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Share Name | Share Symbol | Market | Type |
---|---|---|---|
RBC Bearings Incorporated | NYSE:RBC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-1.19 | -0.47% | 249.99 | 255.12 | 249.30 | 253.73 | 88,374 | 22:30:00 |
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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Wisconsin
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39-0875718
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(State of other jurisdiction of
incorporation)
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(IRS Employer
Identification No.)
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Large Accelerated Filer
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ý
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Accelerated Filer
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¨
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller Reporting Company
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¨
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Emerging growth company
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¨
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Page
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Item 1 —
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Item 2 —
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Item 3 —
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Item 4 —
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Item 1 —
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Item 1A —
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Item 2 —
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Item 6 —
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•
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uncertainties regarding our ability to execute our restructuring plans within expected costs and timing;
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•
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increases in our overall debt levels as a result of the acquisition of the Power Transmission Solutions business of Emerson Electric Co. ("PTS") or otherwise and our ability to repay principal and interest on our outstanding debt;
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•
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actions taken by our competitors and our ability to effectively compete in the increasingly competitive global electric motor, drives and controls, power generation and mechanical motion control industries;
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•
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our ability to develop new products based on technological innovation and marketplace acceptance of new and existing products;
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•
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fluctuations in commodity prices and raw material costs;
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•
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our dependence on significant customers;
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•
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issues and costs arising from the integration of acquired companies and businesses including PTS and the timing and impact of purchase accounting adjustments;
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•
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prolonged declines in oil and gas up stream capital spending;
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•
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economic changes in global markets where we do business, such as reduced demand for the products we sell, currency exchange rates, inflation rates, interest rates, recession, government policies, including policy changes affecting taxation, trade, immigration and the like, and other external factors that we cannot control;
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•
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product liability and other litigation, or claims by end users, government agencies or others that our products or our customers’ applications failed to perform as anticipated, particularly in high volume applications or where such failures are alleged to be the cause of property or casualty claims;
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•
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unanticipated liabilities of acquired businesses;
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•
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unanticipated costs or expenses we may incur related to product warranty issues;
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•
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our dependence on key suppliers and the potential effects of supply disruptions;
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•
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infringement of our intellectual property by third parties, challenges to our intellectual property and claims of infringement by us of third party technologies;
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•
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effects on earnings of any significant impairment of goodwill or intangible assets;
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•
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cyclical downturns affecting the global market for capital goods; and
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•
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other risks and uncertainties including but not limited to those described in “Risk Factors”
in our Annual Report on Form 10-K and from time to time in our reports filed with US Securities and Exchange Commission.
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|
Three Months Ended
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|
Six Months Ended
|
||||||||||||
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July 1,
2017 |
|
July 2,
2016 |
|
July 1,
2017 |
|
July 2,
2016 |
||||||||
Net Sales
|
$
|
869.2
|
|
|
$
|
838.6
|
|
|
$
|
1,682.7
|
|
|
$
|
1,656.8
|
|
Cost of Sales
|
646.2
|
|
|
615.7
|
|
|
1,244.1
|
|
|
1,216.5
|
|
||||
Gross Profit
|
223.0
|
|
|
222.9
|
|
|
438.6
|
|
|
440.3
|
|
||||
Operating Expenses
|
140.0
|
|
|
131.5
|
|
|
280.8
|
|
|
279.6
|
|
||||
Income From Operations
|
83.0
|
|
|
91.4
|
|
|
157.8
|
|
|
160.7
|
|
||||
Interest Expense
|
14.7
|
|
|
14.8
|
|
|
29.1
|
|
|
29.8
|
|
||||
Interest Income
|
1.0
|
|
|
1.2
|
|
|
2.0
|
|
|
2.3
|
|
||||
Income Before Taxes
|
69.3
|
|
|
77.8
|
|
|
130.7
|
|
|
133.2
|
|
||||
Provision For Income Taxes
|
15.0
|
|
|
19.4
|
|
|
28.8
|
|
|
32.1
|
|
||||
Net Income
|
54.3
|
|
|
58.4
|
|
|
101.9
|
|
|
101.1
|
|
||||
Less: Net Income Attributable to Noncontrolling Interests
|
1.3
|
|
|
1.8
|
|
|
2.6
|
|
|
2.9
|
|
||||
Net Income Attributable to Regal Beloit Corporation
|
$
|
53.0
|
|
|
$
|
56.6
|
|
|
$
|
99.3
|
|
|
$
|
98.2
|
|
Earnings Per Share Attributable to Regal Beloit Corporation:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.19
|
|
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$
|
1.27
|
|
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$
|
2.22
|
|
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$
|
2.20
|
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Assuming Dilution
|
$
|
1.18
|
|
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$
|
1.26
|
|
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$
|
2.20
|
|
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$
|
2.19
|
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Cash Dividends Declared Per Share
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$
|
0.26
|
|
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$
|
0.24
|
|
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$
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0.50
|
|
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$
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0.47
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Weighted Average Number of Shares Outstanding:
|
|
|
|
|
|
|
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||||||||
Basic
|
44.7
|
|
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44.7
|
|
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44.8
|
|
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44.7
|
|
||||
Assuming Dilution
|
45.1
|
|
|
45.0
|
|
|
45.1
|
|
|
45.0
|
|
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Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
July 1,
2017 |
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July 2,
2016 |
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July 1,
2017 |
|
July 2,
2016 |
||||||||
Net Income
|
$
|
54.3
|
|
|
$
|
58.4
|
