ITT 8-K/A
Itt Inc. (ITT)
8-K/A
2026-05-05
For: 2026-03-02
View Original
Added on
May 05, 2026
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: March 2, 2026
(Date of earliest event reported)
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||||||
(Address of principal executive offices) (Zip Code)
(914 ) 641-2000
(Registrant's telephone number, including area code)
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Explanatory Note
On March 2, 2026, ITT Inc., an Indiana corporation (“ITT”), filed a Current Report on Form 8-K with the Securities and Exchange Commission (the “Original 8-K”), which reported that on March 2, 2026, ITT completed its previously announced acquisition of LSF11 Redwood TopCo LLC (the “Target”) (the “SPX FLOW Acquisition”) pursuant to that certain Membership Interest Purchase Agreement, dated as of December 4, 2025, by and among ITT, LSF11 Redwood Parent, L.P., Target and ITT Industries Holdings, Inc., a Delaware corporation and wholly owned subsidiary of ITT. The Target is the parent company of SPX FLOW, Inc., a provider of engineered equipment and process technologies for end markets including industrial, health, and nutrition.
This amendment to the Original 8-K (“8-K Amendment”) is being filed for the purpose of satisfying ITT’s undertaking to file the financial statements required by Item 9.01 of Form 8-K. This 8-K Amendment should be read in conjunction with the Original 8-K. Except as set forth herein, no modifications have been made to information contained in the Original 8-K, and ITT has not updated any information therein to reflect events that have occurred since the date of the Original 8-K.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
The audited consolidated financial statements and accompanying notes of SPX FLOW, Inc. as of and for the years ended December 31, 2025 and 2024, are filed herewith as Exhibit 99.1 to this 8-K Amendment and are incorporated herein by reference.
(b) Pro Forma Financial Information.
The unaudited pro forma combined condensed financial information of ITT giving effect to the SPX FLOW Acquisition, which includes the unaudited pro forma combined condensed balance sheet as of December 31, 2025 (which gives effect to the SPX FLOW Acquisition as if it occurred or had become effective on December 31, 2025) and the unaudited pro forma combined condensed statements of income for the year ended December 31, 2025 (which gives effect to the SPX FLOW Acquisition as if it occurred or had become effective on January 1, 2025), are filed herewith as Exhibit 99.2 to this 8-K Amendment and are incorporated herein by reference.
(d) Exhibits.
| Exhibit No. | Description | |||||||
| 23.1 | ||||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL Document). | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ITT Inc. | |||||||||||
(Registrant) | |||||||||||
| May 5, 2026 | By: | /s/ Lori B. Marino | |||||||||
Name: | Lori B. Marino | ||||||||||
Title: | Senior Vice President, Chief Legal Officer, Chief Compliance Officer and Secretary | ||||||||||
(Authorized Officer of Registrant) | |||||||||||
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in Registration Statement No. 333-282956 on Form S-3 and Registration Statement Nos. 333-272135, 333-105203, 333-150934 and 333-177604 on Form S-8 of ITT Inc. of our report dated February 26, 2026 relating to the financial statements of SPX FLOW, Inc. appearing in this Current Report on Form 8-K/A of ITT Inc. dated May 5, 2026.
/s/ Deloitte & Touche LLP
Charlotte, North Carolina
May 5, 2026
EXHIBIT 99.1
SPX FLOW, Inc.
Consolidated Financial Statements
as of and for the Years Ended
December 31, 2025 and 2024
as of and for the Years Ended
December 31, 2025 and 2024
1
SPX FLOW, Inc. and Subsidiaries’ Consolidated Financial Statements
Independent Auditor’s Report 3
Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended 5
December 31, 2025 and 2024
Consolidated Balance Sheets as of December 31, 2025 and 2024 6
Consolidated Statements of Equity for the Years Ended December 31, 2025 and 2024 7
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025 and 2024 8
Notes to Consolidated Financial Statements 10
Note 1 - Basis of Presentation and Summary of Significant Accounting Policies 10
Note 2 - Use of Estimates 18
Note 3 - New Accounting Pronouncements 19
Note 4 - Business and Other Asset Disposals 20
Note 5 - Revenue from Contracts with Customers 21
Note 6 - Leases 22
Note 7 - Restructuring and Other Related Charges 23
Note 8 - Inventories, Net 24
Note 9 - Goodwill and Other Intangible Assets 24
Note 10 - Employee Benefit Plans 26
Note 11 - Income Taxes 31
Note 12 - Indebtedness 38
Note 13 - Derivative Financial Instruments 43
Note 14 - Equity and Equity-Based Compensation 44
Note 15 - Litigation, Contingent Liabilities and Other Matters 47
Note 16 - Fair Value 48
Note 17 - Subsequent Event 49
2
 | Deloitte & Touche LLP 650 South Tryon Street Suite 1800 Charlotte, NC 28202 USA Tel: +1 704 887 1500 www.deloitte.com | ||||
INDEPENDENT AUDITOR'S REPORT
To Management and the Board of Directors of SPX FLOW, Inc.
Opinion
We have audited the consolidated financial statements of SPX FLOW, Inc. and subsidiaries (the "Company"), which comprise the consolidated balance sheets as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive income (loss), equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements (collectively referred to as the "financial statements").
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for one year after the date that the financial statements are issued.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial
likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, we:
•Exercise professional judgment and maintain professional skepticism throughout the audit.
•Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
•Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed.
•Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
•Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
February 26, 2026
SPX FLOW, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(In millions)
Year Ended | ||||||||
December 31, 2025 | December 31, 2024 | |||||||
Revenues | $ | 1,340.0 | $ | 1,380.2 | ||||
Cost of products sold | 782.6 | 808.6 | ||||||
Gross profit | 557.4 | 571.6 | ||||||
Selling, general and administrative | 289.7 | 295.1 | ||||||
Intangible amortization | 101.6 | 105.4 | ||||||
Restructuring and other related charges | 6.9 | 4.9 | ||||||
Loss on sale of business | — | 25.7 | ||||||
Operating income | 159.2 | 140.5 | ||||||
Other income (expense), net | (11.9) | 5.0 | ||||||
Interest expense, net | (126.5) | (139.6) | ||||||
Losses on early extinguishment of debt | (1.2) | (9.3) | ||||||
Income (loss) before income taxes | 19.6 | (3.4) | ||||||
Income tax provision | (32.1) | (41.4) | ||||||
Net loss | $ | (12.5) | $ | (44.8) | ||||
Net loss | $ | (12.5) | $ | (44.8) | ||||
Other comprehensive income (loss), net: | ||||||||
Foreign currency translation adjustments | 149.3 | (75.2) | ||||||
Reclassification of disposed business foreign currency translation adjustment from accumulated other comprehensive loss | — | 0.3 | ||||||
Net unrealized losses on qualifying cash flow hedges, net of tax benefits of $3.0 and $3.8, respectively | (8.9) | (12.7) | ||||||
Other comprehensive income (loss), net | 140.4 | (87.6) | ||||||
Total comprehensive income (loss) | $ | 127.9 | $ | (132.4) | ||||
The accompanying notes are an integral part of these statements.
5
SPX FLOW, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions)
(In millions)
| December 31, 2025 | December 31, 2024 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
Cash and cash equivalents | $ | 203.2 | $ | 170.9 | |||||||
Accounts receivable, net | 228.5 | 231.8 | |||||||||
Contract assets | 33.0 | 27.6 | |||||||||
Inventories, net | 189.7 | 177.1 | |||||||||
Other current assets | 55.1 | 37.0 | |||||||||
Total current assets | 709.5 | 644.4 | |||||||||
Property, plant and equipment: | |||||||||||
Land | 17.0 | 27.6 | |||||||||
Buildings and leasehold improvements | 63.2 | 103.0 | |||||||||
Machinery and equipment | 190.3 | 171.1 | |||||||||
| 270.5 | 301.7 | ||||||||||
Accumulated depreciation | (114.0) | (94.5) | |||||||||
Property, plant and equipment, net | 156.5 | 207.2 | |||||||||
Goodwill | 999.2 | 948.7 | |||||||||
Intangibles, net | 1,479.9 | 1,502.3 | |||||||||
Other assets | 46.9 | 57.3 | |||||||||
TOTAL ASSETS | $ | 3,392.0 | $ | 3,359.9 | |||||||
LIABILITIES AND EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 138.1 | $ | 134.0 | |||||||
Contract liabilities | 96.3 | 75.4 | |||||||||
Accrued expenses and other current liabilities | 133.4 | 135.7 | |||||||||
Income taxes payable | 18.6 | 34.5 | |||||||||
Short-term debt | 2.5 | 6.6 | |||||||||
Total current liabilities | 388.9 | 386.2 | |||||||||
Long-term debt | 1,756.4 | 1,571.5 | |||||||||
Deferred and other income tax liabilities | 321.7 | 306.8 | |||||||||
Other long-term liabilities | 66.7 | 65.0 | |||||||||
Total long-term liabilities | 2,144.8 | 1,943.3 | |||||||||
Commitments and contingent liabilities (Note 15) | |||||||||||
Equity: | |||||||||||
Paid-in capital | 1,906.9 | 1,906.9 | |||||||||
Accumulated deficit | (1,082.4) | (769.9) | |||||||||
Accumulated other comprehensive income (loss) | 33.8 | (106.6) | |||||||||
Total equity | 858.3 | 1,030.4 | |||||||||
TOTAL LIABILITIES AND EQUITY | $ | 3,392.0 | $ | 3,359.9 | |||||||
The accompanying notes are an integral part of these statements.
6
SPX FLOW, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(In millions)
CONSOLIDATED STATEMENTS OF EQUITY
(In millions)
Years ended December 31, 2025 and 2024 | |||||||||||||||||||||||
Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total Equity | ||||||||||||||||||||
Balance at December 31, 2023 | $ | 1,906.9 | $ | (489.9) | $ | (19.0) | $ | 1,398.0 | |||||||||||||||
Net loss | — | (44.8) | — | (44.8) | |||||||||||||||||||
Other comprehensive loss, net | — | — | (87.6) | (87.6) | |||||||||||||||||||
Dividend to Parent | — | (200.0) | — | (200.0) | |||||||||||||||||||
Distribution of equity security | — | (35.2) | — | (35.2) | |||||||||||||||||||
Balance at December 31, 2024 | $ | 1,906.9 | $ | (769.9) | $ | (106.6) | $ | 1,030.4 | |||||||||||||||
Net loss | — | (12.5) | — | (12.5) | |||||||||||||||||||
Other comprehensive income, net | — | — | 140.4 | 140.4 | |||||||||||||||||||
Dividend to Parent | — | (300.0) | — | (300.0) | |||||||||||||||||||
Balance at December 31, 2025 | $ | 1,906.9 | $ | (1,082.4) | $ | 33.8 | $ | 858.3 | |||||||||||||||
The accompanying notes are an integral part of these statements.
7
SPX FLOW, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
| Year Ended | |||||||||||
| December 31, 2025 | December 31, 2024 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net loss | (12.5) | (44.8) | |||||||||
| Adjustments to reconcile net loss to net cash from operating activities: | |||||||||||
| Restructuring and other related charges | 6.9 | 4.9 | |||||||||
| Deferred income tax benefit | (3.9) | (39.7) | |||||||||
| Depreciation and amortization | 126.9 | 134.7 | |||||||||
| Amortization of debt discounts and deferred financing fees | 11.5 | 11.8 | |||||||||
| Pension and other employee benefits | — | 1.6 | |||||||||
| (Gain) loss on asset sales and other, net | (0.5) | 1.2 | |||||||||
| Loss on sale of business | — | 25.7 | |||||||||
| Loss on change in fair value of investment in equity security | — | 4.1 | |||||||||
| Losses on early extinguishment of debt | 1.2 | 9.3 | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable and other assets | (16.8) | (32.0) | |||||||||
| Contract assets and liabilities, net | 17.5 | (37.7) | |||||||||
| Inventories | 0.3 | 11.3 | |||||||||
| Other current assets and other assets (proceeds from termination of former interest rate swaps) | — | 34.4 | |||||||||
| Accounts payable, accrued expenses and other current liabilities | (24.1) | 21.1 | |||||||||
| Cash spending on restructuring actions | (6.6) | (6.7) | |||||||||
| Net cash from operating activities | 99.9 | 99.2 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Proceeds from sale of business, net of cash disposed | — | 312.9 | |||||||||
| Proceeds from asset sale and other, net | 68.6 | 0.1 | |||||||||
| Capital expenditures | (20.3) | (19.4) | |||||||||
| Net cash from investing activities | 48.3 | 293.6 | |||||||||
| Cash flows used in financing activities: | |||||||||||
| Term loan borrowing under senior credit facility, net of debt issuance costs of $2.1 | 172.9 | ||||||||||
| Term loan repayment of senior credit facility | — | (280.0) | |||||||||
| Revolver borrowings under senior credit facility | 28.2 | 10.3 | |||||||||
| Revolver repayments of senior credit facility | (28.2) | (10.3) | |||||||||
| Repayments of purchase card program, net | (0.5) | (2.2) | |||||||||
| Borrowings under other financing arrangements | — | 9.4 | |||||||||
| Repayments of other financing arrangements | (3.6) | (6.2) | |||||||||
| Financing fee paid | (0.7) | (2.1) | |||||||||
| Dividends paid to Parent | (300.0) | (200.0) | |||||||||
| Net cash used in financing activities | (131.9) | (481.1) | |||||||||
| Change in cash, cash equivalents and restricted cash due to changes in foreign currency exchange rates | 14.2 | (12.7) | |||||||||
| Net change in cash, cash equivalents and restricted cash | 30.5 | (101.0) | |||||||||
| Consolidated cash, cash equivalents and restricted cash, beginning of period | 173.4 | 274.4 | |||||||||
| Consolidated cash, cash equivalents and restricted cash, end of period | 203.9 | 173.4 | |||||||||
The accompanying notes are an integral part of these statements.
8
SPX FLOW, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(In millions)
| Year Ended | |||||||||||
| December 31, 2025 | December 31, 2024 | ||||||||||
| Supplemental disclosure of cash flow information | |||||||||||
| Interest paid | $ | 136.3 | $ | 146.7 | |||||||
| Income taxes paid, net of refunds of $2.2 and $1.2, respectively | 69.5 | 57.8 | |||||||||
| Non-cash investing and financing transaction: | |||||||||||
| Distribution of equity security | $ | — | $ | 35.2 | |||||||
| December 31, 2025 | December 31, 2024 | ||||||||||
Reconciliation of cash, cash equivalents and restricted cash to consolidated balance sheets at end of period: | |||||||||||
| Cash and cash equivalents | $ | 203.2 | $ | 170.9 | |||||||
| Restricted cash included in other current assets | 0.7 | 2.5 | |||||||||
| Consolidated cash, cash equivalents and restricted cash, end of period | $ | 203.9 | $ | 173.4 | |||||||
The accompanying notes are an integral part of these statements.
9
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except share and per share data, and unless otherwise noted)
(1) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Our significant accounting policies are described below, as well as in other Notes that follow.
Basis of Presentation - SPX FLOW, Inc. and its consolidated subsidiaries (“SPX FLOW,” “the Company,” “we,” “us,” or “our”), based in Charlotte, North Carolina, improves the world through innovative and sustainable solutions. The Company’s product offering is concentrated in process technologies that perform mixing, blending, fluid handling, separation, thermal heat transfer and other activities that are integral to processes performed across a wide variety of nutrition, health and precision solution markets. In 2025, SPX FLOW’s revenues consisted of approximately 40%, 35%, and 25% of sales into the Americas, EMEA, and Asia Pacific regions, respectively, and we had operations in more than 20 countries and sales in more than 130 countries around the world. In 2024, SPX FLOW’s revenues consisted of approximately 41%, 35%, and 24% of sales into the Americas, EMEA, and Asia Pacific regions, respectively, and we had operations and sales in the same number of countries as in 2025. These financial statements include the Company’s accounts prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) after the elimination of intercompany transactions.
Entry into Agreement for the Sale of SPX FLOW - On December 4, 2025, ITT Inc. (“ITT”), a publicly-owned diversified manufacturer of highly engineered critical components and customized technology solutions primarily for the transportation, industrial and energy markets, entered into a Membership Interest Purchase Agreement (the “SPX FLOW Sale Agreement” or the “Agreement”) by and among ITT, LSF11 Redwood Parent, L.P. (an indirect parent of SPX FLOW, the “Seller”), LSF11 Redwood TopCo LLC (a subsidiary of Seller and also an indirect parent of SPX FLOW, the “Target”) and ITT Industries Holdings, Inc., a wholly owned subsidiary of ITT (the “Buyer”). The Target is the parent of LSF11 Redwood Acquisitions LLC, a Delaware limited liability company, which is the direct parent and sole owner of SPX FLOW, Inc. (the “Parent”).
Pursuant to the SPX FLOW Sale Agreement, the Buyer will purchase 100% of the membership interests of the Target (the “Acquisition”) on a cash-free, debt-free basis, for an aggregate purchase price of $4.775 billion, which is expected to be comprised of $4.075 billion in cash and approximately 3.8 million shares of ITT common stock, subject to a customary net working capital adjustment.
The SPX FLOW Sale Agreement contains representations, warranties, and covenants related to the Acquisition that are customary for a transaction of this nature, including customary operating restrictions on the conduct of the business of the Target and cooperation provisions that apply until the completion of the Acquisition or termination of the Agreement.
The completion of the Acquisition is subject to and dependent upon customary closing conditions, including the receipt of certain U.S. and foreign governmental and regulatory approvals, including receipt of requisite approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
The SPX FLOW Sale Agreement includes customary termination provisions for the parties, including if, subject to certain exceptions: (a) the closing of the Acquisition has not occurred on or prior to September 4, 2026, or (b) the other party has breached its representations, warranties or covenants in the Agreement and such breach would cause certain conditions in the Agreement not to be satisfied, subject to certain negotiated cure periods.
Related Party Costs and Liabilities - We incurred $6.7 and $5.1 of costs from Hudson Americas, L.P., the investment manager of our Parent and various Lone Star funds, in the years ended December 31, 2025 and 2024, respectively, consisting primarily of reimbursement of costs incurred for management and advisory services. Such costs are recorded within “Selling, general and administrative” (“SG&A”) expense in the accompanying consolidated statements of operations. Liabilities associated with such costs were $1.1 and $0.9, respectively, as of December 31, 2025 and 2024, with a portion of each balance recorded within “Accounts payable” and “Accrued expenses and other current liabilities” in the accompany consolidated balance sheets.
10
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
Foreign Currency Translation and Transactions - The financial statements of our foreign subsidiaries are translated into U.S. dollars in accordance with the Foreign Currency Matters Topic of the Financial Accounting Standards Board (the “FASB”) Codification (the “Codification”). Balance sheet accounts are translated at the current rate at the end of each period and income statement accounts are translated at the average rate for each period. Gains and losses on foreign currency translations are reflected as a separate component of equity and other comprehensive income (loss). Foreign currency transaction gains and losses, as well as gains and losses related to foreign currency forward contracts and currency forward embedded derivatives, are included in “Other income (expense), net,” with the related net gains (losses) totaling ($14.2) and $7.5 in the years ended December 31, 2025 and 2024, respectively.
Cash and Cash Equivalents - We consider highly liquid investments with original maturities of three months or less at the date of purchase to be cash and cash equivalents.
Revenue Recognition - We utilize a policy for revenue recognition which depicts the transfer of promised goods or services to customers in accordance with the transfer of control over those goods and services. See Note 5 for additional details regarding revenue from contracts with customers.
