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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 28, 2020
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to            
 
Commission File Number 1-6948

SPX CORPORATION
(Exact Name of registrant as specified in its charter)
Delaware 38-1016240
(State or other jurisdiction of incorporation or
organization)
 (I.R.S. Employer Identification No.)
 
13320-A Ballantyne Corporate Place, Charlotte, North Carolina 28277
(Address of principal executive offices) (Zip Code)

(980474-3700
(Registrant’s telephone number, including area code)

NOT APPLICABLE
(Former name, former address, and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbols(s)Name of each exchange on which registered
Common Stock, par value $0.01SPXCNew York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  No
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer
   
Non-accelerated filer  Smaller reporting company
 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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  No. 
Common shares outstanding April 24, 2020, 44,559,420




SPX CORPORATION AND SUBSIDIARIES
FORM 10-Q INDEX






PART I—FINANCIAL INFORMATION
 
ITEM 1. Financial Statements
 
SPX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited; in millions, except per share amounts)
 Three months ended
March 28,
2020
March 30,
2019
Revenues$369.3  $343.6  
Costs and expenses:   
Cost of products sold255.2  260.4  
Selling, general and administrative78.9  76.7  
Intangible amortization2.6  1.6  
Special charges, net0.3  0.1  
Other operating (income) expense(0.4) 1.8  
Operating income 32.7  3.0  
Other income, net0.7  7.2  
Interest expense(4.7) (5.3) 
Interest income  0.3  
Income from continuing operations before income taxes28.7  5.2  
Income tax provision(6.0) (4.6) 
Income from continuing operations22.7  0.6  
Income (loss) from discontinued operations, net of tax    
Loss on disposition of discontinued operations, net of tax  (1.4) 
Loss from discontinued operations, net of tax  (1.4) 
Net income (loss)$22.7  $(0.8) 
Basic income (loss) per share of common stock: 
Income from continuing operations$0.51  $0.01  
Loss from discontinued operations  (0.03) 
Net income (loss) per share$0.51  $(0.02) 
Weighted-average number of common shares outstanding — basic44.309  43.618  
Diluted income (loss) per share of common stock: 
Income from continuing operations $0.50  $0.01  
Loss from discontinued operations  (0.03) 
Net income (loss) per share$0.50  $(0.02) 
Weighted-average number of common shares outstanding — diluted45.527  44.880  
Comprehensive income $9.8  $0.9  

The accompanying notes are an integral part of these statements.
3


SPX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited; in millions, except share data)
March 28,
2020
December 31,
2019
ASSETS  
Current assets:  
Cash and equivalents$163.1  $54.7  
Accounts receivable, net239.6  265.9  
Contract assets73.6  63.4  
Inventories, net175.1  154.9  
Other current assets (includes income taxes receivable of $22.7 and $23.0 at March 28, 2020 and December 31, 2019, respectively)
92.6  93.2  
Total current assets744.0  632.1  
Property, plant and equipment:  
Land18.7  18.7  
Buildings and leasehold improvements121.0  121.9  
Machinery and equipment343.3  342.6  
483.0  483.2  
Accumulated depreciation(306.1) (304.1) 
Property, plant and equipment, net176.9  179.1  
Goodwill446.6  449.3  
Intangibles, net247.6  251.7  
Other assets592.0  605.9  
Deferred income taxes14.8  16.4  
TOTAL ASSETS$2,221.9  $2,134.5  
LIABILITIES AND EQUITY 
Current liabilities: 
Accounts payable$148.0  $141.6  
Contract liabilities94.0  100.8  
Accrued expenses195.0  220.4  
Income taxes payable2.2  2.2  
Short-term debt260.3  142.6  
Current maturities of long-term debt2.6  1.0  
Total current liabilities702.1  608.6  
Long-term debt248.6  249.9  
Deferred and other income taxes26.2  26.3  
Other long-term liabilities729.9  747.3  
Total long-term liabilities1,004.7  1,023.5  
Commitments and contingent liabilities (Note 15)
Equity: 
Common stock (52,225,682 and 44,533,979 issued and outstanding at March 28, 2020, respectively, and 52,017,204 and 44,202,503 issued and outstanding at December 31, 2019, respectively)
0.5  0.5  
Paid-in capital1,298.5  1,302.4  
Retained deficit(562.6) (584.8) 
Accumulated other comprehensive income231.4  244.3  
Common stock in treasury (7,691,703 and 7,814,701 shares at March 28, 2020 and December 31, 2019, respectively)
(452.7) (460.0) 
Total equity515.1  502.4  
TOTAL LIABILITIES AND EQUITY$2,221.9  $2,134.5  
 
