consist of the following at December 31, 2024 (each with a final maturity of August 12, 2027): • Term loan facilities with original aggregate principal amounts of $545.0 ($245.0 and $300.0 related to our original term loan and the Incremental Term Loan, respectively); • A multicurrency revolving credit facility, available for loans and letters of credit in Dollars, Euro, Sterling and other currencies, in an aggregate principal amount up to the equivalent of $1,000.0 (with sub-limits equal to the equivalents of $200.0 for financial letters of credit, $50.0 for non-financial letters of credit, and $150.0 for non-U.S. exposure); and • A bilateral foreign credit instrument facility, available for performance letters of credit and bank undertakings, in an aggregate principal amount in various currencies up to the equivalent of $25.0.
Cash flows used in investing activities of continuing operations for the year ended December 31, 2022 were comprised of cash utilized in the acquisition of ITL of $41.8 and capital expenditures of $15.9, partially offset by net proceeds from company-owned life insurance policies of $3.7 and $1.8 received upon agreement with the sellers on acquired working capital balances associated with the Cincinnati Fan and ITL acquisitions.
Cash flows used in investing activities of continuing operations for the year ended December 31, 2022 were comprised of cash utilized in the acquisition of ITL of $41.8 and capital expenditures of $15.9, partially offset by net proceeds from COLI policies of $3.7 and $1.8 received upon agreement with the sellers on acquired working capital balances associated with the acquisitions of Cincinnati Fan & Ventilator Co., Inc. acquired in 2021 and ITL acquired in 2022.
Including the effects of recognizing actuarial gains and losses into earnings as described above, a 50 basis point decrease in the discount rate for our domestic plans would have increased our 2023 pension expense by approximately $10.0, a nd a 50 basis point increase in the discount rate would have decreased our 2023 pension expense by appro ximately $9.1.
Including the effects of recognizing actuarial gains and losses into earnings as described above, a 50 basis point decrease in the discount rate for our domestic plans would have increased our 2024 pension expense by approximately $7.0, a nd a 50 basis point increase in the discount rate would have decreased our 2024 pension expense by appro ximately $6.6.
In 2023, we made payments of $59.9 associated with the actual and estimated tax liability for federal, state and foreign tax obligations and received refunds of $1.5. The amount of income taxes that we receive or pay annually is dependent on various factors, including the timing of certain deductions.
In 2024, we made payments of $47.0 associated with the actual and estimated tax liability for federal, state and foreign tax obligations and received refunds of $3.5. The amount of income taxes that we receive or pay annually is dependent on various factors, including the timing of certain deductions.
In connection with the amendment, we recorded a charge of $1.1, which consisted of the write-off of a portion of the unamortized deferred financing costs related to our senior credit facilities ($0.7) and certain expenses incurred in connection with the amendment ($0.4).
Loss on Amendment/Refinancing of Senior Credit Agreement — During 2022, we amended our senior credit agreement. In connection with the amendment, we recorded a charge of $1.1, which consisted of the write-off of a portion of the unamortized deferred financing costs related to our senior credit facilities ($0.7) and certain expenses incurred in connection with the amendment ($0.4).
Senior Credit Facilities On April 21, 2023 (the “Incremental Amendment Effective Date”), we entered into an Incremental Facility Activation Notice (the “Incremental Amendment”) with Bank of America, N.A., as administrative agent (the “Administrative Agent”), and the lenders party thereto, which amends the Amended and Restated Credit Agreement, dated as of August 12, 2022 (as amended, the “Credit Agreement”), among the Company, the lenders party thereto, Deutsche Bank AG, as foreign trade facility agent, and the Administrative Agent.
On April 21, 2023, we entered into an Incremental Facility Activation Notice with Bank of America, N.A., as administrative agent, and the lenders party thereto, which amended the Amended and Restated Credit Agreement, dated as of August 12, 2022, among the Company, the lenders party thereto, Deutsche Bank AG, as foreign trade facility agent, and the Administrative Agent (“Incremental Amendment”).