Application of Our Revenue Recognition Policy:
Performance Obligations - Under our revenue recognition policy, a contract with a customer is an agreement approved by both parties that creates enforceable rights and obligations, has commercial substance and includes identified payment terms under which collectability is probable. Once the Company enters into a contract with a customer, the contract is evaluated to identify performance obligations. Original equipment (“OE”) contracts recognized over time are typically accounted for as a single performance obligation due to the integration of equipment and components, including installation and commissioning of those products, that will together produce a combined output. For OE or aftermarket (“AM”) contracts recognized at a point in time, we evaluate whether we have promised to provide multiple distinct goods or services in the contract, which can include equipment, installation, commissioning, and service. Goods and services that are determined to be distinct are accounted for as separate performance obligations. If determined to be significant to the contract, installation and commissioning may be accounted for as a separate performance obligation. Performance obligations to provide service typically relate to maintenance, repair or upgrade activities to be performed on equipment we provide to customers. Service is typically determined to be a separate performance obligation satisfied as the service is completed.
Shipping and handling are generally determined to be fulfillment activities and typically occur prior to when control of the underlying goods in a contract transfers to a customer. In the event we are required to perform shipping and handling activities after control of the goods transfers to a customer, we treat those obligations as fulfillment activities and accrue for the costs of performing the obligation when revenue on the related goods is recognized.
Determination and Allocation of Transaction Price - We determine the transaction price for each contract based on the consideration we expect to receive for the products or services being provided under the contract. Certain OE contracts may vary in price due to variable consideration, primarily pertaining to late delivery penalties on OE contracts recognized over time and, to a lesser extent, OE contracts recognized at a point in time. We estimate variable consideration at the amount to which we expect to be entitled, which is included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur. Due to the customer- and contract-specific nature of late delivery penalties, we use the most likely amount method to measure variable consideration based on an assessment of key factors related to a contract program schedule and, for certain contracts, specific historical experience with customers. Actual amounts of consideration ultimately received may differ from our estimates. If actual results vary from our estimates, we will adjust these estimates, which would affect revenue and earnings in the period such variances become known.
The total transaction price is allocated to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each distinct performance obligation. In cases where we sell products with observable standalone selling prices, these selling prices are used to determine the standalone selling price.
11
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
In cases where we sell an engineered customer-specific solution, we typically use the expected cost-plus margin approach to estimate the standalone selling price of each distinct performance obligation.
Payment Terms - Customer prepayments and progress billings are customary for certain OE contracts within most of our product lines, including generally those in which revenue is recognized over time and, to a lesser extent, OE contracts in which revenue is recognized at a point in time but for which products are manufactured and/or engineered over a period greater than six months. Customer prepayments and progress billings are not considered a significant financing component because they are intended to protect either our customers or us in the event that some or all of the obligations under the contract are not completed.
Our customers are invoiced for products and services upon delivery or when contractual milestones are met, resulting in outstanding receivables with contractual payment terms from these customers. Payments on contracts with customer prepayments or progress billings are generally aligned with the milestones defined in the related contract, while payments for all other products and services typically occur 30 to 60 days after delivery occurs or services are completed.
Returns and Customer Sales Incentives - We have certain arrangements that require us to estimate, at the time of sale, the amounts of variable consideration that should be excluded from revenue as (i) certain amounts are not expected to be collected from customers and/or (ii) the product may be returned. We rely primarily on historical experience and/or specific customer agreements to estimate these amounts at the time of shipment and to reduce the transaction price. Arrangements that may impact the consideration to be collected from customers primarily include volume rebates and early payment discounts. We establish provisions for estimated returns primarily based on contract terms and historical experience.
Contract Costs - The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if the Company expects the benefit of those costs to be longer than one year. The Company applies a practical expedient to expense costs as incurred for costs to obtain a contract when the amortization period is expected to be less than one year. These costs primarily include the Company's internal sales force compensation program; under the terms of this program these costs are generally earned and recognized at the time the revenue is recognized.
Revenues Recognized Over Time - Certain of our businesses recognize revenues and profits from long-term construction/installation contracts over time. Such method requires estimates of future revenues and costs over the full term of product delivery. We measure our performance principally by the contract costs incurred to date as a percentage of the estimated total costs for that contract at completion. For OE contracts that are recognized over time, our customers generally contract with us to provide a service of integrating a complex set of tasks and components into a single project of a highly engineered and tailored capability that generally cannot be re-sold to another customer without significant re-engineering and/or re-work cost. Such contracts are accounted for as a single performance obligation. For AM service contracts, our customers generally receive and consume the benefits of the service as we perform, or our performance enhances a customer-controlled asset. As noted above, we generally recognize revenue over time using costs incurred to date relative to total estimated costs at completion (“EAC's”) for these OE and service contracts. This measure best depicts the transfer of control to customers continuously over time, which occurs as we incur costs related to satisfaction of performance obligation(s) under our contracts. This transfer of control over time is also supported by the work being either customer-owned throughout the life of the project or by termination clauses which allow us to recover costs incurred plus a reasonable profit. Revenues, including estimated profits, are recorded proportionally as costs are incurred. For certain long-term AM maintenance contracts where we stand ready to perform at any time, we recognize revenue ratably over the life of the related contract.
We have established controls and procedures to update project EAC’s for contracts recognized over time at least quarterly. Costs to fulfill include primarily labor, materials and subcontractors’ costs, as well as other direct costs. Our cost estimation process is based upon (i) historical experience, (ii) the professional judgment and knowledge of our engineers, project managers, and operations and financial professionals, and (iii) an assessment of key factors such as progress towards completion and the related program schedule, identified opportunities and risks and the related changes in estimates of revenues and costs.
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SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
EAC adjustments are recognized in the period in which they become known, including the resulting impact on revenues and operating income. These adjustments may result from positive (or negative) project performance and may result in an increase (or decrease) in operating income during performance, depending on whether or not we are successful in mitigating risks surrounding the technical, schedule and cost aspects of those performance obligations or realizing related opportunities. If and when EAC costs exceed revenue to be earned on a project, a provision for the entire expected loss on the performance obligation is recognized in the period the loss is determined. The impact of EAC adjustments on our revenues and operating income was insignificant for all periods presented.
Revenues Recognized at a Point in Time - For OE and AM contracts recognized at a point in time, we generally determine that control transfers when the customer has obtained legal title and the risks and rewards of ownership, which is usually upon delivery based on FOB shipping terms. Although these types of contracts may contain multiple performance obligations, they are often satisfied at or near the same time, which can have the same effect as though the performance obligations were combined into a single performance obligation and allocated the total amount of the transaction price. For certain of our OE contracts recognized at a point in time, customer acceptance may be required before control transfers to the customer. Although products that require customer acceptance are often recognized over time, these products may also be recognized at a point in time when the contract does not provide us with an enforceable right to recover costs plus a reasonable profit margin in the event of contract termination. Customer acceptance provisions in our contracts with customers generally relate to promises to provide highly engineered products that require precise outputs or customer-defined performance capabilities.
Billing Processes and Contract Balances - For most contracts for which revenues are recognized over time, and generally for larger contracts for which revenues are recognized at a point in time, we bill customers contractually-defined amounts throughout the execution period of the contracts, as our performance under the contracts reaches certain designated milestones as are defined within the terms of the underlying contracts.
Contract assets include unbilled amounts typically resulting from sales under contracts recognized over time when the cost-to-cost method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer, and right to payment is not just subject to the passage of time. Contract assets are generally classified as current, as we expect to bill the amounts within the next twelve months. Contract liabilities include billings in excess of revenue under contracts recognized over time and advance payments received from customers related to product sales (unearned revenue). We classify contract liabilities generally as a current liability, as we expect to recognize the related revenue within the next twelve months. Our contract assets and liabilities are reported on a contract-by-contract basis at the end of each reporting period.
Remaining Performance Obligations - Remaining performance obligations represent the transaction price of orders for which (i) control of goods or services has not been transferred to the customer or we have not otherwise met our performance obligations, or (ii) where revenue is accounted for over time, proportional costs have not yet been incurred. Such remaining performance obligations exclude unexercised contract options and potential orders under “blanket order” contracts (e.g., with indefinite delivery dates or quantities).
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SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
Accounts Receivable Allowances - We provide allowances for estimated credit losses based on our historical experience and the evaluation of the likelihood of success in collecting specific customer receivables. Summarized below is the activity for the allowance for credit losses:
Year ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
Balance at beginning of period | $ | 2.4 | $ | 3.2 | |||||||
Allowances provided | 0.2 | 0.3 | |||||||||
Write-offs, net of recoveries, credits issued and other | (0.4) | (0.1) | |||||||||
Reductions associated with disposed business (see Note 4) | — | (1.0) | |||||||||
Balance at end of period | $ | 2.2 | $ | 2.4 | |||||||
In addition to an allowance for credit losses, we maintain allowances for customer returns, discounts and invoice pricing discrepancies, with such allowances primarily based on historical experience. Summarized below is the activity for such allowances:
Year ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
Balance at beginning of period | $ | 1.8 | $ | 2.8 | |||||||
Allowances provided | 11.3 | 13.3 | |||||||||
Usage and other | (11.5) | (13.5) | |||||||||
Reductions associated with disposed business (see Note 4) | — | (0.8) | |||||||||
Balance at end of period | $ | 1.6 | $ | 1.8 | |||||||
Inventory - We estimate losses for excess and/or obsolete inventory and the net realizable value of inventory based on the aging and historical utilization of the inventory and the evaluation of the likelihood of recovering the inventory costs based on anticipated demand and selling price.
Property, Plant and Equipment - Property, plant and equipment (“PP&E”) is stated at cost, less accumulated depreciation. We use the straight-line method for computing depreciation expense over the useful lives of PP&E, which do not exceed 40 years for buildings and range from 3 to 15 years for machinery and equipment. Depreciation expense, including amortization of finance leases, was $25.3 and $29.3 for the years ended December 31, 2025 and 2024, respectively. Leasehold improvements are amortized over the life of the related asset or the life of the lease, whichever is shorter.
Impairments of PP&E, which represent non-cash asset write-downs, typically arise from business restructuring decisions that lead to the disposition of assets no longer required in the restructured business. For these situations, we recognize a loss when the carrying amount of an asset exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Fair values for assets subject to impairment testing are determined primarily by management, taking into consideration various factors including third-party appraisals, quoted market prices and previous experience. If an asset remains in service at the decision date, the asset is written down to its fair value, if impaired, and the net book value is depreciated over its remaining economic useful life. When we commit to a plan to sell an asset, including the initiation of a plan to locate a buyer, and it is probable that the asset will be sold within one year based on its current condition and sales price, depreciation of the asset is discontinued and the asset is classified as an asset held for sale. In addition, the asset is written down to its fair value less any selling costs, if impaired.
Income Taxes - Deferred income tax assets and liabilities, as presented in the consolidated balance sheets, reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We periodically assess whether deferred tax assets will be realized and the adequacy of deferred tax liabilities, including the results of local, state, federal or foreign statutory tax audits or estimates and judgments used.
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SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
Due to the acquisition of the Company by the Parent in April 2022, the Company and its U.S. subsidiaries became a part of a new consolidated tax filing group for U.S. federal and certain U.S. state purposes with LSF11 Redwood TopCo LLC as the parent of the consolidated group. As a result, certain amounts included in income taxes receivable (classified in “Other current assets” in the accompany consolidated balance sheets) and “Income taxes payable” will be remitted as part of the LSF11 Redwood TopCo LLC consolidated return filings. Based on this change in group, the income taxes for the Company are computed on a separate return basis.
Derivative Financial Instruments - We use interest rate swaps (“Swaps”) and foreign currency (“FX”) forward contracts to manage our exposures to variable rate interest on our term loan and fluctuating currency exchange rates. Derivatives are recorded on the balance sheet and measured at fair value. For derivatives designated as cash flow hedges, the effective portion of the changes in fair value of the derivatives is recorded in accumulated other comprehensive income (loss) and subsequently recognized in earnings when the hedged items impact earnings. Changes in the fair value of derivatives not designated as hedges, and the ineffective portion of cash flow hedges, are recorded in current earnings. We do not enter into financial instruments for speculative or trading purposes.
For those transactions that are designated as cash flow hedges, on the date the derivative contract is entered into, we document our hedge relationship, including identification of the hedging instruments and the hedged items, as well as our risk management objectives and strategies for undertaking the hedge transaction. We also assess, both at inception and quarterly thereafter, whether such derivatives are highly effective in offsetting changes in the fair value of the hedged item. See Notes 13 and 16 for further information.
Cash flows from hedging activities are included in the same category as the items being hedged, which are primarily operating activities.
Goodwill and Other Intangible Assets - We test 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. In reviewing each reporting unit’s goodwill for impairment, we may opt to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Our qualitative evaluation is an assessment of a number of factors, including the excess of the estimated fair value over carrying value at the last quantitative assessment date, reporting unit-specific conditions and operating results, industry and market conditions and trends, and general macroeconomic conditions. If we determine that an impairment is more likely than not, we then proceed with a quantitative impairment test. Otherwise, no further testing is required. Our quantitative analysis of the fair value of reporting units is based generally on discounted projected cash flows, but we also consider factors such as comparable industry price multiples. We employ cash flow projections that we believe to be reasonable under current and forecasted circumstances, the results of which form the basis for making judgments about the carrying values of the reported net assets of our reporting units. The financial results of many of our businesses closely follow changes in the industries and end markets that they serve. Accordingly, we consider estimates and judgments that affect the future cash flow projections, including principal methods of competition such as volume, price, service, product performance and technical innovations and estimates associated with cost improvement initiatives, capacity utilization and assumptions for inflation and blended effective tax rates. Any significant change in market conditions and estimates or judgments used to determine expected future cash flows that indicate a reduction in carrying value may give rise to impairment in the period that the change becomes known.
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SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
We perform our annual trademarks impairment testing during the fourth quarter in conjunction with our annual financial planning process, or on a more frequent basis if there are indications of potential impairment. In reviewing trademarks for impairment, we first assess qualitative factors (as described above) to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the estimated fair value of each trademark may be below its respective carrying amount. If we determine that an impairment is more likely than not, we then proceed with a quantitative impairment test. Our quantitative analysis of trademarks is based on applying estimated royalty rates to projected revenues, with resulting cash flows discounted at a rate of return that reflects current market conditions. The basis for these projected revenues is the annual operating plan for each of the related businesses.
Long-Lived Assets and Intangible Assets Subject to Amortization - We continually review whether events and circumstances subsequent to the acquisition of any long-lived assets, or intangible assets subject to amortization, have occurred that indicate the remaining estimated useful lives of those assets may warrant revision or that the remaining balance of those assets may not be fully recoverable. If events and circumstances indicate that the long-lived assets should be reviewed for possible impairment, we use projections to assess whether future cash flows on an undiscounted basis related to the assets are likely to exceed the related carrying amount. We will record an impairment charge to the extent that the carrying value of the assets exceed their fair values as determined by valuation techniques appropriate in the circumstances, which could include the use of similar projections on a discounted basis.
In determining the estimated useful lives of definite-lived intangibles, we consider the nature, competitive position, life cycle position, and historical and expected future operating cash flows of each acquired asset, as well as our commitment to support these assets through continued investment and legal infringement protection.
Accrued expenses and other current liabilities - We make estimates and judgments in establishing accruals as required under GAAP. Summarized in the table below are the components of accrued expenses and other current liabilities at December 31, 2025 and 2024.
Year ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
Employee benefits(1) | $ | 60.2 | $ | 58.8 | |||||||
| Current portion of operating lease liabilities | 11.1 | 10.1 | |||||||||
| Warranty | 2.5 | 2.5 | |||||||||
| Fair value of swap liabilities | 1.1 | 5.7 | |||||||||
| Restructuring | 1.1 | 2.7 | |||||||||
Other(2) | 57.4 | 55.9 | |||||||||
| Total | $ | 133.4 | $ | 135.7 | |||||||
(1)Employee benefits consist of various employee-related items including, among other items, accrued bonus, vacation, payroll and payroll-related taxes, and sales incentive compensation.
(2)Other consists of various items including, among other items, accruals for sales and value-added taxes, interest, third-party commissions, professional and legal fees, freight costs, self-insurance obligations, and uncertain tax positions.
Legal - It is our policy to accrue for estimated losses from legal actions or claims when events exist that make the realization of the losses probable and they can be reasonably estimated. We do not discount legal obligations or reduce them by anticipated insurance recoveries.
Self-Insurance - We are self-insured for certain of our workers' compensation, automobile, product, general liability and health costs and, thus, record an accrual for our retained liability. The liability for these programs is reflected in our consolidated balance sheets as of December 31, 2025 and 2024 within “Accrued expenses and other current liabilities.”
Warranty - In the normal course of business, we issue product warranties for specific products and provide for the estimated future warranty cost in the period in which the sale is recorded. We provide for the estimate of warranty cost based on contract terms and historical warranty loss experience that is periodically adjusted for recent actual experience. Because warranty estimates are forecasts that are based on the best available information, actual claims costs may differ from amounts provided. In addition, due to the seasonal fluctuations at certain of our businesses, the timing of warranty provisions and the
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SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
usage of warranty accruals can vary period to period. We make adjustments to initial obligations for warranties as changes in the obligations become reasonably estimable.
The following is an analysis of our product warranty accrual for the periods presented:
Year ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
Balance at beginning of period | $ | 2.6 | $ | 4.3 | |||||||
Provisions | 4.2 | 4.2 | |||||||||
Usage | (4.3) | (5.4) | |||||||||
Reduction associated with disposed business (see Note 4) | — | (0.4) | |||||||||
Currency translation adjustment | 0.1 | (0.1) | |||||||||
Balance at end of period | 2.6 | 2.6 | |||||||||
Less: current portion of warranty | 2.5 | 2.5 | |||||||||
Non-current portion of warranty | $ | 0.1 | $ | 0.1 | |||||||
Restructuring and Other Related Charges - As part of our business strategy, we periodically right-size and consolidate operations to improve long-term results. Additionally, from time to time, we alter our business model to better serve customer demand, discontinue lower-margin product lines and rationalize and consolidate manufacturing capacity. Our restructuring and integration decisions are based, in part, on discounted cash flows and are designed to achieve our goals of reducing structural footprint and maximizing profitability. Liabilities for exit costs including, among other things, severance and other employee benefit costs, are measured initially at their fair value and recorded when incurred. The components of the charges have been computed based on expected cash payouts, including severance and other employee benefits based on existing severance policies, local laws, and other estimated exit costs. With the exception of certain employee termination obligations, which are not material to our consolidated financial statements, we anticipate that liabilities related to restructuring actions as of December 31, 2025 will be paid within one year from the period in which the action was initiated. See Note 7 for further discussion of our accounting for restructuring and other related charges.
Employee Benefit Plans - Certain of our employees participate in defined benefit pension and other postretirement plans we sponsor. The expense for these plans is derived from an actuarial calculation based on the plans' provisions and assumptions regarding discount rates and rates of increase in compensation levels. Discount rates for most of the plans are based on representative bond indices. Rates of increase in compensation levels are established based on expectations of current and foreseeable future increases in compensation. Independent actuaries are consulted in determining these assumptions. See Note 10 for further discussion of our accounting for pension and postretirement benefits.
Research and Development Costs - The Company conducts research and development activities for the purpose of developing and improving new products. The related expenditures are expensed as incurred and totaled $20.0 and $19.7 in the years ended December 31, 2025 and 2024, respectively, and are classified within SG&A expense within the consolidated statements of operations.
Acquisitions - The Company accounts for business combinations by applying the acquisition method. The Company’s consolidated financial statements include the operating results of acquired entities from the respective dates of acquisition. The Company recognizes and measures the identifiable assets acquired, liabilities assumed, and any non-controlling interest as of the acquisition date at fair value. The excess, if any, of total consideration transferred in a business combination over the fair value of identifiable assets acquired, liabilities assumed, and any non-controlling interest is recognized as goodwill in the accompanying consolidated balance sheets. Costs incurred by the Company to effect a business combination other than costs related to the issuance of debt or equity securities are included in the accompanying consolidated statements of operations in the period the costs are incurred. There were no acquisitions in 2025 or 2024.