|
|
$
|
101.9
|
|
|
$
|
101.1
|
|
Other Comprehensive Income (Loss) Net of Tax:
|
|
|
|
|
|
|
|
||||||||
Foreign Currency Translation Adjustments
|
39.1
|
|
|
(32.5
|
)
|
|
68.5
|
|
|
(6.8
|
)
|
||||
Hedging Activities:
|
|
|
|
|
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||||||||
Increase (Decrease) in Fair Value of Hedging Activities, Net of Tax Effects of $ 6.1 Million and $(6.7) Million for the Three Months ended July 1, 2017 and July 2, 2016 and $18.0 Million and $(5.4) Million for the Six Months ended July 1, 2017 and July 2, 2016 Respectively
|
10.0
|
|
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(11.1
|
)
|
|
29.4
|
|
|
(8.8
|
)
|
||||
Reclassification of Losses included in Net Income, Net of Tax Effects of $1.8 Million and $4.7 Million for the Three Months ended July 1, 2017 and July 2, 2016 and $6.2 Million and $9.7 Million for the Six Months ended July 1, 2017 and July 2, 2016 Respectively
|
2.7
|
|
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7.6
|
|
|
10.0
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15.7
|
|
||||
Pension and Post Retirement Plans:
|
|
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|
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||||||||
Reclassification Adjustments for Pension and Post Retirement Benefits included in Net Income, Net of Tax Effects of $0.2 Million and $0.4 Million for the Three Months Ended July 1, 2017 and July 2, 2016 and $0.4 Million and $0.6 Million for the Six Months Ended July 1, 2017 and July 2, 2016, Respectively
|
0.4
|
|
|
0.6
|
|
|
0.8
|
|
|
1.3
|
|
||||
Other Comprehensive Income (Loss)
|
52.2
|
|
|
(35.4
|
)
|
|
108.7
|
|
|
1.4
|
|
||||
Comprehensive Income
|
106.5
|
|
|
23.0
|
|
|
210.6
|
|
|
102.5
|
|
||||
Less: Comprehensive Income Attributable to Noncontrolling Interests
|
1.8
|
|
|
0.9
|
|
|
3.6
|
|
|
2.4
|
|
||||
Comprehensive Income Attributable to Regal Beloit Corporation
|
$
|
104.7
|
|
|
$
|
22.1
|
|
|
$
|
207.0
|
|
|
$
|
100.1
|
|
|
July 1,
2017 |
|
December 31,
2016 |
||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and Cash Equivalents
|
$
|
243.7
|
|
|
$
|
284.5
|
|
Trade Receivables, Less Allowances of $10.4 Million in 2017 and $11.5 Million in 2016
|
544.5
|
|
|
462.2
|
|
||
Inventories
|
698.2
|
|
|
660.8
|
|
||
Prepaid Expenses and Other Current Assets
|
156.7
|
|
|
124.5
|
|
||
Total Current Assets
|
1,643.1
|
|
|
1,532.0
|
|
||
Net Property, Plant and Equipment
|
637.3
|
|
|
627.5
|
|
||
Goodwill
|
1,469.0
|
|
|
1,453.2
|
|
||
Intangible Assets, Net of Amortization
|
692.3
|
|
|
711.7
|
|
||
Deferred Income Tax Benefits
|
27.5
|
|
|
22.4
|
|
||
Other Noncurrent Assets
|
13.8
|
|
|
11.7
|
|
||
Total Assets
|
$
|
4,483.0
|
|
|
$
|
4,358.5
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Accounts Payable
|
$
|
406.5
|
|
|
$
|
334.2
|
|
Dividends Payable
|
11.6
|
|
|
10.7
|
|
||
Current Hedging Obligations
|
14.5
|
|
|
49.0
|
|
||
Accrued Compensation and Employee Benefits
|
75.7
|
|
|
70.1
|
|
||
Other Accrued Expenses
|
123.8
|
|
|
137.0
|
|
||
Current Maturities of Long-Term Debt
|
100.7
|
|
|
100.6
|
|
||
Total Current Liabilities
|
732.8
|
|
|
701.6
|
|
||
Long-Term Debt
|
1,199.5
|
|
|
1,310.9
|
|
||
Deferred Income Taxes
|
142.4
|
|
|
97.7
|
|
||
Noncurrent Hedging Obligations
|
1.1
|
|
|
17.6
|
|
||
Pension and Other Post Retirement Benefits
|
107.4
|
|
|
106.5
|
|
||
Other Noncurrent Liabilities
|
51.0
|
|
|
46.0
|
|
||
Commitments and Contingencies (see Note 12)
|
|
|
|
||||
Equity:
|
|
|
|
||||
Regal Beloit Corporation Shareholders' Equity:
|
|
|
|
||||
Common Stock, $.01 par value, 100.0 Million Shares Authorized, 44.6 Million and 44.8 Million Shares Issued and Outstanding in 2017 and 2016, Respectively
|
0.4
|
|
|
0.4
|
|
||
Additional Paid-In Capital
|
890.8
|
|
|
904.5
|
|
||
Retained Earnings
|
1,525.0
|
|
|
1,452.0
|
|
||
Accumulated Other Comprehensive Loss
|
(210.4
|
)
|
|
(318.1
|
)
|
||
Total Regal Beloit Corporation Shareholders' Equity
|
2,205.8
|
|
|
2,038.8
|
|
||
Noncontrolling Interests
|
43.0
|
|
|
39.4
|
|
||
Total Equity
|
2,248.8
|
|
|
2,078.2
|
|
||
Total Liabilities and Equity
|
$
|
4,483.0
|
|
|
$
|
4,358.5
|
|
|
Common
Stock
$.01 Par
Value
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Non-
controlling
Interests
|
|
Total
Equity
|
||||||||||||
Balance as of January 2, 2016
|
$
|
0.4
|
|
|
$
|
900.8
|
|
|
$
|
1,291.1
|
|
|
$
|
(255.0
|
)
|
|
$
|
45.5
|
|
|
$
|
1,982.8
|
|
Net Income
|
—
|
|
|
—
|
|
|
98.2
|
|
|
—
|
|
|
2.9
|
|
|
101.1
|
|
||||||
Other Comprehensive Income (Loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
|
(0.5
|
)
|
|
1.4
|
|
||||||
Dividends Declared ($0.47 Per Share)
|
—
|
|
|
—
|
|
|
(20.9
|
)
|
|
—
|
|
|
—
|
|
|
(20.9
|
)
|
||||||
Stock Options Exercised, Including Income Tax Benefit and Share Cancellations
|
—
|
|
|
(1.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.7
|
)
|
||||||
Dividends Declared to Noncontrolling Interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
(0.3
|
)
|
||||||
Share-based Compensation
|
—
|
|
|
7.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.1
|
|
||||||
Purchase of Subsidiary Shares from Noncontrolling Interest
|
—
|
|
|
(7.2
|
)
|
|
—
|
|
|
(2.7
|
)
|
|
(9.7
|
)
|
|
$
|
(19.6
|
)
|
|||||
Balance as of July 2, 2016
|
$
|
0.4
|
|
|
$
|
899.0
|
|
|
$
|
1,368.4
|
|
|
$
|
(255.8
|
)
|
|
$
|
37.9
|
|
|
$
|
2,049.9
|
|
|
Common
Stock
$.01 Par
Value
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Non-
controlling
Interests
|
|
Total
Equity
|
||||||||||||
Balance as of December 31, 2016
|
$
|
0.4
|
|
|
$
|
904.5
|
|
|
$
|
1,452.0
|
|
|
$
|
(318.1
|
)
|
|
$
|
39.4
|
|
|
$
|
2,078.2
|
|
Net Income
|
—
|
|
|
—
|
|
|
99.3
|
|
|
—
|
|
|
2.6
|
|
|
101.9
|
|
||||||
Other Comprehensive Income
|
—
|
|
|
—
|
|
|
—
|
|
|
107.7
|
|
|
1.0
|
|
|
108.7
|
|
||||||
Dividends Declared ($0.50 Per Share)
|
—
|
|
|
—
|
|
|
(22.3
|
)
|
|
—
|
|
|
—
|
|
|
(22.3
|
)
|
||||||
Stock Options Exercised
|
—
|
|
|
(3.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.1
|
)
|
||||||
Stock Repurchase
|
—
|
|
|
(17.7
|
)
|
|
(4.0
|
)
|
|
—
|
|
|
—
|
|
|
(21.7
|
)
|
||||||
Share-based Compensation
|
—
|
|
|
7.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.1
|
|
||||||
Balance as of July 1, 2017
|
$
|
0.4
|
|
|
$
|
890.8
|
|
|
$
|
1,525.0
|
|
|
$
|
(210.4
|
)
|
|
$
|
43.0
|
|
|
$
|
2,248.8
|
|
|
Six Months Ended
|
||||||
|
July 1,
2017 |
|
July 2,
2016 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net Income
|
$
|
101.9
|
|
|
$
|
101.1
|
|
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities (Net of Acquisitions and Divestitures):
|
|
|
|
||||
Depreciation and Amortization
|
68.8
|
|
|
79.0
|
|
||
(Gain) Loss on Sale or Disposition of Assets, Net
|
(0.3
|
)
|
|
1.0
|
|
||
Share-Based Compensation Expense
|
7.1
|
|
|
7.1
|
|
||
Exit of Business
|
3.9
|
|
|
—
|
|
||
Gain on Sale of Businesses
|
(0.1
|
)
|
|
(11.6
|
)
|
||
Change in Operating Assets and Liabilities, Net of Acquisitions and Divestitures
|
(32.4
|
)
|
|
(0.5
|
)
|
||
Net Cash Provided By Operating Activities
|
148.9
|
|
|
176.1
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Additions to Property, Plant and Equipment
|
(33.7
|
)
|
|
(31.7
|
)
|
||
Sales of Investment Securities
|
0.5
|
|
|
30.3
|
|
||
Purchases of Investment Securities
|
(0.5
|
)
|
|
(25.8
|
)
|
||
Proceeds from Sale of Businesses
|
0.5
|
|
|
25.0
|
|
||
Proceeds from Sale of Assets
|
1.3
|
|
|
0.1
|
|
||
Net Cash Used In Investing Activities
|
(31.9
|
)
|
|
(2.1
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Borrowings Under Revolving Credit Facility
|
492.2
|
|
|
360.0
|
|
||
Repayments Under Revolving Credit Facility
|
(494.3
|
)
|
|
(338.0
|
)
|
||
Proceeds from Short-Term Borrowings
|
15.1
|
|
|
20.8
|
|
||
Repayments of Short-Term Borrowings
|
(15.0
|
)
|
|
(27.5
|
)
|
||
Proceeds from Long-Term Borrowings
|
0.3
|
|
|
—
|
|
||
Repayments of Long-Term Borrowings
|
(112.1
|
)
|
|
(125.2
|
)
|
||
Dividends Paid to Shareholders
|
(21.4
|
)
|
|
(20.5
|
)
|
||
Shares Surrendered for Taxes
|
(3.4
|
)
|
|
(1.9
|
)
|
||
Proceeds from the Exercise of Stock Options
|
0.4
|
|
|
0.5
|
|
||
Payments of Contingent Consideration
|
(5.3
|
)
|
|
—
|
|
||
Repurchase of Common Stock
|
(21.0
|
)
|
|
—
|
|
||
Distributions to Noncontrolling Interests
|
—
|
|
|
(0.3
|
)
|
||
Purchase of Subsidiary Shares from Noncontrolling Interest
|
—
|
|
|
(19.6
|
)
|
||
Net Cash Used In Financing Activities
|
(164.5
|
)
|
|
(151.7
|
)
|
||
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS
|
6.7
|
|
|
(3.7
|
)
|
||
Net Increase (Decrease) in Cash and Cash Equivalents
|
(40.8
|
)
|
|
18.6
|
|
||
Cash and Cash Equivalents at Beginning of Period
|
284.5
|
|
|
252.9
|
|
||
Cash and Cash Equivalents at End of Period
|
$
|
243.7
|
|
|
$
|
271.5
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
|
|
|
|
||||
Cash Paid For:
|
|
|
|
||||
Interest
|
$
|
26.8
|
|
|
$
|
27.3
|
|
Income taxes
|
$
|
30.6
|
|
|
$
|
40.5
|
|
a.