Potential Impacts of Geopolitical Conflicts The Russia/Ukraine conflict, and governmental actions implemented in response to the conflict, did not have a significant adverse impact on our operating results during 2023 and 2022. We are monitoring the availability of certain raw materials that are supplied by businesses in these countries.
Potential Impacts of Geopolitical Conflicts Ongoing geopolitical conflicts, and governmental actions implemented in response to these conflicts, did not have a significant adverse impact on our operating results during the periods presented. We are monitoring the availability of certain raw materials that are supplied by businesses in the countries impacted by these conflicts.
As a result of this transaction, all asbestos obligations and liabilities and related insurance assets have been removed from our consolidated balance sheets effective November 12, 2022. During the years ended December 31, 2022 and 2021, our (receipts) payments for asbestos-related claims, net of respective insurance recoveries of $31.6, and 44 $53.9, were $20.1 and $(0.3), respectively.
As a result of this transaction, all asbestos obligations and liabilities and related insurance assets have been removed from our consolidated balance sheets effective November 12, 2022. During the year ended December 31, 2022, our payments for asbestos-related claims, net of respective insurance recoveries of $31.6, were $20.1.
Net repayments under our various other debt instruments totaled $0.8. 36 Discontinued Operations - Cash flows used in discontinued operations for the year ended December 31, 2023 relate primarily to (i) cash payments of $25.3 made by DBT to MHI during the third quarter of 2023 in connection with the Settlement Agreement, and (ii) disbursements of $14.7 for professional fees and support costs incurred principally in connection with the claims resolved by the Settlement Agreement, partially offset by the recovery of legal costs we were awarded in arbitration proceedings between DBT and MHI of $6.8.
Cash flows used in discontinued operations for the year ended December 31, 2023 relate primarily to (i) cash payments of $25.3 made by DBT to MHI during the third quarter of 2023 in connection with the Settlement Agreement, and (ii) disbursements of $14.7 for professional fees and support costs incurred principally in connection with the various dispute resolution matters resolved by the Settlement Agreement, partially offset by the recovery of legal costs we were awarded in arbitration proceedings between DBT and MHI of $6.8.
Approximately 76% of the segment’s backlog as of December 31, 2023 is expected to be recognized as revenue during 2024.
Approximately 88% of the segment’s backlog as of December 31, 2024 is expected to be recognized as revenue during 2025.
See Note 11 to our consolidated financial statements for additional information on expected future contributions and benefit payments. (2) Represents contractual commitments to purchase goods and services at specified dates and DBT's remaining obligation under the Settlement Agreement. (3) Represents rental payments under operating leases with remaining non-cancelable terms in excess of one year.
See Note 11 to our consolidated financial statements for additional information on expected future contributions and benefit payments. (2) Represents contractual commitments to purchase goods and services at specified dates. (3) Represents rental payments under operating leases with remaining non-cancelable terms in excess of one year. (4) Represents interest payments exclusive of the impact of our interest rate swap agreements.
We record changes in estimates of revenues and costs when identified using the cumulative catch-up method. 46 We believe the underlying factors used to estimate our long-term contracts costs to complete and percentage-of-completion are sufficiently reliable to provide a reasonable estimate of revenue and profit; however, due to the length of time over which revenues are generated and costs are incurred, along with the judgment required in developing the underlying factors, the variability of revenue and cost can be significant.
We believe the underlying factors used to estimate our complex long-term contracts costs to complete and percentage-of-completion are sufficiently reliable to provide a reasonable estimate of revenue and profit; however, due to the length of time over which revenues are generated and costs are incurred, along with the judgment required in developing the underlying factors, the variability of revenue and cost can be significant.
Our derivative financial assets and liabilities include interest rate swap agreements, forward contracts to manage exposure on contracts with forecasted transactions denominated in non-functional currencies and to manage the risk of transaction gains and losses associated with assets/liabilities denominated in currencies other than the functional currency of certain subsidiaries (“FX forward contracts”), and, as related to Transformer Solutions through its date of disposition, forward contracts that managed the exposure on forecasted purchases of commodity raw materials (“commodity contracts”) that are measured at fair value using observable market inputs such as forward rates, interest rates, our own credit risk, and our counterparties’ credit risks.