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SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
Discontinued operations and other business disposals:
Classification and Measurement - The Company classifies assets and liabilities of a business or asset group as held for sale when we commit to a plan to divest a business or asset group, actively begin marketing it for sale, and when it is deemed probable of occurrence within the next twelve months. Furthermore, we classify the assets and liabilities of a held for sale business or asset group as assets and liabilities of discontinued operations, and the results of its operations as income (loss) from discontinued operations, net, for all periods presented, when the sale of the business or asset group reflects a strategic shift that has, or will have, a major effect on the Company’s operations and its financial results. In measuring the assets and liabilities held for sale, the Company evaluates which businesses or asset groups are being marketed for sale, including an allocation of goodwill using the relative fair values of those businesses or asset groups and any businesses or asset groups being retained, and inclusive of relevant cumulative foreign currency translation adjustments recorded in accumulated other comprehensive income (loss). See Note 4 for additional details regarding the sale of a business which occurred during 2024, as well as discussion around the timing of the reclassification of the assets and liabilities of that business to “assets and liabilities held for sale” and related accounting impacts upon such reclassification.
(2) USE OF ESTIMATES
The preparation of our consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues (e.g., our estimates related to contract revenues recognized over time described above) and expenses during the reporting period. We evaluate these estimates and judgments on an ongoing basis and base our estimates on experience, current and expected future conditions, third-party evaluations and various other assumptions that we believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Actual results may differ from the estimates and assumptions used in the consolidated financial statements and related notes.
Listed below are certain significant estimates and assumptions used in the preparation of our consolidated financial statements. Certain other estimates and assumptions are further explained in the related notes.
Assets acquired in acquisitions – Such assets are recorded at their fair values at the acquisition date based, in part, on expert valuations and management estimates. Such estimates include primarily the fair values of inventories, PP&E, right-of-use lease assets, and intangible assets. There were no acquisitions in 2025 or 2024.
Goodwill and Indefinite-Lived Intangible Assets - We test 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 fair value of reporting units is based generally on discounted projected cash flows, but we may also consider factors such as comparable industry price multiples. The fair values of our reporting units’ trademarks are based generally on assumed royalty rates applied to the discounted projected cash flows of the respective product lines of the reporting units. We employ cash flow projections that we believe to be reasonable under current and forecasted circumstances, the results of which form the basis for making judgments about the carrying values of the reported net assets of our reporting units. The financial results of many of our businesses closely follow changes in the industries and end markets that they serve. Accordingly, we consider significant estimates and judgments that affect the future cash flow projections, including principal methods of competition, such as volume, price, service, product performance and technical innovations, as well as significant estimates associated with cost reduction initiatives, capacity utilization and assumptions for inflation and blended effective tax rates. Actual results may differ from these estimates under different assumptions or conditions.
See Note 9 for further information regarding our annual impairment tests performed in 2025 and 2024.
Income Taxes - We review our income tax positions on a continuous basis and accrue for potential uncertain tax positions in accordance with the Income Taxes Topic of the Codification. Accruals for these uncertain tax positions are
18
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
classified as “Accrued expenses and other current liabilities” or “Deferred and other income taxes” in the accompanying consolidated balance sheets based on an expectation as to the timing of when the matter will be resolved. As events change or resolutions occur, these accruals are adjusted, such as in the case of audit settlements with taxing authorities. For tax positions where it is more likely than not that a tax benefit will be sustained, we record the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority, assuming such authority has full knowledge of all relevant information. These reviews also entail analyzing the realization of deferred tax assets. We establish a valuation allowance against deferred tax assets when, based on all available evidence, we believe that it is more likely than not that we will not realize a benefit associated with such assets. See Note 11 for further discussion of our accounting for income taxes and potential uncertain tax positions.
(3) NEW ACCOUNTING PRONOUNCEMENTS
The following is a summary of new accounting pronouncements that apply or may apply to our business.
In December 2023, the FASB issued an amendment to the guidance to accounting for income taxes which, among other matters, requires non-public business entities to provide (i) qualitative disclosure about specific categories of reconciling items and individual jurisdictions that result in a significant difference between the statutory tax rate and the effective tax rate, (ii) increased disclosure around the disaggregation of income taxes paid (net of refunds received) by type of taxing authority (federal, state and foreign) and by individual jurisdiction in which the company operates, and (iii) disclosure of income (or loss) from continuing operations before income taxes disaggregated between domestic and foreign, and income tax provision (benefit) disaggregated between federal, state and foreign. In addition, certain previously required disclosures are being eliminated. The guidance is effective for fiscal years beginning after December 15, 2024. We have adopted the amendment in the current fiscal year. Adoption did not have a material impact on our consolidated financial statements (see additional disclosures required by the amendment in Note 11).
In March 2024, the FASB issued an amendment to the guidance to accounting for stock compensation which, among other matters, provides illustrative examples to demonstrate how an entity should apply the scope guidance in the Compensation – Stock Compensation Topic of the Codification to profit interest and similar awards, in order to reduce complexity in determining whether such types of awards are subject to this topic and given existing diversity in practice. This guidance is applicable to an entity which provides employees or nonemployees with profit interest awards to align compensation with the entity’s performance and provides those recipients with the opportunity to participate in future profits and/or equity appreciation of the entity. This guidance provides illustrative examples to assist in the determination of whether such awards should be accounted for as a share-based payment arrangement or similar to a cash bonus or profit-sharing arrangement. The guidance is effective for annual periods beginning after December 15, 2025, and interim periods within those annual periods. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. We do not expect the adoption of this amendment to have an impact on our consolidated financial statements, related to our accounting for incentive unit awards as is further described in Note 14.
In November 2024, the FASB issued an amendment to the guidance on income statement presentation related to Disaggregation of Income Statement Expenses (“DISE”), which requires public business entities to provide enhanced disclosures about significant expense categories included in income statement line items. This guidance is intended to improve transparency by requiring annual disclosure of certain natural expense categories (such as employee compensation, depreciation, amortization, and inventory purchases) and qualitative information about other expense components that are currently presented in aggregate within cost of sales, SG&A expenses, and similar captions. The guidance is effective for annual periods beginning after December 15, 2026, and for interim periods within annual periods beginning after December 15, 2027, with early adoption permitted. We are currently assessing the impact of this amendment on the disclosures in our consolidated financial statements and expect the primary impact to result in increased disaggregation of certain expense categories within our notes to the consolidated financial statements.
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SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
In September 2025, the FASB issued an amendment to the guidance to accounting for internal-use software. This amendment modernizes the accounting for internal-use software costs, including website development costs, by removing references to prescriptive and sequential software development stages and introducing a new capitalization threshold. Under the updated guidance, entities are required to begin capitalizing software costs when (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed, and the software will be used to perform the function intended. The guidance also requires entities to assess whether significant development uncertainty exists, based on factors such as technological innovations or unproven features and the identification of significant performance requirements. The amendments clarify that disclosures for capitalized internal-use software costs should follow the requirements for PP&E, rather than intangible assets. The guidance is effective for annual reporting periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of this amendment on our consolidated financial statements and related disclosures.
In December 2025, the FASB issued an amendment to the interim reporting guidance intended to improve the clarity and navigability of the Interim Reporting Topic of the Codification (“Topic 270”) and to clarify when interim reporting requirements apply. The amendment introduces a principle requiring entities to disclose, in interim periods, events or changes occurring after the end of the most recent annual reporting period that have a material impact on the entity. It also provides additional guidance on the form and content of interim financial statements, and incorporates into Topic 270 a comprehensive list of interim disclosures required across U.S. GAAP. The amendments do not change the fundamental nature of interim reporting or expand or reduce existing interim disclosure requirements. The guidance is effective for public business entities for interim reporting periods within annual reporting periods beginning after December 15, 2027, and one year later for all other entities. Early adoption is permitted, and entities may apply the guidance either prospectively or retrospectively. We are currently evaluating the impact of this amendment on our interim financial statement disclosures.
(4) BUSINESS AND OTHER ASSET DISPOSALS
Business Disposal – Sale of Hydraulic Technologies Business
Business Disposal – Sale of Hydraulic Technologies Business
On March 29, 2024, the Company entered into a definitive agreement to sell its Hydraulic Technologies (“HT”) business to HYT Buyer, LLC (the “HT Buyer”) for a gross sales price of $325.0, payable in cash (the “HT Sale Agreement”). The gross sales price was subject to (i) certain reductions related to indebtedness of the business at the closing date (as defined in the HT Sale Agreement) and (ii) a reduction due to certain transaction costs and fees, and (iii) adjustments resulting from a customary period of review after the closing date between the parties of net working capital of the business at the closing date (as defined in the HT Sale Agreement). The sale of the HT business was consummated on June 1, 2024, and we received proceeds from the HT Buyer of $311.6 (net of cash disposed of $0.5) in connection with the closing of the sale.
We classified the assets and liabilities of the HT business as “Assets held for sale” and “Liabilities held for sale”, respectively, as of the end of our first quarter of 2024, when certain key terms and final SPX FLOW board approvals related to the HT Sale Agreement were finalized and obtained and, accordingly, we ceased the depreciation of PP&E and amortization of intangible assets of the HT business beginning as of the first day of our second quarter of 2024.
The HT business recognized revenues of $148.2 during the year ended December 31, 2023 and we concluded the sale of the HT business did not qualify for discontinued operations classification. We recorded a pre-tax loss on the HT business of $21.7 during the first quarter of 2024 to reduce the carrying value of the HT business to our estimate of the net proceeds expected to be realized upon finalization of the purchase price with the HT Buyer, less estimated costs to sell. This loss was attributable primarily to circumstances specific to the HT business sale process which arose during the first quarter of 2024 including, among other factors, (i) the narrowing of the population of potential buyers of the HT business, (ii) a conclusion reached that the HT Buyer was not expected to realize a level of post-close synergies that SPX FLOW management believed to have been potentially achievable by certain other types of prior potential buyers of the HT business, (iii) finalization of the nature and types of deductions from gross sales proceeds related to indebtedness of the HT business (as defined in the HT Sale Agreement), and (iv) estimated transaction costs and fees to sell the HT business. As this loss was
20
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
determined not to be attributable to any individual components of the HT business’ net assets, it was reflected as a valuation allowance against the total assets of the HT business as of the first quarter of 2024.
During the second quarter of 2024, we recorded an additional pre-tax loss on sale of the HT business of $4.9 related to (i) finalization of transaction costs and fees, (ii) an increase in certain estimated business taxes payable by SPX FLOW, resulting from the sale, and, to a lesser extent, (iii) an increase in the noncurrent net assets of the HT business during the second quarter of 2024. We concluded the review of net working capital of the HT business as of the closing date with the HT Buyer and received $1.3 of proceeds from the HT Buyer in November 2024. During the third and fourth quarters of 2024, we recorded a pre-tax gain on sale of the HT business of $0.9, related to finalization of the net working capital with the HT Buyer and changes in estimates of certain costs associated with the sale.
Concurrent with the closing of the sale, the parties entered into ancillary transition services agreements (the “HT TSAs”). Under the HT TSAs, SPX FLOW has provided the HT Buyer with certain specified services for varying periods in order to ensure an orderly transition of the business following the closing at agreed-upon prices or rates. These services have substantially concluded and included, among others, certain information technology, finance and human resources services. Income from such services of $1.1 and $2.9 in the years ended December 31, 2025 and 2024, respectively, was recognized as a component of “Other income (expense), net”.
During the second quarter of 2024, using proceeds received from the sale of the HT business and cash on hand, we repaid $280.0 of the outstanding principal balance of the term loan under our senior credit facilities and paid a dividend of $200.0 to the Parent.
Sale of Corporate Headquarters Facility
On July 10, 2025, the Company completed the sale of its corporate headquarters facility to a third party, with net cash proceeds received of $68.6. We recognized a pre-tax gain on sale of the asset disposal group of $1.0 as a component of “Other income (expense), net” in the year ended December 31, 2025.
(5) REVENUE FROM CONTRACTS WITH CUSTOMERS
Information regarding the nature, amount, timing and uncertainty of revenue, and the related cash flows, is noted in further detail below.
Revenues recognized over time were $314.6 and $280.7 in the years ended December 31, 2025 and 2024, respectively. As discussed further in Note 1, our revenues are generally comprised of OE and AM revenues. Our AM revenues generally consist of sales of parts and service/maintenance support, and OE revenues generally include all other revenue streams.
The following table provides disaggregated information about our OE and AM revenues for the years presented below:
Year ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
| Original equipment | $ | 758.3 | $ | 818.2 | |||||||
| Aftermarket | 581.7 | 562.0 | |||||||||
| Total revenues | $ | 1,340.0 | $ | 1,380.2 | |||||||
21
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
Our contract accounts receivable, assets and liabilities as of December 31, 2025 and 2024, respectively, and changes in such balances, were as follows:
December 31, 2025 | December 31, 2024 | Change(1) | |||||||||||||||
Contract accounts receivable(2) | $ | 219.1 | $ | 222.7 | $ | (3.6) | |||||||||||
| Contract assets | 33.0 | 27.6 | 5.4 | ||||||||||||||
| Contract liabilities | (96.3) | (75.4) | (20.9) | ||||||||||||||
| Net contract balance | $ | 155.8 | $ | 174.9 | $ | (19.1) | |||||||||||
(1)The $19.1 decrease in our net contract balance from December 31, 2024 to December 31, 2025 was primarily due to the effects of changes in contract assets and liabilities which resulted from the timing of advance and milestone payments received on certain contracts recognized over time, and of performance obligations satisfied and the related revenue recognized on such contracts.
(2)Included in “Accounts receivable, net” in our consolidated balance sheets. Amounts are presented before consideration of the allowance for credit losses.
During the year ended December 31, 2025, we recognized revenues of $69.0 related to contract liabilities outstanding as of December 31, 2024.
As of December 31, 2025 and 2024, the aggregate amount of our remaining performance obligations was $542.3 and $448.2, respectively. The Company expects to recognize revenue on approximately 90% and substantially all of our remaining performance obligations outstanding as of December 31, 2025 within the next 12 and 24 months, respectively.
(6) LEASES
Information regarding our operating lease right-of-use ("ROU") assets and liabilities, expense, cash flows and non-cash activities, future lease payments and key assumptions used in accounting for such leases, is noted in further detail below. Our finance leases are immaterial.
The components of operating lease ROU assets and liabilities as of December 31, 2025 and 2024 were as follows:
December 31, 2025 | December 31, 2024 | Balance Sheet Caption in Which Balance is Reported | |||||||||||||||
| Operating lease ROU assets | $ | 28.7 | $ | 28.1 | Other assets | ||||||||||||
| Current portion of operating lease liabilities | 11.1 | 10.1 | Accrued expenses and other current liabilities | ||||||||||||||
| Long-term operating lease liabilities | 18.6 | 18.2 | Other long-term liabilities | ||||||||||||||
The components of lease expense for the years presented below were as follows:
Year ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
Operating lease cost(1) | $ | 14.3 | $ | 14.0 | |||||||
Short-term lease cost(1) | 1.1 | 1.0 | |||||||||
Variable lease cost(1) | 0.1 | 0.1 | |||||||||
Total lease cost | $ | 15.5 | $ | 15.1 | |||||||
(1) Included in “Cost of products sold” and “SG&A expense” in our consolidated statements of operations.
22
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
The future lease payments under operating leases with initial remaining terms in excess of one year as of December 31, 2025 were as follows:
| Year Ending December 31, | Operating leases | ||||
| 2026 | $ | 12.4 | |||
| 2027 | 7.2 | ||||
| 2028 | 5.0 | ||||
| 2029 | 2.8 | ||||
| 2030 | 1.9 | ||||
| Thereafter | 3.7 | ||||
| Total lease payments | 33.0 | ||||
| Less: interest | (3.3) | ||||
| Present value of lease liabilities | $ | 29.7 | |||
Key assumptions used in accounting for our operating leases as of December 31, 2025 and 2024 were as follows:
December 31, 2025 | December 31, 2024 | ||||||||||
Weighted-average remaining lease term (years) | 4.2 | 4.5 | |||||||||
Weighted-average discount rate | 5.33 | % | 5.41 | % | |||||||
Cash flows and non-cash activities related to our operating leases for the years presented below were as follows:
Year ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
Operating cash flows paid for operating leases | $ | 14.1 | $ | 12.5 | |||||||
Non-cash activities: | |||||||||||
Operating lease ROU assets obtained in exchange for new operating lease liabilities | 10.1 | 7.0 | |||||||||
(7) RESTRUCTURING AND OTHER RELATED CHARGES
Restructuring and other related charges of $6.9 for the year ended December 31, 2025 relate primarily to (i) reductions in force of certain business unit personnel within our Nutrition and Health Solutions business and across each region in which that business operations, (ii) $2.1 of charges related to management's plan to terminate and exit the lease of a Nutrition and Health Solutions facility based in the EMEA region and, to a lesser extent, (iii) reductions in force of certain business unit personnel within our Pumps business in the EMEA region, each of which were executed in an effort to continue to streamline our costs.
Restructuring and other related charges of $4.9 for the year ended December 31, 2024 relate primarily to severance and other costs related to (i) an evaluation and re-organization of the commercial function across each of our business units and each geographic region in which we operate and (ii) reductions in force of certain business unit personnel primarily within our Mixers business in the United States, Nutrition and Health Solutions business in the Asia Pacific region and Pumps business in the EMEA region, in an effort to continue to streamline our costs. There were no charges related to facilities exit / consolidation costs or other types of restructuring costs recognized during 2024.
The following is an analysis of our restructuring liabilities (included in “Accrued expenses and other current liabilities” in our consolidated balance sheets) for the periods noted:
23
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
Year ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
Balance at beginning of period | $ | 2.7 | $ | 4.7 | |||||||
Restructuring and other related charges(1) | 4.8 | 4.9 | |||||||||
| Utilization - cash | (6.6) | (6.7) | |||||||||
Currency translation adjustment and other | 0.2 | (0.2) | |||||||||
Balance at end of period | $ | 1.1 | $ | 2.7 | |||||||
(1)Amounts that impacted restructuring and other related charges but not the restructuring liabilities included $2.1 in the year ended December 31, 2025.
(8) INVENTORIES, NET
Inventories as of December 31, 2025 and 2024 comprised the following:
December 31, 2025 | December 31, 2024 | ||||||||||
Finished goods | $ | 70.3 | $ | 61.5 | |||||||
Work in process | 25.9 | 26.1 | |||||||||
| Raw materials and purchased parts | 95.0 | 91.1 | |||||||||
Total FIFO cost | 191.2 | 178.7 | |||||||||
| Excess of FIFO cost over LIFO inventory value | (1.5) | (1.6) | |||||||||
Total inventories | $ | 189.7 | $ | 177.1 | |||||||
Inventories include material, labor and factory overhead costs and are reduced, when necessary, to estimated net realizable values. Certain domestic inventories are valued using the last-in, first-out (“LIFO”) method.
LIFO reserves relate to certain of our domestic inventories. These domestic inventories, net of their respective LIFO reserves as of each date, represented approximately 12% and 13% of total inventories as of December 31, 2025 and 2024, respectively. Other inventories are valued using the first-in, first-out (“FIFO”) method.
(9) GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill
Changes in the carrying amount of goodwill were as follows for the periods presented below:
Year ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
Balance at beginning of period | $ | 948.7 | $ | 1,054.9 | |||||||
Goodwill allocated to HT Business(1) | — | (82.4) | |||||||||
Currency translation adjustment and other | 50.5 | (23.8) | |||||||||
Balance at end of period | $ | 999.2 | $ | 948.7 | |||||||
(1)During the year ended December 31, 2024, there was a reduction of $82.4 of goodwill in connection with the sale of the HT business. See Note 4 for further information regarding this transaction.
Goodwill Impairment Tests
In connection with our accounting policy stated in Note 1, we perform our annual impairment testing of goodwill (and indefinite-lived intangible assets that are not amortized) during our fiscal fourth quarter. The results of our annual goodwill impairment tests performed during our fourth quarters of 2025 and 2024 did not indicate impairment of any reporting units.
For our annual goodwill impairment testing performed during fiscal year 2025, we opted for a qualitative evaluation to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the
24
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
fair value of a reporting unit is less than its carrying amount. We completed our qualitative assessment and determined that it was more likely than not the fair values of the reporting units were greater than their carrying amounts and, accordingly, no further quantitative testing of goodwill was required for fiscal year 2025.