|
recording all tax effects associated with stock-based compensation through the income statement, as opposed to recording certain amounts in other paid-in capital, which eliminates the requirement to calculate a "windfall pool";
|
b.
|
allowing entities to withhold shares to satisfy the employer's statutory tax withholding requirement up to the highest marginal tax rate applicable to employees rather than the employer's minimum statutory rate, without requiring liability classification for the award;
|
c.
|
modifying the requirement to estimate the number of awards that will ultimately vest by providing an accounting policy election to either estimate the number of forfeitures or recognize forfeitures as they occur;
|
d.
|
changing certain presentation requirements in the statement of cash flows, including removing the requirement to present excess tax benefits as an inflow from financing activities and an outflow from operating activities, and requiring the cash paid to taxing authorities arising from withheld shares to be classified as a financing activity; and
|
e.
|
the assumed proceeds from applying the treasury stock method when computing earnings per share is amended to exclude the amount of excess tax benefits that previously would have been recognized in additional paid-in capital.
|
|
July 1,
2017 |
|
December 31,
2016 |
Raw Material and Work in Process
|
48%
|
|
45%
|
Finished Goods and Purchased Parts
|
52%
|
|
55%
|
|
Useful Life in Years
|
|
July 1,
2017 |
|
December 31,
2016 |
||||
Land and Improvements
|
|
|
$
|
79.6
|
|
|
$
|
76.7
|
|
Buildings and Improvements
|
3 - 50
|
|
292.2
|
|
|
280.4
|
|
||
Machinery and Equipment
|
3 - 15
|
|
970.8
|
|
|
929.9
|
|
||
Property, Plant and Equipment
|
|
|
1,342.6
|
|
|
1,287.0
|
|
||
Less: Accumulated Depreciation
|
|
|
(705.3
|
)
|
|
(659.5
|
)
|
||
Net Property, Plant and Equipment
|
|
|
$
|
637.3
|
|
|
$
|
627.5
|
|
|
Three Months Ended
|
||||||||||||||
|
July 1, 2017
|
||||||||||||||
|
Hedging Activities
|
|
Pension and Post Retirement Benefit Adjustments
|
|
Foreign Currency Translation Adjustments
|
|
Total
|
||||||||
Beginning Balance
|
$
|
(14.4
|
)
|
|
$
|
(35.8
|
)
|
|
$
|
(211.9
|
)
|
|
$
|
(262.1
|
)
|
Other Comprehensive Income (Loss) before Reclassifications
|
16.1
|
|
|
(0.1
|
)
|
|
38.7
|
|
|
54.7
|
|
||||
Tax Impact
|
(6.1
|
)
|
|
—
|
|
|
—
|
|
|
(6.1
|
)
|
||||
Amounts Reclassified from Accumulated Other Comprehensive Loss
|
4.5
|
|
|
0.6
|
|
|
—
|
|
|
5.1
|
|
||||
Tax Impact
|
(1.8
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
(2.0
|
)
|
||||
Net Current Period Other Comprehensive Income
|
12.7
|
|
|
0.3
|
|
|
38.7
|
|
|
51.7
|
|
||||
Ending Balance
|
$
|
(1.7
|
)
|
|
$
|
(35.5
|
)
|
|
$
|
(173.2
|
)
|
|
$
|
(210.4
|
)
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
|
||||||||||||||
|
July 2, 2016
|
||||||||||||||
|
Hedging Activities
|
|
Pension and Post Retirement Benefit Adjustments
|
|
Foreign Currency Translation Adjustments
|
|
Total
|
||||||||
Beginning Balance
|
$
|
(37.1
|
)
|
|
$
|
(34.7
|
)
|
|
$
|
(149.5
|
)
|
|
$
|
(221.3
|
)
|
Other Comprehensive Income (Loss) before Reclassifications
|
(17.8
|
)
|
|
0.5
|
|
|
(32.1
|
)
|
|
(49.4
|
)
|
||||
Tax Impact
|
6.7
|
|
|
—
|
|
|
—
|
|
|
6.7
|
|
||||
Amounts Reclassified from Accumulated Other Comprehensive Loss
|
12.3
|
|
|
1.0
|
|
|
—
|
|
|
13.3
|
|
||||
Tax Impact
|
(4.7
|
)
|
|
(0.4
|
)
|
|
—
|
|
|
(5.1
|
)
|
||||
Net Current Period Other Comprehensive Income (Loss)
|
(3.5
|
)
|
|
1.1
|
|
|
(32.1
|
)
|
|
(34.5
|
)
|
||||
Ending Balance
|
$
|
(40.6
|
)
|
|
$
|
(33.6
|
)
|
|
$
|
(181.6
|
)
|
|
$
|
(255.8
|
)
|
|
Six Months Ended
|
||||||||||||||
|
July 1, 2017
|
||||||||||||||
|
Hedging Activities
|
|
Pension and Post Retirement Benefit Adjustments
|
|
Foreign Currency Translation Adjustments
|
|
Total
|
||||||||
Beginning Balance
|
$
|
(41.1
|
)
|
|
$
|
(36.0
|
)
|
|
$
|
(241.0
|
)
|
|
$
|
(318.1
|
)
|
Other Comprehensive Income (Loss) before Reclassifications
|
47.4
|
|
|
(0.3
|
)
|
|
67.8
|
|
|
114.9
|
|
||||
Tax Impact
|
(18.0
|
)
|
|
—
|
|
|
—
|
|
|
(18.0
|
)
|
||||
Amounts Reclassified from Accumulated Other Comprehensive Loss
|
16.2
|
|
|
1.2
|
|
|
—
|
|
|
17.4
|
|
||||
Tax Impact
|
(6.2
|
)
|
|
(0.4
|
)
|
|
—
|
|
|
(6.6
|
)
|
||||
Net Current Period Other Comprehensive Income
|
39.4
|
|
|
0.5
|
|
|
67.8
|
|
|
107.7
|
|
||||
Ending Balance
|
$
|
(1.7
|
)
|
|
$
|
(35.5
|
)
|
|
$
|
(173.2
|
)
|
|
$
|
(210.4
|
)
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Six Months Ended
|
||||||||||||||
|
July 2, 2016
|
||||||||||||||
|
Hedging Activities
|
|
Pension and Post Retirement Benefit Adjustments
|
|
Foreign Currency Translation Adjustments
|
|
Total
|
||||||||
Beginning Balance
|
$
|
(47.5
|
)
|
|
$
|
(35.4
|
)
|
|
$
|
(172.1
|
)
|
|
$
|
(255.0
|
)
|
Other Comprehensive Income (Loss) before Reclassifications
|
(14.2
|
)
|
|
0.5
|
|
|
(6.8
|
)
|
|
(20.5
|
)
|
||||
Tax Impact
|
5.4
|
|
|
—
|
|
|
—
|
|
|
5.4
|
|
||||
Amounts Reclassified from Accumulated Other Comprehensive Loss
|
25.4
|
|
|
1.9
|
|
|
—
|
|
|
27.3
|
|
||||
Tax Impact
|
(9.7
|
)
|
|
(0.6
|
)
|
|
—
|
|
|
(10.3
|
)
|
||||
Net Current Period Other Comprehensive Income (Loss)
|
6.9
|
|
|
1.8
|
|
|
(6.8
|
)
|
|
1.9
|
|
||||
Purchase of Subsidiary Shares from Noncontrolling Interest
|
—
|
|
|
—
|
|
|
(2.7
|
)
|
|
(2.7
|
)
|
||||
Ending Balance
|
$
|
(40.6
|
)
|