The accompanying notes are an integral part of these statements.
4


SPX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited; in millions)
Three months ended March 28, 2020
Common
Stock
Paid-In
Capital
Retained
Deficit
Accum. Other
Comprehensive
Income
Common
Stock In
Treasury
SPX
Corporation
Shareholders’
Equity
Balance at December 31, 2019$0.5  $1,302.4  $(584.8) $244.3  $(460.0) $502.4  
Impact of adoption of ASU 2016-13 - See Note 2—  —  (0.5) —  —  (0.5) 
Net income—  —  22.7  —  —  22.7  
Other comprehensive loss, net
—  —  —  (12.9) —  (12.9) 
Incentive plan activity
—  4.7  —  —  —  4.7  
Long-term incentive compensation expense
—  3.0  —  —  —  3.0  
Restricted stock and restricted stock unit vesting
—  (11.6) —  —  7.3  (4.3) 
Balance at March 28, 2020$0.5  $1,298.5  $(562.6) $231.4  $(452.7) $515.1  

Three months ended March 30, 2019
Common
Stock
Paid-In
Capital
Retained
Deficit
Accum. Other
Comprehensive
Income
Common
Stock In
Treasury
SPX
Corporation
Shareholders’
Equity
Balance at December 31, 2018$0.5  $1,295.4  $(650.1) $244.9  $(475.8) $414.9  
Net loss—  —  (0.8) —  —  (0.8) 
Other comprehensive income, net
—  —  —  1.7  —  1.7  
Incentive plan activity
—  3.4  —  —  —  3.4  
Long-term incentive compensation expense
—  2.6  —  —  —  2.6  
Restricted stock and restricted stock unit vesting
—  (21.5) —  —  15.0  (6.5) 
Balance at March 30, 2019$0.5  $1,279.9  $(650.9) $246.6  $(460.8) $415.3  

The accompanying notes are an integral part of these statements.
5


SPX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in millions)
 Three months ended
March 28,
2020
March 30,
2019
Cash flows from (used in) operating activities:  
Net income (loss)$22.7  $(0.8) 
Less: Loss from discontinued operations, net of tax  (1.4) 
Income from continuing operations22.7  0.6  
Adjustments to reconcile income from continuing operations to net cash from (used in) operating activities: 
Special charges, net0.3  0.1  
Gain on change in fair value of equity security  (6.3) 
Deferred and other income taxes3.9  2.5  
Depreciation and amortization9.2  8.1  
Pension and other employee benefits2.2  2.8  
Long-term incentive compensation3.5  3.5  
Other, net0.7  0.3  
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable and other assets23.8  47.5  
Inventories(22.7) (14.4) 
Accounts payable, accrued expenses and other(40.4) (32.2) 
Cash spending on restructuring actions(0.5) (1.0) 
Net cash from continuing operations2.7  11.5  
Net cash used in discontinued operations(3.1) (0.9) 
Net cash from (used in) operating activities(0.4) 10.6  
Cash flows from (used in) investing activities:
Proceeds from company-owned life insurance policies, net1.1  0.5  
Business acquisitions, net of cash acquired  (77.0) 
Net proceeds from sales of assets  5.5  
Capital expenditures(3.6) (3.7) 
Net cash used in continuing operations(2.5) (74.7) 
Net cash from discontinued operations    
Net cash used in investing activities(2.5) (74.7) 
Cash flows from (used in) financing activities:
Borrowings under senior credit facilities178.7  89.3  
Repayments under senior credit facilities(88.7) (64.5) 
Borrowings under trade receivables financing arrangement55.0  40.0  
Repayments under trade receivables financing arrangement(27.0) (29.0) 
Net borrowings (repayments) under other financing arrangements(0.7) 2.8  
Payment of contingent consideration(1.5)   
Minimum withholdings paid on behalf of employees for net share settlements, net of proceeds from the exercise of employee stock options(2.8) (5.9) 
Net cash from continuing operations113.0  32.7  
Net cash from (used in) discontinued operations    
Net cash from financing activities113.0  32.7  
Change in cash and equivalents due to changes in foreign currency exchange rates(1.7) 1.6  
Net change in cash and equivalents108.4  (29.8) 
Consolidated cash and equivalents, beginning of period54.7  68.8  
Consolidated cash and equivalents, end of period$163.1  $39.0  
 
