INFORMATION ON REPORTABLE SEGMENTS

9 Months Ended

Sep. 26, 2015

Segment Reporting [Abstract]

INFORMATION ON REPORTABLE SEGMENTS

INFORMATION ON REPORTABLE SEGMENTS

We are a global supplier of highly specialized, engineered solutions with operations in over 20 countries and sales in over 100 countries around the world.

As indicated in Note 1, during the third quarter of 2015, we realigned our segment reporting structure. Under the realigned structure, we have aggregated our operating segments into the following three reportable segments: HVAC, Detection and Measurement, and Power. The factors considered in determining our aggregated segments are the economic similarity of the businesses, the nature of products sold or services provided, production processes, types of customers, distribution methods, and regulatory environment. In determining our segments, we apply the threshold criteria of the Segment Reporting Topic of the Codification to operating income or loss of each segment before considering impairment and special charges, pension and postretirement expense/income, stock-based compensation and other indirect corporate expenses. This is consistent with the way our CODM evaluates the results of each segment.

HVAC Reportable Segment

Our HVAC reportable segment engineers, designs, manufactures, installs and services cooling products for the HVAC and industrial markets, as well as heating and ventilation products for the residential and commercial markets. The primary distribution channels for the segment’s products are direct to customers, independent manufacturing representatives, third-party distributors, and retailers. The segment primarily serves a North American customer base.

Detection and Measurement Reportable Segment

Our Detection and Measurement reportable segment engineers, designs, manufactures and installs communication technology equipment and systems, bus fare collection equipment and systems, and portable cable and pipe locators. The primary distribution channels for the segment’s products are direct to customers and third-party distributors. The segment serves a global customer base, with a strong presence in North America, Europe and Asia.

Power Reportable Segment

Our Power reportable segment engineers, designs, manufactures, installs and services dry, evaporative and hybrid cooling systems, rotating and stationary heat exchangers and pollution control systems for the power generation market, and transformers for the power transmission and distribution market. The primary distribution channels for the segment’s products are direct to customers and third-party representatives. The segment serves a global customer base, with a strong presence in North America, Europe, Asia Pacific, and South Africa.

Corporate Expense

Corporate expense generally relates to the cost of our Charlotte, NC corporate headquarters, our former Asia Pacific center in Shanghai, China, which was part of the Spin-Off, and costs that were previously allocated to the FLOW Business that do not meet the requirements to be presented within discontinued operations.

For the three and nine months ended September 26, 2015 and September 27, 2014, the below table presents financial data for our reportable segments:

	Three months ended						Nine months ended
	September 26, 2015			September 27, 2014			September 26, 2015			September 27, 2014
Revenues: (1)
HVAC segment	$	142.7		$	137.4		$	368.7		$	361.1
Detection and Measurement segment	55.9			57.3			166.0			180.7
Power segment (2)	175.5			294.9			675.1			855.3
Consolidated revenues	$	374.1		$	489.6		$	1,209.8		$	1,397.1
Income (Loss):
HVAC segment	$	23.5		$	18.1		$	49.4		$	40.6
Detection and Measurement segment (3)	8.3			10.7			27.4			38.9
Power segment (2)	(96.5		)	9.2			(106.3		)	14.6
Total income (loss) for segments	(64.7		)	38.0			(29.5		)	94.1
Corporate expense	(27.6		)	(33.0		)	(84.5		)	(97.8		)
Stock-based compensation expense	(5.5		)	(3.6		)	(30.5		)	(29.8		)
Pension and postretirement expense	(7.4		)	(2.2		)	(8.4		)	(23.3		)
Special charges, net	(8.4		)	(1.3		)	(14.0		)	(5.7		)
Consolidated operating loss	$	(113.6	)	$	(2.1	)	$	(166.9	)	$	(62.5	)

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⁽¹⁾  Under the percentage-of-completion method, we recognized revenues of $78.8 and $156.0 in the three months ended September 26, 2015 and September 27, 2014, respectively. For the nine months ended September 26, 2015 and September 27, 2014, revenues under the percentage-of-completion method were $325.1 and $452.0, respectively. Costs and estimated earnings in excess of billings on uncompleted contracts accounted for under the percentage-of-completion method were $105.7 and $95.6 as of September 26, 2015 and December 31, 2014, respectively, and are reported as a component of ‘‘Accounts receivable, net’’ in the condensed consolidated balance sheets. Billings in excess of costs and estimated earnings on uncompleted contracts accounted for under the percentage-of-completion method were $124.3 and $95.8 as of September 26, 2015 and December 31, 2014, respectively, and are reported as a component of ‘‘Accrued expenses’’ in the condensed consolidated balance sheets.

⁽²⁾  As further discussed in Note 13, during the three months ended September 26, 2015, we made revisions to our estimates of expected revenues and profits on our large power projects in South Africa. As a result of these revisions, we reduced revenue and segment income by $57.2 and $95.0, respectively, during the three and nine months ended September 26, 2015. As of September 26, 2015, certain of these projects had cumulative losses. During the three and nine months ended September 26, 2015, we recorded losses of $59.6 and $66.1, respectively, related to these loss projects, compared to no losses in the three months ended September 27, 2014 and $1.2 during the nine months ended September 27, 2014.

⁽³⁾  As further discussed in Notes 1 and 16, we identified certain misstatements associated with previously reported amounts. To correct these misstatements, and as permitted by SAB Topic 1.N, we have restated prior period condensed consolidated financial statements included herein, including a reduction of segment income for the three and nine months ended September 27, 2014, when compared to the amounts previously reported, of $0.3 and $0.8, respectively.