Inventories, Net

12 Months Ended

Dec. 31, 2021

Inventories at December 31, 2021 and 2020 comprised the following:


	December 31,
	2021		2020
Finished goods	$	55.1	$	49.5
Work in process	21.1		21.1
Raw materials and purchased parts	113.6		84.4
Total inventories	$	189.8	$	155.0

Inventories include material, labor and factory overhead costs and are reduced, when necessary, to estimated net realizable values. Historically, certain of our domestic businesses within our HVAC reportable segment accounted for their inventories under the LIFO method. As indicated in Note 1, during the fourth quarter of 2021, we converted the inventory accounting for these businesses to the FIFO method. We believe that this change in accounting is preferable as it (i) results in a consistent method to value inventories across all of our businesses, (ii) it improves comparability with industry peers, (iii) better reflects current inventory costs, and (iv) aligns with how we internally monitor the performance of our businesses.

The effects of this accounting change have been retrospectively applied to all periods presented. This change resulted in a reduction of our to “Retained deficit” of $9.1 as of December 31, 2018. The impact of this accounting change on our consolidated statements of operations and consolidated statements of comprehensive income for the years ended December 31, 2019 and 2020, and our consolidated balance sheet as of December 31, 2020, was as follows:


	As Computed under LIFO		Effect of Change		As Adjusted
Consolidated Statement of Operations for the year ended December 31, 2019:
Income from continuing operations before income taxes	$	88.7	$	0.1	$	88.8
Income tax provision	(12.4)		(0.1)		(12.5)
Income from continuing operations, net of tax	76.3		—		76.3
Loss from discontinued operations, net of tax	(11.0)		—		(11.0)
Net income	65.3		—		65.3
Adjustment related to redeemable noncontrolling interest	5.6		—		5.6
Net income attributable to SPX common stockholders	$	70.9	$	—	$	70.9


Basic income (loss) per share of common stock:
Income from continuing operations, net of tax	$	1.74	$	—	$	1.74
Loss from discontinued operations, net of tax	(0.13)		—		(0.13)
Net income attributable to SPX common stockholders after adjustment related to redeemable noncontrolling interest	$	1.61	$	—	$	1.61

Diluted income per share of common stock:
Income from continuing operations, net of tax	$	1.70	$	—	$	1.70
Loss from discontinued operations, net of tax	(0.12)		—		(0.12)
Net income attributable to SPX common stockholders after adjustment related to redeemable noncontrolling interest	$	1.58	$	—	$	1.58

Total comprehensive income	$	64.7	$	—	$	64.7

Consolidated Statement of Operations for the year ended December 31, 2020
Income from continuing operations before income taxes	$	76.3	$	2.3	$	78.6
Income tax provision	(4.2)		(0.6)		(4.8)
Income from continuing operations	72.1		1.7		73.8
Gain from discontinued operations, net of tax	25.1		0.1		25.2
Net income	$	97.2	$	1.8	$	99.0

Basic income per share of common stock:
Income from continuing operations, net of tax	$	1.61	$	0.04	$	1.65
Gain from discontinued operations, net of tax	0.57		—		0.57
Net income attributable to SPX common stockholders	$	2.18	$	0.04	$	2.22

Diluted income per share of common stock:
Income from continuing operations, net of tax	$	1.57	$	0.04	$	1.61
Gain from discontinued operations, net of tax	0.55		—		0.55
Net income attributable to SPX common stockholders	$	2.12	$	0.04	$	2.16

Total comprehensive income	$	101.4	$	1.8	$	103.2

Consolidated Balance Sheet as of December 31, 2020:
Inventories, net	$	143.1	$	11.9	$	155.0
Current assets of discontinued operations	121.6		2.8		124.4
Deferred and other income taxes	23.5		3.1		26.6
Non-current liabilities of discontinued operations	30.7		0.7		31.4
Retained deficit	(488.1)		10.9		(477.2)

The following table compares amounts that would have been reported under the LIFO method with amounts reported under the FIFO method in the accompanying consolidated statement of operations and consolidated statement of comprehensive income for the year ended December 31, 2021, and the consolidated balance sheet as of December 31, 2021:


	As Computed under LIFO		As Reported under FIFO		Effect of Change
Income from continuing operations before income taxes	$	58.3	$	69.9	$	11.6
Income tax provision	(8.0)		(10.9)		(2.9)
Income from continuing operations, net of tax	50.3		59.0		8.7
Gain from discontinued operations, net of tax	368.5		366.4		(2.1)
Net income attributable to SPX common stockholders	$	418.8	$	425.4	$	6.6

Basic income per share of common stock:
Income from continuing operations, net of tax	$	1.11	$	1.30	$	0.19
Gain from discontinued operations, net of tax	8.14		8.09		(0.05)
Net income attributable to SPX common stockholders	$	9.25	$	9.39	$	0.14

Total Comprehensive Income	$	434.3	$	440.8	$	6.5

Diluted income per share of common stock:
Income from continuing operations, net of tax	$	1.08	$	1.27	$	0.19
Gain from discontinued operations, net of tax	7.93		7.88		(0.05)
Net income attributable to SPX common stockholders	$	9.01	$	9.15	$	0.14

Inventories, net	$	166.3	$	189.8	$	23.5
Deferred and other income taxes	25.3		31.3		6.0
Retained deficit	(69.3)		(51.8)		17.5

The impact of the change from LIFO to FIFO on our consolidated statements of cash flows for the years ended December 31, 2021, 2020, and 2019 was limited to the changes in income noted above, along with offsetting changes within inventories and deferred and other income taxes. As a result, this accounting change had no impact on our total cash flows from operating, investing, and financing activities during the years ended December 31, 2021, 2020, and 2019.