Our derivative financial assets and liabilities include interest rate swap agreements and forward contracts to manage exposure on contracts with forecasted transactions denominated in non-functional currencies which manage the risk of transaction gains and losses associated with assets/liabilities denominated in currencies other than the functional currency of 38 certain subsidiaries (“FX forward contracts”) that are measured at fair value using observable market inputs such as forward rates, interest rates, our own credit risk, and our counterparties’ credit risks.
Off-Balance Sheet Arrangements A s of December 31, 2023, except as discussed in the contractual obligations table below, we did not have any material guarantees, off-balance sheet arrangements or purchase commitments other than the following: (i) $26.1 of certain standby letters of credit outstanding, all of which relate to self-insurance or environmental matters and $10.8 of which reduce the available borrowing capacity on our domestic revolving credit facility, (ii) $11.6 of letters of credit outstanding, all of which reduce the available borrowing capacity on our foreign trade facilities, and (iii) $81.6 of surety bonds. 41 Contractual Obligations The following is a summary of our primary contractual obligations as of December 31, 2023: Total Due Within 1 Year Due in 1-3 Years Due in 3-5 Years Due After 5 Years Long-term debt obligations $ 542.1 $ 17.3 $ 54.8 $ 470.0 $ — Pension and postretirement benefit plan contributions and payments (1) 184.5 10.5 28.5 29.9 115.6 Purchase and other contractual obligations (2) 223.6 204.8 18.8 — — Future minimum operating lease payments (3) 43.6 12.4 13.9 10.3 7.0 Interest payments (4) 129.4 36.9 68.7 23.8 — Total contractual cash obligations (5) $ 1,123.2 $ 281.9 $ 184.7 $ 534.0 $ 122.6 ____________________________ (1) Estimated minimum required pension funding and pension and postretirement benefit payments are based on actuarial estimates using current assumptions for, among other things, discount rates, expected long-term rates of return on plan assets (where applicable), and health care cost trend rates.
Off-Balance Sheet Arrangements A s of December 31, 2024, except as discussed in the contractual obligations table below, we did not have any material guarantees, off-balance sheet arrangements or purchase commitments other than the following: (i) $18.1 of certain standby letters of credit outstanding, all of which relate to self-insurance or environmental matters and $11.0 of which reduce the available borrowing capacity on our domestic revolving credit facility, (ii) $17.0 of letters of credit outstanding, all of which reduce the available borrowing capacity on our foreign trade facilities, and (iii) $79.6 of surety bonds. 40 Contractual Obligations The following is a summary of our primary contractual obligations as of December 31, 2024: Total Due Within 1 Year Due in 1-3 Years Due in 3-5 Years Due After 5 Years Long-term debt obligations $ 605.9 $ 27.6 $ 578.0 $ 0.3 $ — Pension and postretirement benefit plan contributions and payments (1) 184.6 11.6 32.3 29.2 111.5 Purchase and other contractual obligations (2) 140.0 129.7 10.2 0.1 — Future minimum operating lease payments (3) 62.9 13.2 23.1 19.2 7.4 Interest payments (4) 93.9 36.7 57.2 — — Total contractual cash obligations (5) $ 1,087.3 $ 218.8 $ 700.8 $ 48.8 $ 118.9 ____________________________ (1) Estimated minimum required pension funding and pension and postretirement benefit payments are based on actuarial estimates using current assumptions for, among other things, discount rates, expected long-term rates of return on plan assets (where applicable), and health care cost trend rates.
The remaining balance is payable in full on August 12, 2027. We use operating leases to finance certain equipment, vehicles and properties. At December 31, 2023, we had $ 43.6 o f future minimum rental payments under operating leases with remaining non-cancelable terms in excess of one year.