For our annual goodwill impairment testing performed during fiscal year 2024, we elected to bypass the qualitative assessment and proceeded directly to performing the quantitative goodwill impairment test. We completed our quantitative testing and determined the estimated fair values of our reporting units exceeded their respective carrying values.
There is uncertainty around (i) changes in U.S. and global tariff regulations and the implications of tariff changes on international trade, as well as (ii) the duration and overall impact of global monetary policy and elevated interest rates on the global economy. Adverse changes to or a failure to achieve our business plans (revenue growth rates, profit margins), lower customer spending estimates, deterioration of macroeconomic conditions, an increase in discount rates, and/or significant declines in industry multiples could result in a future impairment of our goodwill, which could be material.
Other Intangibles, Net
Identifiable intangible assets were as follows:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||
| Gross Carrying Value | Accumulated Amortization | Net Carrying Value | Gross Carrying Value | Accumulated Amortization | Net Carrying Value | ||||||||||||||||||||||||||||||
| Intangible assets with determinable lives: | |||||||||||||||||||||||||||||||||||
Customer relationships | $ | 1,356.9 | $ | (319.4) | $ | 1,037.5 | $ | 1,287.9 | $ | (222.7) | $ | 1,065.2 | |||||||||||||||||||||||
Technology | 271.5 | (70.4) | 201.1 | 255.7 | (48.6) | 207.1 | |||||||||||||||||||||||||||||
Backlog | 40.5 | (40.5) | — | 39.0 | (39.0) | — | |||||||||||||||||||||||||||||
| 1,668.9 | (430.3) | 1,238.6 | 1,582.6 | (310.3) | 1,272.3 | ||||||||||||||||||||||||||||||
Trademarks with indefinite lives | 241.3 | — | 241.3 | 230.0 | — | 230.0 | |||||||||||||||||||||||||||||
| Total | $ | 1,910.2 | $ | (430.3) | $ | 1,479.9 | $ | 1,812.6 | $ | (310.3) | $ | 1,502.3 | |||||||||||||||||||||||
During the year ended December 31, 2025, changes in the gross carrying values of identifiable intangible assets reflected the effects of foreign currency translation.
Amortization expense was $101.6 and $105.4 in the years ended December 31, 2025 and 2024, respectively. Estimated future amortization expense related to these intangible assets is $103.6 annually in each of the years 2026 through 2029 and $99.8 in 2030.
The weighted average amortization period for our intangible assets with determinable lives, established when the Company was acquired by its Parent in April 2022, was 15.7 years, with customer relationships being amortized over 16.3 years, technology being amortized over 14.5 years, and our backlog intangible asset being amortized over a weighted average period of less than one year.
Intangible Impairment Tests
As noted above, we perform our annual indefinite-lived intangible asset impairment testing during our fiscal fourth quarter. The results of our annual indefinite-lived intangible asset impairment testing performed during our fourth quarters of 2025 and 2024 did not indicate impairment.
25
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
In fiscal year 2025, we opted for a qualitative evaluation to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of any trademark is less than its carrying amount. We completed our qualitative assessment and determined that it was more likely than not the fair values of the trademarks were greater than their carrying amounts and, accordingly, no further quantitative testing of our trademarks was required for fiscal year 2025. In fiscal year 2024, we elected to bypass the qualitative assessment and proceed to the quantitative test. The fair values of our reporting units’ trademarks were estimated using assumed royalty rates applied to expected future cash flows of the respective product lines of the reporting units, discounted at a rate of return reflecting current market conditions (Level 3 inputs). We applied our best judgment when assessing the reasonableness of the assumptions used to determine the fair values of our indefinite-lived intangible assets. The fair values approximated their respective carrying values, primarily due to the relatively short period of time passage (and therefore relatively insignificant changes in underlying assumptions) since our acquisition by the Parent.
As discussed above, there is uncertainty around (i) changes in U.S. and global tariff regulations and the implications of tariff changes on international trade, as well as (ii) the duration and overall impact of global monetary policy and elevated interest rates on the global economy, which could result in a future impairment of such assets.
In accordance with our accounting policy discussed further in Note 1, we assessed our customer relationships and technology assets for impairment by reviewing whether events and circumstances have occurred that indicate the remaining estimated useful lives of those assets may warrant revision or that the remaining balance of those assets may not be fully recoverable. There were no events or circumstances indicating that the carrying amounts of the long-lived assets are not fully recoverable.
No intangible asset impairment charges were recorded in the years ended December 31, 2025 or 2024.
(10) EMPLOYEE BENEFIT PLANS
Defined Benefit Plans
Defined Benefit Plans
Overview – SPX FLOW sponsors a number of defined benefit pension plans that cover certain employees in foreign countries, principally in Europe, as well as certain domestic nonqualified pension and postretirement plans. For all of these plans, changes in the fair value of plan assets and actuarial gains and losses are recognized to earnings in the fourth quarter of each year, unless earlier remeasurement is required. The remaining components of pension and postretirement expense, primarily service and interest costs and expected return on plan assets, are recorded on a quarterly basis.
The plan year-end date for all our plans is December 31. Below is further discussion regarding our plans, including information on plan assets, employer contributions and benefit payments, obligations and funded status, periodic pension and postretirement benefit expense (income) and plan assumptions.
Plan Assets - Our investment strategy is based on the protection and long-term growth of principal while mitigating overall investment risk. Our foreign defined benefit pension plans’ assets, with fair values of $9.0 and $7.2 at December 31, 2025 and 2024, respectively, are invested in insurance contracts and classified as Level 3 assets in the fair value hierarchy. During the years ended December 31, 2025 and 2024, there were no transfers between levels of the fair value hierarchy for any of our plans, and no equity interests in the Company were held by our defined benefit pension plans as of December 31, 2025 and 2024. Our domestic nonqualified pension and postretirement benefit plans are unfunded and therefore have no plan assets.
Employer Contributions - Many of our foreign plan obligations are unfunded in accordance with local laws. These plans have no assets and instead are funded by us on a pay-as-you-go basis in the form of direct benefit payments. In the years ended December 31, 2025 and 2024, we made contributions of $0.4 and $0.6, respectively, to our foreign plans that are funded. In addition, we made direct benefit payments of $2.4 and $2.3, respectively, related to our foreign plans that are unfunded. Our domestic nonqualified pension and postretirement plans are funded by us on a pay-as-you-go basis. We made direct benefit payments of less than $0.1 related to these plans in the years ended December 31, 2025 and 2024.
26
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
In 2026, we expect to make minimum required funding contributions of $0.5 and direct benefit payments of $2.2 related to our foreign pension plans and direct benefit payments of $0.1 related to our domestic nonqualified pension and postretirement benefit plans.
Estimated Future Benefit Payments - Following is a summary, as of December 31, 2025, of the estimated future benefit payments for our foreign and domestic pension plans and our domestic postretirement plan in each of the next five fiscal years and in the aggregate for five fiscal years thereafter. Benefit payments are paid from plan assets or directly by us for our unfunded plans.
| Year Ending December 31, | Foreign Pension Benefits | Domestic Pension Benefits | Domestic Postretirement Benefits | ||||||||||||||
| 2026 | $ | 3.8 | $ | — | $ | 0.1 | |||||||||||
| 2027 | 2.8 | 2.4 | 0.1 | ||||||||||||||
| 2028 | 2.3 | — | 0.1 | ||||||||||||||
| 2029 | 2.9 | — | 0.1 | ||||||||||||||
| 2030 | 2.8 | 3.6 | 0.1 | ||||||||||||||
| Subsequent five years | 13.7 | — | 0.8 | ||||||||||||||
The expected future benefit payments for our plans are estimated based on the same assumptions used at December 31, 2025 to measure our obligations and include benefits attributable to estimated future employee service, to the extent applicable.
Obligations and Funded Status - The funded status of our pension plans is dependent upon many factors, including returns on invested assets and the level of market interest rates. The following tables show the foreign and domestic pension plans’ funded status and amounts recognized in our consolidated balance sheets:
Foreign Pension Plans | ||||||||
Year ended | ||||||||
December 31, 2025 | December 31, 2024 | |||||||
Change in projected benefit obligation: | ||||||||
Projected benefit obligation - beginning of period | $ | 34.9 | $ | 37.7 | ||||
Service cost | 0.6 | 0.6 | ||||||
Interest cost | 1.2 | 1.1 | ||||||
Actuarial (gain) loss | (1.3) | 0.2 | ||||||
Contributions (employee) | 0.1 | 0.1 | ||||||
Benefits paid | (2.6) | (2.7) | ||||||
Foreign exchange and other | 4.3 | (2.1) | ||||||
Projected benefit obligation - end of period | $ | 37.2 | $ | 34.9 | ||||
Change in plan assets: | ||||||||
Fair value of plan assets - beginning of period | $ | 7.2 | $ | 7.2 | ||||
Actual return on plan assets | 0.6 | 0.2 | ||||||
Contributions (employer and employee) | 0.5 | 0.7 | ||||||
Benefits paid | (0.2) | (0.4) | ||||||
Foreign exchange and other | 0.9 | (0.5) | ||||||
Fair value of plan assets - end of period | $ | 9.0 | $ | 7.2 | ||||
Funded status at year-end | $ | (28.2) | $ | (27.7) | ||||
Amounts recognized in the consolidated balance sheets consist of: | ||||||||
Accrued expenses and other current liabilities | (2.1) | (1.9) | ||||||
Other long-term liabilities | (26.1) | (25.8) | ||||||
Net amount recognized | $ | (28.2) | $ | (27.7) | ||||
27
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
Domestic Pension Plan | |||||||||||
Year ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
Change in projected benefit obligation: | |||||||||||
Projected benefit obligation - beginning of period | $ | 5.2 | $ | 5.3 | |||||||
Interest cost | 0.3 | 0.3 | |||||||||
Actuarial gains | (0.3) | (0.4) | |||||||||
Projected benefit obligation - end of period | $ | 5.2 | $ | 5.2 | |||||||
Funded status at year-end | $ | (5.2) | $ | (5.2) | |||||||
Amounts recognized in the consolidated balance sheets consist of: | |||||||||||
Other long-term liabilities | (5.2) | (5.2) | |||||||||
Net amount recognized | $ | (5.2) | $ | (5.2) | |||||||
Domestic Postretirement Plan | |||||||||||
Year ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
Change in projected benefit obligation: | |||||||||||
Projected benefit obligation - beginning of period | $ | 3.1 | $ | 3.1 | |||||||
Service cost | — | 0.1 | |||||||||
Interest cost | 0.2 | 0.2 | |||||||||
Actuarial gain | — | (0.3) | |||||||||
Benefits paid | — | — | |||||||||
Projected benefit obligation - end of period | $ | 3.3 | $ | 3.1 | |||||||
Funded status at year-end | $ | (3.3) | $ | (3.1) | |||||||
Amounts recognized in the consolidated balance sheets consist of: | |||||||||||
Accrued expenses and other current liabilities | $ | (0.1) | $ | (0.1) | |||||||
Other long-term liabilities | (3.2) | (3.0) | |||||||||
Net amount recognized | $ | (3.3) | $ | (3.1) | |||||||
The accumulated benefit obligation for each foreign pension plan exceeded the fair value of its plan assets at December 31, 2025 and 2024. The accumulated benefit obligation for all foreign pension plans was $36.1 and $33.7 at December 31, 2025 and 2024, respectively. The accumulated benefit obligation for the domestic nonqualified pension plan was $5.2 at December 31, 2025 and 2024. The accumulated benefit obligation for the domestic postretirement plan was $3.3 and $3.1 at December 31, 2025 and 2024, respectively.
28
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
Components of Net Periodic Pension and Postretirement Benefit Expense (Income) - Net periodic pension benefit expense (income) for our foreign and domestic pension plans and domestic postretirement plan included the following components:
Foreign Pension Plans(1) | |||||||||||
| Year Ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
Service cost(1) | $ | 0.6 | $ | 0.6 | |||||||
Interest cost | 1.2 | 1.1 | |||||||||
Expected return on plan assets | (0.3) | (0.2) | |||||||||
Recognized net actuarial (gain) loss(2) | (1.6) | 0.2 | |||||||||
Total net periodic pension/postretirement benefit (income) expense | $ | (0.1) | $ | 1.7 | |||||||
Domestic Pension Plan(1) | |||||||||||
| Year Ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
Interest cost | $ | 0.3 | $ | 0.3 | |||||||
Recognized net actuarial gains(2) | (0.3) | (0.4) | |||||||||
Total net periodic pension/postretirement benefit income | $ | — | $ | (0.1) | |||||||
Domestic Postretirement Plan(1) | |||||||||||
| Year Ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
Service cost(1) | $ | — | $ | 0.1 | |||||||
Interest cost | 0.2 | 0.2 | |||||||||
Recognized net actuarial gain(2) | — | (0.3) | |||||||||
Total net periodic pension/postretirement benefit expense | $ | 0.2 | $ | — | |||||||
(1)Service cost is classified in “SG&A expense” and all other components of net periodic pension and postretirement expense (income) are classified in “Other income (expense), net” in our accompanying consolidated statements of operations for each period presented.
(2)Consists of reported actuarial losses (gains) and the difference between actual and expected returns on plan assets. In the years ended December 31, 2025 and 2024, net actuarial losses (gains) recognized for each type of our benefit plans were due primarily to changes in discount rates during the respective periods used to measure the respective plan obligations as of December 31, 2025 and 2024, in substantially all jurisdictions in which the Company has such obligations (see also the following tables under "Assumptions" for disclosure of weighted-average discount rates used to measure such obligations).
29
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
Assumptions - Actuarial assumptions used in accounting for our foreign pension plans and domestic nonqualified pension plan, were as follows:
Foreign Pension Plans | |||||||||||
Year ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
Weighted-average actuarial assumptions used in determining net periodic pension expense: | |||||||||||
Discount rate | 3.24 | % | 3.13 | % | |||||||
Rate of increase in compensation levels | 3.47 | % | 3.06 | % | |||||||
Cash balance interest credit rate | 2.75 | % | 3.00 | % | |||||||
Expected long-term rate of return on assets | 3.36 | % | 3.36 | % | |||||||
Weighted-average actuarial assumptions used in determining period-end benefit obligations: | |||||||||||
Discount rate | 3.77 | % | 3.24 | % | |||||||
Rate of increase in compensation levels | 3.41 | % | 3.47 | % | |||||||
Cash balance interest credit rate | 3.25 | % | 2.75 | % | |||||||
Domestic Pension Plan | |||||||||||
Year ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
Weighted-average actuarial assumption used in determining net periodic pension expense: | |||||||||||
Discount rate | 5.13 | % | 5.04 | % | |||||||
Weighted-average actuarial assumption used in determining period-end benefit obligations: | |||||||||||
Discount rate | 4.16 | % | 5.13 | % | |||||||
We review pension plan assumptions annually. Pension expense or income for the year is determined using assumptions as of the beginning of the year (except for the effects of recognizing changes in the fair value of plan assets and actuarial gains and losses in the fourth quarter of each year), while the funded status is determined using assumptions as of the end of the year. We determined assumptions and established them at the respective balance sheet date using the following principles: (i) the expected long-term rate of return on plan assets is established based on forward looking long-term expectations of asset returns over the expected period to fund participant benefits based on the target investment mix of our plans; (ii) the discount rate is determined by matching the expected projected benefit obligation cash flows for each of the plans to a yield curve that is representative of long-term, high-quality (rated AA or higher) fixed income debt instruments as of the measurement date; and (iii) the rate of increase in compensation levels is established based on our expectations of current and foreseeable future increases in compensation. In addition, we consider advice from independent actuaries.
30
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
Actuarial assumptions used in accounting for our domestic postretirement plan were as follows:
Year ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
Assumed health care cost trend rates: | |||||||||||
Health care cost trend rate for next period | 6.25 | % | 6.50 | % | |||||||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 5.00 | % | 5.00 | % | |||||||
Year that the rate reaches the ultimate trend rate | 2031 | 2031 | |||||||||
Discount rate used in determining net periodic postretirement benefit expense | 5.94 | % | 5.40 | % | |||||||
Discount rate used in determining period-end postretirement benefit obligation | 5.81 | % | 5.94 | % | |||||||
The accumulated postretirement benefit obligation was determined using the terms and conditions of our plan, together with relevant actuarial assumptions and health care cost trend rates. It is our policy to review the postretirement plan assumptions annually. The assumptions are determined by us and are established based on our prior experience and our expectations that future rates will decline. In addition, we consider advice from independent actuaries.
Defined Contribution Retirement Plan
We sponsor a defined contribution retirement plan (the “401(k) Plan” or "the Plan") pursuant to Section 401(k) of the U.S. Internal Revenue Code to which eligible U.S. employees of the Company may voluntarily contribute. Under the 401(k) Plan, such employees may contribute up to 50% of their compensation into the Plan on a pre-tax or Roth basis and the Company matches a portion of participating employees’ contributions with such matching contributions payable in cash. Amounts contributed under the 401(k) Plan in the years ended December 31, 2025 and 2024 were $3.8 and $4.1, respectively.
(11) INCOME TAXES
As discussed in Note 3, in December 2023, the FASB issued an amendment to the guidance to accounting for income taxes which, among other matters, requires non-public business entities to provide (i) qualitative disclosure about specific categories of reconciling items and individual jurisdictions that result in a significant difference between the statutory tax rate and the effective tax rate, (ii) increased disclosure around the disaggregation of income taxes paid (net of refunds received) by type of taxing authority (federal, state and foreign) and by individual jurisdiction in which the company operates, and (iii) disclosure of income (or loss) from continuing operations before income taxes disaggregated between domestic and foreign, and income tax provision (benefit) disaggregated between federal, state and foreign. We have adopted the amendment on a prospective basis, with relevant disclosures required by the amendment included in various tables below.