The accompanying notes are an integral part of these statements.
6


SPX CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited; in millions, except per share data)
 
(1) BASIS OF PRESENTATION
Unless otherwise indicated, “we,” “us” and “our” mean SPX Corporation and its consolidated subsidiaries (“SPX”).
We prepared the condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information normally required by accounting principles generally accepted in the United States (“GAAP”) can be condensed or omitted. The financial statements represent our accounts after the elimination of intercompany transactions and, in our opinion, include the adjustments (consisting only of normal and recurring items) necessary for their fair presentation.
We account for investments in unconsolidated companies where we exercise significant influence but do not have control using the equity method. In determining whether we are the primary beneficiary of a variable interest entity (“VIE”), we perform a qualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties to determine which party has the power to direct the activities of the VIE that most significantly impact the entity’s economic performance, and which party has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. We have an interest in a VIE, in which we are not the primary beneficiary, as a result of the 2016 sale of Balcke Dürr. All other VIEs are considered immaterial, individually and in aggregate, to our condensed consolidated financial statements.
Acquisition of Sabik
On February 1, 2019, we completed the acquisition of Sabik Marine (“Sabik”), primarily a manufacturer of obstruction lighting products, for a purchase price of $77.2, net of cash acquired of $0.6. The post-acquisition operating results of Sabik are reflected within our Detection and Measurement reportable segment.
Acquisition of SGS
On July 3, 2019, we completed the acquisition of SGS Refrigeration Inc. (“SGS”), a manufacturer of industrial refrigeration products in North America, for cash proceeds of $11.5, including contingent consideration of $1.5 that was paid during the three months ended March 28, 2020. The assets acquired and liabilities assumed have been recorded at preliminary estimates of fair value as determined by management, based on information currently available and on current assumptions as to future operations and are subject to change upon completion of acquisition accounting. The post-acquisition operating results of SGS are reflected within our HVAC reportable segment.
Acquisition of Patterson-Kelley
On November 12, 2019, we completed the acquisition of Patterson-Kelley, LLC (“Patterson-Kelley”), a manufacturer and distributor of commercial boilers and water heaters, for cash proceeds of $59.9. The assets acquired and liabilities assumed have been recorded at estimates of fair value as determined by management, based on information available and on assumptions as to future operations and are subject to change upon completion of acquisition accounting. The post-acquisition operating results of Patterson-Kelley are reflected within our HVAC reportable segment.
Impact of the Coronavirus Disease (the “COVID-19 pandemic”)

We began to experience the adverse impacts of the COVID-19 pandemic in the first quarter of 2020 and these adverse impacts are expected to continue in the second quarter of 2020, and possibly longer. Despite the adverse impacts, there are no indications that the COVID-19 pandemic has resulted in a material decline in the carrying value of any assets, or a material change in the estimate of any contingent amounts, recorded in our condensed consolidated balance sheet as of March 28, 2020. However, there is uncertainty as to the duration and overall impact of the COVID-19 pandemic, which could result in an adverse material change in a future period to the estimates we have made for the valuation of assets and contingent amounts.

Other
Preparing financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ from these estimates. The unaudited information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2019. Interim results are not necessarily indicative of full
7


year results. Unless otherwise indicated, amounts provided in these Notes pertain to continuing operations only. See Note 3 for information on discontinued operations.
We establish actual interim closing dates using a fiscal calendar, which requires our businesses to close their books on the Saturday closest to the end of the first calendar quarter, with the second and third quarters being 91 days in length. Our fourth quarter ends on December 31. The interim closing dates for the first, second and third quarters of 2020 are March 28, June 27 and September 26, compared to the respective March 30, June 29 and September 28, 2019 dates. We had one less day in the first quarter of 2020 and will have two more days in the fourth quarter of 2020 than in the respective 2019 periods. We do not believe the one less day during the first quarter of 2020 had a material impact on our consolidated operating results, when compared to the consolidated operating results for the first quarter 2019.