The remaining balance is payable in full on August 12, 2027. We use operating leases to finance certain equipment, vehicles and properties. At December 31, 2024, we h ad $62.9 of future minimum rental payments under operating leases with remaining non-cancelable terms in excess of one year.
The increase in interest expense, net, during 2023, compared to 2022, was the result of higher average debt balances and a higher average effective interest rate during 2023, with the higher average debt balances primarily resulting from borrowings in connection with the TAMCO and ASPEQ acquisitions.
Refer to Note 13 to the consolidated financial statements for additional details. The increase in interest expense, net, during 2023, compared to 2022, was the result of higher average debt balances and a higher average effective interest rate during 2023, with the higher average debt balances primarily resulting from borrowings in connection with the TAMCO and ASPEQ acquisitions.
The most significant items impacting the income tax provision during the year 2023 were (i) $2.3 of tax benefits related to changes in our estimate of valuation allowances recognized against certain deferred tax assets, as we now expect to realize these deferred tax assets, (ii) $1.8 of excess tax benefits associated with stock-based compensation awards that vested and/or were exercised during the period, and (iii) $1.1 of tax benefits related to revisions to liabilities for uncertain tax positions. 31 During 2022, we recorded an income tax provision of $ 7.3 on $ 27.1 of pre-tax income from continuing operations, resulting in an effective rate of 26.9% .
The most significant items impacting the income tax provision for 2023 were (i) $2.3 of tax benefits related to changes in our estimate of valuation allowances recognized against certain deferred tax assets, as we now expect to realize these deferred tax assets, (ii) $1.8 of excess tax benefits associated with stock-based compensation awards that vested and/or were exercised during the period, and (iii) $1.1 of tax benefits related to revisions to liabilities for uncertain tax positions.
Our objective is to preserve the economic value of non-functional currency-denominated cash flows and to minimize the impact of changes as a result of currency fluctuations. Our principal currency exposures relate to the South African Rand, British Pound Sterling, and Euro.
Our objective is to preserve the economic value of non-functional currency-denominated cash flows and to minimize the impact of changes as a result of currency fluctuations. Our principal currency exposures relate to the South African Rand, British Pound Sterling, Canadian Dollar, and Euro. From time to time, we enter into FX forward contracts.
Year Ended December 31, 2023 2022 2021 Continuing operations: Cash flows from (used in) operating activities $ 243.8 $ (115.2) $ 131.2 Cash flows used in investing activities (570.2) (52.2) (306.0) Cash flows from (used in) financing activities 309.6 (39.9) (167.8) Cash flows from (used in) discontinued operations (35.3) (34.5) 663.7 Change in cash and equivalents due to changes in foreign currency exchange rates (0.1) 2.9 6.6 Net change in cash and equivalents $ (52.2) $ (238.9) $ 327.7 2023 Compared to 2022 Operating Activities - The increase in cash flows from operating activities of continuing operations during the year ended December 31, 2023, compared to 2022, was due primarily to (i) the increase in income during the period discussed previously, (ii) cash contributed during 2022 to the divested subsidiaries of $138.8 in connection with the Asbestos Portfolio Sale, (iii) a reduction in the level of elevated purchases of raw materials and components, primarily within our HVAC reportable segment, during 2023, due to a more stable supply chain environment, (iv) working capital improvements at certain of our project-related businesses, as cash flows for these businesses are often subject to contract milestones that can impact the timing of cash flows from period to period, (v) net payments for asbestos-related matters made prior to the Asbestos Portfolio Sale in 2022, of $15.3, and (vi) a cash payment of $10.0 during the first half of 2022 in connection with the transfer of our postretirement life insurance benefit obligation to an insurance carrier (see Note 11 to our consolidated financial statements for additional details).