31
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
Income (loss) before income taxes and the provision for income taxes consisted of the following:
Year ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
Income (loss) before income taxes: | |||||||||||
United States | $ | (196.6) | $ | (106.5) | |||||||
Foreign | 216.2 | 103.1 | |||||||||
| $ | 19.6 | $ | (3.4) | ||||||||
Provision for (benefit from) income taxes: | |||||||||||
Current: | |||||||||||
United States - Federal | $ | (1.5) | $ | 14.7 | |||||||
United States - State and Local | 0.9 | 1.0 | |||||||||
Foreign | 36.6 | 65.4 | |||||||||
Total current | 36.0 | 81.1 | |||||||||
Deferred and other: | |||||||||||
United States - Federal | 15.5 | (22.8) | |||||||||
United States - State and Local | (0.9) | (8.7) | |||||||||
Foreign | (18.5) | (8.2) | |||||||||
Total deferred and other | (3.9) | (39.7) | |||||||||
Total provision | $ | 32.1 | $ | 41.4 | |||||||
32
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
The reconciliation of income tax computed at the U.S. federal statutory tax rate to our effective income tax rate was as follows:
| Year Ended | |||||||||||
| December 31, 2025 | |||||||||||
| Amount | Percentage | ||||||||||
Tax at U.S. federal statutory rate | $ | 4.1 | 21.0 | % | |||||||
State and Local Income Tax, net of Federal (national) Income Tax Effect | — | — | |||||||||
Foreign Tax Effects | |||||||||||
Australia | |||||||||||
Tax Rate Differential | 0.5 | 2.6 | |||||||||
Withholding Tax | 3.3 | 16.8 | |||||||||
Other | (0.1) | (0.5) | |||||||||
Belgium | |||||||||||
Other | 0.4 | 2.0 | |||||||||
Cayman | |||||||||||
Tax Rate Differential | (28.4) | (144.9) | |||||||||
Chile | |||||||||||
Changes in Valuation Allowance | 0.8 | 4.1 | |||||||||
Other | (0.5) | (2.6) | |||||||||
China | |||||||||||
Tax Rate Differential | 0.7 | 3.6 | |||||||||
Net Impact of High Technology Status | (9.4) | (48.0) | |||||||||
Net Tax on Dividends | (2.9) | (14.8) | |||||||||
Withholding Tax | 5.3 | 27.0 | |||||||||
Research & Development Deduction | (1.2) | (6.1) | |||||||||
Other | (0.3) | (1.5) | |||||||||
Denmark | |||||||||||
Changes in Valuation Allowance | 1.4 | 7.1 | |||||||||
Other | 0.2 | 1.0 | |||||||||
France | |||||||||||
Other | 0.4 | 2.0 | |||||||||
Germany | |||||||||||
Effect of Change in Tax Laws or Rates Enacted in the Current Period | (1.0) | (5.1) | |||||||||
Changes in Valuation Allowance | (1.2) | (6.1) | |||||||||
Other | (0.1) | (0.5) | |||||||||
India | |||||||||||
Tax Rate Differential | 0.3 | 1.5 | |||||||||
Effect of Change in Tax Laws or Rates Enacted in the Current Period | (1.0) | (5.1) | |||||||||
Withholding Tax | 1.4 | 7.1 | |||||||||
Other | (0.4) | (2.0) | |||||||||
Italy | |||||||||||
Other Taxes Imposed | 0.3 | 1.5 | |||||||||
Other | 0.2 | 1.0 | |||||||||
Japan | |||||||||||
Local and Other Non-national Corporate Income Tax | 0.6 | 3.1 | |||||||||
Other | 0.3 | 1.5 | |||||||||
Mexico | |||||||||||
Tax Rate Differential | 0.3 | 1.5 | |||||||||
Other | (0.1) | (0.5) | |||||||||
Poland | |||||||||||
Tax Rate Differential | (0.7) | (3.6) | |||||||||
Tax Incentive | (1.0) | (5.1) | |||||||||
Other | 0.4 | 2.0 | |||||||||
Saudi Arabia | |||||||||||
Other | (0.3) | (1.5) | |||||||||
Spain | |||||||||||
Prior Year Adjustment / Assessment | 0.6 | 3.1 | |||||||||
Other | 0.1 | 0.5 | |||||||||
Sweden | |||||||||||
Audit Adjustment | (0.6) | (3.1) | |||||||||
Other | — | — | |||||||||
Thailand | |||||||||||
Withholding Tax | 0.3 | 1.5 | |||||||||
Other | — | — | |||||||||
UAE | |||||||||||
Effect of Change in Tax Laws or Rates Enacted in the Current Period | 1.6 | 8.2 | |||||||||
Other | 0.3 | 1.5 | |||||||||
UK | |||||||||||
Tax Rate Differential | (0.4) | (2.0) | |||||||||
Changes in Valuation Allowance | 2.3 | 11.7 | |||||||||
Other | — | — | |||||||||
Other Foreign Jurisdictions | (0.1) | (0.5) | |||||||||
33
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
Year ended | |||||||||||
December 31, 2025 | |||||||||||
Amount | Percentage | ||||||||||
Effect of Cross-Border Tax Laws (US) | |||||||||||
Global Intangible Low-Taxed Income | $ | 8.6 | 43.9 | % | |||||||
Foreign Derived Intangible Income | (0.9) | (4.6) | |||||||||
Subpart F | 2.2 | 11.2 | |||||||||
Branch and Partnership Income | 28.3 | 144.5 | |||||||||
Sec. 965 Audit Adjustment | 1.8 | 9.2 | |||||||||
Other | 0.2 | 1.0 | |||||||||
Tax Credits (US) | |||||||||||
R&D Credit | (0.2) | (1.0) | |||||||||
Foreign Tax Credit | (20.8) | (106.0) | |||||||||
Changes in Valuation Allowance (US) | 30.3 | 154.6 | |||||||||
Non-Taxable/Non-Deductible Items (US) | |||||||||||
Non-Deductible Transaction Costs | 0.9 | 4.6 | |||||||||
Other | 0.5 | 2.6 | |||||||||
Changes in Unrecognized Tax Benefits (US) | 5.3 | 27.0 | |||||||||
Other Adjustments (US) | (0.5) | (2.6) | |||||||||
| $ | 32.1 | 163.8 | % | ||||||||
Year ended | |||||
December 31, 2024 | |||||
Tax at U.S. federal statutory rate | 21.0 | % | |||
State and local income taxes, net of U.S. federal benefit | (65.1) | ||||
U.S. credits and exemptions | 444.0 | ||||
Tax rate differential on foreign earnings | (888.3) | ||||
Adjustments to uncertain tax positions | (4.2) | ||||
Changes in valuation allowance | 1,926.8 | ||||
Tax on repatriation of foreign earnings | (710.0) | ||||
Tax impact of disposed businesses | (1,240.2) | ||||
Capital loss expiration | (700.9) | ||||
Other | (0.7) | ||||
| (1,217.6) | % | ||||
34
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
Significant components of our deferred tax assets and liabilities were as follows:
December 31, 2025 | December 31, 2024 | |||||||
Deferred tax assets: | ||||||||
Net operating loss, capital loss and credit carryforwards | $ | 104.3 | $ | 93.9 | ||||
Interest expense carryforwards | 94.6 | 61.6 | ||||||
Working capital accruals | 5.4 | 5.5 | ||||||
Pension, other postretirement and postemployment benefits | 5.2 | 6.8 | ||||||
Payroll and compensation | 5.5 | 5.5 | ||||||
Other | 5.0 | 11.0 | ||||||
Total deferred tax assets | 220.0 | 184.3 | ||||||
Valuation allowance | (122.4) | (79.9) | ||||||
Net deferred tax assets | 97.6 | 104.4 | ||||||
Deferred tax liabilities: | ||||||||
Intangible assets recorded in acquisitions | 332.6 | 342.1 | ||||||
Basis difference in affiliates | 32.2 | 33.1 | ||||||
Accelerated depreciation | 5.7 | 4.8 | ||||||
Other | 10.1 | 1.9 | ||||||
Total deferred tax liabilities | 380.6 | 381.9 | ||||||
| $ | (283.0) | $ | (277.5) | |||||
The following table displays the cash paid for income taxes by jurisdiction, net of refunds, for the year ended December 31, 2025:
Year ended | |||||
December 31, 2025 | |||||
United States - Federal | $ | 11.1 | |||
United States - State and Local | 1.3 | ||||
Foreign: | |||||
China | 11.5 | ||||
Germany | 11.1 | ||||
Canada | 6.2 | ||||
Australia | 4.8 | ||||
India | 4.6 | ||||
Other foreign jurisdictions | 18.9 | ||||
| $ | 69.5 | ||||
Cash paid for income taxes, net of refunds, totaled $57.8 the year ended December 31, 2024. General Matters
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We periodically assess deferred tax assets to determine if they will likely be realized and the adequacy of deferred tax liabilities, incorporating the results of local, state, federal and foreign tax audits in our estimates and judgments.
At December 31, 2025, we had the following tax carryforwards available: U.S. federal tax carryforwards of $340.3, state tax carryforwards of $215.1, and tax loss carryforwards of various foreign jurisdictions of $424.9. Of these amounts, less than $0.1 expire in 2026 and $92.5 expire at various times between 2027 and 2045. The remaining carryforwards have no expiration date.
35
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
Realization of deferred tax assets, including those associated with net operating loss and credit carryforwards, is dependent upon generating sufficient taxable income in the appropriate character and tax jurisdiction. We believe that it is more likely than not that we may not realize the benefit of certain of these deferred tax assets and, accordingly, have established a valuation allowance against certain of these deferred tax assets. Although realization is not assured for the remaining deferred tax assets, we believe it is more likely than not that the deferred tax assets will be realized through future taxable earnings or tax planning strategies. However, deferred tax assets could be reduced in the near term if our estimates of taxable income are significantly reduced or tax planning strategies are no longer viable. The valuation allowance increased by $42.5 in the year ended December 31, 2025 and decreased by $62.3 in the year ended December 31, 2024. Of the net changes during the years ended December 31, 2025 and 2024, $36.5 and ($65.6) were recognized as an increase (decrease) in tax expense, respectively.
The increase in the valuation allowance during 2025 was primarily due to (i) an increase in the valuation allowance on the interest carryforward deferred tax asset in the U.S., (ii) an increase to certain deferred tax assets in jurisdictions where those assets are not expected to be realized, and (iii) the impact of a weaker U.S. dollar on non-U.S. dollar-denominated balances.
The decrease in the valuation allowance during 2024 was primarily due to (i) the utilization of the U.S. capital loss carryforward against capital gains related to the sale of the HT business (see also Note 4) and the distribution of an investment in an equity security (see also Note 16), (ii) the subsequent expiration of all remaining unutilized U.S. capital loss carryforwards, (iii) the disposition of certain HT business deferred tax assets which were not expected to be realized, and (iv) the impact of a stronger U.S. dollar on non-U.S. dollar-denominated balances.
The amount of income tax that we pay annually is dependent on various factors, including the timing of certain deductions. These deductions can vary from year to year and, consequently, the amount of income taxes paid in future years will vary from the amounts paid in prior years.
Due to the acquisition of the Company by the Parent in April 2022, the Company and its U.S. subsidiaries became a part of a new consolidated tax filing group for U.S. federal and certain U.S. state purposes with LSF11 Redwood TopCo LLC as the parent of the consolidated group. As a result, $16.4 of our income taxes receivable as of December 31, 2025 are attributable to the new consolidated group. Our income taxes are computed on a separate return basis.
Undistributed Foreign Earnings
Generally, it has been our practice and intention to reinvest the earnings of most of our non-U.S. subsidiaries in those operations with a few limited exceptions. The Tax Cuts and Jobs Act made significant changes to the taxation of undistributed foreign earnings, requiring that all previously untaxed earnings and profits of our controlled foreign corporations be subjected to a one-time mandatory repatriation tax. The transition tax substantially eliminated the basis difference that existed previously for purposes of ASC Topic 740. However, there are limited other taxes that could continue to apply such as foreign withholding taxes, other foreign taxes on distributions and certain state taxes. For 2025, the Company decided (i) not to reinvest the current year earnings of its primary operations in China, South Africa and Chile to the extent those earnings are available for distribution and (ii) not to reinvest certain earnings of its primary operations in Singapore, Taiwan, Thailand, Japan, Hong Kong, India and Australia to the extent cash is available for distribution. Otherwise, the Company intends to continue to indefinitely reinvest the earnings of our non-U.S. subsidiaries, with certain minor exceptions.
As of December 31, 2025, we have recorded a provision of $9.4 for foreign withholding taxes, other foreign taxes and state taxes on the earnings we expect to repatriate.
Unrecognized Tax Benefits
As of December 31, 2025, we had gross unrecognized tax benefits of $39.1 (net unrecognized tax benefits of $38.7), of which $33.4, if recognized, would have impacted our effective tax rate.
As of December 31, 2024, we had gross unrecognized tax benefits of $30.9 (net unrecognized tax benefits of $27.4), of which $23.4, if recognized, would have impacted our effective tax rate.
36
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
We classify interest and penalties related to unrecognized tax benefits as a component of our income tax provision. As of December 31, 2025, gross accrued interest totaled $4.1 (net accrued interest of $3.2), while the related amount as of December 31, 2024 was $3.3 (net accrued interest of $2.6). Our income tax provision in the years ended December 31, 2025 and December 31, 2024 included gross interest expense of $1.2 and $2.0, respectively. There were no significant penalties recorded during either year.
The aggregate changes in the balance of unrecognized tax benefits for the periods presented below were as follows:
Year ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
Unrecognized tax benefit - beginning of period | $ | 30.9 | $ | 39.6 | |||||||
Gross increases - tax positions in prior period | 6.8 | 2.1 | |||||||||
Gross decreases - tax positions in prior period | (4.4) | (11.0) | |||||||||
Gross increases - tax positions in current period | 11.4 | 2.6 | |||||||||
Settlements | (3.1) | — | |||||||||
Lapse of statute of limitations | (3.0) | (2.2) | |||||||||
Change due to foreign currency exchange rates | 0.5 | (0.2) | |||||||||
Unrecognized tax benefit - end of period | $ | 39.1 | $ | 30.9 | |||||||
Other Tax Matters
During the year ended December 31, 2025, we recorded an income tax provision of $32.1 on $19.6 of pre-tax income. Among other items, the income tax provision for 2025 included income tax charges of (i) $30.2 primarily resulting from the establishment of a valuation allowance on the interest carryforward deferred tax asset in the U.S., (ii) $6.9 resulting from an uncertain tax position related to U.S. income sourcing, and (iii) $1.3 resulting from an examination in the U.S. of federal income tax returns of tax years 2018 and 2019, partially offset by income tax benefits of (i) $7.5 resulting from the impact of a tax incentive received by one of the Company’s Chinese subsidiaries related to its 2024 return and related to the rate reduction on certain deferred tax liabilities reversing in 2025 and 2026, (ii) $5.6 resulting from certain favorable adjustments to our U.S. federal tax return, (iii) $3.1 resulting from a change in estimate for certain uncertain tax positions for transfer pricing and (iv) $2.2 resulting from the impact of a German income tax rate reduction on the deferred tax balances of our German subsidiaries.
During the year ended December 31, 2024, we recorded an income tax provision of $41.4 on $3.4 of pre-tax loss. Among other items, the income tax provision for 2024 included income tax charges of (i) $41.7 resulting from certain U.S. taxes and non-U.S. basis differences on the sale of the HT business, (ii) $10.2 resulting from withholding and other taxes on the repatriation of certain non-U.S. proceeds arising from the sale of the HT business, and (iii) $12.1 resulting from U.S. taxes on foreign earnings, net of related credits, partially driven by the sale of certain foreign subsidiaries and assets that comprised part of the HT business, partially offset by income tax benefits of $35.4 resulting from the release of the valuation allowance on U.S. federal and state capital losses as a result of the sale of the HT business and the distribution of an investment in an equity security.
We review our income tax positions on a continuous basis and record unrecognized tax benefits for potential uncertain positions when we determine that an uncertain position meets the criteria of the Income Taxes Topic of the Codification. As events change and resolutions occur, adjustments are made to amounts previously provided, such as in the case of audit settlements with taxing authorities.
We have various income tax returns under examination. The most significant of these is the examination in the U.S. of the federal income tax returns for tax years 2018 and 2019. We believe that any uncertain tax positions related to these examinations have been appropriately reflected as unrecognized tax benefits. An examination in Germany for the 2015 through 2020 tax years was closed in the second quarter of 2025.
37
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
An unfavorable resolution of one or more of the above matters could have a material adverse effect on our results of operations or cash flows in the quarter and year in which an adjustment is recorded or the tax is due or paid. As audits and examinations are still in process or we have not yet reached the final stages of the appeals process, the timing of the ultimate resolution and any payments that may be required for the above matters cannot be determined at this time.
The Organization for Economic Cooperation and Development (the “OECD”) and G20 Inclusive Framework on Base Erosion and Profit Shifting has introduced model rules to establish a global minimum corporate tax rate of 15% for large multinational corporations, commonly referred to as the “Pillar Two” rules. During 2024 and 2025, many countries in which we operate adopted legislation to implement Pillar Two, the effects of which are reflected in our 2024 and 2025 income tax calculations. Additionally, on January 5, 2026, the OECD released a Pillar Two Administrative Guidance package containing the Side-by-Side Safe Harbor (the “SbS”). Under the SbS, multinational enterprises headquartered in a jurisdiction that has a Qualified SbS Regime are eligible for the SbS election, which includes the U.S. By making the SbS election, top-up taxes under the Income Inclusion Rule and Undertaxed Profits Rule are set to zero. However, the SbS does not have an impact on the application of the Qualified Domestic Minimum Top-up Taxes. Jurisdictions are required to implement the SbS effective for fiscal years beginning on or after January 1, 2026. Accordingly, we continue to evaluate the potential impact of Pillar Two legislation on our effective tax rate, financial position and cash flows, including the adoption of the SbS in each jurisdiction.
On July 4, 2025, the reconciliation bill, commonly referred to as the One Big Beautiful Bill Act (“OBBBA”) was signed into law, which includes a broad range of tax reform provisions. Key corporate tax provisions include 100% bonus depreciation, domestic research cost expensing, the business interest expense limitation, changes to the foreign-derived deduction eligible income computation and changes to the taxation of income from non-U.S. subsidiaries and related credits. Although some of these became effective in 2025, the majority are not effective until 2026. The OBBBA did not have a material impact on the Company’s effective tax rate for the year ended December 31, 2025. We continue to evaluate the impact of the OBBBA as additional guidance becomes available.
(12) INDEBTEDNESS
Debt as of December 31, 2025 and 2024 was comprised of the following:
December 31, 2025 | December 31, 2024 | ||||||||||
Term loan, net of discount of $22.6 and $30.8, respectively(1) | 1,275.4 | 1,092.2 | |||||||||
8.750% senior notes, net of discount of $12.8 and $15.8, respectively (due in April 2030) | 487.2 | 484.2 | |||||||||
Other indebtedness(2) | 2.5 | 6.6 | |||||||||
Less: deferred financing fees(3) | (6.2) | (4.9) | |||||||||
Total debt | 1,758.9 | 1,578.1 | |||||||||
Less: short-term debt | 2.5 | 6.6 | |||||||||
Total long-term debt | 1,756.4 | 1,571.5 | |||||||||
(1)In addition to the amortization of debt discounts during the year, the increase in the term loan balance from December 31, 2024 to December 31, 2025 reflects our entry into the Refinancing Agreement on August 6, 2025 (as defined further below) which, in addition to providing for the refinancing of the existing principal balance of the term loan, resulted in incremental term loan borrowings of $175.0.
(2)Includes balances under a purchase card program of $2.5 and $3.0 and financed insurance premiums of $0.0 and $3.6 as of December 31, 2025 and 2024, respectively. The purchase card program allows for payment beyond customary payment terms for goods and services acquired under the program. As this arrangement extends the payment of these purchases beyond their normal payment terms through third-party lending institutions, we have classified these amounts as short-term debt.
(3)As of December 31, 2025 and 2024, deferred financing fees were comprised of fees related to the term loan facility and to the senior notes as discussed further below.
Debt payable during each of the five years subsequent to December 31, 2025 is $2.5 in 2026, $0.0 annually in 2027 and 2028, $1,298.0 in 2029 and $500.0 in 2030.
38
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
Senior Credit Facilities
On April 5, 2022 (the “Closing Date”), the Company entered into senior credit facilities (the “Senior Credit Facilities”) with a syndicate of lenders, with Citibank, N.A. as the administrative agent, and Deutsche Bank AG Filiale Deutschlandgeschäft, as the foreign trade facility agent, which provided for senior secured financing in an aggregate initial amount of $1,885.0, consisting of the following (as of the date of the Refinancing Amendment (as defined below), the remaining amount of the senior secured financing was $1,573.0):
•a term loan facility in an aggregate initial principal amount of $1,610.0, with the remaining principal balance outstanding as of December 31, 2025 due at final maturity of April 5, 2029 (as of the date of the Refinancing Amendment, the remaining principal balance of the term loan facility was $1,298.0);
•a revolving credit facility, available for loans and performance letters of credit in U.S. Dollars, Euros, British Sterling, and other currencies, in an aggregate principal amount up to the equivalent of $200.0, with an initial final maturity of April 5, 2027 (in connection with the Refinancing Amendment, the maturity was extended to January 4, 2029); and
•a bilateral foreign credit instrument facility, available for performance letters of credit and guarantees in Euros, British Sterling, and other currencies, in an aggregate principal amount up to the equivalent of $75.0, with a final maturity of April 5, 2027 (under which we had committed facilities available for issuance of $74.0 as of December 31, 2025).