(2) NEW ACCOUNTING PRONOUNCEMENTS
The following is a summary of new accounting pronouncements that apply or may apply to our business.
In February 2016, the Financial Accounting Standards Board (“FASB”) issued an amendment to existing guidance, Accounting Standards Codification (“ASC”) 842, that requires lessees to recognize assets and liabilities for the rights and obligations created by leases. Under the amendment, additional qualitative and quantitative disclosures are required to allow users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. Effective January 1, 2019, we adopted ASC 842 using the modified retrospective transition approach. The modified retrospective transition approach recognizes any changes as of the beginning of the year of initial application (i.e., as of January 1, 2019) through retained earnings. The adoption of ASC 842 had no impact on our retained deficit.

In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13. ASU 2016-13 changes how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income, based on historical experience, current conditions and reasonable and supportable forecasts. The requirements of ASU 2016-13 are to be applied on a modified retrospective basis, which entails recognizing the initial effect of adoption in retained earnings. We adopted ASU 2016-13 on January 1, 2020, which resulted in an increase of our retained deficit of $0.5.

In January 2017, the FASB issued an amendment to simplify the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires that an entity recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. This amendment is effective for annual reporting periods beginning after December 31, 2019, including interim periods within those annual reporting periods. The impact of this amendment on our consolidated financial statements will depend on the results of future goodwill impairment tests.
In August 2017, the FASB issued significant amendments to hedge accounting. The FASB’s new guidance will make more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. We adopted this guidance during the first quarter of 2019, with such adoption having no material impact to our condensed consolidated financial statements.
In August 2018, the FASB issued amended guidance to simplify fair value measurement disclosure requirements. The new provisions eliminate the requirements to disclose (i) transfers between Level 1 and Level 2 of the fair value hierarchy, (ii) policies related to valuation processes and the timing of transfers between levels of the fair value hierarchy, and (iii) net asset value disclosure of estimates of timing of future liquidity events. The FASB also modified disclosure requirements of Level 3 fair value measurements. This guidance is effective for annual periods beginning after December 15, 2019. We adopted this standard on January 1, 2020 with no impact on our condensed consolidated financial statements.
In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). This ASU simplifies the accounting for income taxes by, among other things, eliminating certain existing exceptions related to the general approach in ASC 740 relating to franchise taxes, reducing complexity in the interim-period accounting for year-to-date loss limitations and changes in tax laws, and clarifying the accounting for the step-up in the tax basis of goodwill. The transition requirements are primarily prospective and the effective date is for interim and annual reporting periods beginning after December 15, 2020, with early adoption permitted. We are currently evaluating the impact of the new guidance on our condensed consolidated financial statements.

The London Interbank Offered Rate (“LIBOR”) is scheduled to be discontinued on December 31, 2021. In effort to address the various challenges created by such discontinuance, the FASB issued an amendment to existing guidance, ASU No. 2020-04, Reference Rate Reform. The amended guidance is designed to provide relief from the accounting analysis and impacts that may otherwise be required for modifications to agreements (e.g., loans, debt securities, derivatives, borrowings) necessitated by the reference rate reform. It also provides optional expedients to enable companies to continue to apply hedge
8


accounting to certain hedging relationships impacted by the reference rate reform. Application of the guidance in the amendment is optional, is only available in certain situations, and is only available for companies to apply until December 31, 2022. We are currently evaluating the impacts of reference rate reform and the new guidance on our condensed consolidated financial statements.

(3) ACQUISITIONS AND DISCONTINUED OPERATIONS
As indicated in Note 1, on February 1, 2019, July 3, 2019, and November 12, 2019, we completed the acquisitions of Sabik, SGS, and Patterson-Kelley, respectively. The pro forma effects of these acquisitions are not material to our condensed consolidated results of operations for the three months ended March 30, 2019.

During the three months ended March 30, 2019, we recorded an income tax provision of $1.4 within “Loss on disposition of discontinued operations, net of tax” as a result of a change in estimate associated with income tax liabilities retained in connection with a prior business divestiture.