Refer to Notes 4 and 15 to the consolidated financial statements for additional details related to the Settlement Agreement. 35 Change in Cash and Equivalents Due to Changes in Foreign Currency Exchange Rates - Changes in foreign currency exchange rates did not have a significant impact on our cash and equivalents during 2024 and 2023. 2023 Compared to 2022 Operating Activities - The increase in cash flows from operating activities of continuing operations during the year ended December 31, 2023, compared to 2022, was due primarily to (i) the increase in income during the period discussed previously, (ii) cash contributed during 2022 to the divested subsidiaries of $138.8 in connection with the Asbestos Portfolio Sale, (iii) a reduction in the level of elevated purchases of raw materials and components, primarily within our HVAC reportable segment, during 2023, due to a more stable supply chain environment, (iv) working capital improvements at certain of our project-related businesses, as cash flows for these businesses are often subject to contract milestones that can impact the timing of cash flows from period to period, (v) net payments for asbestos-related matters made prior to the Asbestos Portfolio Sale in 2022, of $15.3, and (vi) a cash payment of $10.0 during the first half of 2022 in connection with the transfer of a portion of our postretirement life insurance benefit obligation to an insurance carrier (see Note 11 to our consolidated financial statements for additional details).
Refer to the explanation of this measure and purpose of use by management under “Results of Continuing Operations — Non-GAAP Measures.” HVAC Reportable Segment Year Ended December 31, 2023 vs. 2022 % 2022 vs. 2021 % 2023 2022 2021 Revenues $ 1,122.3 $ 913.8 $ 752.1 22.8 21.5 Income 234.4 135.5 107.7 73.0 25.8 % of revenues 20.9 % 14.8 % 14.3 % Components of revenue increase: Organic 12.2 12.3 Foreign currency (0.2) (0.8) Acquisitions 10.8 10.0 Net revenue increase 22.8 21.5 Revenues — For 2023, the increase in revenues, compared to 2022, was due primarily to (i) organic revenue growth driven primarily by increased sales of cooling products and (ii) the impact of the TAMCO and ASPEQ acquisitions.
Refer to the explanation of this measure and purpose of use by management under “Results of Continuing Operations — Non-GAAP Measures.” 32 HVAC Reportable Segment Year Ended December 31, 2024 vs. 2023 % 2023 vs. 2022 % 2024 2023 2022 Revenues $ 1,364.7 $ 1,122.3 $ 913.8 21.6 22.8 Income 323.9 234.4 135.5 38.2 73.0 % of revenues 23.7 % 20.9 % 14.8 % Components of revenue increase: Organic 9.7 12.2 Foreign currency (0.1) (0.2) Acquisitions 12.0 10.8 Net revenue increase 21.6 22.8 Revenues — For 2024, the increase in revenues, compared to 2023, was due primarily to (i) inorganic revenue growth resulting from the Ingénia, ASPEQ, and TAMCO acquisitions and (ii) organic revenue growth.
Additionally, prior to the Asbestos Portfolio Sale, we recorded charges of $2.3 for asbestos product liability matters, partially offset by a reduction in the fair value/liability associated with the contingent consideration related to the ECS acquisition of $1.3.
Additionally, prior to the Asbestos Portfolio Sale, we recorded charges of $2.3 for asbestos product liability matters, partially offset by a reduction in the fair value/liability associated with the contingent consideration related to the acquisition of Enterprise Control Systems Ltd (“ECS”), which was completed in 2021, of $1.3.
As our long-term contracts generally range from six to eighteen months in duration, we typically reassess the estimated revenues and costs of these contracts on a quarterly basis, but may reassess more often as situations warrant.
As our complex long-term contracts generally range from six to eighteen months in duration, we typically reassess the estimated revenues and costs of these contracts on a quarterly basis, but may reassess more often as situations warrant. We record changes in estimates of revenues and costs when identified using the cumulative catch-up method.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+3 added−0 removed0 unchanged
Biggest changeOur exposures for commodity raw materials vary, with the highest concentration relating to steel and oil. See Note 14 to our consolidated financial statements for further details. The following table provides information, as of December 31, 2023, about our primary outstanding debt obligations and presents principal cash flows by expected maturity dates, weighted-average interest rates and fair values.