|
$
|
(33.6
|
)
|
|
$
|
(181.6
|
)
|
|
$
|
(255.8
|
)
|
|
Total
|
|
Commercial and Industrial Systems
|
|
Climate Solutions
|
|
Power Transmission Solutions
|
||||||||
Balance as of December 31, 2016
|
$
|
1,453.2
|
|
|
$
|
540.6
|
|
|
$
|
341.8
|
|
|
$
|
570.8
|
|
Translation Adjustments
|
15.8
|
|
|
6.6
|
|
|
1.2
|
|
|
8.0
|
|
||||
Balance as of July 1, 2017
|
$
|
1,469.0
|
|
|
$
|
547.2
|
|
|
$
|
343.0
|
|
|
$
|
578.8
|
|
|
|
|
|
|
|
|
|
||||||||
Cumulative Goodwill Impairment Charges
|
$
|
275.7
|
|
|
$
|
244.8
|
|
|
$
|
7.7
|
|
|
$
|
23.2
|
|
|
|
|
|
July 1, 2017
|
|
December 31, 2016
|
||||||||||||
|
|
Weighted Average Amortization Period (Years)
|
|
Gross Value
|
|
Accumulated
Amortization
|
|
Gross Value
|
|
Accumulated
Amortization
|
||||||||
Amortizable Intangible Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Customer Relationships
|
|
15
|
|
$
|
714.0
|
|
|
$
|
226.1
|
|
|
$
|
703.6
|
|
|
$
|
201.6
|
|
Technology
|
|
11
|
|
191.1
|
|
|
116.5
|
|
|
189.7
|
|
|
109.5
|
|
||||
Trademarks
|
|
12
|
|
32.4
|
|
|
24.7
|
|
|
31.8
|
|
|
23.3
|
|
||||
Patent and Engineering Drawings
|
|
5
|
|
16.6
|
|
|
16.6
|
|
|
16.6
|
|
|
16.6
|
|
||||
Non-Compete Agreements
|
|
5
|
|
8.4
|
|
|
8.2
|
|
|
8.3
|
|
|
8.1
|
|
||||
|
|
|
|
962.5
|
|
|
392.1
|
|
|
950.0
|
|
|
359.1
|
|
||||
Non-Amortizable Trade Names
|
|
|
|
121.9
|
|
|
—
|
|
|
120.8
|
|
|
—
|
|
||||
|
|
|
|
$
|
1,084.4
|
|
|
$
|
392.1
|
|
|
$
|
1,070.8
|
|
|
$
|
359.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
Estimated Amortization
|
||
2018
|
|
$
|
53.3
|
|
2019
|
|
52.9
|
|
|
2020
|
|
49.8
|
|
|
2021
|
|
42.1
|
|
|
2022
|
|
40.4
|
|
|
Commercial and Industrial Systems
|
|
Climate Solutions
|
|
Power Transmission Solutions
|
|
Eliminations
|
|
Total
|
||||||||||
As of and for Three Months Ended July 1, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
External Sales
|
$
|
407.4
|
|
|
$
|
270.5
|
|
|
$
|
191.3
|
|
|
$
|
—
|
|
|
$
|
869.2
|
|
Intersegment Sales
|
19.9
|
|
|
6.0
|
|
|
2.2
|
|
|
(28.1
|
)
|
|
—
|
|
|||||
Total Sales
|
427.3
|
|
|
276.5
|
|
|
193.5
|
|
|
(28.1
|
)
|
|
869.2
|
|
|||||
Gross Profit
|
91.9
|
|
|
68.3
|
|
|
62.8
|
|
|
—
|
|
|
223.0
|
|
|||||
Operating Expenses
|
71.3
|
|
|
28.1
|
|
|
40.6
|
|
|
—
|
|
|
140.0
|
|
|||||
Income from Operations
|
20.6
|
|
|
40.2
|
|
|
22.2
|
|
|
—
|
|
|
83.0
|
|
|||||
Depreciation and Amortization
|
14.8
|
|
|
5.6
|
|
|
14.0
|
|
|
—
|
|
|
34.4
|
|
|||||
Capital Expenditures
|
11.1
|
|
|
2.3
|
|
|
3.3
|
|
|
—
|
|
|
16.7
|
|
|||||
As of and for Three Months Ended July 2, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
External Sales
|
$
|
394.7
|
|
|
$
|
254.5
|
|
|
189.4
|
|
|
$
|
—
|
|
|
$
|
838.6
|
|
|
Intersegment Sales
|
11.4
|
|
|
7.0
|
|
|
1.1
|
|
|
(19.5
|
)
|
|
—
|
|
|||||
Total Sales
|
406.1
|
|
|
261.5
|
|
|
190.5
|
|
|
(19.5
|
)
|
|
838.6
|
|
|||||
Gross Profit
|
96.2
|
|
|
64.7
|
|
|
62.0
|
|
|
—
|
|
|
222.9
|
|
|||||
Operating Expenses
|
71.1
|
|
|
28.6
|
|
|
31.8
|
|
|
—
|
|
|
131.5
|
|
|||||
Income from Operations
|
25.1
|
|
|
36.1
|
|
|
30.2
|
|
|
—
|
|
|
91.4
|
|
|||||
Depreciation and Amortization
|
19.2
|
|
|
6.5
|
|
|
13.2
|
|
|
—
|
|
|
38.9
|
|
|||||
Capital Expenditures
|
9.6
|
|
|
3.6
|
|
|
3.6
|
|
|
—
|
|
|
16.8
|
|
|
Commercial and Industrial Systems
|
|
Climate Solutions
|
|
Power Transmission Solutions
|
|
Eliminations
|
|
Total
|
||||||||||
As of and for Six Months Ended July 1, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
External Sales
|
$
|
788.6
|
|
|
$
|
518.2
|
|
|
$
|
375.9
|
|
|
$
|
—
|
|
|
$
|
1,682.7
|
|
Intersegment Sales
|
35.8
|
|
|
14.2
|
|
|
2.9
|
|
|
(52.9
|
)
|
|
—
|
|
|||||
Total Sales
|
824.4
|
|
|
532.4
|
|
|
378.8
|
|
|
(52.9
|
)
|
|
1,682.7
|
|
|||||
Gross Profit
|
187.5
|
|
|
129.0
|
|
|
122.1
|
|
|
—
|
|
|
438.6
|
|
|||||
Operating Expenses
|
141.1
|
|
|
57.6
|
|
|
82.1
|
|
|
—
|
|
|
280.8
|
|
|||||
Income from Operations
|
46.4
|
|
|
71.4
|
|
|
40.0
|
|
|
—
|
|
|
157.8
|
|
|||||
Depreciation and Amortization
|
30.0
|
|
|
11.1
|
|
|
27.7
|
|
|
—
|
|
|
68.8
|
|
|||||
Capital Expenditures
|
21.7
|
|
|
6.6
|
|
|
5.4
|
|
|
—
|
|
|
33.7
|
|
|||||
As of and for Six Months Ended July 2, 2016
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||
External Sales
|
$
|
772.3
|
|
|
$
|
494.3
|
|
|
390.2
|
|
|
$
|
—
|
|
|
$
|
1,656.8
|
|
|
Intersegment Sales
|
22.7
|
|
|
12.2
|
|
|
2.0
|
|
|
(36.9
|
)
|
|
—
|
|
|||||
Total Sales
|
795.0
|
|
|
506.5
|
|
|
392.2
|
|
|
(36.9
|
)
|
|
1,656.8
|
|
|||||
Gross Profit
|
189.8
|
|
|
120.9
|
|
|
129.6
|
|
|
—
|
|
|
440.3
|
|
|||||
Operating Expenses
|
143.0
|
|
|
60.2
|
|
|
76.4
|
|
|
—
|
|
|
279.6
|
|
|||||
Income from Operations
|
46.8
|
|
|
60.7
|
|
|
53.2
|
|
|
—
|
|
|
160.7
|
|
|||||
Depreciation and Amortization
|
38.9
|
|
|
12.7
|
|
|
27.4
|
|
|
—
|
|
|
79.0
|
|
|||||
Capital Expenditures
|
16.9
|
|
|
7.5
|
|
|
7.3
|
|
|
—
|
|
|
31.7
|
|
|
Commercial and Industrial Systems
|
|
Climate Solutions
|
|
Power Transmission Solutions
|
|
Total
|
||||||||
Identifiable Assets as of July 1, 2017
|
$
|
1,926.2
|
|
|
$
|
946.1
|
|
|
$
|
1,610.7
|
|
|
$
|
4,483.0
|
|
Identifiable Assets as of December 31, 2016
|
$
|
1,872.7
|
|
|
$
|
881.8
|
|
|
$
|
1,604.0
|
|
|
$
|
4,358.5
|
|
|
July 1,
2017 |
|
December 31,
2016 |
||||
Term Facility
|
$
|
686.1
|
|
|
$
|
798.1
|
|
Senior Notes
|
600.0
|
|
|
600.0
|
|
||
Multicurrency Revolving Facility
|
15.9
|
|
|
18.0
|
|
||