(4) REVENUES FROM CONTRACTS
Disaggregated Revenues

We disaggregate revenue from contracts with customers by major product line and based on the timing of recognition for each of our reportable segments and other operating segments, as we believe such disaggregation best depicts how the nature, amount, timing, and uncertainty of our revenues and cash flows are affected by economic factors, with such disaggregation presented below for the three months ended March 28, 2020 and March 30, 2019:
Three months ended March 28, 2020
Reportable Segments and All OtherHVACDetection and MeasurementEngineered SolutionsAll OtherTotal
Major product lines
Cooling$57.9  $  $  $  $57.9  
Boilers, comfort heating, and ventilation60.6        60.6  
Underground locators and inspection and rehabilitation
equipment
  48.7      48.7  
Signal monitoring, obstruction lighting, and bus fare collection systems  43.2      43.2  
Power transformers    110.6    110.6  
Process cooling equipment and services, and heat exchangers    44.3  1.9  46.2  
South African projects      2.1  2.1  
$118.5  $91.9  $154.9  $4.0  $369.3  
Timing of Revenue Recognition
Revenues recognized at a point in time
$118.5  $83.5  $11.6  $1.3  $214.9  
Revenues recognized over time
  8.4  143.3  2.7  154.4  
$118.5  $91.9  $154.9  $4.0  $369.3  

9


Three months ended March 30, 2019
Reportable Segments and All OtherHVACDetection and MeasurementEngineered SolutionsAll OtherTotal
Major product lines
Cooling$58.9  $  $  $  $58.9  
Boilers, comfort heating, and ventilation69.5        69.5  
Underground locators and inspection and rehabilitation
equipment
  47.1      47.1  
Signal monitoring, obstruction lighting, and bus fare collection systems  38.0      38.0  
Power transformers    98.8    98.8  
Process cooling equipment and services, and heat exchangers    39.2  3.7  42.9  
South African projects (1)
      (11.6) (11.6) 
$128.4  $85.1  $138.0  $(7.9) $343.6  
Timing of Revenue Recognition
Revenues recognized at a point in time
$128.4  $79.6  $12.5  $1.1  $221.6  
Revenues recognized over time (1)
  5.5  125.5  (9.0) 122.0  
$128.4  $85.1  $138.0  $(7.9) $343.6  
___________________________
(1) As further discussed below, during the three months ended March 30, 2019, we reduced the amount of cumulative revenue associated with variable consideration on the large power projects in South Africa by $17.5.
Contract Balances
Our customers are invoiced for products and services at the time of delivery or based on contractual milestones, resulting in outstanding receivables with payment terms from these customers (“Contract Accounts Receivable”). In some cases, the timing of revenue recognition, particularly for revenue recognized over time, differs from when such amounts are invoiced to customers, resulting in a contract asset (revenue recognition precedes the invoicing of the related revenue amount) or a contract liability (payment from the customer precedes recognition of the related revenue amount). Contract assets and liabilities are generally classified as current. On a contract-by-contract basis, the contract assets and contract liabilities are reported net within our condensed consolidated balance sheets. Our contract balances consisted of the following as of March 28, 2020 and December 31, 2019:

Contract BalancesMarch 28, 2020December 31, 2019Change
Contract Accounts Receivable(1)
$235.2  $260.8  $(25.6) 
Contract Assets73.6  63.4  10.2  
Contract Liabilities - current(94.0) (100.8) 6.8  
Contract Liabilities - non-current(2)
(2.4) (3.3) 0.9  
Net contract balance$212.4  $220.1  $(7.7) 
___________________________
(1) Included in “Accounts receivable, net” within the accompanying condensed consolidated balance sheets.
(2) Included in “Other long-term liabilities” within the accompanying condensed consolidated balance sheets.
The $7.7 decrease in our net contract balance from December 31, 2019 to March 28, 2020 was due primarily to cash payments received from customers during the period, partially offset by revenue recognized during the period.
During the three months ended March 28, 2020, we recognized revenues of $44.6 related to our contract liabilities at December 31, 2019.
Performance Obligations

As of March 28, 2020, the aggregate amount allocated to remaining performance obligations was $74.0. We expect to recognize revenue on approximately 36% and 61% of remaining performance obligations over the next 12 and 24 months, respectively, with the remaining recognized thereafter.
Variable Consideration
During February, March, and April of 2019, we received a number of claims from the prime contractors on the large power projects in South Africa asserting various amounts of damages. In consideration of these claims (including the magnitude
10


of the claims and claims in areas that had not been previously identified by the prime contractors), and in accordance with ASC 606, we analyzed the risk of a significant revenue reversal associated with the amount of variable consideration that had been recorded for the projects. Based on such analysis, we reduced the amount of cumulative revenue associated with the variable consideration on the large power projects in South Africa by $17.5 during the first quarter of 2019, as it was no longer probable that such amounts of revenue would not be reversed. As of March 28, 2020, there was $0.3 of cumulative revenue associated with variable consideration recorded for the large power projects in South Africa.