We also may seek additional commitments, without consent from the existing lenders, to add an incremental term loan facility, increase the commitments in respect of the revolving credit facility and/or add one or more classes of revolving credit commitments not to exceed the greater of (i) $245.0 and (ii) an amount equal to 75% of consolidated adjusted EBITDA, minus prior use of an incremental debt basket and any permitted ratio debt, plus for incremental term loans that effectively extend the maturity of a facility, amounts equal to the portion of such facilities and/or incremental term loans to be replaced with incremental term loans, plus amounts of previous voluntary prepayments of term loans (or incremental equivalent debt), or voluntary commitment reductions of the revolving facility. We may also incur ratio-based incremental debt, as long as, if such incremental facility or incremental equivalent debt is (a) secured on a pari passu basis with the obligations, the First Lien Net Leverage Ratio (as defined in the credit agreement governing the senior credit facilities (as modified by various amendments to the Credit Agreement, up to and including the most recent Amendment No. 4 to Credit Agreement, dated as of August 6, 2025 (collectively, the “Refinancing Amendment”), and as further amended, restated, amended and restated, supplemented or otherwise modified, the “Credit Agreement”)), does not exceed 4.25:1.00, (b) secured on a junior lien basis with the obligations, the Secured Net Leverage Ratio (as defined in the Credit Agreement) does not exceed 4.75:1.00; or (c) unsecured, either (x) the Total Net Leverage Ratio (as defined in the Credit Agreement) does not exceed 6.50:1.00, or (y) the Interest Coverage Ratio (as defined in the Credit Agreement) is not less than 2.00:1.00.
The Company is the borrower under all of the Senior Credit Facilities, and the Company may designate certain of its foreign subsidiaries to be co-borrowers under the revolving credit facility and the bilateral foreign credit instrument facility.
All borrowings and other extensions of credit under the Senior Credit Facilities are subject to the satisfaction of customary conditions, including absence of defaults and accuracy in material respects of representations and warranties.
The letters of credit available for issuance under the revolving credit facility are stand-by letters of credit requested by the Company on behalf of itself or any of its subsidiaries. The bilateral foreign credit instrument facility is used to issue foreign credit instruments, including bank undertakings to support our foreign operations.
39
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
The interest rates applicable to loans under the Senior Credit Facilities are, at our option, equal to either (x) an alternate base rate (the highest of (a) the effective federal funds rate plus 0.5%, (b) the “prime rate” of Citibank, N.A., and (c) the term SOFR plus 1.0%), (y) term SOFR, or (z) certain alternative currency floating rates, plus, in each case, an applicable margin percentage, which varies based on our First Lien Net Leverage Ratio (as defined in the Credit Agreement generally as the ratio of consolidated first lien debt (excluding, without limitation, the face amount of undrawn letters of credit, bank undertakings or analogous instruments and net of cash and cash equivalents) at the date of determination to consolidated adjusted EBITDA for the four fiscal quarters ended most recently before such date). We may elect interest periods of one, three or (other than in the case of an alternative currency term rate borrowing denominated in Canadian dollars) six months for term SOFR borrowings and certain alternative currency rate borrowings. After giving effect to the Refinancing Amendment, the per annum interest rate margins applicable to the loans are as follows:
I.For term loans: (A) for alternate base rate loans, 1.75% and (B) for term SOFR loans, 2.75%.
II.For revolving loans: the following percentages per annum, based upon the First Lien Net Leverage Ratio:
| First Lien Net Leverage Ratio | Term SOFR Loans | Alternative Currency Daily Rate Loans | Alternative Currency Term Rate Loans | Alternative Base Rate Loans | ||||||||||
Greater than 4.25 to 1.00 | 3.25% | 3.25% | 3.25% | 2.25% | ||||||||||
Less than or equal to 4.25 to 1.00 but greater than 3.75 to 1.00 | 3.00% | 3.00% | 3.00% | 2.00% | ||||||||||
Less than or equal to 3.75 to 1.00 | 2.75% | 2.75% | 2.75% | 1.75% | ||||||||||
The fees for bilateral foreign credit commitments are the following percentages per annum, based upon the First Lien Net Leverage Ratio:
| First Lien Net Leverage Ratio | FCI Commitment Fee | Alternative FCI Fee | ||||||||||||
Greater than 4.25 to 1.00 | 0.975% | 3.25% | ||||||||||||
Less than or equal to 4.25 to 1.00 but greater than 3.75 to 1.00 | 0.900% | 3.00% | ||||||||||||
Less than or equal to 3.75 to 1.00 | 0.825% | 2.75% | ||||||||||||
We also pay fronting fees on the outstanding amounts of financial letters of credit at the rate of 0.125% per annum.
The Senior Credit Facilities require mandatory prepayments in amounts equal to the net proceeds from indebtedness not permitted by the Credit Agreement and the sale or other disposition of, including from any casualty to, or governmental taking of, property in excess of specified values (other than in the ordinary course of business and subject to other exceptions) by the Company or its subsidiaries, including a Specified Disposition (certain named businesses and assets, as defined in the Credit Agreement). Mandatory prepayment of the term loans is also required in connection with the calculation of Excess Cash Flow (as defined in the Credit Agreement). No prepayments have been required to date in connection with the calculation of Excess Cash Flow. Mandatory prepayments will be applied to repay, first, amounts outstanding under any term loans and, then, amounts outstanding under the revolving credit facility (without reducing the commitments thereunder). No prepayment is required in connection with an asset sale to the extent the net proceeds are reinvested (or committed to be reinvested) in permitted acquisitions, permitted investments or assets to be used in our business within 18 months (and if committed to be reinvested, actually reinvested within 180 days after the end of such 18-month period) of the receipt of such proceeds.
Indebtedness under the Senior Credit Facilities is guaranteed by the Parent and each existing and subsequently acquired or organized domestic material subsidiary of the Company (with certain exceptions).
40
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
Indebtedness under the Senior Credit Facilities is secured by (i) a first priority pledge and security interest in 100% of the capital stock of our domestic subsidiaries (with certain exceptions) held by the Company or the domestic subsidiary guarantors and 65% of the capital stock of our material first-tier foreign subsidiaries (with certain exceptions) and (ii) first priority security interests and other liens on substantially all of the personal property of the Company and its domestic subsidiary guarantors (with certain exceptions).
The Senior Credit Facilities require that, subject to satisfaction of the Financial Maintenance Covenant Condition (as defined below), the Company shall not permit the First Lien Net Leverage Ratio as of the last day of a fiscal quarter to be greater than 7.75:1.00.
The Financial Maintenance Covenant Condition will be satisfied if, only to the extent occurring on the last day of any test period, the aggregate principal amount of all outstanding revolving loans and letters of credit on such date exceeds 35% of the aggregate amount of revolving commitments.
The Senior Credit Facilities also contain covenants that, among other things, restrict our ability to incur additional indebtedness, grant liens, make investments, loans, guarantees, or advances, make restricted junior payments, including dividends, redemptions of capital stock, and voluntary prepayments or repurchase of certain other indebtedness, engage in mergers, acquisitions or sales of assets, or engage in certain transactions with affiliates, and otherwise restrict certain corporate activities. The Senior Credit Facilities contain customary representations, warranties, affirmative covenants and events of default.
We are permitted under the Senior Credit Facilities to pay dividends or make distributions to repurchase capital stock not to exceed (x) the greater of $24.5 and 7.5% of consolidated adjusted EBITDA (with unused amounts being carried over for the next three succeeding calendar years, not to exceed the greater of $40.5 and 12.5% of consolidated adjusted EBITDA in any calendar year or (y) after a qualified IPO, the greater of $50.0 and 15% of consolidated adjusted EBITDA in any calendar year (with unused amounts being carried over for the next three succeeding calendar years, not to exceed the greater of $81.25 and 25% of consolidated adjusted EBITDA in any calendar year), plus the cash proceeds of key man life insurance policies received after the Closing Date. We are also permitted to, among others, make unlimited restricted payments so long as the Total Net Leverage Ratio, determined on a pro forma basis, does not exceed 5.25:1.00, subject to no payment or bankruptcy event of default with respect to the Company. Furthermore, we are permitted to make restricted payments in an amount not to exceed 50% of the net cash proceeds of any specified disposition, so long as the Total Net Leverage Ratio, determined on a pro forma basis, does not exceed 6.50:1:00, for the relevant reference period.
The original issue discount associated with the term loan borrowing is being amortized to “Interest expense, net” using the effective interest method, through the final maturity date of the term loan facility.
Entry into Senior Credit Facilities Refinancing Amendment
On August 6, 2025, the Company entered into Amendment No. 4 to the Credit Agreement, with Citibank, N.A., as the administrative agent, and the lenders party thereto (the “2025 Term Lenders”), whereby, pursuant to the terms of the Credit Agreement, the 2025 Term Lenders provided for incremental term loan borrowings of $175.0 and, accordingly, term loans in an aggregate principal amount of $1,298.0 (the “2025 Term Loans”), to refinance the existing principal balance of the term loans originally provided to the Company on April 5, 2022 and subsequently refinanced on June 6, 2024 and December 10, 2024. The Refinancing Amendment provided for the interest rate margins set forth above under the heading “Senior Credit Facilities", and included a customary 1.0% prepayment premium required in connection with certain future refinancings of the 2025 Term Loans should such occur within six months of entry into the August 6, 2025 Refinancing Amendment, on terms set forth in the Credit Agreement. The terms of the 2025 Term Loans are otherwise consistent with the previously-existing term loans pursuant to the Credit Agreement.
41
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
Senior Notes due 2030
On the Closing Date, the Company issued $500.0 in aggregate principal amount of 8.750% senior unsecured notes due in April 2030 (the “Senior Notes”). The Senior Notes were issued pursuant to an indenture, dated as of April 5, 2022, by and among the Company, the subsidiary guarantors named therein, and Wilmington Trust, National Association, as trustee of the Senior Notes (the “Indenture”). The interest payment dates for the Senior Notes are April 1 and October 1 of each year, with interest payable in arrears. The Senior Notes were offered in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to certain non-U.S. persons in transactions outside of the United States in reliance on Regulation S under the Securities Act. The original issue discount associated with the Senior Notes is being amortized to “Interest expense, net” using the effective interest method, through the maturity date of such notes.
The Senior Notes are redeemable, in whole or in part, at a price equal to 100% of the principal amount thereof plus a specific premium as set forth in the Indenture, plus accrued and unpaid interest. If we experience certain types of change of control transactions, we must offer to repurchase the Senior Notes at 101% of the aggregate principal amount of the Senior Notes repurchased, plus accrued and unpaid interest.
The Senior Notes are unsecured and rank equally with all our existing and future unsubordinated unsecured senior indebtedness and are effectively junior to the Senior Credit Facilities. The Senior Notes are guaranteed by our existing and future domestic subsidiaries that guarantee the Senior Credit Facilities, subject to certain exceptions. The likelihood of our subsidiaries having to make payments under the guarantee is considered remote.
The Indenture contains covenants that limit the Company’s (and its subsidiaries’) ability to, among other things: (i) incur additional indebtedness; (ii) declare or pay dividends, redeem stock or make other distributions to stockholders; (iii) make certain investments; (iv) create certain liens; (v) enter into certain transactions with affiliates; (vi) agree to certain restrictions on the ability of our restricted subsidiaries to make certain payments; (vii) make certain asset dispositions and (viii) consolidate, merge, sell or otherwise dispose of all or substantially all of our or our restricted subsidiaries’ assets.
Other Indebtedness Matters
The weighted average interest rate of outstanding borrowings under the Senior Credit Facilities was approximately 6.5% and 7.7% as of December 31, 2025 and 2024, respectively.
As of December 31, 2025, we had $192.5 of borrowing capacity under our revolving credit facility after giving effect to $7.5 reserved for outstanding letters of credit. In addition, as of December 31, 2025, we had $20.4 of available, committed issuance capacity under our foreign credit instrument facility after giving effect to $53.6 reserved for outstanding bank guarantees.
As of December 31, 2025, in addition to the revolving line and letters of credit described above, we had $10.6 of letters of credit outstanding under separate arrangements in China and India.
As of December 31, 2025, we were in compliance with all covenants of the Senior Credit Facilities and the Indenture.
In connection with the Refinancing Amendment noted above, we recognized a charge of $1.2, classified as “Losses on early extinguishments of debt” in the accompanying consolidated statements of operations during the year ended December 31, 2025, related to the write-off of the associated unamortized discount and deferred financing fees.
Using proceeds received from the sale of the HT business, and as discussed further in Note 4, we repaid $280.0 of the outstanding principal balance of the term loan during the second quarter of 2024. In connection with the prepayment of the term loan, we recognized a charge of $9.3, classified as “Losses on early extinguishments of debt” in the accompanying consolidated statements of operations for the year ended December 31, 2024, related to the write-off of the associated unamortized discount and deferred financing fees.
42
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
(13) DERIVATIVE FINANCIAL INSTRUMENTS
Interest rate derivatives
Interest rate derivatives
We maintain interest rate swaps (collectively including each of those discussed below, the “Swaps”), which we have designated and accounted for as cash flow hedges, to hedge interest rate risk on our variable rate term loan. These Swaps effectively convert a substantial portion of our borrowings under our variable rate term loan to a fixed rate.
In connection with our entry into our senior credit facilities refinancing amendment during the second quarter of 2024 (as discussed further in Note 12), we also terminated and settled our formerly outstanding Swaps (the “Former Swaps”) during that quarter, receiving proceeds from the termination of $34.4. The unrealized gains associated with the Former Swaps were reclassified from accumulated other comprehensive income (loss) into earnings as a component of “Interest expense, net” when the forecasted transactions (interest payments) impacted earnings, through the original maturity date of the Former Swaps in December 2025.
Subsequent to the termination and settlement of the Former Swaps, we entered into new Swaps (the “Current Swaps”), also designated and accounted for as cash flow hedges, which had maturities through December 2025. Additionally, in connection with our entry into our senior credit facilities Refinancing Amendment during the third quarter of 2025 (as discussed further in Note 12), we entered into an additional tranche of our Current Swaps, also designated and accounted for as cash flow hedges, which have maturities through June 2026 (see Note 17 regarding a change in maturity date that took effect in January 2026).
Consistent with the Former Swaps, the Current Swaps effectively convert a substantial portion of our borrowings under our variable term loan to a fixed rate. Under terms of our term loan, reflective of the effects of the Refinancing Amendment, we pay SOFR plus 2.75% of applicable margin. The Current Swaps allow the Company to pay a fixed rate of 4.39% and receive SOFR from the Current Swaps counterparties which, as of December 31, 2025, was 3.92% (one-month SOFR rate). As of December 31, 2025, the aggregate notional amount of the Current Swaps was $973.5. Changes in the fair value of our Current Swaps are reclassified from accumulated other comprehensive income (loss) into earnings as a component of “Interest expense, net” when the forecasted transactions (interest payments) impact earnings.
The unrealized (loss) gain, net of a tax (benefit) provision of ($0.3) and $2.7, respectively, related to our Swaps and recorded in accumulated other comprehensive income (loss), was ($0.8) and $8.1, respectively, as of December 31, 2025 and 2024. The fair values of our Swaps were $1.1 and $5.7 as of December 31, 2025 and 2024, respectively, and were recorded in “Accrued expenses and other current liabilities” in our consolidated balance sheets.
Foreign currency derivatives
We manufacture and sell our products in a number of countries and, as a result, are exposed to movements in FX exchange rates. Our objective is to preserve the economic value of certain non-U.S.-denominated cash balances and nonfunctional currency-denominated cash flows and to minimize the impact of changes as a result of currency fluctuations. Our principal currency exposures relate to the Euro, Chinese Yuan and British Sterling.
From time to time, we enter into 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 (“FX forward contracts”). In addition, some of our contracts contain currency forward embedded derivatives (“FX embedded derivatives”), because the currency of exchange is not “clearly and closely” related to the functional currency of either party to the transaction. Certain of our FX forward contracts are designated as cash flow hedges. To the extent these derivatives are effective in offsetting the variability of the hedged cash flows, changes in the derivatives' fair value are not included in current earnings but are included in accumulated other comprehensive income (loss). These changes in fair value are reclassified into earnings as a component
43
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
of revenues or cost of products sold, as applicable, when the forecasted transaction impacts earnings. In addition, if the forecasted transaction is no longer probable, the cumulative change in the derivatives' fair value is recorded as a component of “Other income (expense), net” in the period in which the transaction is no longer considered probable of occurring. To the extent a previously designated hedging transaction is no longer an effective hedge, any ineffectiveness measured in the hedging relationship is recorded in earnings in the period in which it occurs.
We had FX forward contracts with an aggregate notional amount of $579.6 and $287.6 outstanding as of December 31, 2025 and 2024, respectively, with all such contracts scheduled to mature within one year. There were no unrealized gains or losses recorded in accumulated other comprehensive income (loss) related to FX forward contracts as of December 31, 2025 and 2024. The net gains (losses) recorded in “Other income (expense), net” related to FX gains (losses) totaled ($14.2) and $7.5 in the years ended December 31, 2025 and 2024, respectively.
Our FX forward contracts had no associated fair values as of December 31, 2025 and 2024, as they were entered into on dates approximating such fiscal year-end dates, respectively.
Concentrations of Credit Risk
Financial instruments that potentially subject us to significant concentrations of credit risk consist of cash and equivalents, trade accounts receivable, contract assets, Swaps and FX forward contracts. These financial instruments, other than trade accounts receivable and contract assets, are placed with high-quality financial institutions throughout the world.
We maintain cash levels in bank accounts that, at times, may exceed federally-insured limits. We have not experienced, and believe we are not exposed to significant risk of, loss in these accounts.
We have credit loss exposure in the event of nonperformance by counterparties to the above financial instruments, but have no other off-balance-sheet credit risk of accounting loss. Except as is provided for in our accompanying consolidated balance sheets through an allowance for credit losses for certain accounts receivable, we anticipate that counterparties will be able to fully satisfy their obligations under the contracts. We do not obtain collateral or other security to support financial instruments subject to credit risk, but we do monitor the credit standing of counterparties.
Concentrations of credit risk arising from trade accounts receivable and contract assets are due to selling to customers in a particular industry. Credit risks are mitigated by performing ongoing credit evaluations of our customers' financial conditions and obtaining collateral, advance payments, or other security when appropriate. No one customer, or group of customers that, to our knowledge, are under common control, accounted for more than 10% of our revenues for any period presented.
(14) EQUITY AND EQUITY-BASED COMPENSATION
Share of SPX FLOW, Inc.
As of December 31, 2025 and 2024, the Company had one share, par value $0.01 per share, of common stock outstanding, which is owned by the Parent.
Equity-Based Compensation
Effective June 10, 2022, certain employees of the Company based in the U.S. were granted incentive unit awards which vest subject to meeting certain vesting conditions. In addition, certain employees of the Company based outside the U.S. were granted awards with similar terms and vesting conditions as the incentive unit awards granted to U.S.-based employees, with the exception that the awards entitle the employee to cash distributions upon a discretionary payment or a future liquidation of the Parent (together with the U.S.-based incentive awards, the “Management Incentive Plan”, or “MIP”). SPX FLOW directors who are independent of both the Company and the investment manager of our Parent and various Lone Star funds were granted MIP awards that are comparable both in nature and terms to MIP awards granted to employees.
44
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
Based on provisions contained within the MIP, compensation costs related to such awards, if vesting provisions are satisfied, are expected to be substantially recognized upon a future liquidation of the Parent.
Amounts potentially distributable to participants in the MIP are dependent upon the amount of capital returned to the Parent in excess of its initial investment contributed to acquire SPX FLOW, plus certain expenses of the Parent, and are subject to fluctuation based upon the amount of capital ultimately returned upon a future liquidation of the Parent. Half of incentive unit awards vest over time, subject to continued employment (or service in the case of independent directors), ratably per year over a five-year period, and the remainder vest at the conclusion of the investment period (also subject to continued employment or service as applicable). Vesting does not trigger the right to a distribution under the MIP but entitles participants to a potential distribution upon a future liquidation of the Parent. Depending on the underlying conditions of a recipient’s termination prior to a future liquidation of the Parent, vested incentive unit awards may either remain outstanding until such liquidation event or be forfeited. In any event, unvested incentive unit awards are forfeited upon a recipient’s termination prior to a future liquidation of the Parent.