Other
|
5.3
|
|
|
5.1
|
|
||
Less: Debt Issuance costs
|
(7.1
|
)
|
|
(9.7
|
)
|
||
|
1,300.2
|
|
|
1,411.5
|
|
||
Less: Current Maturities
|
100.7
|
|
|
100.6
|
|
||
Non-Current Portion
|
$
|
1,199.5
|
|
|
$
|
1,310.9
|
|
|
|
Principal
|
|
Interest Rate
|
|
Maturity
|
||
Floating Rate Series 2007A
|
|
$
|
100.0
|
|
|
Floating (1)
|
|
August 23, 2017
|
Fixed Rate Series 2011A
|
|
100.0
|
|
|
4.1%
|
|
July 14, 2018
|
|
Fixed Rate Series 2011A
|
|
230.0
|
|
|
4.8 to 5.0%
|
|
July 14, 2021
|
|
Fixed Rate Series 2011A
|
|
170.0
|
|
|
4.9 to 5.1%
|
|
July 14, 2023
|
|
|
|
$
|
600.0
|
|
|
|
|
|
(1) Interest rates vary as LIBOR varies. At July 1, 2017, the interest rate was 1.9%. At December 31, 2016, the interest rate was 1.6%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
July 1,
2017 |
|
July 2,
2016 |
|
July 1,
2017 |
|
July 2,
2016 |
||||||||
Service Cost
|
$
|
1.8
|
|
|
$
|
2.0
|
|
|
$
|
3.6
|
|
|
$
|
4.1
|
|
Interest Cost
|
2.4
|
|
|
2.7
|
|
|
4.8
|
|
|
5.1
|
|
||||
Expected Return on Plan Assets
|
(2.8
|
)
|
|
(2.9
|
)
|
|
(5.6
|
)
|
|
(5.9
|
)
|
||||
Amortization of Prior Service Cost and Net Actuarial Loss
|
0.6
|
|
|
1.0
|
|
|
1.2
|
|
|
1.9
|
|
||||
Net Periodic Benefit Cost
|
$
|
2.0
|
|
|
$
|
2.8
|
|
|
$
|
4.0
|
|
|
$
|
5.2
|
|
|
|
July 1,
2017 |
|
July 2,
2016 |
||||
Total intrinsic value of share-based incentive awards exercised
|
|
$
|
3.1
|
|
|
$
|
0.3
|
|
Cash received from stock option exercises
|
|
0.4
|
|
|
0.5
|
|
||
Income tax benefit (expense) from the exercise of stock options
|
|
0.7
|
|
|
(0.1
|
)
|
||
Total fair value of share-based incentive awards vested
|
|
4.3
|
|
|
4.8
|
|
|
2017
|
|
2016
|
||||
Per share weighted average fair value of grants
|
$
|
23.31
|
|
|
$
|
15.22
|
|
Risk-free interest rate
|
2.1
|
%
|
|
1.4
|
%
|
||
Expected life (years)
|
7.0
|
|
|
7.0
|
|
||
Expected volatility
|
28.6
|
%
|
|
29.6
|
%
|
||
Expected dividend yield
|
1.3
|
%
|
|
1.7
|
%
|
Number of Shares Under Options and SARs
|
Shares
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Term (years)
|
|
Aggregate Intrinsic Value (in millions)
|
|||||
Exercisable at December 31, 2016
|
1,610,499
|
|
|
$
|
63.16
|
|
|
|
|
|
||
Granted
|
194,142
|
|
|
80.70
|
|
|
|
|
|
|||
Exercised
|
(134,991
|
)
|
|
52.67
|
|
|
|
|
|
|||
Forfeited
|
(1,180
|
)
|
|
54.61
|
|
|
|
|
|
|||
Expired
|
(9,485
|
)
|
|
64.21
|
|
|
|
|
|
|||
Outstanding at July 1, 2017
|
1,658,985
|
|
|
$
|
66.07
|
|
|
6.1
|
|
$
|
25.4
|
|
Exercisable at July 1, 2017
|
989,761
|
|
|
$
|
63.93
|
|
|
4.3
|
|
$
|
17.4
|
|
|
|
Shares
|
|
Weighted Average Fair Value at Grant Date
|
|
Weighted Average Remaining Contractual Term (years)
|
|||
Unvested RSAs at December 31, 2016
|
|
19,593
|
|
|
$
|
57.43
|
|
|
0.4
|
Granted
|
|
13,941
|
|
|
80.70
|
|
|
|
|
Vested
|
|
(19,593
|
)
|
|
57.43
|
|
|
|
|
Unvested RSAs at July 1, 2017
|
|
13,941
|
|
|
$
|
80.70
|
|
|
0.9
|
|
|
|
|
Shares
|
|
Weighted Average Fair Value at Grant Date
|
|
Weighted Average Remaining Contractual Term (years)
|
|||
Unvested RSUs at December 31, 2016
|
|
277,863
|
|
|
$
|
69.23
|
|
|
1.7
|
||
Granted
|
|
75,614
|
|
|
80.46
|
|
|
|
|||
Vested
|
|
(78,625
|
)
|
|
75.15
|
|
|
|
|||
Forfeited
|
|
(1,634
|
)
|
|
67.90
|
|
|
|
|||
Unvested RSUs at July 1, 2017
|
|
273,218
|
|
|
$
|
70.64
|
|
|
2.1
|
|
July 1, 2017
|
|
July 2, 2016
|
||
Risk-free interest rate
|
1.6
|
%
|
|
0.9
|
%
|
Expected life (years)
|
3.0
|
|
|
3.0
|
|
Expected volatility
|
24.0
|
%
|
|
23.0
|
%
|
Expected dividend yield
|
1.3
|
%
|
|
1.7
|
%
|
|
|
|
|
Shares
|
|
Weighted Average Fair Value at Grant Date
|
|
Weighted Average Remaining Contractual Term (years)
|
|||
Unvested PSUs at December 31, 2016
|
|
133,340
|
|
|
$
|
65.28
|
|
|
2.0
|
||
Granted
|
|
48,403
|
|
|
90.80
|
|
|
|
|||
Vested
|
|
(110
|
)
|
|
83.74
|
|
|
|
|||
Forfeited
|
|
(24,705
|
)
|
|
83.21
|
|
|
|
|||
Unvested PSUs at July 1, 2017
|
|
156,928
|
|
|
$
|
70.31
|
|
|
2.4
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
July 1,
2017 |
|
July 2,
2016 |
|
July 1,
2017 |
|
July 2,
2016 |
||||
Denominator for Basic Earnings Per Share
|
44.7
|
|
|
44.7
|
|
|
44.8
|
|
|
44.7
|
|
Effect of Dilutive Securities
|
0.4
|
|
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
Denominator for Diluted Earnings Per Share
|
45.1
|
|
|
45.0
|
|
|
45.1
|
|
|
45.0
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
July 1,
2017 |
|
July 2,
2016 |
|
July 1,
2017 |
|
July 2,
2016 |
||||||||
Beginning Balance
|
$
|
18.2
|
|
|
$
|
17.5
|
|
|
$
|
20.3
|
|
|
$
|
19.1
|
|
Less: Payments
|
(4.5
|
)
|
|
(4.6
|
)
|
|
(12.8
|
)
|
|
(9.7
|
)
|
||||
Provisions
|
4.4
|
|
|
6.3
|
|
|
10.5
|
|
|
9.8
|
|
||||
Translation Adjustments
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
||||
Ending Balance
|
$
|
18.1
|
|
|
$
|
19.2
|
|
|
$
|
18.1
|
|
|
$
|
19.2
|
|
|
Notional
Amount (in US Dollars)
|
||
Chinese Renminbi
|
$
|
324.2
|
|
Mexican Peso
|
229.8
|
|
|
Euro
|
59.8
|
|
|
Indian Rupee
|
40.7
|
|
|
Canadian Dollar
|
37.1
|
|
|
Australian Dollar
|
13.7
|
|
|
Thai Baht
|
6.2
|
|
|
British Pound
|
7.8
|
|
|
Notional
Amount
|
||
Copper
|
$
|
62.9
|
|
Aluminum
|
5.3
|
|
|
July 1, 2017
|
||||||||||||||
|
Prepaid
Expenses and Other Current Assets
|
|
Other
Noncurrent
Assets
|
|
Current Hedging
Obligations
|
|
Noncurrent Hedging
Obligations
|
||||||||
Designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Interest rate swap contracts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.1