Biggest changeThe following table provides information, as of December 31, 2024, about our primary outstanding debt obligations and presents principal cash flows by expected maturity dates, weighted-average interest rates and fair values.
From time to time, we enter into FX forward contracts to manage the exposure on contracts with forecasted transactions denominated in non-functional currencies and to manage the risk of transaction gains and losses associated with assets/liabilities denominated in currencies other than the functional currency of certain subsidiaries.
From time to time, we enter into FX forward contracts to manage the exposure on contracts with forecasted transactions denominated in non-functional currencies which manage the risk of transaction gains and losses associated with assets/liabilities denominated in currencies other than the functional currency of certain subsidiaries.
ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk (All amounts are in millions) We are exposed to market risk related to changes in interest rates, foreign currency exchange rates and commodity raw material prices, and we selectively use financial instruments to manage these risks.
ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk (All amounts are in millions) We are exposed to market risk related to changes in interest rates, foreign currency exchange rates and commodity raw material prices, and we selectively use financial instruments to manage certain of these risks.
We do not enter into financial instruments for speculative or trading purposes; however, these instruments may be deemed speculative if the future cash flows originally hedged are no longer probable of occurring as anticipated. Our currency exposures vary, but are primarily concentrated in the South African Rand, British Pound Sterling, and Euro. We generally do not hedge currency translation exposures.
We do not enter into financial instruments for speculative or trading purposes; however, these instruments may be deemed speculative if the future cash flows originally hedged are no longer probable of occurring as anticipated. Our currency exposures vary, but are primarily concentrated in the South African Rand, British Pound Sterling, Canadian Dollar, and Euro.
We had FX forward contracts with an aggregate notional amount of $35.6 at December 31, 2023, all of which are scheduled to mature within one year. The fair value of our FX forward contracts was $1.3 at December 31, 2023. 50
We had FX forward contracts with an aggregate notional amount of $22.9 at December 31, 2024, all of which are scheduled to mature within one year. The fair value of our FX forward contracts was less than $0.1 at December 31, 2024. 49
The fair value of these swaps was $7.5 at December 31, 2023, recorded as a current asset. We believe that cash and equivalents, cash flows from operations, and availability under revolving credit facilities and our trade receivables financing arrangement will be sufficient to fund working capital needs, planned capital expenditures, other operational cash requirements and required debt service obligations.
We believe that cash and equivalents, cash flows from operations, and availability under revolving credit facilities and our trade receivables financing arrangement will be sufficient to fund working capital needs, planned capital expenditures, other operational cash requirements and required debt service obligations.
Expected Maturity Date 2024 2025 2026 2027 Thereafter Total Fair Value Senior Credit Facilities $ 17.0 $ 27.3 $ 27.3 $ 470.0 $ — $ 541.6 $ 541.6 Average interest rate 6.9 % At December 31, 2023, we had swaps with a notional amount of $218.8 that cover the period through November 2024, and effectively convert this portion of the borrowings under our senior credit facilities to a fixed rate of 1.077%, plus the applicable margin.
Expected Maturity Date 2025 2026 2027 2028 Thereafter Total Fair Value Senior Credit Facilities $ 27.3 $ 27.3 $ 550.0 $ — $ — $ 604.6 $ 604.6 Average interest rate 5.8 % In 2020, we entered into the Initial Swaps, which covered the period through November 2024, and effectively converted borrowings under our senior credit facilities to a fixed rate of 1.077%, plus the applicable margin.
Added
We generally do not hedge currency translation exposures. Our exposures for commodity raw materials vary, with the highest concentration relating to steel and oil. See Note 14 to our consolidated financial statements for further details.
Added
In September 2024, commensurate with the Second Amendment, we entered into the Additional Swaps, which have a notional amount of $524.6, cover the period from December 2024 to June 2026, and effectively convert this portion of the borrowings under our senior credit facilities to a fixed rate of 3.58%, plus the applicable margin.
Added
We have designated, and are accounting for, our Additional Swaps (and, prior to their maturity, accounted for the Initial Swaps) as cash flow hedges.

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