Based on key terms of the respective agreements and application of relevant guidance contained in the Compensation– Stock Compensation Topic of the Codification, the awards granted to U.S.-based recipients were previously being accounted for as equity-classified awards and the awards granted to non-U.S.-based recipients are being accounted for as liability-classified awards (see discussion further below regarding a change in classification of awards granted to U.S.-based recipients during the fourth quarter of 2025). The Black Scholes option pricing simulation model was used to determine the fair value of the MIP awards, utilizing various inputs discussed further below, with such fair value estimate reflecting a discount for lack of marketability, determined utilizing the Finnerty put option valuation technique, given the privately held nature of the membership units of the Parent.
Key assumptions used in determining the fair value of MIP awards granted on June 10, 2022 included the following:
Annual expected equity volatility | 62.5 | % | |||
Discount for lack of marketability | 31.0 | % | |||
Annual expected dividend yield | — | % | |||
Risk-free interest rate | 3.2 | % | |||
Term | 3.5 years | ||||
Annual expected equity volatility was based on observed comparable guideline public company stock volatilities after consideration of differences in public versus private ownership, growth stage, size, risk and profitability, as well as the composition of the Company’s capital structure. An expected annual dividend yield was not assumed as dividends were not being declared on Parent membership units as of the grant date noted above. The average risk-free interest rate was based on an interpolation of the daily U.S. treasury yield curve rate as of the grant date. The term was based on management’s best estimate of the date of a future liquidation of the Parent.
45
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
The following table summarizes the MIP unit activity during the years ended December 31, 2025 and 2024 (unit amounts below are presented in millions):
| Number of MIP Units | Weighted-Average Grant Date Fair Value per Share | |||||||||||||
Outstanding as of December 31, 2023 | 0.790 | $ | 42.43 | |||||||||||
Grants | 0.009 | 49.59 | ||||||||||||
Forfeited | (0.020) | 42.37 | ||||||||||||
Outstanding as of December 31, 2024(1) | 0.779 | 42.52 | ||||||||||||
Grants | — | n/a | ||||||||||||
Forfeited | (0.005) | 41.08 | ||||||||||||
Outstanding as of December 31, 2025(1) | 0.774 | 42.53 | ||||||||||||
(1)Of the number of outstanding MIP units as of December 31, 2025 and 2024, 0.232 and 0.153 (presented in millions), respectively, had vested in accordance with MIP provisions.
In connection with our entry into the SPX FLOW Sale Agreement in December 2025 and as permitted by key terms of the MIP, it has been concluded that, consistent with the settlement of obligations to non-U.S.-based recipients of vested MIP awards upon a future liquidation of the Parent, the settlement of obligations to U.S.-based recipients of vested MIP awards upon a future liquidation of the Parent will occur in cash. Accordingly, based on this conclusion and in accordance with the application of relevant guidance noted above, we have re-assessed our previous classification of the U.S.-based MIP awards, from equity-classified awards to liability-classified awards.
In consideration of (i) the primary terms of the Agreement entered into in December 2025, as discussed further in Note 1, (ii) management’s estimate of the amount of capital ultimately expected to be returned to our Parent upon its future liquidation (which is substantively dependent on the closing of the sale of the Company to the Buyer in accordance with the terms of the Agreement), and (iii) provisions contained within the MIP, we estimate the expected settlement value of the MIP awards to be approximately $167 per share. Accordingly, there was estimated unrecognized equity compensation of $129.2 related to outstanding MIP awards as of December 31, 2025.
As noted above, no compensation costs have been recognized to date related to such awards as, based on provisions contained within the MIP, compensation costs related to such awards, if vesting provisions are satisfied, are expected to be substantially recognized upon a future liquidation of the Parent. The future liquidation of the Parent is not considered probable at this time.
Accumulated Other Comprehensive Income (Loss)
The Company’s accumulated other comprehensive income (loss) as of December 31, 2025 was comprised of (i) a foreign currency translation adjustment (“CTA”) gain of $34.6, partially offset by (ii) an unrealized loss of ($0.8) related to our Swaps (comprised of a pre-tax loss of ($1.1) and net of a tax benefit of $0.3, as discussed further in Note 13). The Company’s accumulated other comprehensive income (loss) as of December 31, 2024 was comprised of (i) a CTA loss of ($114.7), partially offset by (ii) an unrealized gain of $8.1 related to our Swaps (comprised of a pre-tax gain of $10.8 and net of a tax provision of $2.7).
Among other items, changes in accumulated other comprehensive income (loss) during the year ended December 31, 2024 included the reclassification out of accumulated other comprehensive income (loss) of $0.3 of CTA loss related to the sale of the HT business (see Note 4 for further discussion of the sale of this business).
46
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
Reclassifications from accumulated other comprehensive income (loss) to earnings related to our Swaps, which we have designated and are accounting for as cash flow hedges, were as follows:
| Year Ended | Affected Line Item in the Company's Consolidated Statements of Operations | ||||||||||||||||
| December 31, 2025 | December 31, 2024 | ||||||||||||||||
| Realized gains on Swaps: | |||||||||||||||||
Gains on effective portion of cash flow hedges | $ | 12.4 | $ | 27.6 | Interest expense, net | ||||||||||||
Gain related to dedesignation of a portion of cash flow hedges(1) | — | 0.1 | Other income (expense), net | ||||||||||||||
Less: tax effect | (3.1) | (6.9) | Income tax benefit (provision) | ||||||||||||||
Total, net of tax effect | $ | 9.3 | $ | 20.8 | |||||||||||||
(1)We dedesignated a portion of the Former Swaps in connection with a prepayment of our term loan, which was funded by proceeds from a business sale completed in a prior year.
Dividends to Parent
Using proceeds received from the sale of our corporate headquarters, the Refinancing Amendment and cash on hand, we paid a dividend of $300.0 to the Parent during the third quarter of 2025 (see Note 4 and Note 12 for further discussion of the sale of our corporate headquarters and the Refinancing Amendment, respectively).
Using proceeds received from the sale of the HT business, and as discussed further in Note 4, we paid a dividend of $200.0 to the Parent during the second quarter of 2024.
Effective December 30, 2024, through a series of distributions and contributions to and between entities ultimately wholly-owned by our Parent, we assigned all of our rights, title and interest in a former investment in an equity security, with an estimated fair value of $35.2, to SFI Equity Holding, LLC (a company independent of SPX FLOW and also ultimately wholly-owned by our Parent), with such distribution reflected as a charge to “Accumulated deficit.” See Note 16 below for further information regarding this former investment.
(15) LITIGATION, CONTINGENT LIABILITIES AND OTHER MATTERS
Litigation and Contingent Liabilities
Litigation and Contingent Liabilities
Various claims, complaints and proceedings arising in the ordinary course of business, including those relating to litigation matters (e.g., class actions, derivative lawsuits and contracts, and intellectual property and competitive claims), have been filed or are pending against us and certain of our subsidiaries. We believe these matters are either without merit or of a kind that should not have a material effect, individually or in the aggregate, on our financial position, results of operations or cash flows.
We are subject to domestic and international environmental protection laws and regulations with respect to our business operations and are operating in compliance with, or taking action aimed at ensuring compliance with, these laws and regulations. We believe our compliance obligations with environmental protection laws and regulations should not have a material effect, individually or in the aggregate, on our financial position, results of operations or cash flows.
Potential Impacts of Hamas/Israel Conflict
The Hamas/Israel conflict which began in October 2023 did not have a significant impact on our operating results reflected in these accompanying consolidated financial statements. As of December 31, 2025, we had an insignificant amount of contractual obligations to customers based in the Middle East, potentially impacted by the Hamas/Israel conflict, to be performed. We are engaged with our customers in the Middle East that are potentially impacted by the Hamas/Israel conflict and will continue to monitor the status of the conflict and its potential impacts; however, at this time, we do not expect any
47
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
potential impacts from the disposition of our contractual obligations to be material to our financial position, results of operations or cash flows.
Potential Impacts of Russia/Ukraine Conflict
The Russia/Ukraine conflict did not have a significant impact on our operating results reflected in these accompanying consolidated financial statements. As of December 31, 2025, we had an insignificant amount of contractual obligations to customers based in Russia to be performed and which are generally on hold due to trade restrictions. We continue to monitor developments in the ongoing conflict. In addition, we are monitoring the availability of certain raw materials that are supplied by vendors from time to time in these countries. However, at this time, we do not expect any potential impacts from such relationships or the disposition of such contractual obligations to be material to our financial position, results of operations or cash flows.
(16) FAIR VALUE
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Preference is given to observable inputs. These two types of inputs create the following fair value hierarchy:
•Level 1 — Quoted prices for identical instruments in active markets.
•Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.
•Level 3 — Significant inputs to the valuation model are unobservable.
There were no changes during the periods presented to the valuation techniques we use to measure asset and liability fair values on a recurring basis. There were no transfers between the three levels of the fair value hierarchy during the periods presented.
The following section describes the valuation methodologies we use to measure different financial instruments at fair value on a recurring basis.
Derivative Financial Instruments
Our derivative financial assets and liabilities include Swaps and FX forward contracts, valued using valuation models based on observable market inputs such as forward rates, interest rates, our own credit risk and the credit risk of our counterparties, which comprise investment-grade financial institutions. Based on these inputs, the derivative assets and liabilities are classified within Level 2 of the valuation hierarchy. We have not made any adjustments to the inputs obtained from the independent sources. Based on our recent entry into the Swaps, and our continued ability to enter into FX forward contracts, we consider the markets for our fair value instruments active. We primarily use the income approach, which uses valuation techniques to convert future amounts to a single present amount.
As of December 31, 2025 and 2024, the gross fair values of our derivative financial assets and liabilities, in aggregate, were $0.0 and $0.0 (gross assets) and $1.1 and $5.7 (gross liabilities), respectively. As of December 31, 2025, there had been no significant impact to the fair value of our derivative liabilities due to our own credit risk as the related instruments are collateralized under the Senior Credit Facilities.
48
SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions, except share and per share data, and unless otherwise noted)
Former Equity Security Investment
We previously held an investment in an equity security which was reflected at its net asset value in our consolidated balance sheet in prior years. The change in this former investment, based on the equity security's most recently determined net asset value, was reflected in “Other income (expense), net” in our accompanying consolidated statements of operations. The net asset value of this former investment, utilizing a practical expedient under relevant accounting guidance, was based on our ownership percentage of approximately 19.7%, applied to the equity security’s most recently determined net asset value. Effective December 30, 2024, through a series of distributions and contributions to and between entities ultimately wholly-owned by our Parent, we assigned all of our rights, title and interest in this former investment to SFI Equity Holding, LLC (a company independent of SPX FLOW and also ultimately wholly-owned by our Parent), with such distribution reflected as a charge to “Accumulated deficit.”
During the year ended December 31, 2024, we recorded a loss of $4.1 to “Other income (expense), net” in our accompanying consolidated statements of operations, reflecting a decrease in the estimated fair value of the equity security for such period.
Goodwill, Indefinite-Lived Intangible and Other Long-Lived Assets
Certain of our non-financial assets are subject to impairment analyses, including long-lived assets, indefinite-lived intangible assets and goodwill. We review the carrying amounts of such assets whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable or at least annually for indefinite-lived intangible assets and goodwill. Any resulting impairment would require that the asset be recorded at its fair value.
As of December 31, 2025 and 2024, no significant non-financial assets or liabilities of the Company were required to be measured at fair value on a recurring or non-recurring basis. See Note 9 for further information regarding our goodwill and intangibles impairment testing performed during our fourth quarters of 2025 and 2024.
(17) SUBSEQUENT EVENT
Management evaluated subsequent events through February 26, 2026, the date the financial statements were issued.
Effective January 16, 2026, the Company partially settled (reduced) the remaining term of its interest rate swaps, with a net cash payment of $0.6 to the counterparties. The interest rate swaps now mature on February 27, 2026.
*********
49
EXHIBIT 99.2
Unaudited Pro Forma Combined Condensed Financial Statements
Introduction
On March 2, 2026 (the “Closing Date”), ITT Inc., an Indiana corporation (“ITT” or the “Company”), completed the acquisition (the “Acquisition”) of LSF11 Redwood TopCo LLC ( “SPX FLOW”), pursuant to that certain Membership Interest Purchase Agreement (the “Purchase Agreement”), by and among ITT, LSF11 Redwood Parent, L.P. (the “Seller”), SPX FLOW and ITT Industries Holdings, Inc., a Delaware corporation and wholly owned subsidiary of ITT (the “Buyer”), pursuant to which the Buyer purchased 100% of the issued and outstanding membership interests in SPX FLOW, a provider of highly engineered equipment and process technologies for the industrial and health and nutrition markets. The aggregate consideration (“Purchase Consideration”) under the Purchase Agreement was $4,775 million, which consisted of $4,075 million in cash and 3,839,824 shares of ITT common stock issued to the Seller, with a portion of the consideration effectively satisfied through the assumption of certain indebtedness.
On February 18, 2026, ITT entered into a credit agreement among the Company, as borrower, certain of its subsidiaries, as co-borrowers, each lender from time to time party thereto, and U.S. Bank National Association, as the administrative agent, sole lead arranger and sole bookrunner, which provides for delayed draw term loan commitments in an aggregate principal amount of $2,875 million, which may be drawn, on up to two occasions, to finance the Acquisition (the “Term Loan Facility”).
The unaudited pro forma combined condensed statements of operations reflect the pro forma impact of the following transactions (the “Transactions”) as if they had been completed on January 1, 2025, and the unaudited pro forma combined condensed balance sheet reflects the pro forma impact of the Transactions as if they had been completed on December 31, 2025:
•the consummation of the Acquisition, including the issuance of 3,839,824 shares of common stock of ITT issued to the Seller;
•the incurrence of $2,875 million in debt under the Term Loan Facility;
•the payment and accrual of the expenses and fees related to the above.
The unaudited pro forma combined condensed balance sheet as of December 31, 2025 is based upon ITT’s audited consolidated balance sheet as of December 31, 2025 as filed with the Securities and Exchange Commission (“SEC”) in ITT’s Annual Report on Form 10-K on February 9, 2026, combined with the unaudited historical balance sheet of SPX FLOW as of December 31, 2025 as filed with the SEC on the Form 8-K to which this exhibit relates. The unaudited pro forma combined condensed balance sheet is presented as if the Transactions had occurred on December 31, 2025.
Pro forma adjustments are based upon available information and assumptions that management believes are reasonable. Such adjustments are estimated and are subject to change. Certain financial statement line items included in SPX FLOW’s historical presentation have been adjusted to conform to corresponding financial statement line items included in ITT’s historical presentation.
The unaudited pro forma combined condensed financial statements were prepared using the acquisition method of accounting as outlined in the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) 805, Business Combinations, under U.S. generally accepted accounting principles (“GAAP”), with the Company considered the acquiring company. Based on the acquisition method of accounting, the consideration paid for SPX FLOW is allocated to its assets and liabilities based on their preliminary estimated fair value. The purchase price allocation and valuation are based on preliminary estimates, subject to final adjustments and provided for informational purposes only. For the purpose of measuring the preliminary estimated fair value of the assets acquired and liabilities assumed, management has applied the accounting guidance under GAAP for fair value measurements, using established valuation techniques. This guidance establishes the framework for measuring fair value for any asset acquired or liability assumed under GAAP. Fair value measurements can be highly subjective
and it is possible the application of reasonable judgment could develop different assumptions resulting in a range of alternative estimates using the same facts and circumstances.
The pro forma adjustments and allocation of purchase price of the Acquisition are preliminary and are based on management’s estimates of the fair value of the assets acquired and liabilities assumed, which will be finalized within one year after the Acquisition. The final purchase price allocation will be completed after asset and liability valuations are finalized. Any final adjustments may change the allocations of purchase price, which could affect the fair value assigned to the assets and liabilities and could result in a change to the unaudited pro forma combined condensed financial information.
The condensed consolidated pro forma financial information is being provided for illustrative purposes only and does not purport to represent what the Company’s actual financial position or results of operations would have been had the Transactions occurred on the dates assumed nor do they project the Company’s results of operations or financial position for any future period or date. The actual results reported by the combined company in periods following the Acquisition may differ significantly from these unaudited pro forma combined condensed financial statements for a number of reasons. The pro forma adjustments, as described in the notes to the unaudited pro forma combined condensed financial information, are based on currently available information. Management believes such adjustments are factually supportable, directly attributable, and with respect to the unaudited pro forma combined condensed statements of operations, are expected to have a continuing impact to the combined results. The pro forma financial statements do not account for costs to integrate the operations of ITT and SPX FLOW or the costs necessary to achieve or the impact of any cost savings, operating synergies, and revenue enhancements resulting from the Acquisition.