|
|
|
$
|
—
|
|
Currency contracts
|
6.9
|
|
|
5.1
|
|
|
12.8
|
|
|
1.1
|
|
||||
Commodity contracts
|
5.1
|
|
|
0.2
|
|
|
0.2
|
|
|
—
|
|
||||
Not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Currency contracts
|
3.2
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
||||
Commodity contracts
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total Derivatives
|
$
|
15.3
|
|
|
$
|
5.3
|
|
|
$
|
14.5
|
|
|
$
|
1.1
|
|
|
December 31, 2016
|
||||||||||||||
|
Prepaid
Expenses and Other Current Assets
|
|
Other
Noncurrent
Assets
|
|
Current Hedging
Obligations |
|
Noncurrent Hedging
Obligations |
||||||||
Designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Interest rate swap contracts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.3
|
|
|
$
|
—
|
|
Currency contracts
|
1.3
|
|
|
0.4
|
|
|
39.7
|
|
|
17.6
|
|
||||
Commodity contracts
|
4.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Currency contracts
|
1.5
|
|
|
—
|
|
|
6.0
|
|
|
—
|
|
||||
Commodity contracts
|
2.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total Derivatives
|
$
|
10.1
|
|
|
$
|
0.4
|
|
|
$
|
49.0
|
|
|
$
|
17.6
|
|
|
Three Months Ended
|
||||||||||||||||||||||||||||||
|
July 1, 2017
|
|
July 2, 2016
|
||||||||||||||||||||||||||||
|
Commodity
Forwards
|
|
Currency
Forwards
|
|
Interest
Rate
Swaps
|
|
Total
|
|
Commodity
Forwards
|
|
Currency
Forwards
|
|
Interest
Rate
Swaps
|
|
Total
|
||||||||||||||||
Gain (Loss) recognized in Other Comprehensive Income (Loss)
|
$
|
2.2
|
|
|
$
|
13.9
|
|
|
$
|
—
|
|
|
$
|
16.1
|
|
|
$
|
0.7
|
|
|
$
|
(18.2
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(17.8
|
)
|
Amounts reclassified from Other Comprehensive Income (Loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gain recognized in Net Sales
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Gain (Loss) recognized in Cost of Sales
|
3.8
|
|
|
(7.5
|
)
|
|
—
|
|
|
(3.7
|
)
|
|
(4.3
|
)
|
|
(6.7
|
)
|
|
—
|
|
|
(11.0
|
)
|
||||||||
Loss recognized in Interest Expense
|
—
|
|
|
—
|
|
|
(1.1
|
)
|
|
(1.1
|
)
|
|
—
|
|
|
—
|
|
|
(1.3
|
)
|
|
(1.3
|
)
|
|
Six Months Ended
|
||||||||||||||||||||||||||||||
|
July 1, 2017
|
|
July 2, 2016
|
||||||||||||||||||||||||||||
|
Commodity
Forwards
|
|
Currency
Forwards
|
|
Interest
Rate
Swaps
|
|
Total
|
|
Commodity
Forwards
|
|
Currency
Forwards
|
|
Interest
Rate
Swaps
|
|
Total
|
||||||||||||||||
Gain (Loss) recognized in Other Comprehensive Income (Loss)
|
$
|
4.5
|
|
|
$
|
42.9
|
|
|
$
|
—
|
|
|
$
|
47.4
|
|
|
$
|
2.1
|
|
|
$
|
(15.6
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
(14.2
|
)
|
Amounts reclassified from Other Comprehensive Income (Loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gain recognized in Net Sales
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Gain (Loss) recognized in Cost of Sales
|
4.7
|
|
|
(19.1
|
)
|
|
—
|
|
|
(14.4
|
)
|
|
(9.7
|
)
|
|
(13.2
|
)
|
|
—
|
|
|
(22.9
|
)
|
||||||||
Loss recognized in Interest Expense
|
—
|
|
|
—
|
|
|
(2.2
|
)
|
|
(2.2
|
)
|
|
—
|
|
|
—
|
|
|
(2.5
|
)
|
|
(2.5
|
)
|
|
Three Months Ended
|
||||||||||||||
|
July 1, 2017
|
|
July 2, 2016
|
||||||||||||
|
Commodity Forwards
|
|
Currency Forwards
|
|
Commodity Forwards
|
|
Currency Forwards
|
||||||||
Gain (Loss) recognized in Cost of Sales
|
$
|
(1.4
|
)
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
Gain (Loss) recognized in Operating Expenses
|
—
|
|
|
3.3
|
|
|
—
|
|
|
(1.6
|
)
|
|
Six Months Ended
|
||||||||||||||
|
July 1, 2017
|
|
July 2, 2016
|
||||||||||||
|
Commodity Forwards
|
|
Currency Forwards
|
|
Commodity Forwards
|
|
Currency Forwards
|
||||||||
Gain recognized in Cost of Sales
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
Gain (Loss) recognized in Operating Expenses
|
—
|
|
|
7.7
|
|
|
—
|
|
|
(0.7
|
)
|
|
July 1, 2017
|
||||||||||
|
Gross Amounts as Presented in the Condensed Consolidated Balance Sheet
|
|
Derivative Contract Amounts Subject to Right of Offset
|
|
Derivative Contracts as Presented on a Net Basis
|
||||||
Prepaid Expenses and Other Current Assets:
|
|
|
|
|
|
||||||
Derivative Currency Contracts
|
$
|
10.1
|
|
|
$
|
(5.6
|
)
|
|
$
|
4.5
|
|
Derivative Commodity Contracts
|
5.2
|
|
|
(0.2
|
)
|
|
5.0
|
|
|||
Other Noncurrent Assets:
|
|
|
|
|
|
||||||
Derivative Currency Contracts
|
5.1
|
|
|
(0.9
|
)
|
|
4.2
|
|
|||
Derivative Commodity Contracts
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|||
Current Hedging Obligations:
|
|
|
|
|
|
||||||
Derivative Currency Contracts
|
13.2
|
|
|
(5.6
|
)
|
|
7.6
|
|
|||
Derivative Commodity Contracts
|
0.2
|
|
|
(0.2
|
)
|
|
—
|
|
|||
Noncurrent Hedging Obligations:
|
|
|
|
|
|
||||||
Derivative Currency Contracts
|
1.1
|
|
|
(0.9
|
)
|
|
0.2
|
|
|
December 31, 2016
|
||||||||||
|
Gross Amounts as Presented in the Condensed Consolidated Balance Sheet
|
|
Derivative Contract Amounts Subject to Right of Offset
|
|
Derivative Contracts as Presented on a Net Basis
|
||||||
Prepaid Expenses and Other Current Assets:
|
|
|
|
|
|
||||||
Derivative Currency Contracts
|
$
|
2.8
|
|
|
$
|
(1.7
|
)
|
|
$
|
1.1
|
|
Derivative Commodity Contracts
|
7.3
|
|
|
—
|
|
|
7.3
|
|
|||
Other Noncurrent Assets:
|
|
|
|
|
|
||||||
Derivative Currency Contracts
|
0.4
|
|
|
(0.2
|
)
|
|
0.2
|
|
|||
Current Hedging Obligations:
|
|
|
|
|
|
||||||
Derivative Currency Contracts
|
45.7
|
|
|
(1.7