(5) LEASES
We entered into a ten-year agreement to lease office space for a new corporate headquarters location in Charlotte, NC, with scheduled monthly payments under the agreement commencing on June 1, 2020. Aggregate scheduled payments under the agreement total $17.6. Our existing corporate headquarters lease agreement in Charlotte, NC, with annual lease payments of $2.1, expires in September 2020. There were no other material changes to our operating lease commitments during the three months ended March 28, 2020.

(6) INFORMATION ON REPORTABLE AND OTHER OPERATING SEGMENTS
We are a global supplier of highly specialized, engineered solutions with operations in 17 countries and sales in over 100 countries around the world.
Our DB Thermal (“DBT”) and Heat Transfer operating segments are being reported in an “All Other” category for segment reporting purposes. We have aggregated our other operating segments into the following three reportable segments: HVAC, Detection and Measurement, and Engineered Solutions. The factors considered in determining our aggregated segments are the economic similarity of the businesses, the nature of products sold or services provided, production processes, types of customers, distribution methods, and regulatory environment. In determining our reportable segments, we apply the threshold criteria of the Segment Reporting Topic of the ASC. Operating income or loss for each of our operating segments is determined before considering impairment and special charges, long-term incentive compensation, certain other operating income/expenses, and other indirect corporate expenses. This is consistent with the way our chief operating decision maker evaluates the results of each segment.
HVAC Reportable Segment
Our HVAC reportable segment engineers, designs, manufactures, installs and services cooling products for the HVAC and industrial markets, as well as boilers and comfort heating and ventilation products for the residential and commercial markets. The primary distribution channels for the segment’s products are direct to customers, independent manufacturing representatives, third-party distributors, and retailers. The segment serves a customer base in North America, Europe, and Asia Pacific.
Detection and Measurement Reportable Segment
Our Detection and Measurement reportable segment engineers, designs, manufactures and installs underground pipe and cable locators, inspection and rehabilitation equipment, bus fare collection systems, communication technologies, and obstruction lighting. The primary distribution channels for the segment’s products are direct to customers and third-party distributors. The segment serves a global customer base, with a strong presence in North America, Europe, Africa and Asia Pacific.
Engineered Solutions Reportable Segment
Our Engineered Solutions reportable segment engineers, designs, manufactures, installs and services transformers for the power transmission and distribution market and process cooling equipment for the industrial and power generation markets. The primary distribution channels for the segment’s products are direct to customers and third-party representatives. The segment has a strong presence in North America.
All Other
Our “All Other” group of operating segments engineer, design, manufacture, install and service equipment, including heat exchangers, primarily for the industrial and power generation markets. The primary distribution channels for the group’s products are direct to customers and third-party representatives. These operating segments have a presence in North America and South Africa.
Corporate Expense
Corporate expense generally relates to the cost of our Charlotte, North Carolina corporate headquarters.
11


Financial data for our reportable segments and other operating segments for the three months ended March 28, 2020 and March 30, 2019 are presented below:
 Three months ended
March 28,
2020
March 30,
2019
Revenues:  
HVAC reportable segment$118.5  $128.4  
Detection and Measurement reportable segment91.9  85.1  
Engineered Solutions reportable segment154.9  138.0  
All Other (1)
4.0  (7.9) 
Consolidated revenues$369.3  $343.6  
Income (loss):  
HVAC reportable segment$15.0  $18.4  
Detection and Measurement reportable segment18.2  17.0  
Engineered Solutions reportable segment17.9  8.0  
All Other (1)
(3.9) (22.6) 
Total income for segments47.2  20.8  
Corporate expense(11.1) (12.4) 
Long-term incentive compensation expense(3.5) (3.5) 
Special charges, net(0.3) (0.1) 
Other operating income (expense)0.4  (1.8) 
Consolidated operating income$32.7  $3.0  
_____________________
(1)As indicated in Note 4, during the three months ended March 30, 2019, we reduced the amount of cumulative revenue associated with the variable consideration on the large power projects in South Africa by $17.5.

(7) SPECIAL CHARGES, NET
Special charges, net, for the three months ended March 28, 2020 and March 30, 2019 are described in more detail below:
 Three months ended
March 28,
2020
March 30,
2019
HVAC reportable segment$0.1  $0.1  
Detection and Measurement reportable segment    
Engineered Solutions reportable segment    
All Other