ITT INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEETS
(IN MILLIONS)
As of December 31, 2025 | |||||||||||||||||||||||||||||
| ITT as Reported | Historical SPX FLOW Reclassified | Transaction Accounting Adjustments | Pro Forma Adjustments - Term Loan Facility & Note Redemption | Pro Forma Combined Condensed | |||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Current assets: | |||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 1,742.9 | $ | 203.2 | $ | (3,735.9) | [A] | $ | 2,335.8 | [B] | $ | 546.0 | |||||||||||||||||
| Receivables, net | 756.1 | 228.5 | — | — | 984.6 | ||||||||||||||||||||||||
| Inventories, net | 671.9 | 189.7 | 51.0 | [C] | — | 912.6 | |||||||||||||||||||||||
| Other current assets | 183.4 | 88.1 | — | — | 271.5 | ||||||||||||||||||||||||
| Total current assets | 3,354.3 | 709.5 | (3,684.9) | 2,335.8 | 2,714.7 | ||||||||||||||||||||||||
| Plant, property and equipment, net | 627.0 | 156.5 | 36.0 | [D] | — | 819.5 | |||||||||||||||||||||||
| Goodwill | 1,511.2 | 999.2 | 1,290.2 | [E] | — | 3,800.6 | |||||||||||||||||||||||
| Other intangible assets, net | 432.6 | 1,479.9 | 1,355.1 | [F] | — | 3,267.6 | |||||||||||||||||||||||
| Other non-current assets | 385.3 | 46.9 | — | — | 432.2 | ||||||||||||||||||||||||
| Total non-current assets | 2,956.1 | 2,682.5 | 2,681.3 | — | 8,319.9 | ||||||||||||||||||||||||
| Total assets | $ | 6,310.4 | $ | 3,392.0 | $ | (1,003.6) | $ | 2,335.8 | $ | 11,034.6 | |||||||||||||||||||
| Liabilities and Shareholders’ Equity | |||||||||||||||||||||||||||||
| Current liabilities: | |||||||||||||||||||||||||||||
| Short-term borrowings | $ | 261.3 | $ | 2.5 | $ | — | $ | — | $ | 263.8 | |||||||||||||||||||
| Accounts payable | 465.0 | 156.7 | — | — | 621.7 | ||||||||||||||||||||||||
| Accrued liabilities | 572.0 | 229.7 | 43.2 | [G] | — | 844.9 | |||||||||||||||||||||||
| Total current liabilities | 1,298.3 | 388.9 | 43.2 | — | 1,730.4 | ||||||||||||||||||||||||
| Noncurrent portion of long-term debt | 521.5 | 1,756.4 | (1,223.7) | [H] | 2,335.8 | [B] | 3,390.0 | ||||||||||||||||||||||
| Postretirement benefits | 120.0 | 34.5 | — | — | 154.5 | ||||||||||||||||||||||||
| Other non-current liabilities | 279.3 | 353.9 | 301.4 | [I] | — | 934.6 | |||||||||||||||||||||||
| Total non-current liabilities | 920.8 | 2,144.8 | (922.3) | 2,335.8 | 4,479.1 | ||||||||||||||||||||||||
| Total liabilities | $ | 2,219.1 | $ | 2,533.7 | $ | (879.1) | $ | 2,335.8 | $ | 6,209.5 | |||||||||||||||||||
Common stock | 85.9 | — | 3.8 | [J] | — | 89.7 | |||||||||||||||||||||||
Other shareholders’ equity | 3,998.5 | 858.3 | (128.3) | [K] | — | 4,728.5 | |||||||||||||||||||||||
| ITT Inc. shareholders’ equity | 4,084.4 | 858.3 | (124.5) | — | 4,818.2 | ||||||||||||||||||||||||
| Noncontrolling interests | 6.9 | — | — | — | 6.9 | ||||||||||||||||||||||||
| Total shareholders’ equity | $ | 4,091.3 | $ | 858.3 | $ | (124.5) | $ | — | $ | 4,825.1 | |||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 6,310.4 | $ | 3,392.0 | $ | (1,003.6) | $ | 2,335.8 | $ | 11,034.6 | |||||||||||||||||||
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
Year Ended December 31, 2025 | ||||||||||||||||||||||||||||||||
| As Reported | Historical SPX FLOW Reclassified | Transaction Accounting Adjustments | Pro Forma Adjustments - Term Loan Facility | Proforma Combined Condensed | ||||||||||||||||||||||||||||
| Revenue | $ | 3,938.5 | $ | 1,340.0 | $ | — | $ | — | $ | 5,278.5 | ||||||||||||||||||||||
| Costs of revenue | 2,546.1 | 782.6 | 143.1 | [P] | — | 3,471.8 | ||||||||||||||||||||||||||
| Gross profit | 1,392.4 | 557.4 | (143.1) | — | 1,806.7 | |||||||||||||||||||||||||||
| General and administrative expenses | 368.4 | 147.7 | 49.2 | [G] | — | 565.3 | ||||||||||||||||||||||||||
| Sales and marketing expenses | 228.7 | 212.2 | 31.7 | [F] | — | 472.6 | ||||||||||||||||||||||||||
| Research and development expenses | 110.8 | 38.3 | 0.6 | [F] | — | 149.7 | ||||||||||||||||||||||||||
| Operating income | 684.5 | 159.2 | (224.6) | — | 619.1 | |||||||||||||||||||||||||||
| Interest expense, net | 48.1 | 131.6 | (131.6) | [L] | 141.3 | [M] | 189.4 | |||||||||||||||||||||||||
| Loss on early extinguishment of debt | — | 1.2 | — | — | 1.2 | |||||||||||||||||||||||||||
| Interest income | (10.7) | (5.1) | — | — | (15.8) | |||||||||||||||||||||||||||
Other non-operating (income), expense, net | (4.4) | 11.9 | — | — | 7.5 | |||||||||||||||||||||||||||
| Income from continuing operations before income tax expense | 651.5 | 19.6 | (93.0) | (141.3) | 436.8 | |||||||||||||||||||||||||||
| Income tax expense | 160.1 | 32.1 | 25.1 | [N] | (33.2) | [N] | 184.1 | |||||||||||||||||||||||||
| Income from continuing operations | 491.4 | (12.5) | (118.1) | (108.1) | 252.7 | |||||||||||||||||||||||||||
| Less: Income attributable to noncontrolling interests | 3.3 | — | — | — | 3.3 | |||||||||||||||||||||||||||
| Income from continuing operations, net of tax attributable to ITT Inc. | $ | 488.1 | $ | (12.5) | $ | (118.1) | $ | (108.1) | $ | 249.4 | ||||||||||||||||||||||
| Earnings per share from continuing operations attributable to ITT Inc.: | ||||||||||||||||||||||||||||||||
| Basic earnings per share | $ | 6.15 | $ | 3.00 | ||||||||||||||||||||||||||||
| Diluted earnings per share | $ | 6.11 | $ | 2.98 | ||||||||||||||||||||||||||||
| Weighted average common shares – basic | 79.4 | 83.2 | [O] | |||||||||||||||||||||||||||||
| Weighted average common shares – diluted | 79.9 | 83.7 | [O] | |||||||||||||||||||||||||||||
Notes to Unaudited Pro Forma Combined Condensed Financial Information
(Millions of Dollars)
Note 1. Basis of Presentation
On March 2, 2026 (the “Closing Date”), ITT Inc., an Indiana corporation (“ITT” or the “Company”), completed the acquisition (the “Acquisition”) of LSF11 Redwood TopCo LLC ( “SPX FLOW”), pursuant to that certain Membership Interest Purchase Agreement (the “Purchase Agreement”), by and among ITT, LSF11 Redwood Parent, L.P. (the “Seller”), SPX FLOW and ITT Industries Holdings, Inc., a Delaware corporation and wholly owned subsidiary of ITT (the “Buyer”), pursuant to which the Buyer purchased 100% of the issued and outstanding membership interests in SPX FLOW, a provider of highly engineered equipment and process technologies for the industrial and health and nutrition markets. The aggregate consideration (“Purchase Consideration”) under the Purchase Agreement was $4,775, which consisted of $4,075 in cash and 3,839,824 shares of ITT common stock issued to the Seller, with a portion of the consideration effectively satisfied through the assumption of certain indebtedness.
On February 18, 2026, ITT entered into a credit agreement among the Company, as borrower, certain of its subsidiaries, as co-borrowers, each lender from time to time party thereto, and U.S. Bank National Association, as the administrative agent, sole lead arranger and sole bookrunner, which provides for delayed draw term loan commitments in an aggregate principal amount of $2,875, which may be drawn, on up to two occasions, to finance the Acquisition (the “Term Loan Facility”).
The unaudited pro forma combined condensed financial information was prepared using the acquisition method of accounting in accordance with ASC 805, with ITT as the accounting acquirer, using the fair value concepts defined in ASC Topic 820, Fair Value Measurement, and based on the historical consolidated financial statements of ITT and SPX FLOW. Under ASC 805, all assets acquired and liabilities assumed in a business combination are recognized and measured at their assumed acquisition date fair value, while transaction costs associated with the business combination are expensed as incurred. The excess of Purchase Consideration over the estimated fair value of assets acquired and liabilities assumed, if any, is allocated to goodwill.
The pro forma adjustments represent ITT management’s best estimates and are based upon currently available information and certain assumptions that ITT believes are reasonable under the circumstances.
The unaudited pro forma combined condensed balance sheet as of December 31, 2025, combines the historical consolidated balance sheets of the Company and SPX FLOW and has been prepared as if the Acquisition had occurred on December 31, 2025. The unaudited pro forma combined condensed statements of operations for the year ended December 31, 2025, combine the historical consolidated statement of operations of the Company and SPX FLOW and has been prepared as if the Acquisition closed on January 1, 2025.
Note 2. Purchase Price and Purchase Price Allocation
The following table summarizes the preliminary estimate of Purchase Consideration transferred in connection with the Acquisition:
| Cash | $ | 3,735.9 | |||
ITT shares issued (in whole shares)(a) | 777.2 | ||||
Total estimated purchase consideration | $ | 4,513.1 | |||
Cash acquired on 12/31/2025 | 203.2 | ||||
Total estimated purchase consideration, net of cash acquired | $ | 4,309.9 | |||
(a)Fair value of shares issued is based on 3.8 million shares issued at a price of $202.41 per share on the closing date.
Under the acquisition method of accounting, the identifiable assets acquired, and liabilities assumed of SPX FLOW will be recognized and measured at fair value as of the Acquisition date and added to those of ITT. The determination of fair value used in the transaction-related adjustments presented herein are preliminary and based on ITT management estimates of the fair value and useful lives of the assets acquired and liabilities assumed and have been prepared to illustrate the estimated effect of the Acquisition. The costs of finite-lived intangible assets are amortized through expense over their estimated lives. The allocation is dependent upon certain valuation and other
studies that have not yet been completed. Accordingly, the pro forma purchase price allocation will be subject to further adjustments as additional information becomes available and as additional analyses and final valuations are completed. The purchase price allocation will be finalized within one year from the Acquisition date. There can be no assurances that these additional analyses and final valuations will not result in significant changes to the estimates of fair value set forth below.
The following table sets forth a preliminary allocation of the Purchase Consideration to the identifiable tangible and intangible assets acquired and liabilities assumed by ITT, as if the Acquisition had been consummated on December 31, 2025 based on the unaudited consolidated balance sheet of SPX FLOW as of December 31, 2025, with the excess recorded as goodwill:
| Cash | $ | 203.2 | |||
| Accounts Receivable | 228.5 | ||||
| Inventory | 240.7 | ||||
| Other current assets | 88.1 | ||||
| Customer relationships | 2,070.0 | ||||
| Developed technology | 340.0 | ||||
| Tradename | 330.0 | ||||
| Backlog | 95.0 | ||||
| Property, plant and equipment | 192.5 | ||||
| Other noncurrent assets | 46.9 | ||||
| Accounts payable | (156.7) | ||||
| Other current liabilities | (229.5) | ||||
| Current and noncurrent portions of long-term debt | (535.2) | ||||
| Deferred tax and other income tax liabilities | (623.1) | ||||
| Other noncurrent liabilities | (66.7) | ||||
| Net assets acquired | $ | 2,223.7 | |||
| Goodwill | 2,289.4 | ||||
| Total purchase price | $ | 4,513.1 | |||
Note 3. Pro Forma Adjustments
The pro forma adjustments included in the unaudited pro forma combined condensed financial statements are as follows:
[A] Pro forma adjustment of $(3,735.9) reflects the cash component of the purchase consideration paid at closing.
[B] Reflects the following adjustments:
| Proceeds from Term Loan Facility, net of debt issuance costs of $6.5 | $ | 2,868.5 | |||
Repayment of SPX $500 8.75% Senior Notes(a) | (532.7) | ||||
| Pro forma adjustment | $ | 2,335.8 | |||
(a)The $500 8.75% Senior Notes were redeemed within 30 days of the Acquisition date. For purposes of these unaudited pro forma financial statement financial statements, the redemption is assumed to have occurred on the Acquisition date. The redemption included payment of principal, premium and accrued interest.
[C] Reflects an estimated $51.0 adjustment to reflect inventory at fair value as of December 31, 2025.
[D] Reflects an estimated $36.0 adjustment to reflect property, plant and equipment at fair value as of December 31, 2025.
[E] Reflects the elimination of SPX FLOW’s historical goodwill and the capitalization of the preliminary goodwill for the estimated Purchase Consideration in excess of the fair value of the net assets acquired in connection with the Acquisition, calculated as follows:
| Fair value of consideration transferred in excess of the preliminary fair value of assets acquired and liabilities assumed (Note 2) | $ | 2,289.4 | |||
| Elimination of SPX FLOW’s historical goodwill | (999.2) | ||||
| Pro forma net adjustment to goodwill | $ | 1,290.2 | |||
[F] Adjustments to reflect the preliminary fair values of SPX FLOW’s identifiable intangible assets and the associated amortization expense. The primary assets include customer relationships, tradename, developed technology and backlog. The fair value and amortization adjustments for each asset are based on preliminary assumptions. These assumptions are subject to further analysis and may change, which would result in a change to the adjustments included in the unaudited pro forma financial information. The following table presents the fair value, useful life and pro forma amortization adjustments for each asset:
| Intangible Asset | Estimated Fair Value | Useful Life | Incremental amortization FY 2025 | ||||||||
| Customer relationships | $ | 2,070.0 | 18 | 31.7 | |||||||
| Technology | 340.0 | 18 | 0.6 | ||||||||
| Backlog | 95.0 | 1 | 95.0 | ||||||||
| Tradename | 330.0 | Indefinite | — | ||||||||
| Total | 2,835.0 | 127.3 | |||||||||
| Eliminate historical SPX FLOW intangible assets | (1,479.9) | ||||||||||
| Pro forma net adjustment to intangibles, net | $ | 1,355.1 | |||||||||
[G] Non-recurring adjustment to record $49.2 in transaction fees related to the Acquisition, net of tax of $5.8, the assumption of $10.9 of liabilities in connection with the Acquisition and the elimination of $11.1 accrued interest as of December 31, 2025 in connection with the repayment of SPX indebtedness.
[H] Adjustment of $(1,223.7) reflects the following:
| Repayment of SPX FLOW indebtedness in connection with the Acquisition | $ | (1,275.4) | |||
| Elimination of debt discount and debt issue costs | 19.0 | ||||
| Estimated fair value adjustment for SPX $500 8.75% Notes | 32.7 | ||||
Net impact to noncurrent portion of long-term debt | $ | (1,223.7) | |||
[I] Adjustment to record $318.5 deferred tax liabilities relating to basis differences for incremental identified intangible assets of $1,355.1, calculated based on the statutory rate, offset by additional $17.1 net operating loss related to certain transaction expenses paid at closing.
[J] Represents increase in shares outstanding based on issuance of 3.8 shares to the Seller. Based on a par value per share of $1.00, the increase to common stock value within shareholders’ equity is $3.8.
[K] Reflects the impact to other shareholders’ equity as follows:
Issuance of shares to Sellers as part of Purchase Consideration(a) | $ | 777.2 | |||
| Par value of common stock for shares issued to Sellers | (3.8) | ||||
| Elimination of SPX FLOW shareholders’ equity | (858.3) | ||||
| Impact of transaction costs, net of tax | (43.4) | ||||
Net impact to other shareholders’ equity | $ | (128.3) | |||
(a)Value based on the closing price of ITT shares on the Acquisition date.
[L] Elimination of SPX FLOW historical interest expense of $131.6 for the year ended December 31, 2025.
[M] Reflects the net impact to interest expense for the year ended December 31, 2025 as follows:
| Interest expense on new $2,875 Term Loan Facility at an assumed interest rate of 4.8%. | $ | 138.0 | |||
| Amortization of debt issue costs | 3.3 | ||||
Net impact to interest expense | $ | 141.3 | |||
[N] Adjustments reflect the tax effect of income (loss) before income taxes for the pro forma adjustments, calculated based on the statutory rate.
[O] Reflects the issuance of 3,839,824 shares of ITT common stock to the Seller.
[P] Impact to costs of revenue reflects the non-recurring amortization of backlog intangible asset of $95 and recognition of $44.1 estimated inventory step-up based on inventory values as of January 1, 2025. The step up in inventories to fair value and backlog intangible asset increase cost of goods sold as the related inventories are sold or backlog is converted to revenue which, for purposes of the unaudited pro forma combined condensed financial information is assumed to occur within the first year after the Acquisition date. These costs are non-recurring in nature and not anticipated to affect the combined condensed income statement beyond twelve months after the Acquisition. Incremental depreciation related to the step-up of property, plant and equipment is also included as an impact to costs of revenue. A calculation of the net impact is as follows:
For the Year Ended | December 31, 2025 | ||||
| Inventory impact to costs of revenue | $ | 44.1 | |||
| Impact of step-up of property, plant and equipment to fair value | 4.0 | ||||
| Backlog amortization | 95.0 | ||||
| Net impact to interest expense | $ | 143.1 | |||
Note 4. SPX FLOW Reclassification Adjustment Tables
Refer to the table below for a summary of reclassification adjustments made to SPX FLOW’s consolidated balance sheet as of December 31, 2025 to conform to ITT’s presentation:
As of December 31, 2025 | Historical SPX FLOW | Reclassification Adjustments | Historical SPX FLOW Reclassified | ||||||||||||||
| Assets | |||||||||||||||||
| Current assets: | |||||||||||||||||
| Cash and cash equivalents | $ | 203.2 | $ | — | $ | 203.2 | |||||||||||
| Receivables, net | 228.5 | — | 228.5 | ||||||||||||||
| Contract assets | 33.0 | (33.0) | (a) | — | |||||||||||||
| Inventories, net | 189.7 | — | 189.7 | ||||||||||||||
| Other current assets | 55.1 | 33.0 | (a) | 88.1 | |||||||||||||
| Total current assets | 709.5 | — | 709.5 | ||||||||||||||
| Plant, property and equipment, net | 156.5 | — | 156.5 | ||||||||||||||
| Goodwill | 999.2 | — | 999.2 | ||||||||||||||
| Other intangible assets, net | 1,479.9 | — | 1,479.9 | ||||||||||||||
| Other non-current assets | 46.9 | — | 46.9 | ||||||||||||||
| Total non-current assets | 2,682.5 | — | 2,682.5 | ||||||||||||||
| Total assets | $ | 3,392.0 | $ | — | $ | 3,392.0 | |||||||||||
| Liabilities and Shareholders’ Equity | |||||||||||||||||
| Current liabilities: | |||||||||||||||||
| Short-term borrowings | 2.5 | — | $ | 2.5 | |||||||||||||
| Accounts payable | 138.1 | 18.6 | (b) | 156.7 | |||||||||||||
| Income taxes payable | 18.6 | (18.6) | (b) | — | |||||||||||||
| Contract liabilities | 96.3 | (96.3) | (c) | — | |||||||||||||
| Accrued liabilities | 133.4 | 96.3 | (c) | 229.7 | |||||||||||||
| Total current liabilities | 388.9 | — | 388.9 | ||||||||||||||
| Noncurrent portion of long-term debt | 1,756.4 | — | 1,756.4 | ||||||||||||||
| Postretirement benefits | — | 34.5 | (d) | 34.5 | |||||||||||||
| Deferred and other income tax liabilities | 321.7 | (321.7) | (e) | — | |||||||||||||
| Other non-current liabilities | 66.7 | 287.2 | (d)(e) | 353.9 | |||||||||||||
| Total non-current liabilities | 2,144.8 | — | 2,144.8 | ||||||||||||||
| Total liabilities | $ | 2,533.7 | $ | — | $ | 2,533.7 | |||||||||||
| Total shareholders’ equity | 858.3 | — | 858.3 | ||||||||||||||
| Total liabilities and shareholders’ equity | $ | 3,392.0 | $ | — | $ | 3,392.0 | |||||||||||
(a) Represents a reclassification of $33.0 of contract assets to other current assets.
(b) Represents a reclassification of $18.6 of income taxes payable to accounts payable.
(c) Represents a reclassification of $96.3 of contract liabilities to accrued liabilities.
(d) Represents a reclassification of $34.5 from other non-current liabilities to postretirement benefits.
(e) Represents a reclassification of $321.7 of deferred and other income tax liabilities to other non-current liabilities.
Refer to the table below for a summary of reclassification adjustments to SPX FLOW’s condensed consolidated income statement for the year ended December 31, 2025 to conform with ITT’s presentation:
Year Ended December 31, 2025 | |||||||||||||||||
Historical SPX FLOW | Reclassification Adjustments | Historical SPX FLOW Reclassified | |||||||||||||||
| Revenue | $ | 1,340.0 | $ | — | $ | 1,340.0 | |||||||||||
| Costs of revenue | 782.6 | — | 782.6 | ||||||||||||||
| Gross profit | 557.4 | — | 557.4 | ||||||||||||||
Selling, general and administrative expenses | 289.7 | (142.0) | (a)(c)(d) | 147.7 | |||||||||||||
| Intangible amortization | 101.6 | (101.6) | (b) | — | |||||||||||||
| Sales and marketing expenses | — | 212.2 | (a)(b) | 212.2 | |||||||||||||
| Research and development expenses | — | 38.3 | (b)(c) | 38.3 | |||||||||||||
| Restructuring costs | 6.9 | (6.9) | (d) | — | |||||||||||||
| Operating income | 159.2 | — | 159.2 | ||||||||||||||
| Interest expense, net | 126.5 | 5.1 | (e) | 131.6 | |||||||||||||
| Loss on early extinguishment of debt | 1.2 | — | 1.2 | ||||||||||||||
| Interest income | — | (5.1) | (e) | (5.1) | |||||||||||||
Other non-operating expense, net | 11.9 | — | 11.9 | ||||||||||||||
| Income before income taxes | 19.6 | — | 19.6 | ||||||||||||||
| Income tax benefit | 32.1 | — | 32.1 | ||||||||||||||
| Net income | $ | (12.5) | $ | — | $ | (12.5) | |||||||||||
(a) Represents a reclassification of $128.9 from selling, general and administrative expense to sales and marketing expenses.
(b) Represents a reclassification of $83.3 of customer relationship intangible amortization to sales and marketing expense and $18.3 of technology intangible amortization to research and development expenses.
(c) Represents a reclassification of $20.0 from selling, general and administrative costs to research and development expenses.
(d) Represents a reclassification of $6.9 of restructuring and other related charges to general and administrative expenses.
(e) Represents a reclassification of $5.1 of interest income from interest expense, net to interest income.