|
)
|
|
44.0
|
|
|||
Noncurrent Hedging Obligations:
|
|
|
|
|
|
||||||
Derivative Currency Contracts
|
17.6
|
|
|
(0.2
|
)
|
|
17.4
|
|
Level 1
|
Unadjusted quoted prices in active markets for identical assets or liabilities
|
Level 2
|
Unadjusted quoted prices in active markets for similar assets or liabilities, or
|
|
Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or
|
|
Inputs other than quoted prices that are observable for the asset or liability
|
Level 3
|
Unobservable inputs for the asset or liability
|
|
July 1,
2017 |
|
December 31,
2016 |
|
Classification
|
||||
Assets:
|
|
|
|
|
|
||||
Prepaid Expenses and Other Current Assets:
|
|
|
|
|
|
||||
Derivative Currency Contracts
|
$
|
10.1
|
|
|
$
|
2.8
|
|
|
Level 2
|
Derivative Commodity Contracts
|
5.2
|
|
|
7.3
|
|
|
Level 2
|
||
Other Noncurrent Assets:
|
|
|
|
|
|
||||
Assets Held in Rabbi Trust
|
5.5
|
|
|
5.4
|
|
|
Level 1
|
||
Derivative Currency Contracts
|
5.1
|
|
|
0.4
|
|
|
Level 2
|
||
Derivative Commodity Contracts
|
0.2
|
|
|
—
|
|
|
Level 2
|
||
Liabilities:
|
|
|
|
|
|
||||
Current Hedging Obligations:
|
|
|
|
|
|
||||
Interest Rate Swap
|
1.1
|
|
|
3.3
|
|
|
Level 2
|
||
Derivative Currency Contracts
|
13.2
|
|
|
45.7
|
|
|
Level 2
|
||
Derivative Commodity Contracts
|
0.2
|
|
|
—
|
|
|
Level 2
|
||
Noncurrent Hedging Obligations:
|
|
|
|
|
|
||||
Derivative Currency Contracts
|
1.1
|
|
|
17.6
|
|
|
Level 2
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
July 1,
2017 |
|
July 2,
2016 |
|
July 1,
2017 |
|
July 2,
2016 |
||||||||
Beginning Balance
|
$
|
1.0
|
|
|
$
|
1.0
|
|
|
$
|
0.6
|
|
|
$
|
1.3
|
|
Provision
|
7.7
|
|
|
1.7
|
|
|
10.9
|
|
|
3.1
|
|
||||
Less: Payments
|
7.4
|
|
|
1.3
|
|
|
10.2
|
|
|
3.0
|
|
||||
Ending Balance
|
$
|
1.3
|
|
|
$
|
1.4
|
|
|
$
|
1.3
|
|
|
$
|
1.4
|
|
|
Three Months Ended
|
||||||||||||||||||
|
July 1, 2017
|
|
July 2, 2016
|
||||||||||||||||
Restructuring Costs:
|
Cost of Sales
|
Operating Expenses
|
Total
|
|
Cost of Sales
|
Operating Expenses
|
Total
|
||||||||||||
Employee Termination Expenses
|
$
|
1.2
|
|
$
|
0.7
|
|
$
|
1.9
|
|
|
$
|
0.2
|
|
$
|
0.1
|
|
$
|
0.3
|
|
Facility Related Costs
|
1.6
|
|
0.1
|
|
1.7
|
|
|
0.4
|
|
0.4
|
|
0.8
|
|
||||||
Other Expenses
|
3.9
|
|
—
|
|
3.9
|
|
|
0.6
|
|
—
|
|
0.6
|
|
||||||
Total Restructuring Costs
|
$
|
6.7
|
|
$
|
0.8
|
|
$
|
7.5
|
|
|
$
|
1.2
|
|
$
|
0.5
|
|
$
|
1.7
|
|
Restructuring Related Costs:
|
|
|
|
|
|
|
|
||||||||||||
Other Employment Benefit Expenses
|
$
|
0.2
|
|
$
|
—
|
|
$
|
0.2
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Total Restructuring Related Costs
|
$
|
0.2
|
|
$
|
—
|
|
$
|
0.2
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Total Restructuring and Restructuring Related Costs
|
$
|
6.9
|
|
$
|
0.8
|
|
$
|
7.7
|
|
|
$
|
1.2
|
|
$
|
0.5
|
|
$
|
1.7
|
|
|
Six Months Ended
|
||||||||||||||||||
|
July 1, 2017
|
|
July 2, 2016
|
||||||||||||||||
Restructuring Costs:
|
Cost of Sales
|
Operating Expenses
|
Total
|
|
Cost of Sales
|
Operating Expenses
|
Total
|
||||||||||||
Employee Termination Expenses
|
$
|
2.4
|
|
$
|
1.3
|
|
$
|
3.7
|
|
|
$
|
0.4
|
|
$
|
0.1
|
|
$
|
0.5
|
|
Facility Related Costs
|
2.3
|
|
0.3
|
|
2.6
|
|
|
0.5
|
|
0.4
|
|
0.9
|
|
||||||
Other Expenses
|
3.9
|
|
—
|
|
3.9
|
|
|
0.6
|
|
—
|
|
0.6
|
|
||||||
Total Restructuring Costs
|
$
|
8.6
|
|
$
|
1.6
|
|
$
|
10.2
|
|
|
$
|
1.5
|
|
$
|
0.5
|
|
$
|
2.0
|
|
Restructuring Related Costs:
|
|
|
|
|
|
|
|
||||||||||||
Other Employment Benefit Expenses
|
$
|
0.7
|
|
$
|
—
|
|
$
|
0.7
|
|
|
$
|
0.5
|
|
$
|
0.6
|
|
$
|
1.1
|
|
Total Restructuring Related Costs
|
$
|
0.7
|
|
$
|
—
|
|
$
|
0.7
|
|
|
$
|
0.5
|
|
$
|
0.6
|
|
$
|
1.1
|
|
Total Restructuring and Restructuring Related Costs
|
$
|
9.3
|
|
$
|
1.6
|
|
$
|
10.9
|
|
|
$
|
2.0
|
|
$
|
1.1
|
|
$
|
3.1
|
|
|
Total
|
|
Commercial and Industrial Systems
|
|
Climate Solutions
|
|
Power Transmission Solutions
|
||||||||
Restructuring Costs - Three Months Ended July 1, 2017
|
$
|
7.7
|
|
|
$
|
6.9
|
|
|
$
|
0.6
|
|
|
$
|
0.2
|
|
Restructuring Costs - Three Months Ended July 2, 2016
|
$
|
1.7
|
|
|
$
|
0.7
|
|
|
$
|
0.5
|
|
|
$
|
0.5
|
|
|
Total
|
|
Commercial and Industrial Systems
|
|
Climate Solutions
|
|
Power Transmission Solutions
|
||||||||
Restructuring Costs - Six Months Ended July 1, 2017
|
$
|
10.9
|
|
|
$
|
8.6
|
|
|
$
|
1.7
|
|
|
$
|
0.6
|
|
Restructuring Costs - Six Months Ended July 2, 2016
|
$
|
3.1
|
|
|
$
|
0.8
|
|
|
$
|
1.8
|
|
|
$
|
0.5
|
|
•
|
Commercial and Industrial Systems produces medium and large motors, commercial and industrial equipment, generator and custom drives and systems. These products serve markets including commercial Heating, Ventilation, and Air Conditioning ("HVAC"), pool and spa, standby and critical power and oil and gas systems.
|
•
|
Climate Solutions produces small motors, controls and air moving solutions serving markets including residential and light commercial HVAC, water heaters and commercial refrigeration.
|
•
|
Power Transmission Solutions manufactures, sells and services belt and chain drives, helical and worm gearing, mounted and unmounted bearings, couplings, modular plastic belts, conveying chains and components, hydraulic pump drives, large open gearing and specialty mechanical products serving markets including beverage, bulk handling, metals, special machinery, energy, aerospace and general industrial.
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
July 1,
2017 |
|
July 2,
2016 |
|
July 1,
2017 |
|
July 2,
2016 |
||||||||
(Dollars in Millions)
|
|
|
|
|
|
|
|
||||||||
Net Sales:
|
|
|
|
|
|
|
|
||||||||
Commercial and Industrial Systems
|
$
|
407.4
|
|
|
$
|
394.7
|
|
|
$
|
788.6
|
|
|
$
|
772.3
|
|
Climate Solutions
|
270.5
|
|
|
254.5
|
|
|
518.2
|
|
|
494.3
|
|
||||
Power Transmission Solutions
|
191.3
|
|
|
189.4
|
|
|
375.9
|
|
|
390.2
|
|
||||
Consolidated
|
$
|
869.2
|
|
|
$
|
838.6
|
|
|
$
|
1,682.7
|
|
|
$
|
1,656.8
|
|
|
|
|
|
|
|
|
|
||||||||
Gross Profit as a Percent of Net Sales:
|
|
|
|
|
|
|
|
||||||||
Commercial and Industrial Systems
|
22.6
|
%
|
|
24.4
|
%
|
|
23.8
|
%
|
|
24.6
|
%
|
||||
Climate Solutions
|
25.3
|
%
|
|
25.4
|
%
|
|
24.9
|
%
|
|
24.5
|
%
|
||||
Power Transmission Solutions
|
32.8
|
%
|
|
32.7
|
%
|
|
32.5
|
%
|
|
33.2
|
%
|
||||
Consolidated
|
25.7
|
%
|
|
26.6
|
%
|
|
26.1
|
%
|
|
26.6
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Expenses as a Percent of Net Sales:
|
|
|
|
|
|
|
|
||||||||
Commercial and Industrial Systems
|
17.5
|
%
|
|
18.0
|
%
|
|
17.9
|
%
|
|
18.5
|
%
|
||||
Climate Solutions
|
10.4
|
%
|
|
11.2
|
%
|
|
11.1
|
%
|
|
12.2
|
%
|
||||
Power Transmission Solutions
|
21.2
|
%
|
|
16.8
|
%
|
|
21.8
|
%
|
|
19.6
|
%
|
||||
Consolidated
|
16.1
|
%
|
|
15.7
|
%
|
|
16.7
|
%
|
|
16.9
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Income from Operations as a Percent of Net Sales:
|
|
|
|
|
|
|
|
||||||||
Commercial and Industrial Systems
|
5.1
|
%
|
|
6.4
|
%
|
|
5.9
|
%
|
|
6.1
|
%
|
||||
Climate Solutions
|
14.9
|
%
|
|
14.2
|
%
|
|
13.8
|
%
|
|
12.3
|
%
|
||||
Power Transmission Solutions
|
11.6
|
%
|
|
16.0
|
%
|
|
10.6
|
%
|
|
13.6
|
%
|
||||
Consolidated
|
9.5
|
%
|
|
10.9
|
%
|
|
9.4
|
%
|
|
9.7
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Income from Operations
|
$
|
83.0
|
|
|
$
|
91.4
|
|
|
$
|
157.8
|
|
|
$
|
160.7
|
|
Interest Expense
|
14.7
|
|
|
14.8
|
|
|
29.1
|
|
|
29.8
|
|
||||
Interest Income
|
1.0
|
|
|
1.2
|
|
|
2.0
|
|
|
2.3
|
|
||||
Income before Taxes
|
69.3
|
|
|
77.8
|
|
|
130.7
|
|
|
133.2
|
|
||||
Provision for Income Taxes
|
15.0
|
|
|
19.4
|
|
|
28.8
|
|
|
32.1
|
|
||||
Net Income
|
54.3
|
|
|
58.4
|
|
|
101.9
|
|
|
101.1
|
|
||||
Less: Net Income Attributable to Noncontrolling Interests
|
1.3
|
|
|
1.8
|
|
|
2.6
|
|
|
2.9
|
|
||||
Net Income Attributable to Regal Beloit Corporation
|
$
|
53.0
|
|
|
$
|
56.6
|
|
|
$
|
99.3
|
|
|
$
|
98.2
|
|
|
|
|
July 1,
|
|
December 31,
|
||||
|
|
|
2017
|
|
2016
|
||||
Cash and Cash Equivalents
|
|
|
$
|
243.7
|
|
|
$
|
284.5
|
|
Trade Receivables, Net
|
|
|
544.5
|
|
|
462.2
|
|
||
Inventories
|
|
|
698.2
|
|
|
660.8
|
|
||
Working Capital
|
|
|
910.3
|
|
|
830.4
|
|
||
Current Ratio
|
|
|
2.2:1
|
|
|
2.2:1
|
|
|
|
Principal
|
|
Interest Rate
|
|
Maturity
|
||
Floating Rate Series 2007A
|
|
$
|
100.0
|
|
|
Floating
(1)
|
|
August 23, 2017
|
Fixed Rate Series 2011A
|
|
100.0
|
|
|
4.1%
|
|
July 14, 2018
|
|
Fixed Rate Series 2011A
|
|
230.0
|
|
|
4.8 to 5.0%
|
|
July 14, 2021
|
|
Fixed Rate Series 2011A
|
|
170.0
|
|
|
4.9 to 5.1%
|
|
July 14, 2023
|
|
|
|
$
|
600.0
|
|
|
|
|
|
(1)
Interest rates vary as LIBOR varies. At July 1, 2017, the interest rate was 1.9%. At December 31, 2016, the interest rate was 1.6%
|
Instrument
|
Notional
Amount
|
|
Maturity
|
|
Rate
Paid
|
|
Rate
Received
|
|
Fair Value
(Loss)
|
|||||
Swap
|
$
|
100.0
|
|
|
August 23, 2017
|
|
5.4
|
%
|
|
LIBOR (3 month)
|
|
$
|
(1.1
|
)
|
|
|
|
|
|
|
Gain (Loss) From
|
||||||||||
Currency
|
|
Notional
Amount
|
|
Fair
Value
|
|
10% Appreciation of
Counter Currency
|
|
10% Depreciation of
Counter Currency
|
||||||||
Chinese Renminbi
|
|
$
|
324.2
|
|
|
$
|
3.1
|
|
|
$
|
32.4
|
|
|
$
|
(32.4
|
)
|
Mexican Peso
|
|
229.8
|
|
|
(5.6
|
)
|
|
23.0
|
|
|
(23.0
|
)
|
||||
Euro
|
|
59.8
|
|
|
0.5
|
|
|
6.0
|
|
|
(6.0
|
)
|
||||
Indian Rupee
|
|
40.7
|
|
|
3.0
|
|
|
4.1
|
|
|
(4.1
|
)
|
||||
Canadian Dollar
|
|
37.1
|
|
|
0.1
|
|
|
3.7
|
|
|
(3.7
|
)
|
||||
Australian Dollar
|
|
13.7
|
|
|
(0.3
|
)
|
|
1.4
|
|
|
(1.4
|
)
|
||||
Thai Baht
|
|
6.2
|
|
|
—
|
|
|
0.6
|
|
|
(0.6
|
)
|
||||
British Pound
|
|
7.8
|
|
|
0.1
|
|
|
0.8
|
|
|
(0.8
|
)
|
|
|
|
|
|
|
Gain (Loss) From
|
||||||||||
Commodity
|
|
Notional
Amount
|
|
Fair
Value
|
|
10% Appreciation of
Commodity Prices
|
|
10% Depreciation of
Commodity Prices
|
||||||||
Copper
|
|
$
|
62.9
|
|
|
$
|
4.9
|
|
|
$
|
6.3
|
|
|
$
|
(6.3
|
)
|
Aluminum
|
|
5.3
|
|
|
0.3
|
|
|
0.5
|
|
|
(0.5
|
)
|
2017 Fiscal Month
|
|
Total
Number of
Shares
Purchased
|
|
Average
Price Paid
per Share
|
|
Total
Number of Shares
Purchased as a Part
of Publicly Announced
Plans or Programs
|
|
Maximum Number
of
Shares that May be
Purchased Under the
Plans or Programs
|
|||||
April 2 to May 6
|
|
763
|
|
|
$
|
79.56
|
|
|
—
|
|
|
2,320,000
|
|
May 7 to June 3
|
|
239,522
|
|
|
78.83
|
|
|
213,140
|
|
|
2,106,860
|
|
|
June 4 to July 1
|
|
64,156
|
|
|
78.68
|
|
|
63,664
|
|
|
2,043,196
|
|
|
|
|
304,441
|
|
|
|
|
276,804
|
|
|
|
Exhibit Number
|
|
Exhibit Description
|
12
|
|
Computation of Ratio of Earnings to Fixed Charges.
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
|
Certifications of the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.
|
|
|
|
101
|
|
The following materials from Regal Beloit Corporation’s Quarterly Report on Form 10-Q for the quarter ended July 1, 2017, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements.
|
|
|
|
|
REGAL BELOIT CORPORATION
(Registrant)
|
|
|
|
/s/ Charles A. Hinrichs
|
|
Charles A. Hinrichs
Vice President
Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
/s/ Robert A. Lazzerini
|
|
Robert A. Lazzerini
Vice President
Corporate Controller
(Principal Accounting Officer)
|
|
|
Date: August 8, 2017
|
|
Exhibit Number
|
|
Exhibit Description
|
12
|
|
Computation of Ratio of Earnings to Fixed Charges.
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
|
Certifications of the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.
|
|
|
|
101
|
|
The following materials from Regal Beloit Corporation’s Quarterly Report on Form 10-Q for the quarter ended July 1, 2017, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements.
|
|
|
|
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